This question has been the subject of much ambiguity and debate in the courts in recent years. Some courts and tribunals held the line that this could be done. On the contrary, other courts and tribunals held that this was not possible. The Supreme Court put an end to this ambiguity and debate on March 31, 2023. The Supreme Court has held that the court may also grant summary judgment on the application of a shareholder against another shareholder to cooperate in the sale and delivery of an asset to a third party.
What was involved in this case?
The parties lived together and jointly owned a home. The husband sued the wife in summary proceedings to obtain an order to cooperate in the sale and delivery of the property. The preliminary injunction judge ordered the woman to provide her unconditional and irrevocable cooperation in selling and delivering the home to a third party as soon as possible within two weeks of service of the judgment. The preliminary injunction judge declared this part of the judgment enforceable.
The woman appealed and filed a cross-appeal seeking a stay of execution of the judgment. The Court of Appeal allowed this incidental claim, considering, among other things, that in view of the framework of preliminary relief proceedings, being the taking of an order measure, these proceedings do not lend themselves to the Court ordering a manner of distribution within the framework of Section 3:185 of the Dutch Civil Code. The court held that it is not for the preliminary injunction judge to put a final end to the distribution as part of an order. That, according to the court, can only be done in proceedings on the merits. The court held that there was a legal error and granted the woman’s request for a stay of execution.
The parties subsequently reached a settlement and removed the case to the court. This made the court’s judgment irrevocable.
Supreme Court Supreme Court:
However, the attorney general to the Supreme Court believes that the court’s opinion is incorrect and has appealed the court’s ruling in the interest of the law.
The Supreme Court, citing previous Supreme Court decisions, concluded as follows:
- In summary proceedings, the court may grant interim relief in urgent cases based on a preliminary ruling on the parties’ dispute (art. 254 Rv);
- The provisional nature of a decision in interlocutory proceedings means that that decision is not subject to res judicata and that the parties and the court are not bound by that decision in proceedings on the merits or in subsequent interlocutory proceedings;
- Furthermore, the decision in the operative part of an interlocutory judgment will lapse if another judgment has been rendered in the proceedings on the merits;
- The circumstance that the effects of an interlocutory injunction are actually irreversible does not prevent the granting of such an injunction.
The Supreme Court then lists a number of possibilities:
- In summary proceedings, a court may issue an order to cooperate in the transfer of real property;
- The judge in summary proceedings may also determine on the basis of Article 3:300 paragraph 2 of the Civil Code that the judgment shall take the place of (part of) a deed to perform a legal act as referred to in this article of the law;
- In addition, by way of immediate injunctive relief, the court may grant a shareholder authorization to monetize common property as referred to in Article 3:174(1) of the Civil Code;
On this basis, the Supreme Court finds that the court may also grant summary judgment on the application of a shareholder against another shareholder to cooperate in the sale and delivery of property to a third party. The fact that sale of a common property is a mode of distribution as referred to in Article 3:185 of the Civil Code does not preclude that by way of interlocutory injunction, a condemnation is pronounced. Given the provisional nature of an interlocutory decision, this does not – contrary to what the court considered – put a definitive end to the division.
The Supreme Court concludes that the court’s opinion that an order to compel another shareholder to cooperate in the sale and delivery of a common property is in principle not possible in summary proceedings is incorrect. The Supreme Court therefore, in the interest of the law, set aside the court’s judgment.
This contribution was written by Mr. Henriëtte van Pelt-de Jong.