A creditor who grants a deferral of payment must take into account the interests of third parties who may be held liable. They must not accept less security than they would have done if no third parties could be held liable. If they do so nevertheless, they forfeit the right to seek recourse against those third parties. The burden of proof lies with the creditor. They must demonstrate that it was not possible to obtain further security.
Payment problems right from the start
A haulage company hires staff from a temporary employment agency. The agency goes into liquidation with unpaid tax debts. The agency had been experiencing payment difficulties ever since its establishment in 2015. In 2017, the tax authority granted a deferral of payment for over €644,000 in tax debts. It secured the debt through a charge on receivables and agreed a repayment plan of €75,000 per month. The agency adhered to the arrangement until May 2018, when the payments ceased. The tax collector revoked the deferral and initiated enforced recovery proceedings.
Factoring agreement never requested
In September 2018, the tax authorities seized the temporary employment agency’s stock. This was later sold for less than €8,000. Discussions followed. The agency offered a list of receivables worth €4.5 million as security. The receiver requested the factoring agreement, but the employment agency did not send it. Nevertheless, in November 2018, the receiver accepted a charge over the receivables. He relied on the employment agency’s assurance that the receivables were not already encumbered.
Pledge turns out to be worthless
The temporary employment agency fails to honour the payment agreements. Summary proceedings ensue. The agency was due to pay €6.9 million, but this payment is not made. The creditor registers the charge and files for bankruptcy. In March 2019, the temporary employment agency went into liquidation. It then transpired that the agency had already assigned a large proportion of its claims to a Luxembourg-based company back in 2017. The charge was therefore largely worthless. In July 2022, the tax collector held the haulage company liable for over €109,000 in unpaid payroll and VAT.
The recipient should have asked further questions
The recipient was already aware of the factoring agreement in September 2018. He never received that agreement, but nevertheless accepted a charge. A recipient acting with due care may be expected to verify whether the pledgor is authorised. The reference to the statement from the employment agency is insufficient. The recipient has, in effect, granted a deferral of payment without adequate security.
Loss of the right to hold someone liable
The claimant has not demonstrated that he did not accept a lower level of security than might reasonably be expected of him. Nor has he shown that no other security could have been stipulated. The Court of Appeal finds that the claimant has lost the right to hold the haulage company liable. The liability order is set aside.