The Taiwan High Court rendered the 107-Shang-Yi-217 Civil Decision of June 19, 2018 (hereinafter, the “Decision”), holding that in case a creditor applies for compulsory enforcement on the basis of a confirmed payment order, even though the failure to submit supporting documentation constitutes a lack of prerequisites for such enforcement application, if correction has been made before the application is rejected, the compulsory enforcement application is still lawful.
According to this Decision, the Plaintiff applied for the compulsory enforcement of the real estate at issue which was owned by a joint guarantor. After the court conducted a distribution based on the distribution table at issue, the distribution not only went to the Plaintiff but also the Defendant, who was also an ordinary creditor. However, the Plaintiff asserted that the Defendant, who delivered the payment order at issue on March 15, 2017, had applied to participate in the distribution on March 13, 2017 without submitting a proof confirming the payment order at issue. Therefore, the Plaintiff brought a suit to object to the distribution table. Dissatisfied with the decision rendered by the original trial court in favor of the Defendant, the Plaintiff appealed.
According to this Decision, a creditor holding a confirmed payment order as the basis of enforcement to apply for compulsory enforcement or to participate in a distribution is required to submit the original of the payment order and its confirmation document. Although failure to submit such supporting document constitutes a lack of prerequisites for the enforcement application, still it is not a matter that cannot be corrected. Therefore, a creditor only needs to make the correction before the application is rejected by the enforcing court in accordance with Article 30-1 of the Compulsory Enforcement Law, to which Article 249, Paragraph 1, Subparagraph 6 of the Code of Civil Procedure applies mutatis mutandis, in which case the compulsory enforcement application is still lawful.
It was further pointed out in this Decision that the Defendant had participated in the distribution before the real estate at issue was auctioned off, and that the prerequisite (i.e., the supporting document that confirmed the payment order) which was lacking for the application to participate in the distribution had been corrected before the application to participate in the distribution is rejected by the enforcing court. Since the application was lawful, the Plaintiff’s appeal was finally rejected.