“Order for payment” procedures - Hungary
TABLE OF CONTENTS
- 1 Existence of an order for payment procedure
- 1.1 Scope of procedure
- 1.1.1 What types of claims are eligible (e.g. only pecuniary claims, only contractual claims etc.)?
- 1.1.2 Is there an upper limit regarding the value of the claim?
- 1.1.3 Is the use of that procedure optional or obligatory?
- 1.1.4 Is the procedure available if the defendant lives in another Member State or in a third country?
- 1.2 Competent court
- 1.3 Formal requirements
- 1.3.1 Is the use of a standardised form obligatory? (if yes, where can that form be obtained?)
- 1.3.2 Is representation by a lawyer required?
- 1.3.3 In how much detail do I have to describe the reason for the claim?
- 1.3.4 Is it necessary to present written evidence of the claim at issue? If yes, which documents are admissible as proof?
- 1.4 Rejection of application
- 1.5 Appeal
- 1.6 Statement of opposition
- 1.7 Effect of statement of opposition
- 1.8 Effect of lack of statement of opposition
- 1.1 Scope of procedure
1 Existence of an order for payment procedure
There is an order for payment procedure in Hungary, regulated by Act L of 2009 on order for payment procedures. Order for payment procedures are simplified, out-of-court civil law proceedings for the enforcement of payment claims and fall within the competence of civil law notaries. Civil law notaries proceed in order for payment procedures by machine processing of data, using the uniform online IT system of the Hungarian Chamber of Civil Law Notaries available nationwide to civil law notaries and the parties and other persons involved in the procedure. The notary’s proceedings – as out-of-court civil law proceedings – have the same effect as court proceedings.
1.1 Scope of procedure
Claims for overdue money payments – with some exceptions – can be enforced also by an order for payment. The enforcement of mortgage claims against mortgagees is not regarded as the enforcement of a claim for payment of funds.
Claims filed exclusively for overdue payments of funds in a value not exceeding HUF 1 000 000 can only be enforced in an order for payment procedure if
(a) the debtor has a known permanent address or place of residence in Hungary, or a seat or branch office in Hungary (hereinafter collectively referred to as ‘address for service’), and
(b) the claim for payment did not arise from employment, employment as a civil servant, service in the public or in the private sector, a relationship similar to employment of members of cooperatives or from employment as an outworker.
If the Hungarian address for service of the debtor is not known, it is not possible to issue an order for payment.
Payment claims arising from an employment relationship can only be enforced by an order for payment if the case is not related to the entry into, modification or termination of the employment relationship or applied as a legal consequence of a culpable breach of the obligations arising from the employment relationship on behalf of the employer or of misconduct.
Payment claims for amounts above HUF 400 000 000 may not be enforced by an order for payment procedure. This, however, does not rule out the possibility for the claimant to enforce his or her claim for payment exceeding HUF 400 000 000 in instalments below HUF 400 000 000.
1.1.1 What types of claims are eligible (e.g. only pecuniary claims, only contractual claims etc.)?
See the answer in Section 1.1.
1.1.2 Is there an upper limit regarding the value of the claim?
Yes, HUF 400 000 000.
1.1.3 Is the use of that procedure optional or obligatory?
Below HUF 1 000 000 it is obligatory, as indicated in Section 1.1; in all other cases, it is optional.
No payment order can be issued if the defendant has no Hungarian address known to the authorities for the service of documents.
1.2 Competent court
In order for payment procedures civil law notaries have competence across the country. In order for payment procedures no stipulations may be made in terms of jurisdiction.
If the claimant submits its claim orally or in writing, the civil law notary proceeding in the case will be the notary to whom the claim was submitted, while electronic claims are assigned automatically to a civil law notary by a computer program.
1.3 Formal requirements
Applications for issuing an order for payment must be submitted in writing, on the corresponding form, or orally.
1.3.1 Is the use of a standardised form obligatory? (if yes, where can that form be obtained?)
It is obligatory to use a standardised form for both electronic and paper-based submissions. The form may be downloaded from the homepage of the Hungarian Chamber of Civil Law Notaries or obtained from the notaries.
1.3.2 Is representation by a lawyer required?
1.3.3 In how much detail do I have to describe the reason for the claim?
The application must include the legal basis of the claim (the underlying legal relationship and the right to be exercised), its amount and related contributions, the starting date of the underlying legal relationship and the due date of the claim as well as the data on the basis of which the claim can be identified (in the case of arrears on bills, the date of issue and number of the bill, etc.).
No attachments may be enclosed to the submissions except for applications for partial exemption from costs, restitutio in integrum (application for extension), rebuttal of the presumption of delivery, payment in instalments, a deferral of payment as well as submissions relating to interruption of the procedure. If the applicant wishes to enclose attachments – permitted by law – to the submission, he or she may submit both the form and its attachments in hard copy or may choose to submit the form electronically, indicating that the attachments will be delivered to the civil law notary proceeding in the case by registered mail within three business days, i.e. in this case, the applicant has three business days in which to send the attachments in hard copy. Authorisations may not be submitted as an attachment to the submission; rather, they must form part of the submission, or the submission must include a statement by the authorised person to the effect that he or she holds a valid and effective written authorisation relating to the case. Authorisations given to persons not acting as a legal representative may also be presented orally by the parties to the civil law notary. There is no need to present written evidence; however, a brief overview may be provided of the facts serving as the basis for the right to be exercised, and evidence supporting these facts may be identified.
1.4 Rejection of application
The civil law notary will reject the application automatically if
(a) it can be excluded that Hungarian civil law notaries (courts) have jurisdiction in the procedure;
(b) the enforcement of the claimant’s claim falls within the competence of another court or authority but, owing to the absence of the relevant data, referral is not possible;
(c) the law provides that no order for payment may be issued;
(d) there is already an ongoing order for payment procedure or lawsuit between the parties before a civil law notary or court for the same rights and on the same factual basis, or an effective order for payment or other final ruling has already been made in the case;
(e) the party has no legal capacity to act in the case;
(f) claimants having neither a Hungarian address for service nor a representative with a Hungarian address for service have not specified any agent with a Hungarian address for the service of documents upon submitting their application for the issue of an order for payment, or requested public notification;
(g) service of the order for payment at the Hungarian address of the defendant failed repeatedly as the defendant died (terminated), was unknown as a resident at the address or moved to an unknown location;
(h) the claimant’s application is premature or – for a reason other than limitation – cannot be enforced by a court;
(i) the time limit set by separate legislation for enforcing the claim in civil proceedings entails time-barring and the claimant failed to meet that time limit, did not submit an application for restitutio in integrum, if allowed, or the application was rejected by the court;
(j) an application submitted by a legal representative does not contain all the basic (statutory) elements, or the costs of the proceedings were not paid;
(k) parties or companies and other legal persons having a legal representative failed to submit their application by electronic means despite an obligation to do so, as provided by law, with the exception of applications for partial exemption from costs submitted by a natural person having a legal representative, or
(l) after the court’s call on the applicant to remedy deficiencies, the application (or the part required) is not submitted within the specified time limit, or the submitted application is still incomplete, preventing the court from making a decision.
The claimant may submit an appeal against the order rejecting the application. Generally, appeals are heard in accordance with the rules on appeals against orders in out-of-court proceedings by the regional court (törvényszék) having jurisdiction over the area where the seat of the civil law notary is located. An appeal may be submitted within 15 days of the announcement of the decision. Appeals may be submitted before civil law notaries in writing or orally, and will be registered in the court records. If an application for an order for payment is rejected, the claimant may choose either to file another application for an order for payment to enforce the claim, may bring an action before a court, or may choose other lawful means to enforce the claim. The legal effect of a rejected application for an order for payment remains if the applicant duly resubmits the application or enforces the claim by other lawful means within 30 days of the date on which the decision rejecting the application became final.
1.6 Statement of opposition
The defendant may make a statement of opposition to the order for payment to the civil law notary within 15 days of its service. Applications submitted by the defendant simply for a deferral of payment or payment in instalments are not considered as a challenge to the order for payment. Such applications may only be submitted within the time limit set for statements of opposition. It should be noted that the order for payment is not considered challenged if the defendant states that he or she paid the enforced claim after receiving the order for payment. In this case, the order for payment comes into effect on the day following the last day of the time limit set for statements of opposition. If the defendant had not received (did not request) the order for payment and, for that reason, it must be deemed delivered, the defendant may state his or her opposition within 15 days of service of the document implementing the decision. As a condition for this, the defendant must pay the costs incurred in connection with enforcement and paid in advance by the claimant to the bailiff when stating his or her opposition and must also provide documentary evidence of this fact to the civil law notary.
1.7 Effect of statement of opposition
As a result of a statement of opposition made in due time, the order for payment procedure – with respect to the element affected by the statement of opposition – will become a trial before court.
1.8 Effect of lack of statement of opposition
If an order for payment is not challenged by a statement of opposition before the deadline, it will have the same effect as a final court judgment.
1.8.1 What needs to be done in order to obtain an enforceable decision?
If an order for payment is not challenged by a statement of opposition before the deadline, it will have the same effect as a final court judgment. Consequently, the civil law notary provides a copy of the order for payment with a clause giving it legal effect and has it served on the claimant.
1.8.2 Is this decision final or is there still a possibility for the defendant to appeal against that decision?
The decision is final; however, if the defendant had not received the order for payment and, for that reason, it was deemed delivered in accordance with the provisions of the law, the defendant may state his or her opposition within 15 days of service of the document implementing the decision.
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Last update: 06/09/2016