RASK successfully represented the client in the Supreme Court

Case

RASK attorney-at-law Henri Torop successfully represented the client in a case that reached the Supreme Court (2-21-7855). A lawsuit was filed against the client demanding 45,600 euros and late payment. The Supreme Court annulled the decisions of the county and district court and made a new decision in favor of the client, dismissing the other party's claim. In other words, the Supreme Court established that the claim against the client was groundless.

The Supreme Court explained that the exercise of rights must be done in good faith. It is not allowed to exercise rights in an illegal manner, as well as in such a way that the purpose of exercising rights is to cause harm to another person. The function of the principle of good faith is to limit the abuse of the exercise of contractual or statutory rights. In the event of bad faith, the court will not apply the provisions of the law or the contract.

In this dispute, it was a situation where both I and II rank mortgages had been set as security for the properties in favor of the mortgagor. The mortgagor submitted an enforcement application only for the realization of the II rank mortgage and did not demand the fulfillment of the main requirement, but the fulfillment of the default requirement. However, the second rank mortgage did not even fully cover the arrears claim, let alone the principal claim. Thus, the mortgagor filed an enforcement application only for partial enforcement of the claim, although he could have demanded the entire claim. Realization of the second-ranked mortgage additionally meant that due to the remaining first-ranked mortgages, the sale price of the properties at the auction was extremely low. In the proceedings, the mortgagee was unable to highlight the circumstances why he did not protect his interests by submitting an application for enforcement based on the first and second mortgages - in this case, the guarantees would have been realized to cover the entire claim of the mortgagee, and the realization value of the guarantees would have been higher. The Supreme Court found that in such a situation, the mortgagee's behavior can be considered an abuse of rights.