With the decision of 16 September 2015, No. 18131, the Court of Cassation settled a long-standing debate, ruling that the receiver can not terminate an agreement to sell real estate property, entered into by the company which is later declared bankrupt, if the purchaser has registered with the Land Registry, before bankruptcy, its claim to the Court to be transferred title to the property.
The decision given by the Supreme Court moves from the appeal proposed by the bankruptcy receiver because of the Court of Appeal confirmation of the Court of first instance decision, which granted the purchaser the requested relief, thereby transferring title to the property, pursuant to a claim which was registered with the Land Registry before the declaration of bankruptcy of the committed seller. The Court rejected the objection raised by the bankruptcy receiver, who argued that the commitment to sell the property was unenforceable because the receiver terminated the commitment according to the specific power afforded by Art. 72 IBL.
The Court of Cassation, 1st civil session, transmitted the President the acts, which were then transmitted to the Joint Session of the Supreme Court.
The issue regards the possibility of the bankruptcy receiver to terminate a commitment to sell property, according to Art. 72 IBL, once the purchaser registered with the Land Registry, before the declaration of bankruptcy, its claim to have title to the property transferred by judgment of the Court, in compliance with the Art. 2932 ICC. It should be noted that Article. 72 of IBL, as amended by the Decree. n. 169 of 2007, establishes, in general terms, that the bankruptcy receiver has the right to terminate the pending controversies, and specifies that this right may be exercised even in the presence of a preliminary contract, not stating, however, the outcome of a preliminary purchase agreement in the case the purchaser has registered with the Land Registry, before bankruptcy, his claim to the Court to be transferred title to the property.
The issue could be divided into two sub-problems: 1) understand if, from a substantive standpoint, the bankruptcy receiver can terminate a commitment to sell property; 2) understand what are the effects on the claim for specific performance following the dissolution of the contract.
The Court of Cassation, first of all, makes some general remarks concerning the registration of claims based on Art. 2932 ICC, recalling that Art. 2652, first paragraph, No. 2 ICC states that the decision granting the specific relief of transferring title to property, if the claim was duly registered with the Land Registry, prevails over any other registration which comes after that of the claim. The preliminary agreement transcribed is therefore surrounded by a series of safeguards to ensure the retroactive translating effect if occurs the decision made pursuant to Art. 2932 ICC.
The Supreme Court then considers that the bankruptcy receiver has indeed, pursuant to Art. 72 IBL, the right to terminate the commitment to sell property, and that the receiver can exercise such a right even if the purchaser filed a claim in court in order to obtain the specific relief of the transfer of title to the property.
The issue is, therefore, whether or not the rights attached to the registered claim of the purchaser prevail over the termination powers of the receiver.
The Supreme Court ruled that the termination right exercised by the receiver is unenforceable against the purchaser who has registered his claim with the Land Registry before bankruptcy is declared. Which means that the claim based on Art. 2932 ICC, registered in the Land Registry before bankruptcy, does not prevent the bankruptcy receiver to terminate the preliminary agreement: prevents him only to terminate the commitment to sell property with effect against the buyer who proposed such a request (always provided that the sentence is as well transcribed).
In the past a consistent and consolidated line of cases of the Supreme Court allowed the bankruptcy receiver to terminate a commitment to sell property by a company which later is declared bankrupt, at any time until title to the property is actually transferred or the Court decision granting such a specific relief becomes final (see, for example, Court of Cassation Nos. 3001/1982, 4731/1988, 1497/1989, 4887/1989, 12033/1991, 2577/1993, 2703/1995, 4358/1997, 4747/1999, 239/1999, 17257/2002 and 7070/2004). Therefore, the registration with the Land Registry of the claim in Court for specific relief did not bar, according to these precedents, the bankruptcy receiver from enforcing his termination right.
The Supreme Court came to a different conclusion for the first time in 2004, ruling that the decision granting specific relief to the purchaser and thereby transferring title to the property to him is enforceable against the receiver, if the claim was registered with the Land Registry before the declaration of bankruptcy.
Subsequent decisions of the Court of Cassation were split and some continued to follow the previous line of cases (see decisions Nos. 20451/2005, 28479/2005, 46/2006, 542/2006, 33/2008 and 17405/2009) while others followed on the footsteps of the 2004 decision (see Nos. 15218/2010, 16660/2010 and 27093/2011). Due to this situation, the Joint Session of the Supreme Court re-ruled what was decided in 2004.