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Issues that emerge from the judicial assistance of a person incapable of legal acts

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Issues that emerge from the judicial assistance of a person incapable of legal acts

A. Acts of the judicial assistant

The legal provisions in the Civil Code-hereinafter called for brevity ‘AK’ – regarding the judicial guardianship (Articles 1666 up to 1688 AK) do not make a specific reference to the actions that the judicial assistant may attempt, either alone, without the involvement of any other or with the consent of the supervisory council, or upon Court authorization with the foregoing opinion of the supervisory council.

However, for cases of custodial guardianship (whether full or supplementary), article 1682 AK provides that, if the law has no other provision, the provisions of the institution of guardianship of minors (Articles 1589 through 1654 AK ) apply by analogy.
Therefore, the following cases are distinguished:

i) Acts NOT requiring the permission or approval of the supervisory council and/or the court

1) Preparation (in the presence of a representative of the supervisory council) of an inventory of assets which the assisted person already has or which devolved to him after the judicial assistant was appointed. The law does not lay down a deadline for the inventory being prepared but from the wording and purpose of the relevant provisions it is clear that the judicial assistant is obliged to take the relevant steps as soon as possible after taking up his duties.
The judicial assistant is also entitled, and in case a specific order is received from the supervisory council is obliged, to request that a judicial inventory be drawn up, in other words an inventory ordered by the justice of the peace in the area where the assisted person’s assets are located. The judicial inventory must be prepared by a notary public in the presence of the judicial assistant, a representative of the supervisory council, and the assisted person is also invited to be present.
2) Causing a decision of the supervisory council to be taken which approximately specifies the annual expenditure required to meet the assisted person’s needs. Here too there is no specific deadline but the courts have accepted that this decision is one of the duties which the judicial assistant must perform as soon as possible. If the judicial assistant and supervisory council disagree about the annual expenditure, the court decides following an application from the judicial assistant or acting ex officio. There is such disagreement when the supervisory council was particularly parsimonious with its estimation of annual expenditure, with the result that the judicial assistant is excessively constrained (Article 1682 AK read in conjunction with Article 1612 AK, which applies mutatis mutandis).
3) Placement of securities and other precious items of the assisted person, such as government securities, bonds, shares in societes anonyme, jewellery, collectible coins, etc, in a safe bank or other suitable credit institution. The supervisory council is obliged to carry out periodic checks, when it considers that necessary, and must do so once a year to see whether the judicial assistant is discharging this obligation (Article 1682 AK read in conjunction with Article 1614 AK, which applies mutatis mutandis).
4) Taking all steps to properly administer the assisted person’s patrimonium, and in particular payment of debts and collection of receivables, i.e lease payments (Article 1682 AK, read in conjunction with Article 1615 AK, which applies mutatis mutandis).
The judicial assistant’s powers in this regard are subject to restrictions on the acts which he can perform without the permission or approval of the supervisory council and/or the court (see below).
Legal theory, as well as court decisions have ruled that permissible administration transactions include the conclusion of a long-term interest-free loan; sale of chattels, provided it is not of such an extent that it entails sale of all or part of the patrimonium; endorsing bills of exchange, notes to order or cheques and the judicial assistant’s consent to the extinguishment of a mortgage on the assisted person’s property; the granting of mandates to a lawyer to engage in any judicial or extrajudicial steps needed to administer the assisted person’s patrimonium, provided they do not include matters requiring the permission of the supervisory council and/or court (see below); and any judicial or extrajudicial conservative measure to prevent losses to the assisted person’s patrimonium such as applications for injunctive relief, the registration of a prenotation of mortgage or mortgage or and conclusion of insurance agreements.

ii) Acts requiring permission or approval from the supervisory council only (i.e. not requiring permission from the Court):

1) Beneficial placement of the assisted person’s monies. To be more specific, if the assisted person’s patrimonium includes monies or monies devolve to him during the period of assistance, the judicial assistant is obliged without delay to productively use the amount left over after deducting the annual expenditure or to place such amount in a beneficial manner (e.g. bank deposits, investments in property). The manner in which the monies are placed is determined by the judicial assistant and approved by the supervisory council. If the latter refuses to give approval, then the court decides upon the matter (Article 1682 AK, read in conjunction with Article 1613 AK, which applies mutatis mutandis).
2) Leasing properties (as lessee or lessor) in the assisted person’s name (Article 1682 AK, read in conjunction with Article 1619(1) AK, which applies mutatis mutandis). Permission is given depending on the specific transaction. If the supervisory council refuses to grant permission, then the court decides upon the matter (Article 1682 AK, read in conjunction with Article 1622 AK, which applies mutatis mutandis).
3) Filing of actions in rem for a property or other action relating to a matter which due to the amount involved falls within the remit of the Multi-Member Court of First Instance, or an action relating to personal status. The absence of permission can be examined by the court ex officio (Article 1682 AK, read in conjunction with Article 1621 AK, which applies mutatis mutandis). If the supervisory council refuses to grant permission, then the court decides upon the matter (Article 1682 AK, read in conjunction with Article 1622 AK, which applies mutatis mutandis).
4) Any other act, which is beyond the bounds of normal administration transactions, as described above.

iii) Acts that require the court’s permission only, after an opinion from the supervisory council is obtained (Article 1682 AK, read in conjunction with Article 1624 AK, which applies mutatis mutandis):

1) Disposal of the assisted person’s patrimonium overall or in part. Such disposal exists when the assets being sold off are of particularly high value in light of the patrimonium that is left over. The sale of high value chattels in principle falls within this provision.
2) Sale or acquisition for consideration of a property or right in rem on another’s property.
3) Assignment of claims relating to the transfer of real estate to the assisted person.
4) Sale of securities (shares, bills of exchange, bonds) and valuable items.
5) Undertaking any type of work on a property of the assisted person whose cost exceeds the amount specified by the supervisory council for the assisted person’s annual expenditure.
6) Sale of a commercial, industrial or other business which is part of the assisted person’s patrimonium, a decision to wind up and liquidate such business and a decision to establish a new business.
7) Leasing of one of the assisted person’s properties for a period exceeding 9 years.
8) Providing or accepting a loan.
9) Waiving collateral for a claim of the assisted person or reducing such collateral.
10) Entering into a compromise or arbitration agreement on matters whose value exceeds the annual expenditure, as determined by the supervisory council (see above, point 5, as well as i2).
11) Providing a guarantee or underwriting another’s debt for consideration.
12) Refusing an inheritance or waiving the lawful share of an inheritance which devolves to the assisted person.
13) Acceptance of an inheritance or donation which entails burdens.
14) Refusing an inheritance that devolves to the assisted person.

Acts done by the judicial assistant without complying with the relevant formalities (opinion of the supervisory council and permission of the court) are invalid (Article 1682 AK, read in conjunction with Article 1630 AK, which applies mutatis mutandis). Moreover, such conduct by the judicial assistant (i) gives rise to liability to compensate the assisted person (Article 1682 AK, read in conjunction with Article 1632 AK, which applies mutatis mutandis) and (ii) can lead to him being removed (Article 1682 AK, read in conjunction with Article 1651 AK, which applies mutatis mutandis).

In addition to these general administration requirements, the judicial assistant is also obliged to comply with any special administration requirements that have been laid down. More specifically, the judicial assistant is obliged to administer the patrimonium granted to the assisted person by intra vivos donation or which devolved to him by testamentary disposition, in accordance with the conditions laid down by the donor or testator. The court may allow those conditions to be deviated from, if the interests of the assisted person so require (Article 1682 AK, read in conjunction with Article 1616(1) AK, which applies mutatis mutandis). If, however, the donor or testator state that the judicial assistant is not to administer the patrimonium then the court will appoint a special judicial assistant (Article 1682 AK, read in conjunction with Article 1616(2) AK, which applies mutatis mutandis).

It should be noted that the Law (1623 AK) enables the judicial assistant to obtain a general license by the court, following the opinion of the supervisory council, in order to attempt the following actions without limits: a) the lease of real estate, as well as b) the operation of any other act beyond the limits of ordinary administration, with the exceptions mentioned above (points 1 to 14).

Such permission is called general permission and has a wide-ranging content and arms the judicial assistant with powers upfront without him having to request permission every time. This license is issued by the Court, if the latter considers that this is necessary or useful for the administration of the estate of the assisted person and especially for his business exploitation. In the same way and under the same conditions, the judicial assistant may be granted general permission to borrow in the assisted person’s name, to underwrite another’s debt and to provide guarantees in order to operate the assisted person’s businesses (Article 1682 AK, read in conjunction with Article 1623 AK, which applies mutatis mutandis). The court may grant conditional permission or lay down limits and restrictions. Exceeding those limits equates to an act attempted without permission and entails invalidity.

iv) Acts the judicial assistant is prohibited from entering into whether with or without permission:

1) Gratuitous legal transactions to the detriment of the assisted person’s patrimonium such as donations, loans for use, debt relief and interest-free loans. Gratuitous acts required because of special moral duty or for reasons of decency are permitted (Article 1682 AK, read in conjunction with Article 1617 AK, which applies mutatis mutandis).
2) Use of the assisted person’s patrimonium, and cash in particular, for own account (Article 1682 AK, read in conjunction with Article 1618 AK, which applies mutatis mutandis).

Acts entered into despite that ban are invalid. Invalidity may be pleaded by the judicial assistant, the assisted person and his general or particular successors in title (Article 1682 AK, read in conjunction with Article 1630 AK, which applies mutatis mutandis). Moreover, breach of the ban renders the judicial assistant liable to pay compensation to the assisted person (Article 1682 AK, read in conjunction with Article 1632 AK, which applies mutatis mutandis) and can lead to him being removed by the Court on an application from the supervisory council and/or by the court acting ex officio (Article 1682 AK, read in conjunction with Article 1651 AK, which applies mutatis mutandis).

B. 1. Competences of the supervisory council

The supervisory council has both general competences, which consist of general supervision of the work of the judicial assistant, as well as individual specific responsibilities, which are established by specific provisions of the Civil Code.

• The supervisory council’s general competence entails overseeing the activities of the judicial assistant. Oversight is expressly set out in Article 1642 AK as the primary competence of the supervisory council. Oversight means surveillance, prevention and control, giving advice to the judicial assistant, cooperating with him and, if there are serious grounds, applying to have the judicial assistant removed. (Article 1681 AK, read in conjunction with Article 1651 AK, which applies mutatis mutandis).
• The specific competences of the supervisory council can be divided into authorising-advisory, auditing and decision-making-adjudicatory powers, which are explained in each section below:

i) Authorising – Advisory powers:
– The supervisory council can grant the judicial assistant permission to take a series of important steps without the Court’s permission (see above ii).
– It can provide an opinion before the Court grants permission to the judicial assistant to take a series of specific steps (see above iii).
– It can provide an opinion to the Court about admitting the assisted person to a special institution in the case where his physical, mental or emotional state so requires, following an application from the judicial assistant and/or ex officio on a proposal from the supervisory council (Article 1682 AK, read in conjunction with Article 1609 AK, which applies mutatis mutandis).
ii) Auditing powers:
– It can audit the judicial assistant’s annual report to the supervisory council or reports submitted at less frequent intervals which do not exceed 5 years, if there is a decision of the supervisory council on that matter (Article 1682 AK, read in conjunction with Article 1626 AK, which applies mutatis mutandis).
– It has the right to submit an application to the court to remove the judicial assistant when there are serious grounds for doing so, such as where the judicial assistant neglects his duties. (Article 1682 AK, read in conjunction with Article 1651 AK, which applies mutatis mutandis).
– It checks that securities (shares, securities, bonds, bills of exchange) and valuable items of the assisted person have been safely placed in a bank or other suitable credit institution whenever the supervisory council considers that necessary, but at least once a year. (Article 1682 AK, read in conjunction with Article 1614(2) AK, which applies mutatis mutandis).
– The supervisory council can send a representative to attend the inventory of the assisted person’s patrimonium carried out by the judicial assistant once he takes up his duties. (Article 1682 AK, read in conjunction with Article 1611(1) AK, which applies mutatis mutandis).

iii) Decision-making – adjudicatory powers:
– The supervisory council determines the annual expenditure required for the judicial assistant to do his job, following an application from the judicial assistant immediately after he takes up his duties. (Article 1682 AK, read in conjunction with Article 1612 AK, which applies mutatis mutandis).
– It resolves disputes between its members. (Article 1682 of the Hellenic Civil Code read in conjunction with Article 1605 of that Code which applies mutatis mutandis).

Β.2. Liability of members of the Supervisory Council

The members of the supervisory council are liable to pay compensation to the person assisted in the same way as the judicial assistant (Article 1682 AK, read in conjunction with Article 1632 AK, which applies mutatis mutandis) for any breach of duty due to fraudulent intent or negligence, and therefore are not released from liability even for slight negligence.

For such liability to arise, there must be a breach of duties as members of the supervisory council. For example, members of the supervisory council will be liable in the following indicative (non-restrictive) list of cases: if they opine in favor of the court granting permission to sell off property which proves to be prejudicial in the end (Article 1624 AK(1), point 2); if they found that placement of the assisted person’s capital specified by the judicial assistant was non-advantageous (Article 1682 AK, read in conjunction with Article 1613(2) AK, which applies mutatis mutandis); if they approved an annual report which presented irregularities; if they gave permission for a clearly unfounded action to be filed or for prejudicial waiver of the right to prosecute an action that had been filed (Article 1682 AK, read in conjunction with Article 1621(2) AK, which applies mutatis mutandis); or if they were absent without reason from a meeting of the supervisory council although summoned, with the result that due to the non-existence of a quorum the meeting was cancelled and necessary decisions were not taken.

Quite reasonably, of course, the assisted person must have suffered prejudice from the breach of duty by members of the supervisory council in order for there to be a duty to compensate. According to legal theory, if the decision is not unanimous, the minority members are not liable. Also, since the law does not provide for this matter (Article 480 AK), legal theory takes the view that liability is not several, i.e. each member of the supervisory council is liable in equal shares by the amount resulting by dividing the amount of compensation by the number of members.

Fraudulent intent or negligence are decided based on the evidence which exists at the time of the decision. Therefore, a member of the supervisory council is not liable if a clearly advantageous opinion to sell off assets at that time subsequently becomes prejudicial due to overvaluation of the property or due to a change in building terms in the area. Moreover, the supervisory council has the right and duty to request removal of the judicial assistant, and consequently members of the supervisory council are liable if they deliberately or negligently fail to request his removal and as a result of that delay the assisted person suffers prejudice (Article 1682 AK, read in conjunction with Article 1651 AK, which applies mutatis mutandis).

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