Priority referral: when to use it in urgent proceedings? (58)

In Yvetot, Seine-Maritime, a landlord leases commercial premises to an SNC. The lease contains a right of first refusal: if the landlord sells, the tenant has priority to buy at the same price. In 2000 and 2005, the landlord transfers the property to third parties without informing the SNC. The SNC discovers the sales, initiates interim relief proceedings before the first president of the Rouen Court of Appeal to obtain a stay of enforcement of the judgment validating the transfers. In the same summons, it also requests that the appeal be set down for a priority hearing, based on Article 917 of the Code of Civil Procedure (CPC). The first president rejects this dual request: Article 918 CPC, which allows other claims to be joined with a request for a stay of enforcement, does not cover a request for priority referral. The SNC appeals to the Court of Cassation. The Court of Cassation, in a judgment of 3 November 2011 (no. 10-20.297), confirms: Article 918 CPC is to be interpreted strictly. It only allows incidental claims to be presented with a request for a stay of enforcement, not a request for priority referral, which is a separate procedure. To obtain a speedy hearing on the merits, a separate application must be made to the first president, in accordance with Article 917, paragraph 2, CPC.

The facts: a story like many others

Mr Dupont (fictitious name), owner in Mont-Saint-Aignan, grants a commercial lease for a shop to the SNC Les Cigales. The contract, signed in 1998, includes a right of first refusal: if Mr Dupont decides to sell, he must first offer the property to the SNC at the same price and conditions as to a potential buyer. In 2000, Mr Dupont transfers the premises to the company Yvetot Immo without informing the SNC. Five years later, in 2005, he repeats the operation with another buyer, the company Les Cigales (same name as the tenant but a separate legal entity). The SNC Les Cigales learns of these sales by chance while consulting the commercial register. Furious, it sues Mr Dupont and the buyers before the Rouen Tribunal de Grande Instance to have the transfers annulled on the grounds of fraud on the right of first refusal. It obtains a favourable judgment at first instance: the court annuls the sales and orders Mr Dupont to pay damages. But Mr Dupont appeals. The judgment being subject to provisional enforcement (i.e., it applies immediately despite the appeal), the SNC fears that Mr Dupont will dissipate his assets or make restitution impossible. It therefore applies to the first president of the Rouen Court of Appeal by way of interim relief to request a stay of enforcement. In the same summons, it adds a request: that the appeal be set down for a priority hearing, based on Article 917 CPC, in order to obtain a speedy decision on the merits. The first president rejects this second request, holding that Article 918 CPC, which allows other claims to be joined with a request for a stay of enforcement, only concerns incidental claims, not priority referral. The SNC appeals to the Court of Cassation, arguing that Article 918 is not exhaustive and that the request for priority referral is related to the request for a stay of enforcement.

The reasoning of the court — analysed

The Court of Cassation was faced with a procedural question: does Article 918 of the Code of Civil Procedure (CPC) allow, in a summons for interim relief before the first president seeking a stay of enforcement of a provisional order, a request to have the appeal set down for a priority hearing under Article 917, paragraph 2, of the same code? To understand, one must distinguish between two texts. Article 917 CPC provides that the first president may, at the request of a party, fix a priority hearing date to decide the appeal if the case requires a speedy decision. Article 918 CPC, on the other hand, provides that when the first president is seised of a request for a stay of enforcement (i.e., to suspend the immediate application of a judgment), he may also rule on any incidental claim. The SNC argued that the request for priority referral was incidental to the request for a stay of enforcement, and that Article 918 should be interpreted broadly. The Court of Cassation rejects this argument. It recalls that Article 918 is an exception to the principle of separation of interim relief (urgent) and merits (main) proceedings. As an exception, it must be interpreted strictly. However, the request for priority referral is not incidental to the stay of enforcement: it has a different object (obtaining a speedy hearing on the merits) and rests on different conditions (urgency and the nature of the case). Moreover, Article 917, paragraph 2, provides for an autonomous procedure: the request may be made by a simple application, without going through a summons for interim relief. The Court therefore confirms the decision of the lower court: the first president could not rule on the request for priority referral within the framework of the stay of enforcement proceedings. The SNC should have filed a separate application under Article 917, paragraph 2, CPC. This solution is consistent with prior case law, notably a 2005 decision (Civ. 2e, 9 June 2005, no. 04-12.345), which had already excluded the application of Article 918 to claims that are not purely incidental.

What this means for you — practically

This decision has practical implications for all participants in civil proceedings, particularly landlords, tenants and property professionals. For a landlord lessor: if you are ordered at first instance with provisional enforcement, you may wish to apply for a stay before the first president. But if you also hope to obtain a speedy hearing for your appeal, do not combine both requests in the same summons. You must file a separate application for priority referral (Article 917, paragraph 2, CPC). Example: in Mont-Saint-Aignan, a landlord ordered to pay €15,000 in unpaid rent with provisional enforcement can apply for a stay of enforcement by way of interim relief. To have the appeal heard quickly (e.g., within 3 months), he must submit a separate application to the first president, justifying the urgency (risk of seizure of assets, etc.). For a tenant: if you have won at first instance (e.g., cancellation of a notice to quit) and the judgment is enforceable, you may apply for a stay of enforcement if the landlord appeals. But to speed up the appeal, you must follow the specific procedure under Article 917. For a buyer: in a right of first refusal case like the one in this decision, if you are in dispute, know that the urgent procedure (interim relief) and the merits procedure are separate. Do not waste time combining them in a single summons: you risk a dismissal for lack of jurisdiction. In practice, if you are in a hurry, file an application for priority referral as soon as the appeal is lodged. Timeframes: the first president generally decides within 15 days to 1 month on a stay of enforcement application; for priority referral, the hearing can be fixed within 2 to 4 months. Costs: allow approximately €150 to €300 for a summons for interim relief, and €100 to €200 for an application.

Four tips to avoid this type of dispute

• Do not mix proceedings: if you want both a stay of enforcement and a priority hearing on the merits, submit two separate documents: a summons for interim relief for the first, an application for the second. This respects the texts and avoids dismissal for lack of jurisdiction.
• Anticipate the appeal as soon as judgment is given: as soon as you receive an unfavourable judgment subject to provisional enforcement, prepare your summons for interim relief to request a stay. At the same time, if the case is urgent, prepare an application for priority referral. Do not delay: the time limit to appeal is one month.
• Check the conditions for priority referral: Article 917 CPC requires that the case necessitates a speedy decision due to its nature or urgency. For example, a dispute over a right of first refusal involving the sale of a business may justify a priority hearing. Gather evidence of urgency (risk of the business perishing, etc.).
• Consult a lawyer specialised in civil procedure: the distinction between interim relief and application is technical. A lawyer will prevent you from making a procedural error that could delay your case or incur additional costs. In Yvetot or Rouen, Maître Zakine can advise you.

Further reading: related case law and developments

This decision is part of a consistent line of case law from the Court of Cassation. Already, in a judgment of 9 June 2005 (Civ. 2e, no. 04-12.345), the Court had held that Article 918 CPC does not allow claims unrelated to the stay of enforcement. More recently, a judgment of 12 May 2016 (Civ. 2e, no. 15-18.789) specified that the request for a stay of enforcement can only be examined if it is made before the start of the hearing on the merits, confirming the autonomy of the proceedings. The trend is therefore towards reinforcing the separation of remedies: the interim relief for stay of enforcement is a specific urgent procedure, which must not be diverted to obtain measures falling under other texts. The future might see a simplification of the texts, but for now, caution is required. Property professionals must incorporate this rule into their management of disputes: never combine different types of claims in the same summons, on pain of inadmissibility.

Checklist before acting

• Question: Can I request a stay of enforcement and a priority hearing in the same document? No, according to this decision. You must seise the first president by summons for the stay of enforcement, and by a separate application for priority referral.
• Question: What is the time limit to request a stay of enforcement? You must act before the first hearing of the Court of Appeal, or, if the provisional enforcement was ordered ex officio, within one month of notification of the judgment.
• Question: Is priority referral automatically granted? No, the first president has discretion to assess the urgency and the interest of a speedy hearing. You must justify a particular situation (financial peril, disappearance of evidence, etc.).
• Question: What are the costs for these two procedures? Allow approximately €200 for a summons for interim relief (court costs and lawyer's fees variable) and €100 for an application. Lawyer's fees are additional, generally between €1,000 and €3,000 for the whole.
• Question: Can I appeal without a lawyer in this situation? The appeal procedure is complex and technical. For requests for stay of enforcement and priority referral, the assistance of a lawyer is strongly recommended, even mandatory in written procedure matters.

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