The Decision of the Court of Cassation General Assembly on the Unification of Case Law Holding That Lawsuits Filed for Deferred Receivables Have to Be Dismissed Without Prejudice
Introduction
The Court of Cassation General Assembly of Civil Chambers and the Chambers of the Court of Cassation both issued opinions on whether a lawsuit filed for not due receivables should be dismissed with or without prejudice by the court on the grounds that the time of performance has not yet come, and whether the attorney’s fee in such a case should be fixed or proportional. Unfortunately, the Courts reached different decisions on these matters. Accordingly, the matter was taken up by The Court of Cassation General Assembly on the Unification of Case Law (“Assembly”).
In its decision dated 18.02.2022 and numbered 2019/5 E., 2022/1 K (“Decision”),[1] the Assembly resolved this split, holding that in a lawsuit filed for a receivable that has not come due to performance, the court should dismiss the case without prejudice on the grounds that the time for performance has yet not come. In this article, the concepts, the differences of opinion, and the reasoning of the Decision are examined.
A General Overview of the Concepts of the Decision
Performance
Performance, which is one of the concepts that terminates the debtor-creditor relationship, is not defined in the Turkish Code of Obligations No. 6098 (“TCO”). The concept of performance can be briefly described as the fulfillment of the debt. As stated in the Decision, performance is the purpose of the debt. In order for the debt to be fully and correctly performed, it must be fulfilled in accordance with the parties, place, and time of the performance.[2]
Time of Performance
Time of performance is regulated under Art. 90 ff. of the TCO and refers to the moment when the right of the creditor to demand performance arises. At the time of performance, the creditor may request performance and, if necessary, file a lawsuit. The statute of limitations for a debt begins at the time of performance. The time of performance is the time when the debt is due.[3]
According to Art. 90 of the TCO, “unless the time of performance is agreed upon by the parties or suggested by the nature of legal relationship, every obligation becomes due immediately.” As a rule, a debt becomes due at the time of its birth and its performance can be requested. However, the provisions regarding the time of performance are regulatory and the parties may decide otherwise. If the time of performance has been agreed upon by the parties, that is, a term has been determined, the performance of the debt cannot be demanded until the term has concluded.[4]
Term refers to a specific time within a period. But it is also possible to determine the time of performance with duration. Duration refers to a certain period, a timeframe. To determine the time of performance with duration, there must be a start date and an expiry date. While term answers the question of "when", in duration the question of "until when" is answered. Term constitutes the expiry date of the duration.[5] Debt that is not yet due is called "deferred debt."
Causes of Action
A cause of action is defined as a set of predefined factual elements that allow for a legal remedy. They are conditions that must be met before consideration of the merits of a lawsuit. Cause of Action is examined under three categories as conditions regarding the court, the parties, and the subject of the lawsuit. The conditions are defined by Art. 114 of the Code of Civil Procedure (“CCP”) No. 6100.
According to Art. 115 of the CCP, the existence of the causes of actions are investigated by the court ex officio at every stage of the lawsuit, and the parties can always claim that the causes of action are not met. If the causes of action are found to be incomplete, the lawsuit is dismissed without prejudice. However, if it is possible to complete the missing condition, the court gives a definite time for its completion. If the deficiency of the condition is not fulfilled within this period, the court dismisses the lawsuit without prejudice due to the absence of cause of action. However, if the deficiency in the cause of action was not noticed by the court or the parties before considering the merits of the lawsuit and the missing cause of action was met during the litigation it shall not be dismissed due to the lack of cause of action at the motion date.
The dismissal due to the absence of a cause of action is a final procedural decision and legal remedies can be appealed against the decision. The dismissed lawsuit can always be filed again after the missing condition is met.[6]
Legal Interest
Legal interest is one cause of action under Art. 114/1-h of the CCP. Accordingly, the claimant has to have an interest at present in providing legal protection for his subjective right. If the claimant does not need a court decision as of the date of the lawsuit to attain his right, a legal interest is not present. A doubtful or possible interest is not considered a legal interest.
The interest in litigation must be a legitimate interest recognized by the legal order. An ideal or economic interest alone is not enough. The legal interest must be related to the claimant and must still exist at the time of litigation. Finally, the lawsuit to be filed must be of such a nature as to eliminate the danger that will arise.[7]
If the person who filed the lawsuit has no legal interest, the case is dismissed without prejudice. This is because, the lack of legal interest, which is a cause of action, cannot be eliminated by allowing more time. The absence of legal interest can be raised by the judge on its own, or it can always be raised by the parties.[8]
Differences of Opinion between the Civil Chambers of the Court of Cassation
The (closed) 19th Civil Chamber of the Court of Cassation stated that the dismissal of a lawsuit that isn’t ripe or the decision that restitution cannot be claimed while the contract is still valid is based on the merits of the lawsuit. It also argued that if a receivable is conditional it has to be evaluated whether the agreed condition is fulfilled or not. In the same way, if a negative declaratory action or action for annulment of the objection has been filed due to enforcement proceedings initiated against a non-due receivable, it should be evaluated whether the receivable is due or not. Therefore, such lawsuits should be dismissed with prejudice and a decision should be made on proportional attorney's fee.
On the other hand, the 4th, 8th, 9th, 11th, (closed) 15th, (closed) 22th, (closed) and 23rd Civil Chambers of the Court of Cassation and the Court of Cassation General Assembly of Civil Chambers held that maturity means that the debt becomes demandable by the creditor and a certain period must pass for the debt to be fulfillable and for the creditor to be able to demand its performance. So, if the debt is yet not due, it cannot be demanded until the term date. Therefore, the lawsuit shall be dismissed due to the lack of legal interest, if a deferred debt is requested. Unless, the debtor declares before the term date, that he will not perform his obligation, or performance becomes impossible before the date of performance. It is stated that a not-ripe lawsuit has to be dismissed without prejudice and a fixed attorney’s fee should be decided following Art. 7/2 of the Minimum Attorneyship Fee Tariff. However, the Court of Cassation General Assembly of Civil Chambers also has decisions that the dismissal of a lawsuit filed before the date of performance shall be with prejudice.
Reasoning
The Assembly states that the right to litigation is a manifestation of the right to legal remedies, and within this framework, it enables everyone to apply to the court to realize or protect their rights and legally protected interests. However, it also emphasizes that to be able to decide on the merits of a lawsuit, there must be an interest worthy of legal protection, and in the absence of legal interest which is a cause of action, the merits of the case cannot be taken into consideration.
In the justification, the Assembly underlines that there is no legal interest in the lawsuit filed for a deferred receivable, and since the performance of the obligation cannot be demanded before the time of performance, the creditor does not have a current and present interest. According to Art. 90 of the TCO, unless agreed by the parties or otherwise understood from the nature of the business, every debt becomes due when it arises, but the parties can expressly or implicitly determine the time of performance.
According to the Board, a lawsuit filed for a deferred receivable shall be considered a not ripe lawsuit and there is no legal interest. Hence, it is stated that the case should be dismissed without prejudice.
Conclusion
The Assembly has concluded that in a lawsuit filed for a receivable that has not come due to performance, the court should decide to dismiss the case without prejudice on the grounds that the time for performance has yet not come.
- The Court of Cassation General Assembly on the Unification of Judgments, numbered 2019/5., 2022/1 K., 18.02.2022 (OG, No. 32003, 4.11.2022).
- Eren, Fikret: Borçlar Hukuku Genel Hükümler, Ankara, 2019, p. 1020.
- Eren, p. 1064.
- Oğuzman, M. Kemal/Öz, M. Turgut: Borçlar Hukuku Genel Hükümler Cilt – 1, Istanbul, p. 353.
- Eren, p. 1066.
- Pekcanıtez, Hakan/Atalay, Oğuz/ Özekes, Muhammet: Hukuk Muhakemeleri Kanunu Hükümlerine Göre Medeni Usul Hukuku, Ankara, 2011, p. 301.
- Karslı, Abdurrahim: Medeni Muhakeme Hukuku, Istanbul, 2014, p. 401; Pekcanıtez/Atalay/Özekes, p. 296.
- Pekcanıtez/Atalay/Özekes, p. 300.
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