The period for objecting to a payment order has expired: what is left to the defendant company

A payment order gives the defendant 15 days from service to pay or to object. Once that period has expired fruitlessly, the order becomes final (Section 268 of the Code) and the creditor may apply for enforcement. Companies often learn of the order late: the managing director was away, post was collected at another address or a message in the electronic mailbox went unopened. There are then fewer options than if the objection had arrived in time, but not everything is always lost. Proceed in the following order.

1. Was the order in fact served?

A payment order is served on the defendant into their own hands together with the claim (Section 266(1)). For ordinary documents served into the addressee’s own hands, where they cannot be delivered to the address under Section 106 they are deemed served on the day the undelivered consignment is returned to the court (Section 111(3)). That does not apply to a payment order:

The provisions of Section 111(3) and Section 116 shall not apply to service of a payment order.

— Section 266(2) of Act No. 160/2015 Coll. (unofficial English translation)

If the consignment containing the order was returned to the court uncollected, the order was not served, the period for objecting did not begin to run and the court must set the order aside (Section 266(3)). The same rule applies to an order from electronic payment order proceedings (Section 9(4) of Act No. 307/2016 Coll.). The position is different with an electronic mailbox, where service also occurs on the fruitless expiry of the storage period; we explain how that works and what can be done about it in the question the company did not read the judgment in its electronic mailbox. The first step is therefore to inspect the file and establish how and when the court served. The acknowledgement of service is a public document and the particulars in it are presumed true unless the contrary is proved (Section 111(1)).

2. Excusing a missed deadline

If the order was served but the company could not object because of an obstacle it did not create, an application to excuse the missed deadline remains:

The court shall excuse a missed deadline where the party, a representative or a procedural guardian missed it for an excusable reason and was thereby precluded from an act to which they are entitled. The application must be filed within 15 days after the obstacle ceased and must be joined with the missed act.

— Section 122 of Act No. 160/2015 Coll. (unofficial English translation)

The conditions apply cumulatively. The reason must be excusable and must be the cause of the missed deadline, that is, without it the party would have complied. The courts assess it on the circumstances of the case and treat excusal as an exception, because it interferes with the other party’s legal certainty. With a company, it is also considered whether it had the collection of post and the monitoring of deadlines properly organised. The objection itself must be filed together with the application, with substantive reasons; an application without an objection will not do. The fifteen-day period runs from the cessation of the obstacle, not from service of the order, so what matters are the days after the obstacle ends.

3. The order is final: what can be done in enforcement

Once enforcement has commenced, the company receives a notification in which the enforcement officer also states the lower amount of costs on payment within fifteen days (Section 61a(1)(e)). Within 15 days of its service, the obliged person may apply to have the enforcement discontinued, which has suspensive effect (Section 61k(2)). The grounds are narrow, however: for instance that after the enforcement title arose, circumstances occurred that caused the claim to lapse, that the title was set aside or that other facts preclude its enforceability (Section 61k(1)). If the company paid the invoice after the order was issued, that belongs here. Objections that the goods were not delivered or were defective belonged in the objection to the order and generally cannot be raised in enforcement. If the court dismisses the application as out of time although a ground for discontinuance existed, the obliged person may seek return of the performance by an action against the entitled person (Section 61l(3)).

4. Instalments and agreement with the creditor

A legal person may ask the enforcement officer for instalments. The officer will permit them if the claim enforced exceeds EUR 1,000 and does not exceed EUR 10,000, the company does not dispute the claim, this is not a repeat request and within fifteen days of service of the notification it pays a first instalment of at least EUR 500; the whole claim must be paid in no more than 18 monthly instalments, with at least half within six months of the first instalment. It must also be the case that the company is not listed as a tax debtor or in a register of debtors under special legislation, that it declares that no other enforcement is being conducted against it and that it keeps proper accounts, and that according to its latest financial statements neither its liabilities nor its assets exceed the statutory limit (Section 61g(3) in conjunction with (2)(e)). With the entitled person’s consent, the officer may permit instalments outside those conditions as well, but for a company only where it satisfies the conditions concerning tax debts, other enforcement proceedings, accounts and the limits (Section 61g(5)). Negotiating an agreement with the creditor also makes sense because, once fifteen days from the notification have passed, the costs of enforcement are higher (Section 61a(1)(f)).

What to do at once

Establish the date and manner of service, secure the envelope, the acknowledgement of service or the mailbox record, and note down when you learned of the order. If excusing the missed deadline comes into play, the days count. We review the file, prepare the application for excusal together with the objection and represent you in any agreement with the creditor through our objection to a payment order service. If the dispute continues before the court, we also take on representation in court proceedings. To stop the situation recurring, the overview in the question what a payment order is and how to defend against it will help.