SF v MV and Others.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2024:389
• Docket Number: C-20/23
• Date: 08 May 2024

Provisional text

JUDGMENT OF THE COURT (Second Chamber)

8 May 2024 (*)

(Reference for a preliminary ruling – Judicial cooperation in civil matters – Directive (EU) 2019/1023 – Procedures concerning restructuring, insolvency and discharge of debt – Article 20 – Access to discharge – Article 23 – Derogations – Article 23(4) – Exclusion of specific categories of debt from discharge of debt – National legislation excluding tax and social security debts from the discharge of debt – Duly justified nature of such an exclusion)

In Case C‑20/23,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal da Relação do Porto (Court of Appeal, Porto, Portugal), made by decision of 14 December 2022, received at the Court on 16 January 2023, in the proceedings

SF

v

MV,

Instituto da Segurança Social IP,

Autoridade Tributária e Aduaneira,

Cofidis SA – Sucursal em Portugal,

intervening party:

José da Costa Araújo, as insolvency administrator of SF,

THE COURT (Second Chamber),

composed of A. Prechal, President of the Chamber, F. Biltgen (Rapporteur), N. Wahl, J. Passer and M.L. Arastey Sahún, Judges,

Advocate General: J. Richard de la Tour,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– SF, by U. Freitas, advogado,

– Instituto da Segurança Social IP, by A. Serrano, advogada,

– the Portuguese Government, by M. Afonso Brigas, P. Barros da Costa, A. de Almeida Morgado, I. Inverno and A. Rodrigues, acting as Agents,

– the Spanish Government, by A. Ballesteros Panizo, acting as Agent,

– the European Commission, by G. Braun, J.L. Buendía Sierra and I. Melo Sampaio, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 11 January 2024,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 23(4) of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency) (OJ 2019 L 172, p. 18), and of Article 16 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

2 The request has been made in proceedings between SF, a natural person who has become insolvent (‘the debtor’), and MV, the Instituto da Segurança Social IP (Social Security Institute, Portugal), the Autoridade Tributária e Aduaneira (Tax and Customs Authority, Portugal) and Cofidis SA – Sucursal em Portugal concerning an application for discharge of debt lodged by the debtor in the insolvency proceedings concerning him.

Legal context

European Union law

3 Recitals 78 and 81 of the Directive on restructuring and insolvency state:

‘(78) A full discharge of debt or the ending of disqualifications after a period no longer than three years is not appropriate in all circumstances, therefore derogations from this rule which are duly justified by reasons laid down in national law might need to be introduced. For instance, such derogations should be introduced in cases where the debtor is dishonest or has acted in bad faith. Where entrepreneurs do not benefit from a presumption of honesty and good faith under national law, the burden of proof concerning their honesty and good faith should not make it unnecessarily difficult or onerous for them to enter the procedure.

…

(81) Where there is a duly justified reason under national law, it could be appropriate to limit the possibility of discharge for certain categories of debt. It should be possible for Member States to exclude secured debts from eligibility for discharge only up to the value of the collateral as determined by national law, while the rest of the debt should be treated as unsecured debt. Member States should be able to exclude further categories of debt when duly justified.’

4 Article 2(1)(10) of the directive is worded as follows:

‘For the purposes of this Directive, the following definitions apply:

…

(10) “full discharge of debt” means that enforcement against entrepreneurs of their outstanding dischargeable debts is precluded or that outstanding dischargeable debts as such are cancelled, as part of a procedure which could include a realisation of assets or a repayment plan or both’.

5 Article 20 of that directive, entitled ‘Access to discharge’, provides:

‘1. Member States shall ensure that insolvent entrepreneurs have access to at least one procedure that can lead to a full discharge of debt in accordance with this Directive.

Member States may require that the trade, business, craft or profession to which an insolvent entrepreneur’s debts are related has ceased.

2. Member States in which a full discharge of debt is conditional on a partial repayment of debt by the entrepreneur shall ensure that the related repayment obligation is based on the individual situation of the entrepreneur and, in particular, is proportionate to the entrepreneur’s seizable or disposable income and assets during the discharge period, and takes into account the equitable interest of creditors.

3. Member States shall ensure that entrepreneurs who have been discharged from their debts may benefit from existing national frameworks providing for business support for entrepreneurs, including access to relevant and up-to-date information about these frameworks.’

6 Article 23 of that directive, entitled ‘Derogations’, provides, in paragraph 4 thereof:

‘Member States may exclude specific categories of debt from discharge of debt, or restrict access to discharge of debt or lay down a longer discharge period where such exclusions, restrictions or longer periods are duly justified, such as in the case of:

(a) secured debts;

(b) debts arising from or in connection with criminal penalties;

(c) debts arising from tortious liability;

(d) debts regarding maintenance obligations arising from a family relationship, parentage, marriage or affinity;

(e) debts incurred after the application for or opening of the procedure leading to a discharge of debt; and

(f) debts arising from the obligation to pay the cost of the procedure leading to a discharge of debt.’

7 Article 34(1) of the Directive on restructuring and insolvency provides:

‘Member States shall adopt and publish, by 17 July 2021, the laws, regulations and administrative provisions necessary to comply with this Directive, with the exception of the provisions necessary to comply with points (a), (b) and (c) of Article 28 which shall be adopted and published by 17 July 2024 and the provisions necessary to comply with point (d) of Article 28 which shall be adopted and published by 17 July 2026. They shall immediately communicate the text of those provisions to the [European] Commission.

They shall apply the laws, regulations and administrative provisions necessary to comply with this Directive from 17 July 2021, with the exception of the provisions necessary to comply with points (a), (b) and (c) of Article 28, which shall apply from 17 July 2024 and of the provisions necessary to comply with point (d) of Article 28, which shall apply from 17 July 2026.’

8 Pursuant to Article 35 of that directive, which provides that it is to enter into force on the twentieth day following that of its publication in the Official Journal of the European Union, that directive entered into force on 16 July 2019.

Portuguese law

The CIRE

9 Article 235 of the Código da Insolvência e da Recuperação de Empresas (Insolvency and Business Recovery Code), approved by Decreto-Lei n.º 53/2004 (Decree-Law No 53/2004) of 18 March 2004 (Diário da República I, Series I‑A, No 66, of 18 March 2004), and as amended by Lei n.º 9/2022 (Law No 9/2022) of 11 January 2022 (Diário da República, Series I, No 7, of 11 January 2022) (‘the CIRE’), entitled ‘General principle’, is worded as follows:

‘If the debtor is a natural person, he or she may be discharged from any insolvency debts that have not been fully paid back during the insolvency proceedings or within three years of the end of those...