A sale contract deposited to defeat a creditor was cancelled

In short

A company owing €262,985 under a judgment sold a house to its director’s wife and deposited the contract. The Court of Appeal upheld the order cancelling the deposit.

Klitos Platis, advocate

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A company that owed €262,985.37 under a 2009 judgment sold one of its houses to its own director’s wife and deposited the sale contract at the Land Office. On 24 September 2026 the Court of Appeal upheld the order cancelling that deposit, because the contract had been made to defeat the judgment creditors.

The decision matters to two kinds of reader. For a creditor holding a judgment against a company, it shows that a deposited contract standing between them and the company’s property can be removed. For anyone buying from a developer with debts, it shows what a court will not protect.

What happened

The judgment was given on 14 April 2009, against Mindoras Estates Ltd, for €262,985.37 with interest and costs. The creditors were the estate of the late Apostolos Potamos, through its administratrix, and Maria Potamou.

The creditors then applied, within the same proceedings, for three things:

an examination of the company’s directors, so that payment by monthly instalments could be ordered;
the cancellation of the deposit, at the Paphos District Land Office, of a sale contract dated 30 November 2010 between the company and Kyriakoula Zorzi;
an order preventing the company from disposing of or charging its property.

The District Court granted the second and third. It cancelled the deposit. Both the company and Ms Zorzi appealed, and both appeals failed.

Why the court found a fraud on the creditors

The finding rested on facts that were not in dispute, read together. The contract was signed by Mr Kaiser, as director of the company, with his wife, Ms Zorzi, after the 2009 judgment. It was deposited at the Land Registry on 31 January 2012, after the Sale of Land (Specific Performance) Law of 2011, Law 81(I)/2011, had been enacted.

Mr Kaiser knew of the judgment debt. He also knew of the specific performance actions brought over three other houses built on the company’s land. The house sold to his wife was the fourth, the one connected with the dispute with the creditors, and the couple used it as their own home. The company received nothing from the sale with which to pay its debts.

The Court of Appeal held that these acts left no room for any other reading: the director and his wife intended to defraud the creditors. The trial judge had also noted that the company was making no effort to pay, and that the debt did not even appear in its accounts.

A contract made, among other things, to defraud a judgment creditor cannot create a valid charge on the property it burdens.

The arguments that failed

The company said it had another property that could satisfy the judgment. It did not. That property had never been transferred to the company; it had been mortgaged, and the loan raised on it had paid other debts of the company. The Court asked how the trial court could have counted it among the company’s assets.

Ms Zorzi said that because the creditors had not cross-examined her, they had accepted her affidavit. Her affidavit adopted her husband’s, and he had been cross-examined. The Court held that it would have been a contradiction to accept her account without reservation once his had been tested.

The Court also restated that an appeal court interferes with a trial judge’s assessment of witnesses only where the findings are contrary to common sense or unsupported by the evidence the judge accepted. The appeals were dismissed with one set of costs of €4,000 plus VAT.

What this means in practice

If you hold a judgment against a company that is moving property out of reach, a deposited sale contract is not the end of the road. The creditors here did not bring a new action. They applied within the enforcement of their judgment, asked for the directors to be examined, and asked for the deposit to be cancelled and further disposals stopped. What carried the application was evidence:

who signed the contract, and on which side;
when it was signed and deposited, measured against the date of the judgment;
what, if anything, the company received for the property;
who lives in or uses the property now;
what the company’s accounts say about the debt.

The trap for the debtor’s side is to treat a sale within the family as a shelter. A contract signed after judgment, with a director’s relative, for nothing that reaches the company, is the pattern the court described as fraud.

For a buyer, the lesson runs the other way. A deposit protects a genuine purchase. Keep the evidence that yours is one: the bank transfers, their dates, and the receipts. If you are buying from a developer with judgments against it, check the title and the registrations against it before you pay, as described in our article on a memo on property.

Our property and litigation lawyers act for creditors enforcing judgments and for buyers whose contracts are challenged, and the wider means of execution are in our guide to enforcing a judgment in Cyprus.

A deposit at the Land Office protects a purchase. It does not protect a transfer made to keep a creditor out.

Questions we are asked

Our debtor company has signed over property to a relative. Can that be undone?

It can be challenged. In this case the creditors applied within the enforcement of their judgment, and the court cancelled the deposit of the sale contract at the Land Office once it found that the contract was made to defeat them. The answer turns on the evidence of intent, so what the company received for the property, and when, matters.

I bought from a developer that has judgments against it. Is my deposited contract safe?

A deposit made in good faith, for a real price, is a different case from the one the court decided here. What the court refused to protect was a contract made with the director’s own wife, after the judgment, for a house the couple lived in, with nothing paid to the company. Keep proof of every payment you made and when.

What should my first message say?

The court, number and date of the judgment, the amount still owed, what you know about the debtor’s property, and any sale or transfer you suspect, with the dates.

Sources

Klitos Platis

Advocate, Partner

Kleanthous & Platis LLC, Cyprus
Published 22 October 2026

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