When the new Code of Civil Procedure (CPC) entered into force, one of the provisions that generated great stir in legal scholarship was article 139, IV, which gave the judges the power to “determine all inductive, coercive, mandatory, or subrogatory measures necessary to ensure compliance with a judicial order, including in actions that have as their purpose a monetary payment.” The futurology exercises on what claims would be submitted to the judges and to what extent these provisions could give rise to a wave of judicial activism were fruitful.

In fact, it is a provision that gives room for the creativity of the parties and judges, since its objective is to select and apply the measures that, in the specific case, have the greatest chance of compelling the debtor to comply with a certain judicial order or obligation. At first, a series of very original claims could be identified: suspension of social network accounts and blocking of instant messaging applications, blocking of credit cards, prohibition of access to condominium leisure areas by defaulters, sealing of commercial establishments, or part of commercial activity, among others.

This diversity of claims challenged the courts to develop some criteria for applying atypical measures to balance the creditor's enforcement claim and the rights - particularly fundamental rights - of the debtor. In addition, it was necessary to carry out an examination of the measures required that would be effective in motivating the fulfillment of the obligation and which would be emulative and motivated by vengefulness or merely punitive intent. These criteria have been outlined around the concepts of reasonableness, proportionality, and the use of atypical measures as the ultima ratio.

More than two thirds of decisions on atypical measures involve suspension or seizure of CNH and passport

The application of these criteria over the four years of the CPC has finally defined a certain typicity to the atypical measures most demanded and therefore most often granted. Thus, although the legal provision gives the judge broad powers to define the best atypical measure to be applied in the specific case, most of the claims for application of article 139, IV, of the CPC and, consequently, of the decisions that grant the application of the atypical enforcement measures, revolve around the suspension or seizure of the National Driver's License (CNH) and passports. At the São Paulo Court of Appeals (TJSP), for example, 362 out of 544 judgments on atypical measures issued between 2016 and 2019 dealt with claims of this nature - over 66%, therefore.[1]

In view of this, the delimitation of the criteria for granting and maintaining atypical enforcement measures, and the current stage of this discussion with the higher courts - as will be seen below - is already occurring in a much more controlled environment, with a much smaller variety of claims and decisions. The same was observed in the TJSP during the new coronavirus pandemic.

The case law of the STJ and the parameters for granting atypical measures

The case law of the Superior Court of Appeals (STJ) regarding atypical measures, following the trend observed with the TJSP (and other state courts), has also been forming around claims for suspension or apprehension of CNH and passports. Therefore, it is not uncommon for the parameters for granting or revoking atypical enforcement measures to be found in a habeas corpus suit, on the grounds that they constrain the fundamental rights of debtors to come and go.

The following is an analysis of some recent judgments by the STJ aimed at identifying which parameters have prevailed for the application of atypical measures.

  1. Resp 1.788.950/MT (decided on April 23, 2019)

Execution of an extrajudicial enforcement order brought by the appellant against Mr. Fernando Bardi. At the trial level, an interlocutory decision was issued rejecting the claim for suspension of the CNH and seizure of the passport of the judgment debtor. The appellant filed an interlocutory appeal, which was denied relief. Thereafter, the appellant filed a special appeal for annulment alleging, among other things, violation of article. 139, IV, of the CPC, since it would be "appropriate and necessary to adopt an atypical enforcement measure, as it is essential for satisfaction of the obligation in the execution proceeding, considering that numerous attempts have already been made to locate assets liable to constriction, all of them unsuccessful."

Appellate Decision. In the opinion, it was stated that application of article 139, IV, of the CPC requires:

  1. The prior summons of the judgment debtor to pay the debt or to present assets intended to settle it, followed, as a corollary, by the typical acts of expropriation;
  2. The prior exhaustion of the typical means of satisfaction of the debt executed;
  3. The existence of minimal indications that the judgment debtor possesses assets capable of satisfying the debt; and
  4. The decision to authorize the use of indirect enforcement measures must also be duly reasoned, according to the specific circumstances of the case (case-by-case analysis).

In the specific case, the STJ held that, despite having exhausted the traditional means of satisfaction of the debt, there were no signs that the debtor was hiding its assets, but rather that it did not possess assets to pay off the debt, which is why it dismissed the special appeal, as highlighted by the reporting judge Nancy Andrighi in her opinion:

 

"In short, it is possible for the judge to adopt atypical enforcement means provided that, if there is evidence that the debtor possesses assets capable of fulfilling the obligation imposed on it, such measures are adopted in a secondary manner, by means of a decision that contains adequate grounds for the specificities of the concrete scenario, with due regard for the substantantive adversarial process and the requirement of proportionality."

More recently, the same grounds were adopted in the following appeals: REsp 1.782.418/RJ (DJe April 26, 2019), 1.828.969/MT (DJe September 5, 2019); REsp 1.854.289/PB (DJe February 26, 2020), and REsp 1864190 (Dje June 19, 2020).

2. HC 558.313/SP (decided on June 23, 2020)

 Collection action in view of execution of judgment. In this case, the partners of the judgment debtor company (whose corporate veil was pierced) filed a writ of habeas corpus in order to vacate the order restricting the departure of the patients from the national territory, without a prior guarantee of execution.

 

Appellate Decision. In the opinion, it was stated that application of article 139, IV, of the CPC requires:

  1. Meet the requirements of necessity, adequacy, and proportionality of the measure;
  2. There are indications that the debtor has expropriated assets or has been hiding its assets to frustrate the execution; and
  3. The typical execution measures are found to be ineffective.

In the specific case, it was found that (i) the international trips taken by the patients are not be compatible with the allegation of lack of funds to pay the amounts due, (ii) the typical measures proved ineffective, and, (iii) although the judgment debtors claimed that the atypical enforcement measure was disproportionate, they did not present any alternative, less burdensome, and more effective executive means, as incumbent on them, for which reason the habeas corpus was not heard and the constriction was maintained.

3. HC 453870/PR (decided on June 25, 2019)

Tax execution filed by the municipality of Foz do Iguaçu (PR). In this case, the debtor filed a habeas corpus suit to vacate the order that seized his passport and suspended his CNH.

 

Appellate Decision. At the time of the judgmnet, it was stated that, in tax collection proceedings, atypical personal coercive measures, such as suspension of passport and driver’s licence, are not fitting, as application thereof in this context would result in excess. To this end, the STJ held that the State has super priority in its capacity as creditor, and tax debt is highly resistent to the risk of default by its own “legal and procedural conformation”.

In view of this, the STJ granted habeas corpus for the exclusion of the atypical measures contained in the judgment under appeal, since they were excessive, stating that, in the record, there was already indication of attachment of 30% of the salary the defendant receives at Sanepar (the Paraná Sanitation Company).

Atypical enforcement measures during the pandemic

The new coronavirus pandemic has placed greater emphasis on the need for a careful and a thorough examination of the necessity, adequacy, and proportionality of the atypical enforcement measures requested. The decrease in income and the financial difficulties caused by the health crisis have increased both the creditors' need to receive and the debtors' solvency problems, making the judge's actions even more critical, as they are responsible for balancing the interests expressed by the parties in the case.

Because of the short time that has elapsed since the restrictive measures adopted by the public authorities to contain the advance of the pandemic began, few judgments on the application of atypical enforcement measures in the context of the pandemic have reached the courts.

In the scope of execution for a certain amount, the TJSP, despite finding that, in theory, the atypical measure claimed as a way to ensure the success of the enforcement claim, opted for the non-applicability of article 139, IV, of the CPC, in view of the exceptional situation caused by the pandemic. According to the judgment, this guidance would persist until, in principle, the return to economic normalcy:

"EXECUTION FOR CERTAIN AMOUNT. FINANCING AGREEMENT, GUARANTEED BY MORTGAGE. ATYPICAL COERCIVE MEASURES UNDER ARTICLE 139, IV, OF THE CPC. SUSPENSION OF CREDIT CARD. REASONABILITY. PROPORTIONALITY. 1. Atypical coercive measures may be used to compel the debtor to perform his duty (CPC, article 139, IV). 2. However, they should not be merely a means of constricting the debtor, as a mere punishment, without bringing about for the creditor the possibility of satisfaction of the debt. The measures must be useful to that satisfaction, as well as proportionate and reasonable. 3. The blocking of credit cards seems to us, as a rule, an appropriate measure that contributes to the achievement of the scope of the execution process, aiming at removing debtors from their inertia. 4. Considering, however, the situation of deep economic and financial crisis imposed by the Covid-19 pandemic, without prospects for improvement in the scenario of global recession in the short term, we have to maintain the decision under appeal, at least until the resumption of economic normality, when the issue may be reviewed. Appeal denied relief, with an observation.” (TJSP; Interlocutory Appeal 2092438-16.2020.8.26.0000; reporting judge: Melo Colombi; Adjudicatory Body: 14th Chamber of Private Law; Central Civil Courts - 4th Civil Court; Date of Judgment: June 17, 2020; date of registration: June 17, 2020)

Excerpt from the opinion of the reporting judge:

"The blocking of cards of [...] would work as a stimulus for the discharge of their debts, without so much recalcitrance, being useful, therefore, for the scope of the execution process. It so happens that the current scenario in which we find ourselves does not recommend the adoption of this measure. [...]

The moment, therefore, does not favor the blocking of funds and means of acquisition of basic survival inputs of people (individuals or companies) who were already experiencing financial difficulties even before the arrival of the epidemic in our country."

The discussion regarding the applicability of atypical measures during the new coronavirus pandemic was given greater prominence in the area of alimony suits. In this case, there was discussion of the possibility of imposing house arrest on the alimony debtor in this context (cf. CNJ Resolution No. 62) and adopting, first, other atypical enforcement measures (credit card blocking, CNH etc.) before civil imprisonment. The application of a prison sentence in the current health crisis scenario would potentially expose the debtor to a substantially higher risk of contamination, which is why other legal restrictions have been adopted to encourage the payment of the alimony debt.

On the other hand, and considering the indispensable adequacy link between the atypical measure applied and the incentive given to the debtor to pay the debt, it is certain that, at the present time, restrictions such as suspension or seizure of a passport will not have the same effectiveness as in other times, considering the current limitations on international travel.

Thus, with the pandemic, the complex task of the courts to strike a balance between legitimately inducing compliance with a court order or obligation litigated and overly restricting the rights of debtors has become even more arduous and with potentially more serious consequences for the parties.

Parameters consolidating

The application of atypical enforcement measures, under the terms of article 139, IV of the CPC, brings with it the challenge of pondering and weighing up the interests of creditors and debtors, going beyond the sphere of assets and entering into the sphere of fundamental rights. With the submission of the subject to the scrutiny of the STJ, a list of parameters has been formed that should guide judges and courts in the application of the concept.

Currently, in order to maintain the constriction of CNH and passport due to default or debt, it is necessary to observe the following issues:

  • Exhaustion of the typical means of satisfying the obligation (atypical measures as ultima ratio);
  • Indications that the debtor is voluntarily concealing assets capable of discharging the debt;
  • The appropriateness and proportionality of the measure, analyzed in the specific case; and
  • Balanced relationship between the litigant parties.

Thus, although case law has tried to establish predictability in the application of these measures, there is still a high degree of subjectivity bequeathed to judges and courts to assess the advisability and effectiveness of atypical constrictions requested by creditors in each specific case.

The pandemic, which has significantly altered the financial condition of some creditors and debtors as well as the national and international travel dynamics of all individuals, has also interfered with the parameters for the application of the most common atypical measures and their effectiveness in effecting satisfaction of debtors’ obligations.

[1] Empirical research conducted in March of 2019, with the collection and analysis of all judgments with the term "atypical measures" available for consultation on the website of the Court of Appeals of São Paulo and relating to cases judged since March of 2016.