CASE OF ZVOLSKÝ AND ZVOLSKÁ v. THE CZECH REPUBLIC
Violation of Art. 6-1;Violation of P1-1;Pecuniary damage - financial award;Non-pecuniary damage - finding of violation sufficient;Costs and expenses partial award
Gaukur Jörundsson
9. On 20 June 1967 the applicants executed a deed of sale and gift (kupní a darovací smlouva) under which M.R., as vendor, agreed to sell them a farmhouse in Srch and to transfer the adjoining agricultural land to them without consideration. At the time, the system for transferring agricultural holdings was by a sale of the house and gift of the adjoining land that was farmed by a socialist cooperative. The approval of the cooperative and the agreement of the competent national committee were required before the deed of sale and gift could be executed. Purchasers of land were required to give an undertaking that they would work for the cooperative. According to the applicants, M.R. wished to secure his release from his obligation to work for the socialist cooperative and could only do so by transferring the land. It was he who had proposed the arrangement, as he wanted to sort out his domestic affairs. Under the statutory provisions then in force, the applicants were obliged, as a condition for purchasing the house, to give an undertaking to work for the cooperative as a replacement for M.R. They paid him 30,000 Czechoslovak korunas on top of the purchase price of the house, as compensation for the value of the transferred land. 10. In 1991 M.R. signed a declaration that he had transferred the land of his own free will. In the applicants' submission, that declaration constituted a rider to the deed confirming M.R.'s consent. 11. However on 1 July 1993 M.R. brought a civil action against the applicants seeking, inter alia, rescission under section 8(3) of the Land Act (Law no. 229/1991) of the part of the agreement that concerned the transfer of the agricultural land. 12. In a judgment of 30 September 1994, the Pardubice District Court (okresní soud) found in favour of M.R., holding, inter alia: “[The applicants] have invited the Court to dismiss M.R.'s actions on the ground that he transferred his land of his own free will to sort out his domestic affairs and that in consideration [for that transfer] they had assumed his obligation to work for the agricultural cooperative. ... Section 8(3) of the Land Act (Law no. 229/1991) provides that if a landowner has donated land to a private individual under duress or transferred it without consideration under a contract for the sale of an adjoining building and at the date this Act entered into force the land was still in that person's possession, the court shall, on application by a person with standing, either (a) order rescission of that part of the sale agreement by which the land was donated or transferred without consideration, or (b) order the current owner to reimburse the price of the land. ... The Court ... finds that the aforementioned conditions were satisfied in the present case and therefore finds in favour of [M.R.]. It has been established that [M.R.] is the person with standing within the meaning of Law no. 229/1991, that is to say the person who gave [the applicants] – the obligees within the meaning of that Act – the agricultural land in connection with the sale of the building ... It has also been established that [the applicants] are currently in possession of the land. Consequently, the Court ... rescinds the section of the deed of sale and gift executed by the parties on 20 June 1967 that provides for the transfer of ownership of the land in question without consideration. ... It does not consider that the 'minuted rider to the deed' dated 6 April 1991 constitutes a valid rider to the deed of sale and gift. The statement in which [M.R.] expressly confirmed that he had sold his immovable property voluntarily and at the agreed price has no ... value in law, as it was made before the amendment to the legislation on land law that enabled him to seek restitution was passed. In fact, [M.R.] denies that he intended to sell the land [to the applicants] and the intentions of both parties are set out in the notary's minutes ... The Court finds that the [applicants'] argument that a decision in favour of [M.R.] would entail a violation of Article 11 of the Charter of Fundamental Rights and Freedoms is unfounded, as the latter was obliged to transfer ownership of the agricultural land used by the agricultural cooperative without consideration.” 13. In a judgment of 29 February 1996, the Hradec Králové Regional Court (krajský soud) upheld the District Court's judgment rescinding the relevant part of the deed of sale and gift. It found that M.R. had given, and thus de facto transferred without consideration, the agricultural land to the applicants as part of the agreement for the sale of the adjoining house. The Regional Court also noted that the terms “donate” and “transfer without consideration” were identical. At the same time, it dismissed an application by the applicants for leave to appeal on points of law (dovolání), holding that the request for a ruling on the construction of the words “transfer without consideration” in section 8(4) of the Land Act did not raise a question of crucial legal importance (rozhodnutí po právní stránce zásadního významu). 14. Article 239 § 2 of the Code of Civil Procedure provides that leave to appeal on points of law will be granted if the court hearing the appeal on points of law (dovolací soud) considers that the impugned decision gives rise to a question of crucial legal importance. In reliance on that provision, the applicants appealed to the Supreme Court on 14 June 1996, alleging that the ordinary courts had construed the Land Act erroneously by confusing two incompatible concepts: “donations” and “transfers without consideration”. 15. In a judgment of 29 July 1997, the Supreme Court (Nejvyšší soud) refused the applicants leave to appeal on points of law, holding that the Regional Court's judgment did not give rise to a question of crucial legal importance. It noted that it had considered the question of the definition of the terms “donations” and “transfers without consideration” in a number of previous decisions in which it had construed the Act as not requiring duress to have been used if the agricultural land had been transferred without consideration. The Supreme Court's judgment was served on the applicants at the earliest on 11 September 1997. 16. On 12 November 1997 the applicants lodged a constitutional appeal (ústavní stížnost) in which they alleged that the domestic courts' decisions had violated the constitutional guarantees embodied in Articles 1, 11 §§ 1 and 3 of the Charter of Fundamental Rights and Freedoms (Listina základních práv a svobod), namely equality of rights for citizens and protection of property. They also sought an order abrogating section 8(4) of the Land Act. 17. On 4 August 1998 the Constitutional Court (Ústavní soud) declared their appeal inadmissible as being out of time. It held, inter alia: “The Constitutional Court considers that litigants are not entitled to bring proceedings in the Supreme Court that do not qualify for leave under the statutory rules or to make an application in such proceedings for an order quashing decisions of the ordinary courts, unless a refusal to hear [the appeal on points of law] would constitute a denial of justice and, consequently, a breach of the right to a fair trial. The [Supreme Court's] judgment does not constitute a decision on the final statutory remedy for the protection of rights ... The constitutional appeal could only be brought against the appeal court's decision, which became enforceable on 15 May 1996. Since it was not lodged until 17 November 1997, it fails to satisfy the condition set out in section 72(2) of the Constitutional Court Act. For this reason, the Constitutional Court has no alternative but to declare the appeal inadmissible, as it was lodged after the expiry of the statutory time-limit.” 18. Article 10 of the Constitution of the Czech Republic (as worded at the material time) provided that treaties on human rights and fundamental freedoms that had been ratified and promulgated and were binding on the Czech Republic had immediate mandatory effect and prevailed over statute. 19. Article 11 §§ 1 and 2 of the Charter of Fundamental Rights and Freedoms provide, inter alia, that everyone has the right to property. It is for the legislature to identify property that is necessary for society's needs, the development of the national economy or the public interest that may be owned only by the State, local authorities or such legal entities as the legislature may designate. It may also provide that certain property may be owned solely by citizens or legal entities domiciled in the Czech and Slovak Federal Republic. Article 11 § 3 prohibits any abuse of property that infringes the rights of others or conflicts with the general interest protected by law. The right to property must not be exercised in such a way as to cause an unlawful interference with human health, nature or the environment. 20. Article 36 § 1 of the Charter on Fundamental Rights and Freedoms provides that everyone has the right to seek justice under a set procedure from an independent and impartial court, or in specified cases, another authority. 21. Article 236 § 1 lays down that an appeal on points of law (dovolání) shall lie only against decisions (rozhodnutí) that have become enforceable, and solely as provided by law. 22. Article 239 § 1 provides that an appeal court that has upheld a decision of the court below must grant leave to appeal on points of law if it considers that its decision gives rise to a question of crucial legal importance justifying such leave (rozhodnutí po právní stránce zásadního významu). It may grant such leave on its own initiative. Article 239 § 2 provides that if an appeal court refuses to grant an application for leave to appeal on points of law made by one of the parties before the decision upholding the decision at first instance was adopted, leave may only be obtained if the Supreme Court itself considers that the appeal court's decision gives rise to a question of crucial legal importance. 23. Section 72(1) provides that anyone claiming to be a victim of a violation by a “public authority” of a fundamental right or freedom recognised in a constitutional law or international treaty within the meaning of Article 10 of the Constitution shall have standing to bring a constitutional appeal. Under section 72(2), constitutional appeals must be lodged within sixty days after the appellant has been served with the decision on the final statutory remedy available for the protection of his or her rights. 24. Section 75(1) provides that a constitutional appeal shall be inadmissible if the appellant has not used all available statutory remedies, other than an application to reopen proceedings. Section 75(2)(a) gives the Constitutional Court a discretion not to declare a constitutional appeal inadmissible for failure to exhaust statutory remedies if the issue at stake goes significantly beyond the appellant's personal interest and the appeal was lodged within one year after the impugned decision or event. 25. Section 8(4) (formerly section 8(3)) confers on a person who has donated land to a private individual under duress or transferred it without consideration under a contract for the sale of an adjoining building the right (provided that at the date the Act came into force the land was still in that person's possession) to apply to the court, which must either (a) order rescission of the part of the contract by which the land was donated or transferred without consideration to a private individual, or (b) order the owner (or his or her estate) to pay the value of the land thus acquired, such value to be assessed by reference to the price regulations in force at 24 June 1991. If the owner of the land does not agree to pay the price in accordance with (b) above, the court will order rescission of the agreement in accordance with (a). 26. In its decision no. I ÚS 22/93 of 5 January 1995, the Constitutional Court considered, inter alia, the question of the admissibility of a constitutional appeal that had been lodged outside the statutory time-limit in a case in which the appellant was not sure whether he would be granted leave to appeal on points of law. The Constitutional Court held that when an appellant decides to appeal on points of law against a decision of the appeal court in circumstances in which it is unclear whether leave to appeal will be granted, he must lodge a constitutional appeal at the same time, in order to ensure that it is brought within the statutory time-limit. 27. In its decision no. 131/1994 of 24 May 1994, the Constitutional Court dismissed an application by forty-one members of Parliament for an order abrogating section 8(3) of the Land Act. In its reasons, it stated that section 8(3) allowed private individuals' land to be expropriated lawfully and restrictions to be imposed on the manner in which they exercised their right of property without payment of compensation, adding that the rule applied not only to rights of property that had been acquired by taking advantage of the socialist system but also to those acquired in good faith. It noted the legitimate aim pursued by the Land Act and the priority given to restoring land to original owners who had been deprived of it without compensation between 1948 and 1989. In the circumstances, it was both feasible and fair to ask those who had received property without consideration to return it without compensation to the original owner, who had been forced to donate it to them. 28. In its decision no. IV ÚS 146/96 of 30 July 1996, the Constitutional Court said that notwithstanding the fact that appeals on points of law had no suspensive effect and did not affect the enforceability of appeal court decisions, the initial target of a constitutional appeal had to be the Supreme Court's decision. If the constitutional appeal was directed only against the appeal court's judgment, the Supreme Court's decision would remain valid, so that the principle of legal certainty would be violated in the event of a conflict. 29. In its decision no. I ÚS 213/96 of 26 November 1996, the Constitutional Court said that if an appellant was unsure whether an application he had just lodged for leave to appeal on points of law would be granted, then, in order to avoid being out of time with his constitutional appeal, he should lodge it at the same time, without waiting for the decision on the application for leave, since, if leave was refused, the final decision in his case would be the appeal court decision. 30. In its decision no. II ÚS 113/97 of 8 October 1998, the Constitutional Court held that an appellant whose application for leave to appeal on points of law has been dismissed by the appeal court is nevertheless entitled to apply for leave to the Supreme Court under Article 239 § 2 of the Code of Civil Procedure. Unless he does so, he will not have exhausted the statutory remedies provided to protect his rights. 31. In its decision no. III ÚS 53/98 of 8 September 1998, the Constitutional Court found, inter alia, that, even though the applicants had been refused leave to appeal on points of law by the appeal court, they were still entitled to seek leave under Article 239 § 2 of the Code of Civil Procedure, as they satisfied the necessary conditions. Since they had not made use of that available remedy, their constitutional appeal could not be declared admissible. 32. In its decision no. IV ÚS 93/98 of 28 April 1998, the Constitutional Court declared a constitutional appeal inadmissible for failure to exhaust statutory remedies, on the ground that the appellant had failed to exercise his right to lodge an appeal on points of law under Article 239 § 2 of the Code of Civil Procedure. 33. In its reasoning in decision no. III ÚS 224/98 of 8 July 1999, the Constitutional Court stated, inter alia, that if a party to the proceedings is refused leave by the appeal court to appeal on points of law, he must apply to the Supreme Court for leave under Article 239 § 2 of the Code of Civil Procedure, otherwise his constitutional appeal will be inadmissible. 34. Decision no. IV ÚS 294/98 of 23 March 1999, which was adopted after the entry into force of an amendment to the Code of Civil Procedure on 1 January 1996 extending the right of appeal on points of law, makes it clear that an appellant may only be regarded as having exhausted available statutory remedies once the Supreme Court has delivered its decision. Any other solution would give rise to an undesirable situation with the coexistence of two sets proceedings. In such cases, time for lodging a constitutional appeal will, therefore, only start to run after the Supreme Court's decision has been served on the appellant. 35. In its decision no. III ÚS 148/99 of 15 September 1999, the Constitutional Court declared a constitutional appeal inadmissible on the ground that if a party's application to the appeal court for leave to appeal on points of law was dismissed, he would still be regarded as having failed to exhaust statutory remedies unless he applied to the Supreme Court for leave, despite the fact that it was his application to the appeal court that had made the application to the Supreme Court necessary. 36. Furthermore, applications nos. 73577/01 and 73403/01 (Vodárenská Akciová Společnost, A.S. v. the Czech Republic and Turek v. the Czech Republic, respectively), which have been lodged with the Court and communicated to the respondent Government, show that the effectiveness of lodging an appeal on points of law simultaneously with a constitutional appeal may prove to be purely theoretical. In these cases, the applicants lodged both forms of appeal at the same time, but their constitutional appeals were declared inadmissible for failure to exhaust domestic remedies, as their appeals to the Supreme Court. They subsequently lodged fresh appeals with the Constitutional Court, once the Supreme Court had refused them leave to appeal. However, their constitutional appeals were again declared inadmissible, this time on the ground that they were out of time.