LESNÍ SPOLEČNOST PŘIMDA, A.S. v. THE CZECH REPUBLIC
Inadmissible
Ganna Yudkivska;Isabelle Berro-Lefèvre;Karel Jungwiert;Mark Villiger;Mirjana Lazarova Trajkovska;Peer Lorenzen;Rait Maruste
The applicant, Lesní společnost Přimda, a.s., is a joint-stock company with its seat in Přimda. It was represented before the Court by Mrs R. Tunklová, practising in Plzeň. The Czech Government (“the Government”) were represented by their Agent, Mr. V.A. Schorm, from the Ministry of Justice. The facts of the case, as submitted by the parties, may be summarised as follows. By Resolution no. 323 of 29 April 1992 of the Government of the Czech Republic and the decision of the Ministry of Administration of National Property and Privatisation (ministerstvo pro správu národního majetku a jeho privatizaci) of 30 April 1992, privatisation project no. 3132 of the State enterprise Západočeské státní lesy Plzeň was approved. On the basis of that project, the applicant company was founded on 1 September 1992. In accordance with the privatisation project approved by the Government, the property transferred to it included the building in issue. On 3 June 1996, further to the applicant company's notification (oznámení), its title to the building was recorded in the Land Register. On 8 December 1995 the Přimda Municipality (Město Přimda) brought a civil action against the applicant company, seeking to determine that it was the owner of the building. It referred to the Act on Transfer of Certain Property of the Czech Republic to Municipalities (Act no. 172/1991) which provided that certain property was to be ipso jure transferred to municipalities with effect from the date on which the law came into force, that was, on 24 May 1991. Judgments of the Tachov District Court (okresní soud) of 14 June 1996 and of 18 November 1997 in favour of the Municipality were quashed by the Plzeň Regional Court (krajský soud) on 19 May 1997 and on 19 January 1999 respectively. The Regional Court held that the first-instance court had failed to establish the facts of the case properly, and instructed it to supplement the evidence. On 19 December 2000 the District Court again allowed the Municipality's action, holding that the conditions set forth in section 2(1)(c) of Act no. 172/1991 were met, specifically that the plaintiff had been the owner of the property in issue as of 31 December 1949 and that the property was in State ownership on the date on which the Act entered into force. Responding to one of the applicant company's objections and with reference to the conclusions of an expert opinion drawn up on the court's request of 1 November 1999, it concluded that the building owned by the Municipality as of 31 December 1949 was the one in issue. Notwithstanding the reconstruction works carried out by the applicant company's legal predecessor, the building had not lost its character, that is, it had not ceased to exist and a new building had not been created. In an appeal of 19 February 2001 the applicant company argued that the reasoning of the District Court did not comply with the statutory requirements. It further challenged the court's interpretation of section 2(1)(c) of Act no. 172/1991 and its finding that a new building had not been created. In a judgment of 21 August 2002 the Regional Court upheld the first-instance judgment finding that its reasoning had been in compliance with the Code of Civil Procedure since it referred, inter alia, to the expert opinion and it had therefore been possible to ascertain the evidence on which the court had based its decision. It further rejected the applicant company's interpretation of the provision cited above and accepted the interpretation given by the District Court. Lastly, it upheld the conclusion that the original building had never ceased to exist. The Regional Court's judgment became final on 30 September 2002. On 21 March 2003 the Supreme Court (Nejvyšší soud), holding that the courts had decided in compliance with the established case-law and that therefore no issue of crucial legal importance arose, rejected an appeal on points of law (dovolání) by the applicant company as inadmissible. On 15 September 2004 a constitutional appeal (ústavní stížnost) by the applicant company alleging a violation of the right to a fair hearing and its property rights was dismissed as manifestly ill-founded. The Constitutional Court (Ústavní soud) found that the applicant company had merely disputed the ordinary courts' findings of fact and law and had presented the same legal opinion again. However, its status as a party to the proceedings had been respected and the courts had examined enough evidence and reasoned their decisions. As to the alleged violation of property rights, the court held that ownership that was merely the subject of legal proceedings did not enjoy constitutional protection. The decision was served on the applicant's legal representative on 27 September 2004. On 22 August 2005, pursuant to Act no. 58/1969 on State Liability Act, the applicant company brought an action in the Prague 1 District Court (obvodní soud) against the Ministry of Finance (ministerstvo financí). The damages sought consisted of (i) the price of the building in issue which had been transferred to it under the privatisation project and in respect of which it had later been established that it had been the property of the Přimda Municipality, (ii) legal costs incurred in the proceedings for a determination of ownership, and (iii) costs incurred for the upkeep of the property. On 31 January 2007 the District Court excluded the first two claims for a separate hearing and transferred the case to the Prague High Court (Vrchní soud) for a decision which level of courts had jurisdiction to hear the case. In a judgment of the same day, the District Court dismissed the applicant company's third claim. On 11 June 2007 the High Court remitted the case to the District Court. It appears that the proceedings are still pending before that court. On 17 October 2007 the District Court's judgment concerning the third claim was upheld by the Prague Municipal Court (městský soud). On 21 January 2008 the applicant company lodged an appeal on points of law (dovolání) in which it submitted, inter alia, that should it not have been possible to infer the State's liability under Act no. 58/1969 or Act no. 82/1998, its liability should have been given under general provisions of civil law. The proceedings appear to be pending before the Supreme Court. At the material time, the relevant provisions of Act no. 172/1991 as amended read as follows: “(1) As of the date when this law comes into force, the following property shall be transferred to municipalities: ... (c) Buildings with land constituting a single functional unit with the building, ... which were owned by municipalities as of 31 December 1949 and provided that they are owned by the Czech Republic ...” “Within one year after acquiring the ownership of real estate in accordance with this law, municipalities shall be obliged to lodge an application with the Geodetic Centre to record [the title to] such real estate in the Register of Real Property.” At the material time, the relevant provision of Act no. 92/1991, on the conditions of transfer of State property to other persons (the Privatisation Act) read as follows: “(3) Privatisation proceedings are not subject to general rules on administrative proceedings and a privatisation decision is not subject to judicial review.” Act no. 58/1969 on State liability for damage caused by a State body's decision or its incorrect administrative procedure. As of 5 May 1998 it has been replaced by Act no. 82/1998. Resolution of the Constitutional Court no. III. ÚS 380/97 “ ... a decision (of the State) on privatisation, under the Act on the conditions of transfer of State property to other persons (Law no. 92/1991, as amended) is a decision of the State, however not in its capacity as the holder of public power, but in its capacity as the owner of the privatised property; it follows ... that any disposition of (decision on) the property in the framework of the above-mentioned law is an expression and a consequence of the owner's will and that the liability of any authority empowered to carry out privatisation falls outside the scope of general liability under domestic legislation.” Resolution of the Constitutional Court no. III. ÚS 93/99 “The activity of privatisation commissions ... has the character of decision-making by the owner of property on the manner in which the property will be treated, and the State does not act as a superior subject. ... A prerequisite for application of Law no. 58/1969 is that the State, through its bodies, must act as the holder of public power and exercise that power. If [in the context of the activity of privatisation commissions] the State acts as the owner of the property and disposes of its property in the framework of civil-law relation, it is clear that the State's liability cannot be based on Law no. 58/1969.” Resolution of the Constitutional Court no. III. ÚS 1734/07 “In the instant case the ordinary courts ... referred to the established case-law of the Constitutional Court and the Supreme Court and held that a decision of the State in the context of privatisation is one of the owner, not the holder of public power. ... On the other hand they did not rule out a State's mistake from the point of view of statutory provisions in making a decision. They merely ruled out that such mistakes would be covered by special laws on the State's liability.”