CASE OF KÁROLY NAGY v. HUNGARY
Inadmissible (Article 35-3-a - Ratione materiae)
Aleš Pejchal;András Sajó;André Potocki;Angelika Nußberger;Carlo Ranzoni;Egidijus Kūris;Guido Raimondi;Helen Keller;Iulia Motoc;Jon Fridrik Kjølbro;Julia Laffranque;Krzysztof Wojtyczek;Linos-Alexandre Sicilianos;Luis López Guerra;Marko Bošnjak;Nebojša Vučinić;Nona Tsotsoria;Paul Lemmens;Paulo Pinto De Albuquerque;Síofra O’Leary;Vincent A. De Gaetano;Georges Ravarani
8. The applicant was born in 1951 and lives in Gödöllő. 9. In 1991 the applicant took up the position of pastor in the Reformed Church of Hungary (Magyar Református Egyház). His rights and obligations, together with his remuneration, were set out in an appointment letter issued by the Presbytery of the Reformed Parish of Gödöllő on 14 December 2003 (the “Letter of Appointment”). The relevant part of the Letter of Appointment reads as follows: “I. Obligations of the pastor: The tasks defined by ecclesiastical laws and legal provisions, in particular those laid down in Statute no. II of 1994 on pastors and pastoral service and the code of conduct of the Cis-Danubian Ecclesiastical Region; the pastor is expected to perform the aforementioned tasks in the spirit of his oath and to the best of his abilities. In addition, as required by the special needs of his ecclesiastical community, the pastor’s responsibilities include the following: exercising the rights and obligations of management, as detailed in the Hungarian Reformed Church’s Statute 1995/I on Public Education ...” 10. In June 2005 disciplinary proceedings were instituted against the applicant for statements he had made in a local newspaper. At the same time the first-instance ecclesiastical court suspended the applicant’s service with immediate effect pending a decision on the merits in the disciplinary proceedings. He received a letter stating that, under section 82 (1) of Statute no. I of 2000 on the jurisdiction of the Reformed Church of Hungary, during his suspension he was entitled to 50% of his service allowance. 11. The applicant claimed that, following his suspension, he had sent letters to the head of the congregation and to the competent bishop claiming payment of his overdue services allowances, but to no avail. 12. On 27 September 2005 the first-instance ecclesiastical court concluded that the applicant had committed disciplinary offences and removed him from service. On appeal, on 28 March 2006, the second-instance ecclesiastical court upheld that decision. 13. On 26 June 2006 the applicant took his case to the Pest County Labour Court, seeking payment of 50% of his service allowance and other benefits to which, in his view, he should have been entitled during the period of his suspension. Arguing that his suspension had reached its statutory maximum duration on 21 October 2005, he also sought the payment of the entire service allowance from that date until the termination of his service, that is, on 30 April 2006. He argued in substance that his ecclesiastical service was analogous to employment. 14. On 22 December 2006 the Labour Court discontinued the proceedings pursuant to Article 157 (a) in conjunction with Article 130 (1) (f) of the Code of Civil Procedure, holding that the applicant’s claim could not be enforced before domestic courts (“a felperes kereseti kérelmében foglaltak bírói úton nem érvényesíthető igények”). Under section 2 (3) of Statute no. I of 2000 on the jurisdiction of the Reformed Church of Hungary, a pastor’s service with the Church was regulated by ecclesiastical law, whereas a layman’s employment with the Church was governed by the State labour law. Accordingly, since the dispute before it concerned the applicant’s service as a pastor, the provisions of the Labour Code were not applicable in the case. This decision was upheld on appeal. The applicant did not apply for review to the Supreme Court. 15. On 10 September 2007 the applicant lodged a civil action against the Reformed Church of Hungary with the Pest Central District Court, the relevant parts of which read as follows: “The Plaintiff’s service remuneration, as described in his Letter of Appointment, was .... In addition, the Plaintiff was also eligible to an age bonus equal to .... The Plaintiff was also involved in teaching for which he received ... per month. On 23 June 2005 the Respondent suspended the Plaintiff as a pastor and reinstated him to the service roster, which meant he was exempt from all duties until further notice. The Respondent has paid the Plaintiff’s pastoral allowance until 30 June 2005 and his salary as a teacher until 1 May 2006. In view of the above, the Respondent has caused damage to the Plaintiff by not paying his dues according to their standing legal agreement. Plaintiff’s claims are as follows: I. For the period between 1 July 2005 and 21 October 2005, a monthly amount of ... II. For the period between 22 October 2005 and 30 April 2006, an amount of .... III. For the period between 1 May 2005 and 30 April 2006 (12 months) the unpaid teaching fees ... Furthermore I submit that the Plaintiff considered the legal basis of the above dues ... as employment and went to the Labour Court to have them reimbursed. In view of the fact that the Pest County Regional Court’s final decision ... upheld the ruling of the first-instance Labour Court which, for its part, stated that my involvement with the Respondent did not qualify as employment, I, the Plaintiff, hereby seek reimbursement of my loss before the Pest Central District Court.” 16. On 11 December 2007 the respondent Church filed a defence, inviting the court to dismiss the applicant’s claim. 17. On 15 December 2007 the applicant filed another submission with the first-instance court, further elaborating on his claim. The relevant parts of that submission read as follows: “The Plaintiff’s pastoral service was constituted ... on the basis of election by the Reformed Parish of Gödöllő and confirmed by the dean of the ecclesiastical district as well as the bishop of the ecclesiastical region. Its terms were laid down in the Letter of Appointment ... which remained in force during the period indicated in the case. The pastoral service was carried out by the Plaintiff in person. Its content and accomplishment has not been in dispute between the parties. The Plaintiff’s pastoral activities were manifold. In particular, he was responsible for the community services of the Parish – e.g. preaching, handling the sacraments, outreach, evangelisation, maintaining the bond between the Parish and the Church and various related tasks of pastoring, teaching and administration, which included the tutoring of his assistant and deputy pastor. The Plaintiff as pastor, together with the caretaker, represented the Parish and had numerous other administrative tasks as well. As part of his pastoral duties, the Plaintiff was also obliged to take part in management and teaching. Neither the establishment of the pastoral service relationship nor the substance of the resulting mutual obligations was the subject of any dispute between the parties involved. As to the legal classification of the pastoral service relationship itself ... we hold that the Plaintiff’s activity is best characterised as agency because its content and nature correspond to the factual elements of an obligation of means necessitating personal involvement. For the above reason, we consider that the relevant rules are those of the Civil Code on agency contracts ... Despite the fact that the Respondent’s dean – the Plaintiff’s immediate superior –had already confirmed in writing the legal basis and the amount of the fees due for the period of suspension, in its correspondence dated 22 June 2005 ..., these were, in fact, paid only partially. Namely, the pastoral cash allowance was paid only up until 30 June 2005 and the fee due for religious teaching only up until 30 April 2005.” 18. The applicant based his claim in the first place on Articles 277 (1) and 478 (1) of the Civil Code (as in force at the material time) seeking payment of overdue fees stemming from an agency contract he believed he had with the Church. He maintained that for the period from 22 October 2005, when the suspension allegedly became unlawful, until the date of termination of his appointment, he was entitled to a fee for his services, which corresponded to the service allowance set out in his Letter of Appointment. He thus sought enforcement of the agency contract. Alternatively, he based his claim on Articles 318 (1) and 339 (1) of the Civil Code, which provided for damages for breach of the agency contract he had allegedly entered into with the respondent Church. 19. On 2 January 2008 the Pest Central District Court dismissed the applicant’s claim, holding as follows: “An agency contract, according to the particulars of Act IV of 1959 on the Civil Code ... is a mutual legal transaction (Article 474). Such transactions are regarded by the Civil Code as contracts of material exchange, as the Civil Code, in accordance with Article 1 (1), typically regulates pecuniary rights. Contracts, by definition, are between parties with common material interests: they need whatever value the other has to offer. The goal of the contract is to obtain such value from each other. Pursuant to Article 201 (1) of the Civil Code, mutual property services are contracts for valuable consideration – with the notable exception of gratuitous two-party transactions in which one party provides a material service whereas the other is not obliged to do so. The alleged agency contract between the Plaintiff and the Respondent might be gratuitous if the agent receives no payment from the principal. Except that there was no statement from the Plaintiff to that effect. Quite the contrary: he filed the lawsuit with the clear intention of obtaining material gain from the Respondent. Thus it can be said that the Plaintiff based his claim on a non-gratuitous agency contract, as provided for in Article 478 (1) of the Civil Code. In view of the above, this required the Plaintiff to provide some sort of material service, interest or condition in return, something with clearly defined market value. The pastoral service provided by the Plaintiff (according to exhibit no. 3, it also involved preaching, handling the sacraments, outreach, evangelisation and various related tasks of pastoring, teaching etc.), however, does not qualify as material service. It is, for all intents and purposes, religious activity. If the undertaking of mutually agreed conduct is not gratuitous, and the conduct of one of the parties has no material value, then, according to the rules of the Civil Code, there can be no civil-law contract for valuable consideration. Agency contracts, like all contracts, are based on mutual agreement: one party makes a formal proposal containing all the key elements of the deal to another, which, in turn, issues a statement of acceptance – see Article 205 (1) and (2), and Articles 211, 213 and 214 of the Civil Code. The parties involved are free to negotiate terms on the basis of legal parity. The documents submitted show that the Plaintiff’s appointment was an ecclesiastical process, the terms of his service were set out in a Letter of Appointment ... formulated by the Presbytery of his Parish. The Respondent and its officials exercised various rights vis-à-vis the Plaintiff (suspension, reprimand by the ecclesiastical court, relocation to service roster, demotion, etc.). Within the meaning of the Civil Code, the parties did not negotiate the details of the service, and the Plaintiff became a pastor by appointment, not as a result of a binding agreement. Due to the lack of legal parity between the Plaintiff and the Respondent, the Plaintiff did not enter as a civil-law party into a legal relationship with another civil-law party. The lack of binding agreement means that the Plaintiff’s primary claim – with reference to Articles 277 and 478 of the Civil Code – is insufficient to support his case. Pursuant to Article 318 of the Civil Code, the rules of tort liability are applicable to liability for breach of contract. Once again, the lack of binding agreement means there was no breach of contract nor any material damage involved. In view of this, the Plaintiff’s secondary claim is also unfounded. The acknowledgment of debt, by legislative nature and in practice, is a contractual institution which allows one party to affirm its financial obligation towards another. Statements stemming from relationships beyond the control of civil legislation are, for that very reason, neither valid nor binding pursuant to Article 242 of the Civil Code. The letter submitted by the Plaintiff (illegible reference number) as acknowledgement of debt is, in this context, rather irrelevant: the sender does not legally represent the Respondent, which might not endorse, or even share, his opinion. The documents and statements presented by the Plaintiff were sufficient for a review of the case. As the claim was unfounded, the amount at issue was not determined. The hearings of the bishop ... and dean ... were also deemed unnecessary as their opinions feature prominently in the documents and cover all necessary aspects.” 20. On 27 January 2008 the applicant filed an appeal against the first-instance judgment. On 12 October 2008 the respondent Church filed pleadings in reply, requesting the court to dismiss the applicant’s claim. 21. On 17 October 2008 the Budapest Regional Court dismissed the applicant’s appeal and upheld the first-instance decision with the following reasoning: “The first-instance court established the facts correctly and the second-instance court agrees with its decision, but differs in its legal reasoning: Section 13 of Act IV of 1990 provides that the Church and – in accordance with its Constitution – its self-governing bodies are independent legal entities. Pursuant to section 14(2) of the Respondent’s own Statute no. II of 1994 on the Constitution and Government of the Church, a parish is such a legal entity. Section 29 of the same Statute defines the Letter of Appointment as the service contract of Church officials. The Plaintiff’s Letter of Appointment, detailing his pastoral duties and allowances, was issued on 14 December 2003 by the Reformed Parish of Gödöllő. It proves that a legal relationship was established between the Plaintiff and the Parish of Gödöllő, an independent legal entity. In its pleadings ..., the Respondent referred to section 13 of Act IV of 1990 and Article 14 (2) of its own Statute II of 1994, thus confirming that the Parish of Gödöllő ... is an independent legal entity within the Hungarian Reformed Church. In view of the above, the second-instance court came to the conclusion that the Plaintiff’s claim was unfounded vis-à-vis the Respondent, the Reformed Church of Hungary.” 22. On 2 June 2009 the applicant lodged a petition for review with the Supreme Court, in which he stated as follows: “....The Budapest Regional Court held that, based on the Letter of Appointment, the Plaintiff’s legal relationship was with the Reformed Parish of Gödöllő. But, as indicated by us several times, the Letter of Appointment does not mention the lectures on ecclesiastical history the Plaintiff has been giving in a Foundation School. The fees for these lectures were paid by the Respondent to the Plaintiff directly. Our motions to take evidence were dismissed because of the decision of the first-instance court, which the Budapest Regional Court overruled – but it is the lack of this very evidence that caused the second-instance court to disregard the difference between the nature and the remuneration of the above-mentioned activities. Pursuant to Articles 200 (1), 198 (1) and 474 of the Civil Code, a legal relationship – namely agency – is established when one party (the agent) is obliged to provide quality service and the other (the principal) is obliged to pay for the said service in accordance with the agreement. As far as teaching is concerned, the Respondent was the sole principal. The Reformed Parish of Gödöllő had nothing to do with that – which is evident from the fact that the fee was determined according to State standards ... The decisions of the courts are, first of all, only partially compliant with Article 221 of the Civil Code, which lays down the requirement of full justification, and secondly, constitute an infringement of multiple provisions of the Civil Code, namely Articles 200 (1), 198 (1), and much of the content of Article 474. Due to the dismissal of our motions to take evidence, the contradictory decisions of the courts are not based on the true nature of the material service exchanged between the parties, and regard pastoral service and teaching in a Foundation School as one and the same, despite the fact that these activities greatly differ from each other in both nature and practice of execution ...” 23. The respondent Church replied to this petition in a submission dated 28 March 2009. 24. On 28 May 2009 the Supreme Court discontinued the proceedings, finding as follows: “The Plaintiff commenced his action specifically in order to claim fees arising from his contractual relationship with the Gödöllő Parish, as contained in his Letter of Appointment. He did not make any reference to a contract between him and the Gödöllő Parish to provide teaching of church history, nor did he claim any fee in connection with such a contract. He submitted a claim regarding such a contract for the first time in his petition for review [to the Supreme Court]. Consequently, the fact that the lower courts did not analyse that contractual relationship between the parties and did not take evidence regarding that issue cannot be considered an omission on their part ... In order to determine the rules applicable to the agreement in question and to the implementation of the rights and obligations arising from it, it is necessary to have regard to the very purpose of the agreement underlying the Plaintiff’s actual claim as well as the elements thereof defining the parties’ rights and obligations. The first-instance court rightly stated in its assessment that the agreement serving as the basis of the applicant’s claim was not an agency contract under civil law or concluded by and between parties enjoying personal autonomy in the marketing of [goods and services]. The Plaintiff was appointed as a pastor in an ecclesiastical procedure, and the obligations of the Respondent were defined in an appointment letter issued by the assembly of presbyters. The parties established between themselves a pastoral service relationship, governed by ecclesiastical law. Under section 15 (1) of Act no. IV of 1990 on Freedom of Conscience and Religion and on Churches, the Church is separate from the State. Under sub-section (2), no State coercion can be used to enforce the internal laws and regulations of Churches. Relying on the above provisions, the applicant can make a claim under the ecclesiastical law before the relevant bodies of the Reformed Church. The fact that the agreement entered into under ecclesiastical law resembles a contractual agreement under the Civil Code does not entail State jurisdiction or the enforceability of the claim in a judicial procedure within the meaning of Article 7 of the Civil Code. (In the particular case, the basic elements of an agency contract and the execution of such a contract could not be established either.) The Labour Court reached the same conclusion in the earlier proceedings when assessing the claim under State labour law and dismissing its enforcement in judicial proceedings. The first-instance court was right to point out that as the impugned agreement lacked a civil-law legal basis, the court could not examine the applicant’s secondary claim (compensation for breach of contract). On the basis of the above reasoning, there were no grounds to adjudicate on his claim on the merits. The Supreme Court accordingly quashes the final judgment, including the first-instance judgment, and discontinues the proceedings under Articles 130 (1) (f) and 157 (a) of the Code of Civil Procedure ...”