MACH v. POLAND
Inadmissible
András Sajó;Egidijus Kūris;Krzysztof Wojtyczek;Paulo Pinto De Albuquerque;Vincent A. De Gaetano;Gabriele Kucsko-Stadlmayer
1. The applicants, spouses Ms Jolanta Mach and Mr Bogusław Mach, are Polish nationals who were both born in 1933 and live in Łódź. They are represented before the Court by Ms M. Szereda, a lawyer practising in Łódź. 3. The application concerns national bonds issued by the State Treasury in 1936. The bonds were to have been redeemed by 1995. However, the Treasury failed to undertake any steps to redeem them or to pay interest to the holders of those bonds. 4. The applicants’ claim was not subject to limitation because on 28 July 2003 they had asked the State Treasury to arrange a friendly settlement before the Warsaw District Court. 5. On 20 June 2008 the applicants instituted civil proceedings for payment against the State Treasury represented by the Ministry of Finance. They claimed 55,000 Polish zlotys (PLN), with interest. 6. On 12 February 2009 the Warsaw District Court granted the applicants PLN 35.48 (approximately 9 euros (EUR)). The amount granted was calculated in the following way. The court first referred to § 2 of the 1949 Decree (see paragraph 15 below) and found that by introducing this provision the lawmaker had deprived the applicants’ claim of its economic value. According to the court, by 1949 the applicants’ claim had already been worth only about 2% of the average monthly salary at that time. On the day that the 1949 Decree entered into force – that is to say on 6 August 1949 – the nominal value of the applicants’ bonds had been PLN 1,000 each. It further referred to the 1950 Act (see paragraphs 16 and 17 below) and concluded that after the entry into force of the relevant provisions the value of the applicants’ bonds had been PLN 10 each. Relying on the 1994 Act (see paragraph 18 below) it further found that the nominal value of the applicants’ bonds in 1994 was 1 grosz. Finally, the court, relying on the judgment of the Constitutional Court of 24 April 2007 (see paragraphs 22 and 23 below), ruled that it could recalculate the applicants’ claim on the basis of Article 3571 § 3 of the Civil Code. It based the indexation of the applicants’ claim on the official average salary and considered that the State Treasury should bear 90% of the inflation costs and the applicants 10%. 7. On 22 March 2009 the applicants appealed against that judgment. 8. On 10 August 2009 the Warsaw Regional Court quashed the firstinstance judgment and remitted the case. The Regional Court did not accept the basis of indexation of the applicants’ claim applied by the District Court and held that the indexation should have been based on the real value of the claim in 1936, when the bonds in question had been issued, and on the price of gold at the time the applicants instituted civil proceedings. The court further considered that while recalculating the value of the applicants’ claim, the District Court should have weighed the interests of both parties and taken into account the effects of the Second World War in order to assess the extent of participation of the defendant in the process of bringing about “a significant change in the purchasing power of money” (istotna zmiana siły nabywczej pieniądza). 9. On 22 March 2010 the Warsaw District Court, having re-examined the case and having recalculated the applicants’ claim on the basis of the instructions contained in the Regional Court’s judgment, found that the claim’s value amounted to PLN 17,016. The court, having weighed the interests of both parties, considered that they should bear the effects of inflation in equal parts. Accordingly, the above amount was divided by two and the applicants were granted PLN 8,508. The Court dismissed the remainder of the claim. 10. Both parties appealed against that judgment. 11. On 18 March 2011 the Warsaw Regional Court found the applicants’ appeal ill-founded and the defendant’s appeal partly well-founded, amended the challenged earlier judgment, and granted the applicants PLN 169 (approximately EUR 42). The Court considered that the District Court, in its judgment of 22 March 2010, had failed – when recalculating the value of the claim – to apply the 1949 Decree and the 1950 Act, which had never been repealed or declared unconstitutional; they thus remained in force and had to be applied to the present case. Having set the value of the applicants’ claim at PLN 169, the Court considered that it would be “contrary to the principles of community life” (sprzeczne z zasadami współżycia społecznego) to reduce this amount further by placing on the applicants part of the burden of the effects of inflation; accordingly, it granted them the whole of the recalculated amount. 12. The Court then referred to the applicants’ argument that the value of the claim had been decreased by the 1994 Act. It found that this Act had not significantly influenced the value of their claim because after the entry into force of the 1950 Act the claim had been of only symbolic value, namely PLN 10. The Court further considered that for the more than 40 years that had followed the entry into force of the 1950 Act the applicants’ claim had lost its value as a result of economic developments in Poland and that it was in fact immaterial whether an assessment of the claim’s value was made with or without reference to the 1994 Act. 13. Article 4 provides: “The payment of dues resulting from pecuniary obligations arising from any title of a private or public nature before the entry into force of the present decree and not redeemed until that day may only be effected in the Polish currency.” 14. At the relevant time, Article 5 (subsequently repealed) provided: “(1) The change in the purchasing power of money during the time between the creation of an obligation and its payment date or performance does not constitute a basis for a change in the amount of the obligation or in the means of the execution of the contract or dissolution of the contract. (2) Payment of an obligation, specified in Polish currency on the basis of this decree, shall be made in banknotes of the Polish National Bank according to their nominal value, which is equal to the nominal value of banknotes or other means of payment, which were expressed in zlotys and which were in circulation on the territory of Poland or a part thereof before the introduction of the National Polish Bank’s banknotes into circulation. (3) For the establishment of the value of pecuniary obligations referred to in the present Decree and expressed in the Polish currency, it is irrelevant what means of payment was in circulation at the time of the creation of the obligation.” 15. Article 6 § 2 provides: “The amount of obligations expressed in zlotys in gold is calculated at 1 zloty for 1 zloty in gold.” (Wysokość nalezności z zobowiazań pieniężnych wyrażonych w złotych w złocie liczy się jeden złoty za jednego złotego w złocie). 16. The Change of Monetary System Act of 28 October 1950 (o zmianie systemu pieniężnego) provided that all public and private obligations expressed in zlotys (irrespective of the time at which they came into existence) were to be recalculated with effect from 30 October 1950 according to the following ratio: 100 “old” zlotys = 1 zloty. 17. Under section 9 of the 1950 Act, all amounts expressed in “old” zlotys and mentioned in legal provisions binding on the day of the entry into force of this Act were to be recalculated, by virtue of law, according to the following ratio: 100 “old” zlotys = 3 zlotys. 18. The Polish Zloty Denomination Act of 7 July 1994 (ustawa o denominacji złotego) introduced a new payment unit: with effect from 1 January 1995 the new unit of PLN 1 was to be worth 10,000 “old” zlotys. 19. Article 32 of the Constitution reads: 1. All persons shall be equal before the law. All persons shall have the right to equal treatment by public authorities. 2. No one shall be discriminated against in political, social or economic life for any reason. 20. Article 64 of the Constitution reads, in so far as relevant, as follows: 1. Everyone shall have the right to ownership, other property rights and the right of succession. 2. Everyone, on an equal basis, shall receive legal protection regarding ownership, other property rights and the right of succession... 21. Article 3581 § 3 of the Civil Code provides: “In the case of an essential change of the purchasing power of money after an obligation falls due the court may, after considering the interests of the parties and in accordance with the principles of community life, change the amount or the mode of payment, even if these were fixed in a decision or a contract.” 22. On 24 April 2007 the Constitutional Court gave a judgment (SK49/05) in which it held that section 12(1) of the Act of 28 July 1990 amending the Civil Code – in so far as it limited the possibility of judicial indexation referred to in Article 3581 § 3 of the Civil Code as regards pecuniary obligations which had come into existence before 30 October 1950 as a result of bonds emitted by the State Treasury – was inconsistent with Article 64 §§ 1 and 3 in conjunction with Article 32 § 1 of the Constitution. 23. In the part named “effects of the judgment” the Constitutional Court noted: “Taking into consideration the effects of this judgment and the impossibility of claiming the full value of claims arising from national bonds issued before 1939, the matter of possibility and scope and, in particular, the amount of just satisfaction for persons holding such bonds, should be resolved by the lawmaker. As stressed on many occasions in its case-law, the Constitutional Court should not replace the lawmaker. The finding by the Constitutional Court that section 12(1) of the Act of 28 July 1990 amending the Civil Code was inconsistent with the Constitution ... will enable the holders of national bonds to access the indexation of their claims guaranteed by Article 3581 § 3 of the Civil Code. However, in practice, the expiry of limitation periods may effectively deprive claimants of a chance to achieve a positive outcome in the relevant proceedings. If [the Parliament] does not enact new provisions before section 12 (1) of the Act of 28 July 1990 expires, holders of national bonds, who have been patiently waiting for the settlement of their claims, will be able to lodge [with civil courts] their claims for payment in an amount which will be calculated with the application of the indexation clause. However, the present judgment of the Constitutional Court does not indicate to the courts the scope, direction or scale of the indexation.” 24. The provisions which had been found unconstitutional were subsequently repealed, which opened the way for applicants to seek their claims before the courts and to demand that the value of their claims be judicially increased.