CASE OF KRCMAR AND OTHERS v. THE CZECH REPUBLIC
Violation of Art. 6-1;Pecuniary damage - financial award;Non-pecuniary damage - financial award;Costs and expenses partial award - Convention proceedings
Nicolas Bratza
8. The applicants are successors in title to “František Otta”, a company in Rakovník (“the Company”) which belonged to members of their family until it was nationalised by the former communist regime. 9. Pursuant to Article 1 § 1 (5) of Presidential Decree no. 101/1945 (dekret presidenta republiky) (“the Decree”), which entered into force on 27 October 1945, companies producing margarine which had more than 150 employees1 were nationalised as from that date. The former Minister of Food (ministr výživy) was authorised to declare, with reference to Article 1 § 4 of the Decree, which companies had been nationalised, as recorded in the Official Register (Úřední list). On 2 June 1948 Act no. 115/1948, which amended the Decree, was published in the Official Gazette (Sbírka zákonů a nařízení). According to this Act, all enterprises nationalised before 22 February 1948, pursuant to Article 1 § 4 of the Decree, were considered nationalised as from 27 October 1945. The Act did not specify the number of employees in the nationalised enterprises. 10. By Decree (vyhláška) no. 26 of 9 January 1946, published in the Official Gazette, the former Minister of Food declared the Company nationalised. The nationalisation procedure was closed by an order (výměr) of the former Minister of Food on 11 January 1949 which determined the final extent of the nationalisation. The order was based on section 1(1)(6) of Act no. 115/1948. 11. On 25 March 1991 the Company was transformed into Rakona a.s. (akciová společnost) with the 100% property participation of the State. On 19 June 1991 Procter & Gamble, a foreign company, concluded a purchase contract with the National Property Foundation (Fond národního majetku), and on 22 July 1991 the Czech Government approved a privatisation plan (privatizační projekt) to sell the Company to Procter & Gamble. 12. In November 1991, pursuant to the Extra-Judicial Rehabilitations Act no. 87/1991 (zákon o mimosoudních rehabilitacích) (“the Restitution Act”) and the Transfer of the State’s Property to Other Persons Act no. 92/1991 (zákon o převodu majetku státu na jiné osoby) (“the Privatisation Act”), the applicants commenced an action for restitution of the Company against the Ministry for Administration of National Property and its Privatisation (Ministerstvo pro správu národního majetku a jeho privatizaci). They claimed that they were Czech nationals and successors in title to the original owners of the Company and, therefore, persons entitled to restitution under section 3(2)(c) of the Restitution Act. They also claimed that the Company had been nationalised in a way which violated generally recognised human rights and freedoms within the meaning of section 2(3) of the Act. They further submitted that the Decree had been wrongly applied to their family’s Company because the nationalisation conditions laid down in the Decree, in particular the condition that the company should have more than 150 employees, were not satisfied. The applicants argued that the Company had therefore been nationalised pursuant to Act no. 115/1948, that is after 25 February 1948, the decisive date for restitution under the Restitution Act. 13. On 29 June 1993 the Prague 1 District Court (obvodní soud) found against the applicants. The court held that ownership of the applicants’ property had passed to the State by the ministerial decree of 9 January 1946, i.e. before the decisive date of 25 February 1948 specified in the Restitution Act. Accordingly, this Act as well as the Privatisation Act did not apply to the applicants’ case. The court noted that the order of the Minister of Food of 11 January 1949 had only a declaratory character. It stated that the fact that the Decree had been applied to the applicants’ property contra legem, as the Company had less than 150 employees, could not influence its finding as to the decisive date of the nationalisation. The court considered in this regard certain documentary evidence, in particular a statement from the former owners of the Company, made in response to a request from the former Ministry of Food (Ministerstvo výživy), dated 24 November 1945, that the average number of employees between 1 January 1938 and 1 January 1940 was 117.3, and heard the husband of the fourth applicant (who died before the end of the restitution proceedings on 7 September 1995). He stated, inter alia, that the trade union council (závodní rada) had wrongly calculated the number of employees, having erroneously determined the ratio of administrative staff to workers: according to the trade union council’s calculation, there had been 1.8 administrative staff members per 1 worker. 14. The applicants appealed to the Prague Municipal Court (městský soud). On 24 November 1993 the court dismissed their appeal stating that the Company had been nationalised under the Decree on the day of its entry into force, i.e. 27 October 1945. On 28 July 1995 the High Court (Vrchní soud), upon the applicants’ appeal on points of law (dovolání), upheld this decision. 15. On 22 October 1995 the applicants lodged a constitutional appeal (ústavní stížnost). They alleged a violation of Articles 11 § 1 and 36 § 1 of the Charter of Fundamental Rights and Freedoms (Listina základních práv a svobod) and challenged the legal opinion of the ordinary courts. 16. On 2 October 1996 the Constitutional Court, after a public hearing, dismissed the applicants’ appeal, finding no violation of the applicants’ rights. The Constitutional Court recalled that, according to its case-law, nationalisation of property takes place by operation of law under a particular presidential decree if the conditions prescribed by the decree are complied with. Considering the question of the number of employees in the Company at the time of the nationalisation as a crucial point in order to establish whether the Decree had been applied lege artis, the Constitutional Court decided to complete the taking of evidence and asked the Rakovník District Records Office (státní okresní archiv), the Prague District Records Office (státní oblastní archiv), the Prague Central Records Office (státní ústřední archiv), the Ministry of Employment and Social Affairs (Ministerstvo práce a sociálních věcí) and the Ministry of Finance (Ministerstvo financí) to submit further documentary evidence. The documents submitted to the Constitutional Court contained, in particular, information about the number of employees in the Company between 1936 and 1940 in different categories of production. These documents included a letter from the former Ministry of Food, dated 24 November 1945, to the former owners of the Company and to the trade union council, asking them, inter alia, to specify the number of people employed in different sections of the Company. In answer to this letter, the former owners indicated that the average number of employees working in the production of margarine between 1938 and 1940 was 117.3. The trade union council and the national administration (národní správa) informed the former Ministry of Food that the average number of employees was 217.7, and, by letter of 8 December 1945, they specified that between 1938 and 1940 the average number of employees was 204.3. 17. The Constitutional Court, basing its finding particularly on these documents which had not been shown to the parties during the hearing, stated, contrary to the opinion of the lower courts, that the nationalisation had been effected in compliance with the nationalisation conditions established in the Decree, i.e. before 25 February 1948. Accordingly, the applicants were not entitled to the restitution of the Company under the Restitution Act. 18. In the preamble to the Restitution Act, the Federal Assembly of the Czech and Slovak Federal Republic affirmed its intention to redress the consequences of certain infringements of property and other rights which occurred between 1948 and 1989. 19. Section 1(1) of the Act provides that its aim is to redress the consequences of certain violations of property and other rights caused by acts falling within the sphere of civil or labour law or by administrative acts incompatible with the principles of a democratic society respecting the rights of citizens, as enshrined in the Charter of the United Nations and the Universal Declaration of Human Rights. 20. According to section 2(1)(c) and (3), such redress consists in the surrender of property if the violation in question was caused by an act infringing generally recognised human rights and freedoms, that is, an act in contradiction with the principles referred to in section 1(1) of the Act. When an entitled person was deprived of his or her property rights under nationalisation laws adopted between 1945 and 1949 without appropriate compensation, the entitled person has a claim under this Act, which he or she can raise under the Privatisation Act. 21. Section 3(1) provides that, in order to be entitled to restitution of his or her property, a claimant must be a natural person and a citizen of the Czech and Slovak Federal Republic whose property was ceded to the State in the circumstances listed in section 6 of the Act. According to section 3(2)(e), if the person whose property has been transferred to the State in cases specified in section 6 died before the expiry of the period specified in section 5(2), the entitled persons, provided they are citizens of the Czech and Slovak Federal Republic, are his or her spouse and children, or in the case of the latter’s death, their children. 22. Article 11 § 1 of the Charter provides, inter alia, that everybody has the right to own property. The property rights of every owner are equal in the eyes of the law and benefit from the same legal protection. 23. According to Article 36 § 1, everybody may defend, in a way prescribed by law, his or her right before an independent and impartial tribunal and, in specified cases, before another authority. 24. According section 48 of the Act, the Constitutional Court must consider all the evidence necessary to establish the facts of the case. It decides what evidence submitted by the parties should be considered and may take into account other evidence which has not been proposed. It may assign a judge to consider evidence obtained otherwise than at an oral hearing or request another court to consider such evidence. At the request of the Constitutional Court, courts, public administrative authorities and other State institutions must assist it in its decision-making by procuring documentary evidence. A record is drawn up of all evidence which is obtained otherwise than at an oral hearing, this record being signed by a judge, a clerk and other persons taking part. The resulting evaluation of that evidence must always be communicated at the oral hearing. 25. Section 63 stipulates that the provisions of the Code of Civil Procedure apply to proceedings before the Constitutional Court, unless the Constitutional Court Act provides otherwise. 26. According to section 81, the Constitutional Court is not bound by the statements of fact established in the earlier proceedings. 27. According to Article 121 of the Code, it is not necessary to prove facts which are generally known, or known to a court through the exercise of its functions. Nor is it necessary to prove generally binding legislative or regulatory instruments published or announced in the Official Gazette. 28. According to Article 129, the evaluation of documentary evidence is carried out by the President of the Chamber during the hearing. The President reads out the whole or part of the document, or informs the Chamber of its contents. He may also invite the holder of the document to submit the document to the court, or he may obtain it by himself from another court, authority or legal person.