MORAWSKI AND MORAWSKA v. POLAND

FIRST SECTION

DECISION

Application no. 3508/12
Tadeusz MORAWSKI and Zuzanna MORAWSKA
against Poland

The European Court of Human Rights (First Section), sitting on 7 January 2020 as a Chamber composed of:

Ksenija Turković, President,
Krzysztof Wojtyczek,
Aleš Pejchal,
Pauliine Koskelo,
Tim Eicke,
Jovan Ilievski,
Raffaele Sabato, judges,
and Abel Campos, Section Registrar,

Having regard to the above application lodged on 29 December 2011,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,

Having deliberated, decides as follows:

THE FACTS

1.  The applicants, Mr Tadeusz Morawski and Ms Zuzanna Morawska, are Polish nationals who were born in 1952 and live in Wielowieś. They are married. They were represented before the Court by Mr B. Sarzalski, a lawyer practising in Dąbrowa Górnicza.

2.  The Polish Government (“the Government”) were represented by their Agent, Ms J. Chrzanowska, and subsequently by Mr J. Sobczak, of the Ministry of Foreign Affairs.The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.The lease agreement

3.  On 30 June 1995, following a competitive bid, the applicants signed a 10-year lease agreement with the State Treasury Agricultural Property Agency (“the Agency”). Under the agreement they leased Grzybowice Farm, which consisted of a plot of land with a total surface area of 2.33 ha and buildings attached to the land. On 16 December 2004 the parties signed an annex to the lease agreement extending it for ten years. Under the annex the size of the leased plot of land was updated to 2.76 ha. In the course of the lease agreement the property was divided into two plots: no. 1291/133 with a surface area of 1.61 ha and no. 1486/136 with a surface area of 1.15 ha.

4.  The applicants submit that their agreement was an agricultural lease (leasing rolniczy), a special type of lease introduced by the Law of 29 December 1993 amending the Law of 19 October 1991 on the Administration of the State Treasury Agricultural Property (Ustawa o gospodarowaniu nieruchomościami rolnymi Skarbu Państwa – “the 1991 Act”). In their view, on signing the lease they undertook to pay a fixed market value for the leased property in annual instalments over a period of ten years, while the Agency was required to sell them the property at the latest upon the expiry of the lease. According to the applicants, the lease agreement, an integral part of which was the 1991 Act (as amended), explicitly envisaged in section 38a that the applicants had the right to buy the property upon the expiry of the period for which it was concluded.

5.  The applicants submitted that, in the course of the bid, the Agency let them understand that they would be entitled to buy the leased property not later than on the expiry of the lease. The applicants were also required to declare the intended level of investment in the property and the jobs expected to be created.

6.  According to the Government, no confirmation of a claim that the applicants were to buy the leased property upon expiry of the lease could be found in either the lease agreement of 1995 or the report from the bid for or the subsequent annexes to the lease from 2004, 2008 and 2015. According to their submission, the lease was concluded as a regular lease, governed by section 38 of the 1991 Act, and not as a so-called agricultural lease, governed by section 38a of the said law which aimed at selling the property to the lessee upon the expiry of the lease.

7.  The applicants ran their business (trade and production of building materials) on the leased property. Having obtained the Agency’s agreement, the applicants invested significant amounts of money with a view to developing their business.

8.  By letters of 7 August 1998, 19 July 2001, 30 September 2003 and 3 March 2008 the applicants requested the Agency to allow them to buy the leased property.

9.  According to the applicants, in September 2003 the Agency informed them that the property was to be put up for sale at a price determined by valuers.

10.  On 13 October 2003 the Agency publicly announced that the two plots leased by the applicants were earmarked for sale.

11.  According to the Government, such a public announcement could not activate the lessees’ priority right to buy the land since, under section 29 § 1 (3) of the 1991 Act, this right would only arise after the Agency had notified the applicants in writing of its intention to sell, with the price, and upon the lessees’ acceptance of the notified conditions within a given time‑limit. The Agency took no further action in respect of the plots concerned.

12.  By an annex signed by the parties in December 2004 the lease was extended for another 10 years. The applicants submit that they were promised that they would be able to buy the property within a short period of time. According to the Government, no confirmation of such claim could be found in the annex.

13.  In August 2008 the parties concluded another annex to the lease agreement of 1995, updating the surface area of the leased plot and the rent due in the light of the transfer of ownership of one of the plots (no. 1291/133) from the Agency to the Catholic Parish in Pawłowice (see paragraph 17 below).

14.  On 27 April 2015 the parties concluded a third annex, extending the lease until 30 June 2018.

15.  According to the Government, in the course of the lease, the applicants had attempted to modify the agreement in order to transform it into the “agricultural lease” regulated by section 38a of the 1991 Act; however, the Agency had informed them by letter of 8 July 2015 that their lease agreement had been concluded as a regular lease, governed by section 38 of the 1991 Act, and not as an “agricultural lease” based on section 38a of the said law, and that the nature of the lease could not be changed.The Property Commission’s decision

16.  The Catholic Parish of Pawłowice (“the parish”) instituted regularisation proceedings before the Property Commission (Komisja Majątkowa) acting on the basis of the Law of 17 May 1989 on Relations between the State and the Catholic Church in Poland (“the 1989 Act”). The parish sought restitution of its agricultural property or grant of an alternative property.

17.  On 15 January 2008 the Property Commission gave a decision transferring the title to a number of alternative State-owned properties to the parish, since the restitution of its former property had not been feasible. Among the properties transferred to the parish was part of the property (plot no. 1291/133) leased to the applicants by the Agency.

18.  According to the applicants, the composition of the Property Commission did not comply with the requirements set out in the 1989 Act and therefore, in their view, the Commission never issued a legally binding decision.

19.  On 8 February 2008 the Agency was informed about the Property Commission’s decision of 15 January 2008. The Agency was not a party to the regularisation proceedings. On 20 February 2008 the Agency informed the applicants about the Property Commission’s decision, the date of the transfer of the ownership and the fact that this transfer would not affect the lease, which remained in force. On 29 February 2008 the applicants protested to the Agency. On 4 March 2008 they sent a letter to the Agency, in which they again expressed their wish to buy the leased plot of land.

20.  On 5 March 2008 the plot of land no. 1291/133 was formally transferred to the parish. On the same day the Agency and the parish concluded an agreement regarding the conditions for the latter entering into the lease agreement with the applicants in place of the Agency.

21.  The applicants complained to the Minister of Internal Affairs and Administration. On 18 May 2009 they were advised that they could institute court proceedings with a view to asserting their vested rights as third parties pursuant to section 61 § 4(3) of the 1989 Act.

22.  They also complained to the Minister of Agriculture, who supervised the Agency. On 29 June 2009 the Ministry informed the applicants that they could not exercise the right to buy in respect of the leased plot. This right could only have been exercised had the Agency decided to sell the leased plot, which was not the case.The applicants’ efforts to challenge the Property Commission’s decision

23.  On 16 September 2009 the applicants sued the State Treasury and the parish in the Gliwice Regional Court, seeking annulment of the Property Commission’s decision of 15 January 2008.

24.  The applicants argued that the Property Commission had transferred the title to the properties, which included part of the property leased by them. By doing so, the Property Commission breached the applicants’ vested rights contrary to section 61 § 4(3) of the 1989 Act. The transfer of the title to the property had disregarded their right to buy the leased property based on sections 38a and/or 29 of the 1991 Act. It also discounted the fact that they had incurred outlay in connection with the development of the property.

25.  The applicants further submitted that, in accordance with the 1991 Act (section 38a), the Agency could lease agricultural land with a guarantee to a lessee that the land would be sold to him not later than upon the expiry of the lease. The legislature’s intention was to promote the transfer of State agricultural land to individual farmers on conditions favourable to the former. The applicants complied with their obligations under the lease, but the State did not fulfil its promise of selling them the property. It was true that after the Property Commission had issued its decision, the lease continued with the parish as lessor; however, the applicants were deprived of their statutory right to buy.

26.  The defendants contested the Regional Court’s jurisdiction to hear the case. The parish argued that the applicants’ claim should be rejected because the civil court had no jurisdiction to hear it and to review a decision of the Property Commission. The State Treasury supported the position of the parish.

27.  On 30 March 2010 the Gliwice Regional Court dismissed the defendants’ objection to its jurisdiction in the case. It had regard to Article 77 § 2 of the Constitution which stated that a statute could not bar the institution of court proceedings in order to vindicate one’s constitutional rights and noted that this principle had to be adhered to in an interpretation of relevant statutes. The availability of court proceedings before a civil court was based on two conditions. Firstly, the case had to be a civil one and, secondly, the law did not allocate competence to hear a civil case to a body other than a civil court. The Regional Court held that the claim asserted by the applicants, which was based on the provisions of civil law, should be categorised as a civil case. It further held that a civil court had jurisdiction to hear a dispute arising in the present case. In this regard, it noted that in accordance with section 61 § 4 (3) of the 1989 Act the regularisation proceedings could not have adversely affected the vested rights of third parties. The interpretation of this provision in the light of Article 77 § 2 of the Constitution and Article 6 of the Convention indicated that there had to be a procedure in which those rights could be vindicated, and in the absence of any particular regulation on this issue, civil courts had jurisdiction to hear such disputes. The Regional Court stated that its decision concerning the issue of jurisdiction did not in any way prejudge the strength of the applicants’ claims. Consequently, the Regional Court decided to reject the preliminary objection to its lack of jurisdiction.

28.  Both defendants lodged interlocutory appeals.

29.  On 30 June 2010 the Katowice Court of Appeal amended the Regional Court’s decision and rejected the applicants’ claim. It noted that the applicants had not lodged an action in connection with a breach of their priority right to buy or other rights based on the civil law, but petitioned for annulment of the Property Commission’s decision. However, under section 63 § 4 of the 1989 Act, the Property Commission’s decision had the force of a judicial writ of enforcement, constituted a basis for an entry into a land register and was not subject to appeal (section 63 § 8). The Court of Appeal found that the applicants’ action was an attempt to challenge the Property Commission’s decision contrary to section 63 § 8 of the 1989 Act. As such it was not based on the provisions of civil law and could not have been classified as a civil case. The Court of Appeal noted that the Regional Court had erred in relying on the constitutional provisions and Article 6 of the Convention.

30.  The applicants filed a cassation appeal. They argued, inter alia, that the Court of Appeal’s decision breached Article 45 of the Constitution, according to which everyone had the right to have his or her case examined by a court. On 29 June 2011 the Supreme Court refused to entertain their cassation appeal. It concurred with the Court of Appeal’s finding on the absence of a civil nature to the dispute.

31.  The applicants filed a constitutional complaint in which they challenged the constitutionality of sections 62 § 2 and 63 § 8 of the 1989 Act.

32.  On 26 September 2011 the Constitutional Court refused to examine their constitutional complaint for failure to satisfy formal requirements. It noted that in the civil proceedings forming the background of their constitutional complaint, the applicants solely intended to invalidate the Property Commission’s decision. They did not seek protection of their rights as lessees and of their priority right to buy disputed property. In consequence, the civil courts did not rule on those rights, but examined the sole claim of the applicants, namely to annul the Property Commission’s decision. Accordingly, the applicants did not demonstrate that their constitutional rights or freedoms had been violated and for that reason their constitutional complaint was inadmissible.

33.  The Constitutional Court dismissed the applicants’ contention that any attempt to assert their rights as lessees would in any event lead to annulment of the Property Commission’s decision. It found this to be a speculative argument in the absence of its verification in court proceedings.

34.  The Constitutional Court drew the applicants’ attention to the Supreme Court’s case-law on the scope of claims that could be examined by the Property Commission. It referred in particular to the Supreme Court’s judgment of 23 July 2004 (no. III CK 194/03; see paragraph 50 below) which confirmed that the applicants could have instituted relevant civil proceedings in order to seek protection of their right to buy with regard to the property transferred by the Property Commission to a parish.

35.  The applicants incurred an aggregate amount of PLN 24,160 (EUR 6,000) in court and legal fees connected with the above civil proceedings.Civil proceedings against the Agency

36.  On 25 June 2012 the applicants brought an action against the Agency in the Opole Regional Court. They sought compensation in the amount of PLN 850,163 (EUR 212,540), equal to the value of the leased property since they had been deprived of the right to buy it, acquired on the basis of the lease agreement of 30 June 1995. They also claimed PLN 24,160 (EUR 6,000) for the court and legal fees connected with their first attempt to vindicate their rights. The overall claim amounted to PLN 874,323 (EUR 218,540).

37.  The applicants, referring to the Law of 29 December 1993 amending the 1991 Act, submitted that under the lease agreement of 30 June 1995 they were obliged to pay the Agency the market value of the leased property in annual instalments over a period of ten years, while the Agency was required to sell the property at the latest upon the expiry of the lease. They submitted that in December 2004 the Agency had proposed that they return the leased property or accept a higher rent and extension of the lease for the next ten years.

38.  The applicants maintained that the lease agreement gave rise to an expectation on their part that they would buy the leased property. Taking into account the circumstances of the case and the State Treasury’s declaration of its will to dispose of the leased property, the applicants argued that their expectation of their right to buy was a firmly established one. The applicants noted that the Agency had avoided discharging its obligation to sell the leased property and that the State Treasury had transferred the ownership of plot no. 1291/133 to the parish instead of the lessee. This deprived the applicants of their right to buy the leased property under section 38a of the 1991 Act and gave rise to damage.

39.  In their action, the applicants indicated that they would file separate compensation claims (1) in respect of their investment of PLN 1,275,413 made on the leased property; (2) for lost profits in connection with forced termination of their business on the leased property and (3) for non‑pecuniary damage.Application for exemption from court fees

40.  The applicants also requested exemption from court fees which amounted to PLN 43,700 (EUR 10,925).

41.  On 4 September 2012 the Opole Regional Court partly granted their request and exempted them from the fees in the amount exceeding PLN 20,000 (EUR 5,000). It established that the applicants owned two houses and a farm which were mortgaged to the amount of PLN 150,000 (EUR 37,500). Ms Z. Morawska ran a business which generated a certain profit and, in addition, she drew a monthly pension of PLN 1,280 (EUR 300). The value of her business assets was estimated at PLN 280,000 (EUR 70,000). The applicants also had savings of PLN 16,000 (EUR 4,000). In the light of the applicants’ financial situation, the Regional Court found that it would not be justified to exempt them entirely from the court fees.

42.  The applicants appealed. They argued that the Regional Court had erred in its assessment that the required fees would not entail a substantial reduction in the applicants’ standard of living. Their legal and financial situation had deteriorated as a result of the decision of the Property Commission. They objected to the argument that all their savings should be spent on initiating court proceedings. Likewise, they could not reduce the means used for their business activity in order to finance the litigation.

43.  The Wrocław Court of Appeal directed the applicants to provide additional information about their bank accounts and a copy of their tax return for 2011. The applicants complied with the court order.

44.  On 27 December 2012 the Wrocław Court of Appeal dismissed their appeal. It held that the applicants had not succeeded in demonstrating that they belonged to the category of impecunious claimants who were unable to make savings with a view to financing future litigation. Having regard to the profit made in the year 2012 by the business of Ms Z. Morawska (PLN 100,000; EUR 25,000), who in addition received a pension, the court did not regard as justified her assertion of not being able to bear court fees, at least partly. It was equally unjustified to claim that the applicants could not have been expected to have recourse to their savings.

45.  In the circumstances of the case, the Court of Appeal agreed with the lower court’s finding that the applicants had been able to pay the required amount in court fees and that the amount did not hinder their constitutional right to a court. It noted that the nature of their claim could not constitute a decisive argument in the case. Furthermore, it transpired from the additional information produced by the applicants that their financial situation was not difficult, that they regularly met their financial obligations and that their accounts showed a significant surplus. In addition, the character of their transactions indicated their considerable financial means.

46.  Having regard to the above, the Court of Appeal found that the applicants’ request for a full exemption from the court fees was unjustified. Having regard to their earnings and the scale of their business activity, the applicants did not demonstrate that they had been unable to set aside PLN 20,000 without detriment to their necessary expenses or significant reduction of their business activity.

47.  The applicants submitted that, due to this decision, they had to desist from pursuing their claims.Relevant domestic law and practiceAdministration of the State Treasury Agricultural Property

48.  The Law of 19 October 1991 on the Administration of the State Treasury Agricultural Property (“the 1991 Act”) entered into force on 1 January 1992. Its relevant provisions, as applicable at the material time, provided as follows:

“Section 29[1].

1. Priority to buy a property (...) is conferred on:

1) ...,

2) ...,

3) a lessee of a property, provided that the lease lasted in fact for at least three years.

1c. The fact of earmarking a property for sale, to which a person specified in paragraph 1 holds the right of priority to buy, is to be notified in writing by the Agency to that person, together with the price of the property and a time-limit for filing a request to buy [it] on the conditions provided for in the notification; however, this time-limit cannot be shorter than twenty-one days from the day of the delivery of the notification.

1d. Persons specified in paragraph 1 exercise their right of priority to buy a property if they make a declaration that they agree to acquire it at the price stipulated in the notification.

(...)

Section 38[2]

1. Property belonging to the [State Treasury Agricultural Property] reserves can be leased or rented to natural or legal persons, in accordance with the Civil Code, subject to section 38a.

2. Section 28 shall apply accordingly to properties being subject to lease or rent.

(...)

Section 38a

1. Property belonging to the [State Treasury Agricultural Property] resources can be leased or rented to natural or legal persons with the guarantee of the lessee’s or tenant’s right to buy the leased or rented property at the latest on the expiry of the period for which the agreement was concluded.

2. The agreement referred to in paragraph 1 specifies, in particular:

1) the value of the leased or rented property;

2) annual rent in the amount equaling the sum of the value of the leased or rented property divided by the number of years for which the agreement was concluded, and the interest on the unpaid part of the value of the property.”The Law of 17 May 1989 on Relations between the State and the Catholic Church in Poland (“the 1989 Act”)

49.  Section 61 § 1 of the 1989 Act provides that legal persons of the Catholic Church may request the institution of proceedings (so-called “regularisation proceedings”) with a view to restitution of their properties that were nationalised. Section 61 § 4 (3) stipulates that the regularisation proceedings may not affect the rights acquired by third parties. In accordance with section 63 § 8, no appeal lies against decisions of adjudicatory panels of the Property Commission.The Supreme Court’s judgment of 23 July 2004, no. III CK 194/03

50.  In this judgment, the Supreme Court held as follows:

“The provisions of the 1989 Act did not grant the Property Commission the competence to adjudicate on other claims than those listed in the 1989 Act, and, in particular, on claims of third parties relating to their rights concerning property that is the subject of regularisation. The Property Commission has thus no competence to adjudicate on claims of a former possessor of the property relating to outlay made on it or to determine compensation claims raised in connection with the use of the property. Decisions of the Property Commission cannot affect the rights acquired by third parties, and this applies not only to real right to the property, but also all other rights, including obligation rights.”Court fees in civil proceedings

51.  The Law of 28 July 2005 on Court Fees in Civil Cases (ustawa o kosztach sądowych w sprawach cywilnych) sets out general principles with respect to the collection of fees by courts and exemptions from the payment of such fees. Pursuant to section 102 of the Law, a natural person may ask for exemption from court fees, if he submits a declaration to the effect that the fees required would entail a substantial reduction in his and his family’s standard of living. Such a declaration shall contain detailed information about his family, assets and income.

52.  Article 13 § 1 of the Law provides as follows:

“A relative fee (opłata stosunkowa) is collected in cases concerning property rights; this is estimated at 5% of the value of the claim in question or the subject of an appeal, but [may not be] lower than PLN 30 or higher than PLN 100,000.”

COMPLAINTS

53.  The applicants alleged a violation of Articles 6 § 1 and 13 of the Convention, referring to the Property Commission’s decision which had adversely affected their rights. They complained that the Property Commission did not meet the requirements of an independent and impartial tribunal under Article 6 of the Convention and that its decisions could not be reviewed by a court.

54.  The applicants complained under Articles 6 § 1 and 13 of the Convention that their right of access to a court had been violated as a result of the refusal to exempt them fully from court fees in the civil proceedings instituted against the Agency.

55.  The applicants alleged a breach of Article 1 of Protocol No. 1 to the Convention. They submitted that they had a legitimate expectation of acquiring the leased property based on sections 38a and/or 29 of the 1991 Act. However, they had been deprived of this right following the Property Commission’s decision.

THE LAWComplaint under Article 6 § 1 regarding a challenge to the Property Commission’s decision

56.  The applicants alleged a violation of Articles 6 § 1 and 13 of the Convention in connection with the Property Commission’s decision of 15 January 2008 which had adversely affected their rights. They complained that the Property Commission had not met the requirements of an independent and impartial tribunal required by Article 6 of the Convention and that its decisions could not be judicially reviewed.

57.  The Court considers that this complaint falls to be examined solely under Article 6 § 1 of the Convention which reads, in so far as relevant:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”The Government’s submissions

58.  The Government firstly argued that the complaint was incompatible ratione materiae with Article 6 § 1 of the Convention in so far as it concerned the proceedings aimed at challenging the Property Commission’s decision to transfer ownership of the plot of land leased by the applicants to the parish. The applicants could not rely on any substantive right in national law to challenge the decision of the Property Commission. The provisions of the 1989 Act expressly ruled out the possibility of contesting the Property Commission’s decision before the courts (cf. section 63 § 8 of the 1989 Act). Moreover, even if the national law allowed for review of the outcome of the regularisation proceedings before a civil court, the applicants would not have the right to contest the Property Commission’s decision since they were not party to them. Those proceedings did not concern the applicants’ rights since they were dependent possessors with limited rights over the leased property compared to the rights of the owner and owner-like possessors.

59.  When interpreting section 63 § 8 of the 1989 Act, the domestic courts had consistently declined their jurisdiction to review decisions of the Property Commission (cf. the Supreme Court’s judgment of 13 May 1998, no. III CKN 483/97; and the Poznań Court of Appeal’s judgment of 13 February 2007, no. I Aca 998/06). This was also confirmed in the applicants’ case, where the court of second instance, as well as the Supreme Court, declared their lack of jurisdiction. Similarly, the administrative courts adopted the same approach (cf. the Supreme Administrative Court’s decision of 26 September 1991, no. I SA 768/91).

60.  The Government pointed out that the regularisation proceedings were aimed at compensating the loss of property endured by church entities under the communist regime. The proceedings consisted of assessing the legitimacy of the restitution claims and were not of an adversarial character. It was determined that the requests lodged with the Property Commission by church entities would be settled primarily through mediation, hence their quasi mediation-arbitration character. This settlement and mediation procedure provided for delegating the task of restitution of the nationalised church’s property to the arbitrators designated in equal number by both parties, and explicitly ruled out the possibility of engaging courts in this matter, unless no conclusion was reached within the Property Commission. The prohibition on infringing the rights of others, provided for in section 61 § 4 (3) of the 1989 Act, could not be read as protecting indiscriminately the whole range of rights pertaining to the property, but only the broadest ones, namely ownership rights and the right to perpetual use of the property, and not more narrow and less stable obligation rights, such as tenancy or lease. This interpretation was confirmed by the Constitutional Court in its resolution of 24 June 1992 (no. W 11/91).

61.  Accordingly, the applicants could not have sought adjudication by the civil courts of their claims pertaining directly to the outcome of the regularisation proceedings. They did not have any arguable claim that could be brought before the civil court and thus, Article 6 § 1 was not applicable to the impugned proceedings.

62.  Secondly, the Government submitted that the applicants’ complaint had been lodged out of time. When bringing an action against the parish and the State Treasury seeking the annulment of the Property Commission’s decision, the applicants should have been aware that such action did not have any prospects of success. Their decision to bring that action should therefore have no effect on the starting point of the six-month period for lodging their complaint. Hence, the six-month time-limit should be counted from the day on which the applicants were informed about the Property Commission’s final decision of 15 January 2008, namely the day they received the Agency’s letter of 20 February 2008. Thus, the time-limit in question expired at the end of August 2008.

63.  Thirdly, the Government argued that the complaint under Article 6 § 1 was manifestly ill-founded. The applicants’ case had been examined by the courts at three instances. Despite the lack of examination of the merits of the applicants’ claim due to absence of the civil courts’ jurisdiction, the arguments put forward by the applicants in this respect were properly addressed. The finding of a lack of jurisdiction of the civil courts to adjudicate the applicants’ claim was in accordance with the established domestic practice. Furthermore, in the course of the proceedings the applicants had an unhindered opportunity to present their observations in support of their claim, and in response to the position expressed by the defendants, in accordance with the rule of equality of arms.The applicants’ submissions

64.  The applicants disagreed with the Government’s submissions. In their view, the composition of the Property Commission did not comply with the statutory requirements and for this reason it never issued a legally binding decision regarding plot no. 1291/133. Having regard to the flawed nature of the Property Commission’s decision, they argued that the Agency could not have validly handed over the plot to the parish.

65.  The applicants submitted that the Court of Appeal had failed to notice this shortcoming in the Property Commission’s decision. It also erred in finding that it had not been bound by the Constitution and Article 6 of the Convention.The Court’s assessment

66.  The Court will first examine the Government’s objection that the complaint was incompatible ratione materiae with the provisions of the Convention.

67.  The Court reiterates that for Article 6 § 1 in its “civil” limb to be applicable, there must be a dispute over a “right” which can be said, at least on arguable grounds, to be recognised under domestic law, irrespective of whether that right is protected under the Convention. The dispute must be genuine and serious; it may relate not only to the actual existence of a right but also to its scope and the manner of its exercise; and, finally, the result of the proceedings must be directly decisive for the right in question, mere tenuous connections or remote consequences not being sufficient to bring Article 6 § 1 into play (see, among many other authorities, Károly Nagy v. Hungary [GC], no. 56665/09, § 60, 14 September 2017 with further references).

68.  In the present case, the applicants complained under Article 6 § 1 that the Property Commission’s decision of 15 January 2008 had adversely affected their rights. However, the Court notes that following the Property Commission’s decision, the applicants’ lease in respect of the plot transferred to the parish continued unaffected, the difference being that the parish become the lessor. In so far as the applicants contest the proceedings before the Property Commission as such, the Court notes that those proceedings concerned exclusively examination of the parish’s application for restitution of property. The applicants have not shown that those proceedings, to which they were not a party, in any way involved determination of their rights and that Article 6 § 1 would apply to those proceedings.

69.  In so far as the applicants complain that the Property Commission’s decision resulted in depriving them of their right to buy the leased property, the Court notes that the applicants did not demonstrate that they had properly asserted a claim to this effect before the domestic courts in the proceedings instituted in 2009 (see paragraphs 70-71 below). It notes in this connection that in 2009 the applicants lodged an action in civil court, seeking annulment of the Property Commission’s decision transferring the ownership of one of the plots leased by them to the parish (see paragraphs 23-25 above). They maintained that the decision at issue had breached their vested rights as third parties, contrary to section 61 § 4 (3) of the 1989 Act.

70.  The Court of Appeal, overruling the first-instance court, found that the courts had no jurisdiction to hear the applicants’ action since it was aimed at declaring the Property Commission’s decision null and void. It noted that such action could not have been regarded as a civil case. The Court of Appeal relied on section 63 § 8 of the 1989 Act which ruled out the possibility of lodging an appeal against the Property Commission’s decision with the courts. The Court of Appeal further found that the applicants had not lodged an action relating to the alleged breach of their priority right to buy or other rights based on the civil law (see paragraph 29 above). The Supreme Court concurred with the Court of Appeal’s decision (see paragraph 30 above).

71.  The Constitutional Court also endorsed the above-mentioned rulings. It further advised the applicants, referring to the Supreme Court’s case-law, that they could have pursued before civil courts their claims relating to their right to buy or other claims pertaining to their rights as lessees (see paragraph 34 above).

72.  Having regard to the above findings, the Court considers that by initiating the proceedings aimed at challenging the Property Commission’s decision the applicants intended to protect their rights, as a third party, to the property at issue. However, it does not appear that such an action was a necessary precondition for vindicating their rights. Instead, it was open to them to initiate civil proceedings against the Agency and pursue their compensation claims relating to the right to buy or those regarding the outlay made on the property. The Court notes that the applicants acknowledged that approach by subsequently attempting to institute relevant civil proceedings (see paragraph 36 above).

73.  Accordingly, the Court concludes that the proceedings instituted by the applicants in 2009 with a view to challenging the Property Commission’s decision did not concern determination of their civil rights within the meaning of Article 6 § 1 of the Convention.

74.  It follows that the applicants’ complaint relating to the above‑mentioned proceedings is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.

75.  In view of this conclusion, it is not necessary for the Court to examine two further objections raised by the Government, namely that the complaint under Article 6 § 1 was lodged out of time and that it was manifestly ill-founded.Complaint under Article 6 § 1 regarding the right of access to a court

76.  The applicants complained under Articles 6 § 1 and 13 of the Convention that the excessive court fees required for proceeding with their claim against the Agency had been in breach of their right of access to a court.

77.  The Court considers that this complaint falls to be examined solely under Article 6 § 1 of the Convention which reads, in so far as relevant:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”The Government’s submissions

78.  The Government noted that the applicants were partially exempted from paying the court fees and ordered to pay PLN 20,000 (EUR 5,000) out of PLN 43,700 (EUR 10,925), which constituted less than 50% of the regular amount of court fees. Their request for full exemption from the court fees was examined by the courts at two instances and the decision on partial exemption from the considerable amount of fees was based on the thorough and objective assessment of the applicants’ financial situation. This included an analysis of the applicants’ current accounts and tax return for 2011, which indicated PLN 100,000 (EUR 25,000) of annual income, that is, almost PLN 8,000 a month. The courts at both instances also took into account the amount of the applicants’ savings and one of the applicant’s additional income in the form of a pension. The examination of the applicants’ financial standing, balanced against the right of access to a court and the principle of aiding impecunious claimants to pursue their claims, as well as the nature of their particular compensation claim, led the domestic courts to the conclusion that the applicants were able to cover a substantial part of the court fees without detriment to their situation. Such a partial exemption satisfied the interests of the State in collecting court fees for dealing with claims, as well as the interests of the applicants to have their case brought before a court.

79.  In the Government’s view, the court fees required from the applicants in order to pursue their compensation claim against the Agency, which constituted slightly more than half of their monthly income, did not constitute a disproportionate restriction on their right to access to a court.The applicants’ submissions

80.  The applicants contested the Government’s arguments.The Court’s assessment

81.  The Court considers that the civil proceedings that the applicants wished to institute with a view to pursuing their compensation claims against the Agency involved their “civil rights” within the meaning of Article 6 § 1 of the Convention, which accordingly applies to these proceedings.

82.  The Court reiterates that the right of access to a court was established as an aspect of the right to a tribunal under Article 6 § 1 of the Convention in Golder v. the United Kingdom (21 February 1975, §§ 28-36, Series A. no. 18). In that case, the Court found the right of access to a court to be an inherent aspect of the safeguards enshrined in Article 6, referring to the principles of the rule of law and the avoidance of arbitrary power which underlie much of the Convention. Thus, Article 6 § 1 secures to everyone the right to have a claim relating to his civil rights and obligations brought before a court (see, among many others, Lupeni Greek Catholic Parish and Others v. Romania [GC], no. 76943/11, § 84, ECHR 2016 (extracts)).

83.  However, the right of access to the courts is not absolute but may be subject to limitations; these are permitted by implication since the right of access by its very nature calls for regulation by the State, which regulation may vary in time and in place according to the needs and resources of the community and of individuals. Nonetheless, the limitations applied must not restrict the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6 § 1 if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved (see Zubac v. Croatia [GC], no. 40160/12, §§ 78, 5 April 2018, with further references).

84.  The Court will examine whether, in the circumstances of the present case, the fee actually required constituted a restriction that impaired the very essence of the applicants’ right of access to a court.

85.  The Court firstly notes that the case concerned primarily the applicants’ claim for compensation against the Agency for having allegedly deprived them of their right to buy the property leased on the basis of the lease agreement.

86.  According to the general rule of the domestic law, court fees for bringing a civil action are set at 5% of the value of the claim (see paragraph 52 above). The fees calculated in accordance with that rule amounted to PLN 43,700 (EUR 10,925). The domestic courts exempted the applicants from the court fees in excess of PLN 20,000, that is about 54% of the amount due. In doing so they relied, inter alia, on the amount of profit made by the business of one of the applicants (PLN 100,000), the amount of their savings (PLN 16,000) and on the fact that their bank accounts showed a considerable surplus (see paragraphs 41 and 45 above). In addition, the courts had regard to the scale of the applicants’ business activity. Having regard to all the relevant information, they established that the applicants were able to secure sufficient funds to pay the reduced court fees in question (compare and contrast, Kreuz v. Poland, no. 28249/95, §§ 62-63, ECHR 2001‑VI).

87.  In accordance with the principle of subsidiarity, the Court finds that it does not appear that, in the present case, the domestic courts’ approach when interpreting the law or assessing the applicants’ financial situation and their ability to pay the fees was arbitrary or manifestly unreasonable. On the contrary, the domestic courts carefully examined the applicants’ financial situation and the extent to which they could realistically be expected to contribute to the costs of taking the action. In the circumstances, it is not for the Court to controvert those findings (see Kata v. Poland, no. 9590/06, § 47, 7 July 2009).

88.  Having regard to the foregoing and, in particular, the fact that the domestic courts exempted the applicants from a considerable part of the applicable court fees, the Court considers that the amount of fees required from the applicants in the present case cannot be considered a disproportionate restriction on their right of access to a court.

89.  It follows that the complaint under Article 6 § 1 regarding the right of access to a court is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.Complaint under Article 1 of Protocol No. 1

90.  The applicants complained under Article 1 of Protocol No. 1 to the Convention that they had been deprived of their legitimate expectation of acquiring the leased property based on sections 38a and/or 29 of the 1991 Act, following the Property Commission’s decision.The Government’s submissions

(a)   Incompatibility ratione materiae

91.  Firstly, the Government submitted that the applicants did not have a substantive interest that could be protected by Article 1 of Protocol no. 1. In particular, they did not have a legitimate expectation of becoming the owners of the leased property due to the lack of a sufficiently established claim in the domestic legal order that would constitute an asset within the meaning of Article 1 of Protocol No. 1. Therefore, their complaint was incompatible ratione materiae with this provision.

(b)   Non-exhaustion of domestic remedies

92.  Secondly, the Government argued that the applicants had not exhausted the remedies provided by domestic law with regard to their claims to the leased property.

93.  The applicants had at their disposal the following remedies: 1) they could have seized the court on the basis of Article 189 of the Code of Civil Procedure in order to establish the existence of their priority right to buy; 2) the applicants could have effectively pursued their compensation claim against the Agency, but decided not to do so in the absence of full exemption from the court fees; and 3) lastly, they still have the possibility to institute civil proceedings to recover the outlay incurred in connection with the development of the plot which was transferred to the parish, based on Article 676 of the Civil Code in connection with Article 694 of this Code. In the Government’s view, the above remedies were available to the applicants and could have been used to redress the alleged violation of their property rights.The applicants’ submissions

94.  The applicants disagreed with the Government’s submissions. They argued that the right to buy the leased property, acquired on the basis of section 38a of the 1991 Act, had first been violated on 30 June 2005, the date of the expiry of the original agreement, and continued to the present day. The Agency had failed to act in accordance with the 1991 Act, namely to draw up an expected sale contract for the property upon the expiry of the lease agreement, pursuant to the principles laid down in the Act. The applicants did not comment on the Government’s objection regarding non‑exhaustion of domestic remedies.The Court’s assessment

95.  The Court notes that the applicants complained under Article 1 of Protocol No. 1 that they had been deprived of their legitimate expectation of acquiring the leased property. The Government firstly argued that the domestic law did not confer on the applicants any sufficiently established claim to acquire the leased property, which resulted in Article 1 of Protocol No. 1 being inapplicable to their complaint. Secondly, the Government submitted that the applicants had failed to exhaust available domestic remedies.

96.  The Court considers that in the circumstances of the case it is not necessary to determine whether Article 1 of Protocol No. 1 is applicable to the case, because even assuming that it is, the applicants’ complaint should be rejected for non-compliance with the rule of exhaustion of domestic remedies laid down in Article 35 § 1 of the Convention for the following reasons.

(a)   General principles on exhaustion of domestic remedies

97.  The Court reiterates that the machinery of protection established by the Convention is subsidiary to the national systems safeguarding human rights. This Court is concerned with the supervision of the implementation by Contracting States of their obligations under the Convention. It cannot, and must not, usurp the role of Contracting States whose responsibility it is to ensure that the fundamental rights and freedoms enshrined therein are respected and protected on a domestic level. The rule of exhaustion of domestic remedies is therefore an indispensable part of the functioning of this system of protection. States are dispensed from answering before an international body for their acts before they have had an opportunity to put matters right through their own legal system and those who wish to invoke the supervisory jurisdiction of the Court as concerns complaints against a State are thus obliged to use first the remedies provided by the national legal system. The Court cannot emphasise enough that it is not a court of first instance; it does not have the capacity, nor is it appropriate to its function as an international court, to adjudicate on large numbers of cases which require the finding of basic facts or the calculation of monetary compensation – both of which should, as a matter of principle and effective practice, be the domain of domestic jurisdictions (see, Demopoulos and Others v. Turkey (dec.) [GC], nos. 46113/99, 3843/02, 13751/02, 13466/03, 10200/04, 14163/04, 19993/04 and 21819/04, § 69, ECHR 2010; and Akdivar and Others v. Turkey, 16 September 1996, § 65, Reports 1996‑IV).

98.  In so far as there exists at the national level a remedy enabling the domestic courts to address, at least in substance, the argument of a violation of a given Convention right, it is that remedy which should be exhausted. It is not sufficient that the applicant may have unsuccessfully exercised another remedy which could have overturned the impugned measure on other grounds not connected with the complaint of a violation of a Convention right. It is the Convention complaint which must have been aired at national level for there to have been exhaustion of “effective remedies”. It would be contrary to the subsidiary character of the Convention machinery if an applicant, ignoring a possible Convention argument, could rely on some other ground before the national authorities for challenging an impugned measure, but then lodge an application before the Court on the basis of the Convention argument (see Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, § 75, 25 March 2014, with further references). Article 35 § 1 also requires that the complaints intended to be made subsequently in Strasbourg should have been made to the appropriate domestic body, at least in substance and in compliance with the formal requirements and time-limits laid down in domestic law (ibid., § 72).

99.  As regards the burden of proof, it is incumbent on the Government claiming non-exhaustion to satisfy the Court that the remedy was an effective one, available in theory and in practice at the relevant time. Once this burden has been satisfied, it falls to the applicant to establish that the remedy advanced by the Government was in fact exhausted, or was for some reason inadequate and ineffective in the particular circumstances of the case, or that there existed special circumstances absolving him or her from this requirement (ibid., § 77).

(b)   Application to the present case

100.  According to the applicants’ submission, their right to buy the leased property was based on sections 38a and/or 29 of the 1991 Act. The Court notes that in the first set of civil proceedings instituted in 2009 the applicants limited their action to seeking annulment of the Property Commission’s decision. In those proceedings, as observed by the Court of Appeal, the applicants had not raised a claim relating to a breach of their priority right to buy or other rights based on the civil law (see paragraph 29 above). In the ensuing decision on the applicants’ constitutional complaint, the Constitutional Court, referring to the Supreme Court’s case-law, noted that the applicants had the possibility of instituting civil proceedings with a view to asserting their right to buy (see paragraph 34 above).

101.  The above-mentioned decisions indicate that the domestic law provided a legal avenue before civil courts for asserting the applicants’ priority right to buy. They further show that it was equally open to the applicants to pursue before civil courts their claim under the Civil Code with regard to outlay incurred in connection with the development of the plot. On this point, the Court notes that the applicants intended to file a separate claim in respect of their investment made on the leased property (see paragraph 39 above).

102.  In accordance with the general principles on exhaustion of domestic remedies, the applicants were required to test their claims based on sections 38a and/or 29 of the 1991 Act in the civil proceedings. The Court attaches importance to the fact that the applicants did not raise any arguments challenging the effectiveness of the remedy at issue.

103.  Following the domestic courts’ findings referred to above (see paragraph 100), the applicants initiated civil proceedings against the Agency, seeking compensation on account of having been deprived of their right to buy (see paragraph 36 above). The Court is satisfied that the civil proceedings offer a reasonable prospect of success for the applicants to have their claims adjudicated on the merits and, potentially, to obtain damages. They are therefore capable of providing redress in the circumstances for the alleged violation of the applicants’ rights under Article 1 of Protocol No. 1, and thus constitute an effective remedy to be used for the purposes of Article 35 § 1 of the Convention (see, mutatis mutandis, Laurus Invest Hungary KFT and Others v. Hungary (dec.), nos. 23265/13 and 5 others, § 43, ECHR 2015 (extracts)).

104.  However, the Court notes that the applicants failed to pursue their claims regarding the right to buy as a result of what was, in their view, an unjustified refusal to grant them full exemption from court fees. Nonetheless, the Court has rejected as manifestly ill-founded the applicants’ complaint under Article 6 § 1 of the Convention to the effect that the impugned refusal unjustifiably hindered their right of access to a court (see paragraphs 88-89 above).

105.  In those circumstances, the Court considers that the applicants failed to make proper use of a civil remedy which was available and capable of redressing their grievances.

106.  Consequently, the applicants cannot be considered to have done everything that could reasonably be expected of them to exhaust domestic remedies. The Court therefore allows the Government’s objection and rejects the complaint regarding the alleged violation of the applicants’ rights under Article 1 of Protocol No. 1 for failure to exhaust domestic remedies, pursuant to Article 35 §§ 1 and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 30 January 2020.

Abel CamposKsenija Turković
RegistrarPresident

[1].  As per the Law of 6 May 1999 amending the 1991 Act which entered into force on 15 June 1999 (Journal of Laws 1999, no. 49, item 484).

[2].  As per the Law of 29 December 1993 amending the 1991 Act which entered into force on 19 January 1994 (Journal of Laws 1994, no. 1, item 3).

Full & Egal Universal Law Academy