FIRST SECTION
DECISION
Application no. 1041/12
PAROWA FABRYKA CUKRÓW I CZEKOLADY KRYSZTAŁ against Poland
and 2 other applications
(see list appended)
The European Court of Human Rights (First Section), sitting on 22 May 2018 as a Committee composed of:
Aleš Pejchal, President,
Krzysztof Wojtyczek,
Armen Harutyunyan, judges,
and Renata Degener, Deputy Section Registrar,
Having regard to the above applications lodged on the various dates indicated in the appended table,
Having deliberated, decides as follows:
THE FACTS
1. A list of the applicants is set out in the appendix.
A. The circumstances of the case
2. The facts of the cases, as submitted by the applicants, may be summarised as follows.
1. Background to the cases
3. On 3 January 1946 the State National Council (Krajowa Rada Narodowa) passed the Law on the nationalisation of basic branches of the State economy (Ustawa o przejęciu na własność Państwa podstawowych gałęzi gospodarki narodowej – “the 1946 Act”; see paragraph 43 below). Owners of the nationalised enterprises were to receive compensation, the amount of which was to be determined at a later stage pursuant to a Cabinet ordinance yet to be enacted. However, no such ordinance has ever been enacted.
2. Application no. 1041/12
4. The applicant company was established before the Second World War and registered in the companies register at the Cracow Regional Court under the name Parowa Fabryka Cukrów i Czekolady “Kryształ” Sp. z. o.o. In 1949 its assets included a factory building with numerous machines and plots of land in Cracow and Gdynia.
5. On 27 December 1948 the company was nationalised by virtue of a decision of the Minister for Industry and Trade (“the 1948 decision”).
(a) Proceedings for the annulment of the 1948 decision
6. On 27 May 1990 J.D, Z.K and C.L., heirs of the former shareholders of the applicant company, applied to the Minister for Economy (Minister Gospodarki) for restitution of the expropriated property.
7. On 22 March 2000 they modified their request and lodged an application for declaring the 1948 decision null and void.
8. On 18 October 2002 the Minister for Economy declared null and void the 1948 decision. The Minister established that the company’s real employment capacity at the material time had been no more than forty nine people on one shift and not more than fifty, as estimated for the purposes of the impugned decision. Consequently, nationalisation of the company had been unlawful as, pursuant to section 3(1) B of the 1946 Act, it could only be effected in respect of enterprises employing a minimum of fifty people on one shift.
9. The decision was upheld by the Warsaw Regional Administrative Court on 2 June 2004.
(b) The applicant company’s claim for compensation
(i) Administrative proceedings
10. On 5 September 2005 the applicant company lodged a claim with the Minister of Economy under Article 160 of the Code of Administrative Procedure (“CAP”) for compensation.
11. On 13 June 2006 the Minister returned the claim as meanwhile Article 160 had been repealed. The proceedings were terminated by the Warsaw Regional Administrative Court on 27 June 2007.
(ii) Civil proceedings
12. On 21 November 2007 the applicant company lodged a claim with the Warsaw Regional Court seeking damages arising from the unlawful nationalisation. It sought 12,913,419 Polish zlotys (PLN) (approximately 3,228,354 euros (EUR)) and the costs of the proceedings. The claim was based on Article 160 of CAP.
13. On 24 October 2011 the Warsaw Regional Court partly granted the claim. It awarded the applicant company PLN 1,445,815 (approx. EUR 361,454) with interest from 24 October 2011. The court noted that the applicant company had already been restituted the factory building. It further held that the company should be compensated by the State for the lost equipment, products and supplies. However, it considered that the claim for the loss of expected profit (lucrum cessans) was manifestly ill-founded. In this respect it repeated the reasons given by the Supreme Court in its Resolution of 31 March 2011 (see paragraphs 45, 46 below).
14. On 31 July 2012 the Warsaw Court of Appeal amended the first-instance judgment and awarded the applicant company additional compensation for the actual loss (damnum emergens), in the amount of PLN 1,517,651 (approx. EUR 379,413). The court relied on the fact that in the 1960’s the factory had been transformed into an apartment building. On 9 January 2008, the date when the building was restituted to the applicant company, there were ten apartments and twelve commercial premises. All ten apartments were occupied, eight of them on the basis of the special lease scheme. In the court’s view, had it not been for the nationalisation of the applicant company’s property, the factory building would not have been converted into an apartment building. Consequently, the applicant company suffered damage on account of this conversion.
15. On 20 November 2013 the Supreme Court, sitting as a bench of three judges, quashed the Court of Appeal’s judgment in so far as it had awarded additional PLN 1,517,651 and dismissed the applicant company’s claim in this respect. The Supreme Court held that there had been no direct causal link between the nationalisation of the property and the fact that the apartments created in the converted factory building had been subject to the special lease scheme. The judgment is final.
3. Application no. 38617/13
16. Before the Second World War the applicants’ legal predecessor, owned a tannery in Leszno which operated under the name “White Leather Tannery A. Herman and Son” (Przedsiębiorstwo Garbarni Białoskórniczej A. Herman i Syn).
17. In 1945 the tannery consisted of several plots of land, factory buildings and had its own railroad spur.
18. On 2 November 1950 the enterprise was nationalised by virtue of a decision of the Minister for Light Industry (Minister Przemysłu Lekkiego) (“the 1950 decision”).
(a) Proceedings for the annulment of the 1950 decision
19. On 10 December 1990 the heirs of the of the former owners of the nationalised enterprise: A.H., J.H., JA.H., and one of the applicants, applied to the Minister for Economy (Minister Gospodarki) for restitution of the expropriated property. Subsequently, they modified their request into an application for declaring the 1950 decision null and void.
20. On 17 August 2004 the Minister for Economy declared null and void the 1950 decision. The Minister established that the enterprise’s potential employment capacity had been no more than forty five people on one shift and not over fifty as it had been estimated for the purposes of the 1950 decision. Consequently, nationalisation of the company had been unlawful.
21. The decision of 17 August 2004 was eventually upheld by the Supreme Administrative Court on 31 January 2007.
b) The applicants’ claim for compensation
(i) Administrative proceedings
22. On 9 August 2004 one of the applicants lodged a claim under Article 160 of CAP for compensation with the Minister of Economy. On 13 June 2007 the Minister of Economy returned the claim as meanwhile that provision had been repealed.
(ii) Civil proceedings
23. In 10 March 2008 the applicants lodged an application with the Warsaw District Court proposing to settle amicably with the State Treasury their compensation claims arising from unlawful nationalisation. They asked for a total sum of PLN 7,800,000 (approx. EUR 1,950,000), of which PLN 6,300,000 (approx. EUR 1,575,000) for the actual loss and the remainder of that sum for the loss of expected profit. At a conciliatory hearing held on 21 April 2008 the parties failed to agree on a settlement.
24. On 7 April 2011 the applicants and J.H. (another heir of the former owner) lodged a claim with the Poznań Regional Court seeking damages arising from the nationalisation of the tannery. They sought PLN 9,000,000 (approx. EUR 2,250,000) to each of them with statutory interest from 1 April 2003 and the costs of the proceedings. They further extended their claim.
25. On 3 July 2012 the Poznań Regional Court branch in Leszno partly granted the claim. It awarded to each of the plaintiffs PLN 11,714,385 (approx. EUR 2,928,596) with interest from 1 April 2005. The court held that there was no doubt that the applicants had sustained actual loss that should be compensated by the State. It noted in that regard that the applicants had already been restituted some of the nationalised land. It further held that the company should be compensated by the State for the lost equipment, products and supplies. However, referring to the Supreme Court’s Resolution of 31 March 2011 (see paragraphs 45-46 below) it considered that the claim for the loss of expected profit should be dismissed.
26. On 28 December 2012 the Poznań Court of Appeal modified the first-instance judgment. It dismissed the applicants’ claims in so far as they exceeded PLN 1,575,000 (approx. EUR 393,750), as time-barred. It further dismissed the applicants’ claims for loss of expected profit and remitted the remainder of the case to the Regional Court instructing it to recalculate the company’s assets, with reference to experts’ opinions.
27. On 22 September 2015 the Supreme Court refused to examine the applicant’s cassation appeal. Consequently, the ruling relating to the claim for loss of expected profit became final. It would appear that the proceedings, in so far as they relate to the claim for the actual loss, are pending before the Poznań Regional Court.
28. Meanwhile, on 17 April 2013 the applicants also lodged a constitutional complaint. They claimed that Article 160 of the CAP was in breach of the Constitution in so far as it excluded the possibility of obtaining compensation for the loss of expected profit in a situation when the administrative decision had been issued before the entry into force of the Constitution, even though the loss occurred after the Constitution’s entry into force.
29. On 30 October 2015 the Constitutional Court refused to examine the complaint on the ground that it had already examined a similar legal issue in its judgment of 24 April 2014 (SK 56/12)(see paragraph 47 below).
4. Application no. 50598/14
30. The applicant’s legal predecessor was an owner of property situated in Rzeszów consisting of three plots of land. On an unknown date before 31 December 1954, the property was de facto seized by the Regional Public Car Transport Company in Rzeszów (“Transport Company”) (Wojewódzkie Przedsiębiorstwo Państwowej Komunikacji Samochodowej w Rzeszowie).
31. On 29 April 1961 the Minister of Transport (Minister Komunikacji) issued a decision (“the 1961 decision”) validating the transfer of ownership of plots in question pursuant to the provisions of the Act of 25 February 1958 on regulating the legal status of property under the State management (ustawa z dnia 25 lutego 1958 r. o uregulowaniu stanu prawnego mienia pozostającego pod zarządem państwowym) (“the 1958 Act”).
(a) Proceedings for the annulment of the 1961 decision
32. On 10 March 1997 the applicant applied to the Minister for Transport and Maritime Economy (Minister Transportu i Gospodarki Morskiej) for declaring the 1961 decision null and void.
33. On 15 May 2002 the Minister for Infrastructure (Minister Infrastruktury) declared the 1961 decision null and void. The Minister noted that the 1958 Act had only allowed for nationalisation of properties which had been subject to State’s management (mienie pozostające pod zarządem państwowym). However, the property in question had been taken over by the Transport Company without any title. Therefore, the provisions of the 1958 Act were not applicable.
34. On 2 December 2004 one of the plots was restituted to the applicant.
(b) The applicant’s claim for compensation
(i) Administrative proceedings
35. On 4 February 2005 the applicant lodged a claim under Article 160 of the CAP with the Minister for Transport and Construction (Minister Transportu i Budownictwa) for compensation for unlawful nationalisation.
36. On 20 March 2006 the Minister refused to grant compensation on the ground that the applicant had not proved that he had suffered damage and/or that there was a direct causal link between any damage and the 1961 decision.
(ii) Civil proceedings
37. On 26 April 2006 the applicant lodged a claim with the Warsaw Regional Court seeking damages arising from the nationalisation of his legal predecessor’s property. He sought PLN 199,000 (approx. EUR 49,750) and the costs of the proceedings. The claim was based on Article 160 § 2 of the CAP.
38. Subsequently, on 15 June 2007 the applicant extended his claim to PLN 1,730,970 (approx. EUR 432,742). This amount comprised compensation for the loss of expected profit (PLN 1,490,000) (approx. EUR 372,500) and compensation for the legal defects (wady prawne) of the returned property (PLN 235,000) (approx EUR 58,750).
39. On 20 June 2008 the Warsaw Regional Court dismissed the claim as manifestly ill-founded. The court held that the applicant did not prove any damage relating to the legal defects of the property. With relation to the claim for the loss of expected profit it repeated the reasons given by the Supreme Court’s in its judgment of 25 January 2006 (no. I CK 273/05) (see paragraph 44 below). The Regional Court held that, even though Article 160 of the CAP had been declared unconstitutional by the Constitutional Court in so far as it had restricted compensation to actual loss, this ruling had not concerned claims for compensation for damage that had been incurred before the Constitution had entered into force, that is before 17 October 1997.
40. On 28 April 2009 the Warsaw Court of Appeal quashed the judgment in so far as it had concerned the claim for the loss of expected profit. It also dismissed the remainder of the applicant’s appeal.
41. On 18 September 2011 the Warsaw Regional Court dismissed the claim for the loss of expected profit. The court referred to the reasons given by the Supreme Court in its Resolution of 31 March 2011 (see paragraphs 45, 46 below).
42. The judgment was upheld by the Warsaw Court of Appeal on 11 July 2012 and subsequently by the Supreme Court on 11 October 2013.
B. Relevant domestic law and practice
1. Nationalisation of industrial property and State’s liability in tort
43. The relevant provisions of the domestic law and practice concerning nationalisation of industrial property and State’s liability in tort are set out in the Court’s decision in the case of Lubelska Fabryka Maszyn i Narzędzi Rolniczych ‘Plon’ and 2 other applications ((dec.) 1680/08, §§ 44-62, 3 October 2017).
2. Compensation for damage caused by unlawful administrative decisions
44. The relevant provisions of the domestic law and the case-law of the domestic courts relating to compensation for damage caused by unlawful administrative decisions are set out in the Court’s decision in the case of Dobrzańska and Dobrzański v. Poland (see, (dec.) no. 64128/12, §§ 22-33, 2 February 2016)
3. Supreme Court’s resolution on the application of Article 160 of the CAP to compensation claims
45. On 30 March 2011 the Civil Chamber of the Supreme Court, sitting in plenary (25 judges), gave a resolution (no. III CZP 112/10) on the application of Article 160 of the CAP and rules regarding compensation. The resolution was given in response to legal questions submitted by the First President of the Supreme Court in connection with certain problems and divergences arising in judicial practice, in particular in respect of the temporal effects of Article 160.
46. The resolution contains an extensive reasoning which, in so far as relevant, may be summarised as follows:
1) Article 160 §§ 1,2,3 and 6 of the CAP applies to all claims for damages arising from an issuance of a final administrative decision given before 1 September 2004, which has been declared null and void or has been declared as being issued in breach of Article 156 § 1 of the CAP. In contrast, paragraphs 4 and 5 of Article 160, setting out the procedure for vindicating such claims, should be considered as no longer applicable. Consequently, a party seeking compensation under this provision should file an action directly with a civil court.
2) Where an annulled administrative decision has been given before the entry into force of the Constitution (17 October 1997), compensation defined in Article 160 of the CAP shall not include loss of expected profit sustained in consequence of its issuance, even if such loss has occurred after this date.
4. The Constitutional Court
47. On 24 April 2014 the Constitutional Court gave judgment (SK 56/12) holding as follows:
“Article160 § 1 of the Code of Administrative Proceedings in conjunction with Article 5 of the Act of 17 June 2004 amending the Civil Code, as far as it limits compensation for damaged caused by an unlawful act of a public authority to actual loss in cases where the deficient final decision was issued before 17 October 1997:
a. is consistent with Article 2 [rule of law in a democratic state] and with Article 32 § 1 [equality before the law] of the Constitution;
b. is not inconsistent with Article 77 § 1 of the Constitution.”
COMPLAINTS
48. All applicants complained, under Article 1 of Protocol No. 1 to the Convention, that as a result of the case-law of the Supreme Court and the Constitutional Court they had been deprived of compensation for the loss of expected profit.
49. Two applicants (application nos. 93861/13 and 50598/14) also asserted a breach of Article 1 of Protocol No 1 to the Convention on the ground that their legal predecessor’s property was nationalised after the Second World War.
50. Two applicants (application nos. 1041/12 and 50598/14) alleged under Article 13 of the Convention that they did not have an effective remedy for their complaints under Article 1 of Protocol No 1 to the Convention.
51. Lastly, the applicants in application no. 93861/13 complained under Article 6 of the Convention about the fact that a civil court dismissed part of their claims as time-barred.
THE LAW
A. Joinder of the applications
52. Given their similar factual and legal background, the Court considers that the three applications should be joined pursuant to Rule 42 § 1 of the Rules of Court.
B. Complaint under Article 1 of Protocol No. 1 to the Convention
53. The applicants alleged that they had been unable to obtain full compensation for their property nationalised after the Second World War notwithstanding the fact that the authorities had confirmed that the nationalisation decisions had been null and void. They relied on Article 1 of Protocol No. 1 to the Convention, which reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
54. The Court reiterates that where the proprietary interest is in the nature of a claim it may be regarded as an “asset” only where it has a sufficient basis in national law, for example where there is settled case-law of the domestic courts confirming it (see Kopecký v. Slovakia [GC], no. 44912/98, § 52, ECHR 2004‑IX).
55. The Court observes that in all the three cases under consideration, administrative authorities’ confirmed that the nationalisation decisions were null and void (see paragraphs 8, 20 and 33 above). Consequently, the applicants had a possibility to claim damages for nationalisation under Article 160 of the CAP (see, Ogórek v. Poland (dec), no. 28490/03, § 33-36, 18 September 2012 and Pikielny v. Poland (dec.) no. 3524/05 § 58, 18 September 2012, and a contrario, Lubelska Fabryka Maszyn Rolniczych ‘Plon’, cited above § 85).
56. Subsequently, the applicants in all the cases were restituted some part of the nationalised property (see paragraphs 13, 25 and 34 above). In the first case (no. 1041/12) the applicant company was also awarded compensation for the actual damage caused by the nationalisation of the enterprise in question corresponding to the value of the damages to the building, lost technical equipment, products and supplies (see paragraphs 13 and 15 above). The proceedings relating to the claim for actual damage in the second case (no. 38617/13) are still pending (see paragraph 27 above). As regards the third application (no. 505981/14), the applicant’s claim was dismissed (see paragraph 39 above).
57. The Court observes that crux of the matter is that the applicants’ claims for the loss of expected profit were rejected by the domestic courts. In this respect it notes that the domestic courts consistently held, with reference to the case-law of the Supreme Court, that when an annulled administrative decision had been given before 17 October 1997, compensation provided by Article 160 of the CAP did not include loss of expected profit (see paragraphs 13, 25, 26, 39, and 41 above).
58. In that connection, the present cases resemble the case of Dobrzańska and Dobrzański v. Poland (cited above), in which Article 1 of Protocol No. 1 was found to be inapplicable in similar circumstances. The Court held in that case that the claim for loss of expected profit had not had a sufficient basis either in the relevant domestic provisions or in the practice of the domestic courts.
59. In the light of the conclusions reached by the domestic courts in the present cases, the Court considers that the applicants’ claims are not based on any statutory provision. Nor can it be said that such claims have been recognised in the Polish courts’ case-law.
60. Accordingly, the Court finds that the applicants cannot be considered to have had any claim under domestic law that could qualify as a “possession” protected under Article 1 of Protocol No. 1 to the Convention.
61. It follows that these complaints are incompatible ratione materiae with the provisions of the Convention and the Protocols thereto within the meaning of Article 35 § 3, and must be rejected pursuant to Article 35 § 4.
C. Remaining complaints
62. In so far as the applicants complained under Article 1 of Protocol No 1 about the fact that their legal predecessor’s property was nationalised, the Court observes that the properties in question were nationalised in 1948, 1950 and 1954 respectively (see paragraphs 5, 18 and 30 above).
63. The Court reiterates that the deprivation of ownership or of another right in rem is in principle an instantaneous act and does not produce a continuing situation of “deprivation of a right” (see Malhous v. the Czech Republic (dec.), no. 33071/96, ECHR 2000‑XII).
64. Consequently, given that given that Article 1 of Protocol No. 1 entered into force with respect to Poland only on 1 May 1994, the Court considers that, these complaints are incompatible ratione temporis with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.
65. In so far the applicants (application nos. 1041/12 and 50598/14) alleged a breach of Article 13 of the Convention, the Court reiterates that this provision of the Convention only applies where an individual has an “arguable claim” to be the victim of a violation of a Convention right. Given its findings under Article 1 of Protocol No 1 to the Convention (see paragraph 60 above), the Court considers that the applicants have no “arguable claim” and that the complaint under Article 13 should also be rejected under Article 35 §§ 3 (a) and 4 of the Convention.
66. Lastly, as regards the complaint under Article 6 (application no. 93861/13), the Court finds it to be of a fourth-instance nature as it relates to the outcome of the proceedings. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court, unanimously,
Decides to join the applications;
Declares the applications inadmissible.
Done in English and notified in writing on 14 June 2018.
Renata DegenerAleš Pejchal
Deputy RegistrarPresident
Appendix
No.
Application no.
Lodged on
Applicant
Place of residence
Represented by
1041/12
08/12/2011
PAROWA FABRYKA CUKRÓW I CZEKOLADY KRYSZTAŁ
Kraków
Józef FORYSTEK
38617/13
07/06/2013
Anna HERMAN
Leszno
Maria Lewandowska
Leszno
Jacek Herman
Poznań
Jarosław PEDA
50598/14
07/07/2014
Jakub BULANDA
Kraków
Marcin IMIOŁEK
Full & Egal Universal Law Academy