Communicated on 16 December 2014
FOURTH SECTION
Application no. 31210/11
Danuta POGODA
against Poland
lodged on 6 May 2011
STATEMENT OF FACTS
The applicant, Ms Danuta Pogoda, is a Polish national, who was born in 1930 and lives in Czestochowa.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
The enterprise belonging to the applicant’s legal predecessors at that time was nationalised on 15 July 1948 by virtue of the decision of the Minister of Industry and Trade under the Law of 3 January 1946 on the nationalisation of basic branches of the State economy (Ustawa o przejęciu na własność Państwa podstawowych gałęzi gospodarki narodowej).
By way of an administrative decision given in 1959 the plot of land on which the enterprise was situated was officially listed as a constituent part of the nationalized enterprise (przedsiębiorstwo państwowe) which continued to use it.
On 16 March 1994 the Minister of Industry and Trade declared both decisions null and void. It observed that they had been given in breach of the laws applicable at the material time in that the property did not belong to the category of properties subject to nationalisation.
On 4 January 1996 the Supreme Administrative Court dismissed the company’s complaint against that decision. It found that the property in question was not of an industrial character and should therefore not have been expropriated as it had not met the expropriation criteria applicable in 1948.
In the meantime, on 1 August 1994 the company was declared insolvent. The insolvency proceedings commenced. The company did not transfer the actual possession of the property to the legal successors of the former owners, despite their requests to this effect.
In 1996 W.K., a legal successor of one of the original owners of the property, filed a claim for repossession of the property against the state‑owned company. On 30 January 1998 the claim was modified and the original repossession claim was replaced by an action for compensation for non-contractual use of property (wynagrodzenie za bezumowne korzystanie).
On 8 March 1999, in a separate set of proceedings for repossession which had apparently been lodged with the court on an unspecified date, the Regional Court ordered the company to return the property to W.K. This judgment became final. The transfer to W.K. and apparently also to the applicant was effectuated on 11 May 1999.
On 26 January 2000 the applicant joined the proceedings in which W.K. sought compensation for non-contractual use of property (see above) as co‑plaintiff.
In 2001 the applicant sold her share in the ownership of the property amounting to 12/80 for 35,000 Polish zlotys (PLN) (approx. 8,750 euros (EUR).
On 7 March 2002 the Częstochowa Regional Court gave a judgment in the claimants’ favour. It awarded the applicant PLN 262,000 (approx. EUR 65,500) in compensation for the use of the property concerned by the state‑owned company. The defendant company, represented by the insolvency trustee (syndyk masy upadłości), appealed.
On 30 June 2003 the Katowice Court of Appeal modified the judgment and rejected the claim. The court considered that claims against companies in insolvency could be sought only in insolvency proceedings. The applicant failed to do so. Ordinary civil proceedings were not the appropriate legal avenue for her.
On 23 June 2004 the Supreme Court quashed the decision of the appellate court and remitted the case. The Supreme Court considered that the case-law concerning the appropriate type of proceedings to be resorted to in cases against insolvent companies was inconsistent. The case‑law, including that of the Supreme Court, as to whether a case could be examined in proceedings other than insolvency proceedings, was criticised and the judicial practice diverged. The Supreme Court was of the view that as long as the applicant had not joined the insolvency proceedings, her civil claim against the insolvent company should have been examined by the civil court.
On 16 September 2004 the Katowice Court of Appeal quashed the first- instance judgment of 7 March 2002 and remitted the case. The trustee in insolvency of the company was the defendant in the proceedings. The court was of the view that after the administrative courts had upheld, in 1996, the decision declaring the expropriation decision null and void, the applicant should be regarded as owner of the property concerned in 12/80. However, the first-instance court had failed to establish the period during which the state-owned company had been using the property without a legal basis.
On 14 July 2005 the insolvency proceedings were terminated and on 18 July 2005 the state-owned company was deleted from the relevant register.
On an unspecified later date the State Treasury joined the proceedings as a legal successor of the defunct company.
On 10 July 2006 the Czestochowa Regional Court gave a judgment. It found against the defendant State Treasury and awarded the applicant PLN 51,071 (approx. EUR 12,700) in compensation for the unlawful use of property from January 1996 (the Supreme Administrative Court’s judgment became final) until May 1998, when the trustee in insolvency had first offered to return the property to the plaintiffs. The domestic court considered that the State Treasury was responsible for the debt under Article 40 § 2 of the Civil Code as it had become the company’s legal successor after the insolvency proceedings had been terminated. The value of the assets of the defunct company taken over by the State Treasury after the insolvency proceedings came to a close was estimated at PLN 3,012,439.
Both the applicant and the State Treasury appealed. The defendant State Treasury argued that the court had wrongly applied Article 40 para. 2 of the Civil Code by holding that the State Treasury was responsible for the obligations of a state-owned company which had ceased to exist. The applicant challenged May 1998 as the final date which the court had accepted as the end of period during which the company had been in possession of the property in bad faith.
On 25 April 2008 the Court of Appeal upheld the judgment in principle. The court stressed that the State was liable jointly with the State‑owned company. The limit of the State’s civil liability was equivalent to the value of assets recovered by it after the company had closed down. The court increased the amount of compensation to be paid to the applicant for the period to PLN 200,839 (approx. EUR 50,200). It considered that in the light of the findings made by the Supreme Administrative Court the state-owned company had possessed the property in bad faith ab initio. Hence, the period that should be taken into consideration had started in 1988. That period corresponded to the ten-year period of prescription provided for pecuniary claims under Polish civil law. Hence, it awarded the applicant compensation for the period between 1988 and 1995. The court was further of the view that Article 40 para. 2 of the Civil Code provided for the State Treasury being liable for the obligations of a state-owned company liquidated by way of insolvency.
The court reiterated that the applicant was not obliged to seek payment of the debt in the insolvency proceedings and emphasised that it agreed with the interpretation accepted by the Supreme Court in its decision of 23 June 2004. It was further of the view that after insolvency proceedings had come to an end, there remained certain assets which had been transferred to the State Treasury. In these circumstances, the debts incurred by the company should be paid from the assets of the State Treasury. The court further noted that it would have been contrary to fairness and to substantive justice if the State should shirk the responsibility for debts incurred by the liquidated company it had owned, the more so as due to the unlawfulness of the original expropriation decision given in 1948 the company had ab initio been a possessor of the land in question in bad faith.
The State Treasury lodged a cassation appeal challenging the fact that it could have been held responsible under domestic law for the debts of a defunct state-owned company.
On 30 September 2009 the Supreme Court allowed the cassation appeal, quashed the judgment of the appellate court and remitted the case. It summarised its case-law regarding interpretation of Article 40 § 2 of the Civil Code. In the older approach that court was of the view that the State Treasury continued to be responsible for debts incurred by state‑owned companies which had become insolvent, jointly with that company until it was de-registered. In the newer approach, the courts tended to be of the view that after 2003, after a state-owned company ceased to exist, the State Treasury could not be held liable for debts incurred by them. The Supreme Court shared the latter approach. It considered that for Article 40 § 2 of the Civil Code to be applicable, the transfer of the assets of the State company to the State Treasury should be effectuated when the state company was still in existence.
On 22 December 2009 the Katowice Court of Appeal dismissed the applicant’s claim while applying this interpretation of the law. It ordered the applicant to pay to the State Treasury PLN 363,919 (EUR 86,900) in court costs.
The applicant appealed.
On 23 November 2010 the Supreme Court refused to entertain the applicant’s cassation appeal. It noted that the applicant was right in submitting that the interpretation of Article 40 para. 2 of the Civil Code in the judicial practice was divergent and had led to contradictory results. However, in the present case the appellate court was bound by the legal view expressed by the Supreme Court in its judgment of 30 September 2009. As it had correctly applied that legal view as to the interpretation of this provision, there were no grounds on which to accept the cassation appeal for examination.
B. Relevant domestic law and practice
In a number of decisions the domestic courts held that the State should be held liable for obligations incurred by the state-owned companies after their liquidation (a seven-judges bench resolution of the Supreme Court, I PZP 56/92 of 15 December 1992; the Supreme Court judgments I PRN 18/95 of 26 May 1995; III CKN 110/98 of DATA; the Łódź Court of Appeal, I ACa 1312/12 of 26 February 2013).
In another strand of the case-law the courts held otherwise (the Supreme Court, III CSK 4/06 of 22 February 2006; CSK 556/07 of 27 March 2008; I CSK 181/07 of 8 August 2007; I CSK 259/10 of 3 February 2011, 22 October 2002 of II UK 123/03; the Poznań Court of Appeal, I ACa 1150/05 of 13 April 2013).
COMPLAINT
The applicant complains under Article 1 of Protocol No. 1 to the Convention that as a result of the shortcomings in the decisions of the domestic courts and the lack of legal certainty as to the State’s civil liability for debts incurred by defunct State-owned companies, she was deprived of compensation for damage caused by non-contractual use of her land.
QUESTIONS TO THE PARTIES
1. Has the applicant’s right to the peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1, been respected in the case (see Plechanow v. Poland, cited above, § 99-103)? In particular, was the principle of legal certainty, as developed in the Court’s case-law in the interpretation of this provision, complied with by the domestic courts?
Reference is made, in particular, to the following:
- three successive courts held that the civil proceedings were an appropriate legal avenue to be pursued in her case and awarded her compensation;
- they considered that the State was liable for debts incurred by defunct State-owned enterprises;
- ultimately her claim was dismissed as the courts were in favour of the view expressed by another strand of case-law, namely that the State could not be held responsible;
- substantial assets of the defunct company remained after the parallel bankruptcy proceedings had come to end.
2. Has the applicant had access to a court within the meaning of Article 6 § 1 of the Convention?
Full & Egal Universal Law Academy