FOURTH SECTION
DECISION
Application no. 70720/11
Zdzisław WOŹNY
against Poland
The European Court of Human Rights (Fourth Section), sitting on 15 December 2015 as a Chamber composed of:
András Sajó, President,
Vincent A. De Gaetano,
Paulo Pinto de Albuquerque,
Krzysztof Wojtyczek,
Egidijus Kūris,
Iulia Antoanella Motoc,
Gabriele Kucsko-Stadlmayer, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having regard to the above application lodged on 10 November 2011,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr Zdzisław Woźny, is a Polish national who was born in 1949 and lives in Elbląg. He is represented before the Court by Ms M. Szereda, a lawyer practising in Łódź.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
3. The application concerns national bonds issued by the State Treasury in 1936. The bonds were to have been redeemed by 1982. However, the State failed to undertake any steps to redeem them or to pay interest to the holders of those bonds.
4. On 14 November 2005 the applicant instituted civil proceedings for payment against the State Treasury, represented by the Ministry of Finance. He claimed 550,823.19 Polish zlotys (PLN) (approximately 137,700 euros (EUR)).
5. On 19 December 2006 the Warsaw Regional Court dismissed the applicant’s claim, finding that it had become time-barred and that, moreover, its value would in any event approach zero zlotys after the application of all due indexation methods.
6. The applicant appealed against that judgment.
7. On 6 August 2008 the Warsaw Court of Appeal quashed the first‑instance judgment and remitted the case to the Regional Court. It considered, inter alia, that finding the applicant’s claim time-barred had been contrary to the principles of community life (sprzeczna z zasadami współżycia społecznego). The Court of Appeal found that the Regional Court should have examined the applicant’s claim on the merits.
8. On 18 December 2008 the Warsaw Regional Court found part of the claim well founded, awarded the applicant PLN 216,647 (approximately EUR 54,160) and dismissed the remainder of the claim.
9. On 2 February 2009 the Ministry of Finance lodged an appeal against that judgment.
10. On 30 June 2009 the Warsaw Court of Appeal asked the Supreme Court for an explanation of a legal question concerning the applicability to the present case of the indexation clause contained in Article 3581§ 3 of the Civil Code. In particular, the Court of Appeal had doubts as to whether the indexation clause should be applied if a significant change in the value of a claim had resulted from legislative changes.
11. On 22 October 2009 the Supreme Court, in reply to the Court of Appeal’s request, ruled that the Court of Appeal had failed to meet the requirements which would have allowed it to turn to the Supreme Court for interpretation; instead, it stated that the Court of Appeal should decide independently on the present case.
12. On 15 January 2010 the Warsaw Court of Appeal amended the challenged judgment and dismissed the applicant’s claim. The court found, inter alia, that the national bonds had lost their real value because of the 1949 Decree (see paragraph 14) and the 1950 Act (see paragraph 18). Relying on the judgment of the Constitutional Court of 24 April 2007 (see paragraph 27), it ruled that the indexation of the value of the applicant’s claim by way of judicial decision was inadmissible because the change in the value of the claim had been caused by the lawmaker and had not been a result of external, unpredictable causes.
13. The applicant lodged a cassation appeal with the Supreme Court.
14. On 24 March 2011 the Supreme Court dismissed the applicant’s cassation appeal. The Supreme Court endorsed the reasoning of the judgment given by the Court of Appeal and confirmed that the applicant’s claim had indeed lost its economic value as a result of legislative changes enacted in 1949 and 1950.
B. Relevant domestic law and practice
1. The decree of 27 July 1949 on incurring new obligations and on the determination of the amount of non-redeemed pecuniary obligations (o zaciąganiu nowych i określeniu wysokości nie umorzonych zobowiązań pieniężnych)
15. Article 4 provides:
“The payment of dues resulting from pecuniary obligations arising from any title of a private or public nature before the entry into force of the present decree and not redeemed until that day may only be effected in the Polish currency.”
16. At the relevant time, Article 5, subsequently repealed, provided:
“(1) The change in the purchasing power of money during the time between the creation of an obligation and its payment date or performance does not constitute a basis for a change in the amount of the obligation or in the means of the execution of the contract or dissolution of the contract.
(2) Payment of an obligation, specified in Polish currency on the basis of this decree, shall be made in banknotes of the Polish National Bank according to their nominal value, which is equal to the nominal value of banknotes or other means of payment, which were expressed in zlotys and which were in circulation on the territory of Poland or a part thereof before the introduction of the National Polish Bank’s banknotes into circulation.
(3) For the establishment of the value of pecuniary obligations referred to in the present Decree and expressed in the Polish currency, it is irrelevant what means of payment was in circulation at the time of the creation of the obligation.”
17. Article 6 § 2 provides:
“The amount of obligations expressed in zlotys in gold is calculated at 1 zloty for 1 zloty in gold.” (Wysokość należności z zobowiązań pieniężnych wyrażonych w złotych w złocie liczy się jeden złoty za jednego złotego w złocie)
2. Other relevant provisions and practice
18. The Change of Monetary System Act of 28 October 1950 (o zmianie systemu pieniężnego) provided that all public and private obligations expressed in zlotys, irrespective of the time at which they came into existence, were to be recalculated with effect from 30 October 1950 according to the following ratio: 100 “old” Polish zlotys equals 3 Zloty.
19. Under section 9 of this Act, all amounts expressed in “old” zlotys and mentioned in legal provisions binding on the day of the entry into force of this Act were recalculated, by virtue of law, according to the following ratio: 100 “old” zlotys = 3 zloty.
20. The Polish Zloty Denomination Act of 7 July 1994 Act (ustawa o denominacji złotego) introduced a new payment unit: with effect from 1 January 1995 the new unit of PLN 1 was to be worth 10,000 “old” Polish zlotys.
21. Article 32 of the Constitution reads:
1. All persons shall be equal before the law. All persons shall have the right to equal treatment by public authorities.
2. No one shall be discriminated against in political, social or economic life for any reason.
22. Article 64 of the Constitution reads, in so far as relevant, as follows:
1. Everyone shall have the right to ownership, other property rights and the right of succession.
2. Everyone, on an equal basis, shall receive legal protection regarding ownership, other property rights and the right of succession ...
23. Article 3581 § 3 of the Civil Code provides:
“In the case of an essential change of the purchasing power of money after an obligation falls due the court may, after considering the interest of the parties and in accordance with the principles of community life, change the amount or the mode of payment, even if these were fixed in a decision or a contract.”
24. On 24 April 2007 the Constitutional Court gave a judgment (SK 49/05) in which it held that section 12(1) of the Act of 28 July 1990 amending the Civil Code, in so far as it limited the possibility of judicial indexation referred to in Article 3581 § 3 of the Civil Code as regards pecuniary obligations which had come into existence before 30 October 1950 as a result of bonds emitted by the State Treasury, was inconsistent with Article 64 §§ 1 and 3 in conjunction with Article 32 § 1 of the Constitution.
25. In the part named “effects of the judgment” the Constitutional Court noted:
“Taking into consideration the effects of this judgment and the impossibility of claiming the full value of claims arising from national bonds issued before 1939, the matter of possibility and scope and, in particular, the amount of just satisfaction for persons holding such bonds should be resolved by the lawmaker. As stressed on many occasions in its case-law, the Constitutional Court should not replace the lawmaker.
The finding by the Constitutional Court that section 12(1) of the Act of 28 July 1990 amending the Civil Code was inconsistent with the Constitution ... will enable the holders of national bonds to access the indexation of their claims guaranteed by Article 3581 § 3 of the Civil Code. However, in practice, the expiry of limitation periods may effectively deprive claimants of a chance to achieve a positive outcome in the relevant proceedings.
If [the Parliament] does not enact new provisions before section 12 (1) of the Act of 28 July 1990 expires, holders of national bonds, who have been patiently waiting for the settlement of their claims, will be able to lodge [with civil courts] their claims for payment in an amount which will be calculated with the application of the indexation clause.
However, the present judgment of the Constitutional Court does not indicate to the courts the scope, direction or scale of the indexation.”
26. The provisions which had been found unconstitutional were subsequently repealed, which opened the way for applicants to lodge their claims before the courts and to demand that the value of their claims be increased by judicial order.
COMPLAINTS
27. The applicant complained under Article 1 of Protocol No. 1 to the Convention and under Articles 6 and 14 of the Convention.
28. He claimed, in particular, that the authorities had done nothing to pay their obligations in respect of the national bonds. He further submitted that his right of access to court was of an illusory nature. Firstly, the proceedings before the domestic courts had been completely arbitrary; secondly, as a result of those proceedings his pecuniary claims had been deprived of their economic value.
29. Under Article 14 of the Convention the applicant complained that he had been discriminated against as a Polish national, because the claims of the foreign holders of national bonds issued before the Second World War, including foreign companies, had been satisfied on the basis of bilateral international agreements whereas the claims of Polish citizens are being ignored by the State authorities.
THE LAW
A. Alleged violation of Article 1 of Protocol No. 1 to the Convention
30. The applicant complained that the State authorities had done nothing to meet the State’s obligations that arose from his national bonds. In particular he referred to a lack of relevant legislation in this respect and alleged a violation of Article 1 of Protocol No. 1, which provides:
“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.”
1. Compatibility ratione temporis
31. The Court first has to examine whether the applicant’s complaint as regards a reduction in the value of his claim and the inactivity of the State authorities is compatible ratione temporis with the provisions of the Convention and Protocol No. 1 to the Convention.
(a) General principles deriving from the Court’s case-law
32. The Court’s jurisdiction ratione temporis covers only the period after the date of ratification of the Convention or its Protocols by the respondent State. From the ratification date onwards, all the State’s alleged acts and omissions must conform to the Convention or its Protocols; subsequent facts fall within the Court’s jurisdiction, even where they are merely extensions of an already existing situation (see, for example, Broniowski v. Poland [GC] (dec.), no. 31443/96, §§ 74 et seq., ECHR 2002‑X, with further references).
33. Accordingly, the Court is competent to examine the facts of the present case for their compatibility with the Convention only in so far as they occurred after 10 October 1994, the date of ratification of Protocol No. 1 by Poland. It may, however, have regard to the facts prior to ratification inasmuch as they could be considered to have created a situation extending beyond that date or may be relevant for the understanding of facts occurring after that date (ibid.).
34. A continuing violation of the Convention – that is to say, a situation which originates before the date on which the Convention entered into force but continues after this date – has effects on the temporal limitations of the Court’s jurisdiction. In particular, such situations as a continuing and total denial of access to – and the control, use and enjoyment of – property, as well as any compensation for the expropriation of property may fall within this notion, even if they stemmed from events or laws that occurred before the ratification of the Convention or the Protocol (see, inter alia, Loizidou v. Turkey (merits and just satisfaction), 18 December 1996, §§ 41 et seq., Reports 1996‑VI, and Cyprus v. Turkey [GC], no. 25781/94, §§ 187‑189, ECHR 2001-IV).
35. However, as the Court has consistently held, in particular within the context of expropriation measures effected by the post- Second World War regulation of property, the deprivation of ownership or another right in rem is in principle an instantaneous act and does not constitute a continuous “deprivation of a right” (see, among many other authorities, Malhous v. the Czech Republic [GC] (dec.) no. 33071/96, ECHR 2000-XII; Smoleanu v. Romania, no. 30324/96, § 46, 3 December 2002; Bergauer and Others v. the Czech Republic (dec.), no. 17120/04, 13 December 2005; and Von Maltzan and Others v. Germany [GC] (dec.), nos. 71916/01, 71917/01 and 10260/02, § 74, ECHR 2005-V).
(b) Application of the above principles in the present case
36. In the instant case, the applicant was not deprived of his property in the classic manner; rather, he held and still holds a legal title acquired by his predecessors, which should have been expected to entitle him to claim payment from the State. The Court notes however, that the applicant’s claim had already been partially deprived of its economic value before the entry into force of the 1950 Act. It further lost a substantial part of its economic value with the entry into force of this Act. This was confirmed by the Warsaw Court of Appeal in its judgment of 15 January 2010 (see paragraph 12 above).
37. The Court considers that the reduction in the value of the applicant’s claim should be regarded as the equivalent of the deprivation of the applicant’s property. This, in turn, occurred as a result of legislative changes in the Polish legal system made in 1949 and 1950 – that is to say, well before Protocol No. 1 to the Convention came into force in respect of Poland.
38. Under such circumstances, it cannot be said that there was a continuing violation of the Convention which could be ascribed to the Polish State and which could have consequences for the Court’s temporal jurisdiction, as defined above (see paragraphs 33-34 above).
39. It thus follows that the part of the application which refers to events before 10 October 1994 is incompatible ratione temporis 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 of the Convention.
2. Compatibility ratione materiae as regards the applicant’s situation after 10 October 1994
40. The Court notes that according to its well-established case-law, Article 1 of Protocol No. 1 to the Convention cannot be interpreted as imposing any general obligation on the Contracting States to restore property which was transferred to them before they ratified the Convention. Nor does Article 1 of Protocol No. 1 impose any restrictions on the Contracting States’ freedom to determine the scope of property restitution or to choose the conditions under which they agree to restore the property rights of former owners (see Jantner v. Slovakia, no. 39050/97, § 34, 4 March 2003).
41. Having found that the applicant’s bonds had already been deprived of any realistic value well before Article 1 of Protocol No. 1 entered into force in respect of Poland and noting that after the entry into force of Protocol No. 1 the Polish State had not enacted any laws which would create for the applicant any hope or expectation in respect of claims arising out of the 1936 national bonds (see and compare Lobanov v. Russia, no. 16159/03, § 51, 16 October 2008), the Court considers that the Polish State has no duty under Article 1 of Protocol No. 1 to enact laws providing for rehabilitation, restitution or compensation in respect of property lost by individual applicants.
42. It follows that this part of the application is incompatible ratione materiae with the provisions of the Convention and Protocols thereto within the meaning of Article 35 § 3, and must be rejected pursuant to Article 35 § 4 of the Convention.
B. Alleged violation of Article 1 of Protocol No. 1 to the Convention taken together with Article 6 § 1 of the Convention
43. The applicant further complained that his right of access to a court was of an illusory nature. He claimed that the proceedings before the domestic courts had been completely arbitrary; in addition, he claimed that as a result of those proceedings his pecuniary claim had been deprived of its economic value. He relied on Article 1 of Protocol No. 1 and on Article 6 of the Convention, the relevant part of which reads:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
44. The Court notes that the applicant’s claim has lacked any economic value for a considerable time. This was already so at the time when Poland ratified the Convention and Protocol No. 1 thereto. The applicant’s situation was not changed to a substantial extent by the entry into force of the 1994 Act.
45. The Court further notes that on 24 April 2007 the Constitutional Court gave a judgment which removed obstacles to seeking a judicial recalculation of claims arising from the 1936 national bonds (see paragraphs 24 and 25 above). That judgment did not empower the courts to disregard the effects of the 1949 Decree and the 1950 Act. After that judgment took effect the Court of Appeal asked the Supreme Court whether the indexation clause contained in Article 3581§ 3 of the Civil Code could be applied to the applicant’s situation (see paragraph 10 above). The courts held that in view of the fact that the value of the claim had been decreased as a result of legislative changes, the indexation clause could not be applied (see paragraphs 12 and 14 above). The Regional Court, having reexamined the case, granted the applicant’s claim in part (see paragraph 8 above). However, the Court of Appeal and the Supreme Court dismissed the claim, finding its value insignificant. Thus, the domestic courts in principle upheld the claim albeit that they were not unanimous as regards its value.
46. It follows that the Court must first examine whether the circumstances of the case taken as a whole allow it to conclude that the applicant had and still has title to a substantive interest protected by Article 1 of Protocol No. 1 (Broniowski v. Poland (dec.) [GC], no. 31443/96, § 98, ECHR 2002‑X)
47. In this respect the Court reiterates that according to its well‑established case-law, the concept of “possessions” referred to in the first part of Article 1 of Protocol No. 1 has an autonomous meaning which is not limited to ownership of physical goods and is distinct from the formal classification in domestic law – that is to say, certain other rights and interests constituting assets can also be regarded as “property rights”, and thus as “possessions” for the purposes of this provision (see Anheuser‑Busch Inc. v. Portugal [GC], no. 73049/01, § 63, ECHR 2007‑I).
48. The Court has found on numerous occasions that a “claim” can constitute a “possession” within the meaning of Article 1 of Protocol No. 1 if it is sufficiently established to be enforceable (see, for example: Stran Greek Refineries and Stratis Andreadis v. Greece, 9 December 1994, § 59, Series A no. 301‑B, and Pravednaya v. Russia, no. 69529/01, § 38, 18 November 2004).
49. Moreover, the European Commission of Human Rights in its case‑law found that securities having an economic value could be regarded as “possessions”. In particular, it was of the opinion that bonds vesting a title to repayment on a fixed future date could indeed be regarded as assets giving rise to a right of ownership (see Jasinskij and Others v. Lithuania (dec.), no. 38985/97).
50. As noted above, the applicant holds national bonds, a claim arising from which has been recognised by a final and enforceable domestic judgment. It follows that the Court must conclude that the applicant’s claim amounts to “possessions” within the meaning of Article 1 of Protocol No. 1 to the Convention.
51. Having found that the applicant indeed holds “possessions” within the meaning of Article 1 of Protocol No. 1, the Court must now examine whether there has been interference with the applicant’s peaceful enjoyment of his possessions.
52. The Court notes that the applicant’s complaint essentially concerned the manner in which the national courts interpreted and applied domestic law. In particular, he complained that his access to court was illusory and that as a result of the courts’ rulings his pecuniary claim has been deprived of its economic value. He also submitted that in his case the proceedings before the civil courts were arbitrary; each time the courts gave different judgments.
53. The obligations of a State under Article 1 of Protocol No. 1 entail the taking of measures necessary to protect the right of property. In particular, the State is under an obligation to afford the parties to dispute judicial procedures which offer the necessary procedural guarantees and therefore enable the domestic courts and tribunals to adjudicate effectively and fairly in the light of the applicable law. However, the Court reiterates that its jurisdiction to verify whether domestic law has been correctly interpreted and applied is limited and that it is not its function to take the place of the national courts; rather, its role is to ensure that the decisions of those courts are not flawed by arbitrariness or otherwise manifestly unreasonable. This is particularly true when, as in this instance, the case turns upon difficult questions concerning the interpretation of domestic law. According to Article 19 of the Convention, the Court’s duty is to ensure the observance of the engagements undertaken by the Contracting Parties to the Convention. In particular, it is not its function to deal with errors of fact or law allegedly committed by a national court unless and in so far as such errors may have infringed rights and freedoms protected by the Convention (see García Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I, and Anheuser-Busch Inc., cited above, § 83).
54. Turning to the circumstances of the present case, the Court observes that the applicant instituted civil proceedings before the domestic courts, which examined his claim twice, at two instances. On 6 August 2008 the Warsaw Court of Appeal quashed the first-instance judgment and ordered the first-instance court, among other things, to examine the applicant’s claim on the merits (see paragraph 7 above). The first-instance court (in accordance with the appellate court’s instructions) gave another judgment and granted the applicant’s claim in part (see paragraph 8 above). Following the appeal lodged by the defendant, the applicant’s claim was dismissed not because of its manifestly ill-founded character but because of its insignificant economic value. The courts at two instances also exhaustively addressed the applicant’s arguments as regards the application of the indexation clause contained in Article 3581§ 3 of the Civil Code (see paragraphs 12 and 14 above).
55. Taking into account the foregoing, the Court considers that the domestic courts properly addressed and examined the applicant’s arguments and applied the existing domestic law in a reasonable way. It is true, as was confirmed by the Constitutional Court (see paragraphs 24 and 25 above), that the matter of the redemption of national bonds issued before the Second World War has not been regulated by the Polish law. However, as already found by the Court, the Polish State cannot be considered to have a particular obligation under the Convention or Protocols thereto to regulate that matter by means of legislative provisions (see paragraph 41 above). In the absence of any arbitrariness or manifest unreasonableness the Court cannot call into question the findings of the Regional Court.
56. In his application form, the applicant recognised that in respect of most lawsuits lodged with the domestic courts by holders of national bonds, either (i) the claims in question had been rejected as time-barred or (ii) the value of those claims had been estimated as minimal. In the instant case, the courts did apply different methods of indexation; however, this did not lead them to completely different conclusions. It follows that even in the absence of clear guidance as regards the estimation of claims resulting from national bonds, the domestic courts’ case-law has remained relatively stable.
57. In the light of the foregoing, the Court concludes that the domestic courts’ judgments did not constitute interference with the applicant’s right to the peaceful enjoyment of his possessions. It follows that the applicant cannot be considered a victim of the alleged violation of his rights under Article 1 of Protocol No. 1 to the Convention taken together with Article 6 § 1 of the Convention. This part of the application is incompatible ratione personae with the provisions of the Convention and the Protocols thereto within the meaning of Article 35 § 3 and must therefore be rejected pursuant to Article 35 § 4 of the Convention.
C. Alleged violation of Article 14 of the Convention taken in conjunction with Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention
58. The applicant also complained that the circumstances of the case amounted to a breach of Article 14 of the Convention read in conjunction with Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention.
59. Article 14 of the Convention provides:
“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
60. Having regard to the fact that Article 14 of the Convention is not autonomous and to the conclusion that the ratione materiae complaint under Article 1 of Protocol No. 1 is incompatible and the complaint under Article 6 of the Convention taken together with Article 1 of Protocol No. 1 to the Convention is incompatible ratione personae with the Convention, the Court considers that Article 14 cannot apply in the instant case (see mutatis mutandis Gratzinger and Gratzingerova v. the Czech Republic (dec.), no. 39794/98, § 76).
61. It follows that the complaint under Article 14 is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected, in accordance with Article 35 § 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 14 January 2016.
Fatoş AracıAndrás Sajó
Deputy RegistrarPresident
Full & Egal Universal Law Academy