2004/03/09 - Pl. ÚS 2/02: Basic Principles

09 March 2004

HEADNOTES

The

amendment to the Civil Code effected by Part Two, Art. II of Act No.

229/2001 Coll. violated one of the basic principles of the law-based

state, namely the principle of legal certainty and of trust in law, as

emerges from Art. 1 para. 1 of the Czech Constitution.  In view of the

fact that the legislature changed the rules virtually the day before the

expiration of the time period laid down for the acquisition of the

right, it renounced its moral obligation to set an example in terms of

respect   law.

The legislature’s encroachment exhibit strong features of

arbitrariness.  Such a means of proceeding disrupts trust in law, which

is one of the elementary attributes of the law-based state.  The

legislature’s manner of proceeding did not correspond to the basic

principles of a law-based state, which include the tenets of the

foreseeability of laws, of their comprehensibility, and of their

internal consistency.

The above-described manner in which the legislature proceeded also

resulted in a violation of Article 1 of Protocol No. 1 to the Convention

for the Protection of Human Rights and Fundamental Freedoms.  In

keeping with the legal rules laid down in § 879c of the Civil Code, the

affected subjects anticipated, from 1 July 2000 until 30 June 2001, that

on the day following, that is on 1 July 2001, property rights would

accrue to them in the plots of land in which until then they had held a

right of permanent use.
 

The

contested amendment changed the equal status of the affected subjects,

which had continued to exist until 30 June 2001, into that of inequality

among individual groups of these subjects.  This inequality does not

correspond to any public interest.  The interest in providing an

advantage to one group of subjects and simultaneously disadvantaging a

second group, under the circumstance that all subjects stood at the same

starting position of § 879c of the Civil Code, cannot qualify as such a

public interest.  The Constitutional Court judges an inequality

introduced in this way, which cannot be said to correspond to a public

interest, to be a violation of Art. 1 of the Charter of Fundamental

Rights and Basic Freedoms, which expresses the principle of equality in

rights.
 



CZECH REPUBLIC

CONSTITUTIONAL COURT

                         JUDGMENT                            


IN THE NAME OF THE CZECH REPUBLIC

 

 

The

Constitutional Court of the Czech Republic decided today in the Plenum

composed of Justices JUDr. František Duchoň, JUDr. Vojen Güttler, JUDr.

Pavel Holländer, JUDr. Dagmar Lastovecká, JUDr. Jiří Malenovský, JUDr.

Jiří Mucha, JUDr. Jan Musil, JUDr. Jiří Nykodým, JUDr. Pavel Rychetský,

JUDr. Pavel Varvařovský a JUDr. Miloslav Výborný in the matter of the

petition of the District Court in Příbram proposing the annulment of

„Part Two“ of Act No. 229/2001 Coll., entitled „Amendments to the Civil

Code Art. II“, as follows:
Part Two of Act No. 229/2001 Coll.,

entitled „Amendments to the Civil Code Art. II.“, shall be annulled as

of 31 December 2004.  
 



REASONING

 

The

District Court in Příbram submitted the petition proposing the

annulment of Part Two of Act No. 229/2001 Coll. (Art . II.), which

amends Act No. 219/2000 Coll., on the Property of the Czech Republic and

its Representation in Legal Relations as amended by Act No. 492/2000

Coll., due to conflict with the Constitution of the Czech Republic.

It

made this submission in connection with deciding the lawsuit initiated

by the cooperative, JEDNOTA Příbram, which has its headquarters in

Příbram II, Dlouhá 155 (hereinafter „plaintiff“), against the defendant,

the Czech Republic, represented by the Office for State Representation

in Property Matters, which has its office in Prague 2, Rašínovo nábřeží

42, on the determination of property rights in the parcel of land

designated for building No. 99 – having a built-upon surface area

measuring 362 meters square registered in the municipality and the Land

Registry in Jablonná, under consideration at the District Court in

Příbram as file no. 7 C 139/2001.
 

The

core of the given dispute is the fact that the plaintiff, the owner of

building No. 26 (an assorted goods store) in the Municipality of

Jablonná, former District of Příbram, considers itself also to be the

owner of the above-indicated building plot which is situated in part

beneath the mentioned building.  Ownership certificate No. 98, which is

kept both for the Municipality and the Land Registry of Jablonná, lists

the Czech Republic as the owner of this plot of land with a permanent

right of use for the plaintiff’s benefit.  The plaintiff seeks a

determination of who owns the property rights in the given plot of land

because it is of the opinion that it became the owner of it pursuant to

Act No. 103/2000 Coll. – in particular, pursuant to § 879c para. 1 of

the Civil Code.  According to this provision, the right of permanent use

of a plot of land under § 70 of Act No. 109/1964 Coll., the Management

Code, upon which stands a building or structure owned by the person for

whose benefit it was created, which continues in existence until the day

this Act takes effect (that is, on the date 1 July 2000), shall, with

the passage of one year from the day this Act takes effect, change into

the property of the legal person for whose benefit it was created.  In

view of the fact that, pursuant to § 879c para. 4 of the Civil Code, the

plaintiff requested from the State, within the set time period, the

transformation of the right of management to a right of property, the

transformation of his permanent right of use of the plot of land into a

property right therein occurred.  Nothing can change that, not even the

fact that § 879c of the Civil Code was repealed by Part Two, Art. II of

Act No. 229/2001 Coll. because this provision is a retroactive norm,

which is to be disregarded.
 

The

District Court in Příbram (hereinafter „petitioner“) concurred with the

plaintiff’s legal opinion and added that, as of 1 July 2000, the

subjects listed in § 879c of the Civil Code were given the right to

request that their right of use be converted into property and that this

right remained in existence until 30 June 2001, inclusive.  While the

repeal of the cited provision effected, as of 30 June 2001, by Part Two,

Art. II of Act No. 229/2001 Coll. did not result in the mentioned

subjects being deprived of property (that would have come into being

only as of 1 July 2001), yet they were deprived, with retrospective

effect, of the right to request the conversion of their right of use

into property.  This was an already-acquired right in the sense of Art. 1

of the Constitution of the Czech Republic.  In the petitioner’s view,

the legislature carried out these changes in a constitutionally

impermissible form of retroactivity, which is in conflict with Art. 1 of

the Czech Constitution.  All subjects fulfilling the requirements of §

879c of the Civil Code were disadvantaged by the the repeal of this

provision because they were divested of a right that had already been

granted by law, that is, the right to the creation of a property right. 

The annulment of Part Two, Art. II of Act No. 229/2001 Coll. would not

deny the rights of other subjects (in particular natural persons to whom

apartments and non-residential space had passed pursuant to Act No.

72/1994 Coll.) to the creation of property in the plot of land beneath

the structure or house that they own pursuant to § 60a and following of

Act No. 229/2001 Coll.  On the contrary, it merely revives the state of

affairs established by the provisions of § 879c of the Civil Code and

pursuant § 879d and 879e.
 

The

Constitutional Court assessed first of all whether the formal

requirements for the submission of a petition were met.  The petition

was submitted by the District Court in Příbram in connection with its

decision-making in the case of the plaintiff, the cooperative JEDNOTA

Příbram, against the defendant the Czech Republic concerning the

determination of property rights in a plot of land.  In resolving that

case, Act No. 219/2000 Coll., on the Property of the Czech Republic and

Representation of the State in Property Matters, as amended by Act No.

492/2000 Coll., and Act No. 229/2001 Coll. must be applied.  The

petition was thus submitted by an authorized petitioner and fulfills the

conditions of Article 95 para. 2 of the Constitution of the Czech

Republic and of § 64 para. 4 of Act No. 182/1993 Coll., on the

Constitutional Court, as amended by later acts (hereinafter „Act on the

Constitutional Court“).  The petition also meets the requirements of

admissibility under § 66 of the Act on the Constitutional Court.
 

In

conformity with § 69 para. 1 of the Act on the Constitutional Court,

the Constitutional Court requested the Assembly of Deputies and the

Senate of the Parliament of the Czech Republic to give their views.  The

Assembly of Deputies and the Senate gave their views on the petition.
…..
 

It

was established that the contested statute was adopted and issued

within the bounds of competence laid down in the Constitution of the

Czech Republic and in the manner prescribed in the Constitution.        
Following

this initial finding, the Constitutional Court moved on to consider the

content of the contested provision of Part Two, Art. II of Act No.

229/2001 Coll., from the perspective of its conformity or conflict with

the Czech Republic’s constitutional order and came to the conclusion

that the petition is well-founded.
 

The

provisions contested by the petitioner read as follows: „In Act No.

40/1964 Coll., the Civil Code, as amended by Act No.58/1969 Coll., Act

No. 131/1982 Coll., Act No. 94/1988 Coll., Act No. 188/1988  Coll., Act

No.  87/1990 Coll., Act No. 105/1990 Coll., Act No. 116/1990 Coll., Act

No. 87/1991 Coll., Act No. 509/1991 Coll., Act No. 264/1992 Coll.,  Act

No. 267/1994 Coll., Act No. 104/1995 Coll., Act No. 118/1995  Coll., 

Act No. 89/1996 Coll., Act No. 94/1996 Coll., Act No. 227/1997 Coll.,

Act No. 91/1998 Coll., Act No. 165/1998 Coll., Act No. 159/1999 Coll.,

Act No. 363/1999  Coll.,  Act No. 27/2000 Coll., Act No. 103/2000 Coll.,

Act No. 227/2000 Coll. and Act No. 367/2000 Coll., § 879c, § 879d and §

879e, including the designation of chapters and headings, shall be

repealed.“
 

Sec. 879c was

included in the Civil Code by Art. VII, Part the Fifth (Amendments to

the Civil Code) of Act no. 103/2000 Coll., of 4 April 2000, and § 879d a

§ 879e were placed into the Civil Code by an act amending that Code,

No. 367/2000 Coll. of 14 September 2000.  Sec. 879c formed a part of the

Civil Code from 1 July 2000 (that is, from the day Act No. 103/2000

Coll. entered into force) until 20 June 2001, that is, until the day Act

No. 229/2001 Coll. entered into force.
 

Stated

in brief § 879c, § 879d and § 879e were by these means removed from the

text of the Civil Code. For a better comprehension of the problem, it

would appear desirable to quote the precise wording of the repealed

provisions, §§ 879c to 879e, from which the problem arises:

§ 879c    

(1) The right of permanent use of a plot of land under § 70 of Act No.

109/1964 Coll., the Management Code, upon which stands a building or

structure owned by the person for whose benefit the right of permanent

use was created, and the plot of land related thereto, if such plot of

land is connected with the operation of that building or structure,

which continues in existence until the day this Act takes effect, shall,

with the passage of one year from the day this Act takes effect, change

into the property of the legal person for whose benefit the right of

permanent use was created.
(2)  The provisions of paragraph 1 shall

apply analogously as well to the right of loan or of lease, which

substituted for the right of permanent use of the plot of land, if it

was created for the benefit of a residential cooperative or for the

benefit of the person to whom title to an apartment or a non-residential

space was transferred pursuant to§ 23 of the Act on the Ownership of

Apartments.
(3) If the right of permanent use was created for more

than one person in a common plot of land, such persons shall become,

pursuant to para. 1, co-owners with equal shares.
(4) If a legal

person for whose benefit the right of permanent use was created does

not, within a period of one year from the day this Act takes effect,

request from the State that this right be changed into property, the

change of this right into that of property, pursuant to paras. 1 or 2,

shall not occur, and the right of permanent use shall terminate with the

expiration of one year from the day this Act takes effect.

§ 879d  
For

the purposes of § 879c, a person for whose benefit a right of permanent

use was created shall refer as well to a residential cooperative of

citizens or an association of citizens which has come into being or is

deemed to have come into being pursuant to Act No. 83/1990 Coll., on

Associations of Citizens, as amended by subsequent acts, to the extent

that the right of permanent use mentioned in § 879c para. l shall have

passed to such residential cooperative or the association of citizens.

§

879e    § 879c para. 1 shall apply analogously as well to the right of

loan or lease under § 879c para. 2, created at the latest on 31 December

2000 for the benefit of the person to whom title to an apartment or a

non-residential space was transferred pursuant to§ 23 of the Act on the

Ownership of Apartments.  The conversion of such right of loan or rental

into ownership shall come about on 1 July 2001.
             
The

petitioners arguments consist in the assertion that § 879c of the Civil

Code accorded to the subjects there indicated the right to request that

their rights of use be converted into property rights and that they

were divested of this right, an already acquired right, by the contested

provision of Act No. 229/2001 Coll.  In the petitioner’s view, this

occurred by means of an impermissible form of retroactivity, which is in

conflict with Article 1 of the Czech Constitution.
 

The

Constitutional Court has dealt with the issue of retroactivity in a

large number of its judgments.  Perhaps its most extensive treatment of

this problem was in its judgment No. 63/1997 Coll., the reasoning of

which can be referred to in this connection.  In that case, the

Constitutional Court expressed, among other things, the postulate that

the principle of the protection of citizens‘ trust in law, as well as

the related principle prohibiting the retroactive effect of legal norms,

belong among the basic principles which define the category of the

law-based state.  While the prohibition on retroactivity of legal norms

is expressly provided for, in respect of the field of criminal law, in

Art. 40 para. 6 of the Charter of Fundamental Rights and Basic Freedoms,

its operation for other branches of law must be deduced from Art. 1 of

the Czech Constitution.  A legal norm can be considered retroactive in

the case that it lays down legal consequences for such factual

conditions as already came into being prior to the dates the norm came

into effect.
 

In the given

case, the factual conditions laid down in § 879c of the Civil Code for

the conversion of the property right on 1 July 2001 can be considered as

just such factual conditions.  The acquisition of property rights

pursuant to § 879c of the Civil Code was tied to the fulfillment of two

condition (§ 879c paras.1, 4).  The first condition was the submission

of a request to the competent state body, and the second was the passage

of time, that is, the lapsing of the one-year period running from the

day that Act No. 103/2000 Coll. came into effect, in other words from 1

July 2000.  That term would have expired on 1 July 2001.  This did not

occur however, because the fulfillment of this second condition was

excluded by operation of Part Two, Art. II of Act No. 229/2001 Coll.,

promulgated on 29 June 2001 in Issue 85 of the Collection of Laws, with

effect from 30 June 2001, which among other things repealed § 879c of

the Civil Code in its entirety.  The legislature thus managed, prior to

the end of the one-year term, to eliminate the legal consequences

foreseen in § 879c of the Civil Code in the case that period elapsed. 

This was a manner of proceeding, however, in which none of the subjects

upon whom the benefaction of § 879c of the Civil Code was conferred were

deprived of any property right because such right never came into

being.  The right to the delivery of title to a plot of land, which was

established on 1 July 2000 by § 879c and following of the Civil Code,

would have arisen only as of 1 July 2001.  Thus the repeal of the cited

provisions of the Civil Code by the contested Part Two of Act No.

229/2001 Coll., did not constitute the deprivation of a property right.
 

In

the dispute which the District Court of Příbram is deciding, it was

determined that the plaintiff submitted the required request.  He thus

met the first condition, but was not given the opportunity to meet the

second condition because Part Two, Art. II of Act No. 229/2001 Coll., in

effect from 30 June 2001, did not enable him to fulfill it.  In this

context it must be concluded that the mere submission of the request, in

the sense of § 879c para. 4 of the Civil Code, within the time limit

set down therein, established no property right in the plaintiff.  The

Constitutional Court, therefore, does not consider the contested

provisions to be retroactive.
 

It

follows however from the above-mentioned facts that, in the period from

the entry into effect of Act No. 103/2000 Coll. (that is, from 1 July

2000), to all those subjects who met the conditions in § 879c, which

were introduced into the Civil Code by the mentioned statute, and who

conducted themselves in conformity with them, a legitimate expectation

arose consisting in the belief that with the passage of one year, that

is from 1 July 2001, they would become the owners of the plots of land

falling within the regime of §§ 879c to 879e of the Civil Code.  The

already-mentioned manner in which the legislature proceeded encroached

upon this legitimate expectation a mere day before the expiration of the

period in which the acquisition of the property right would have

occurred.  This means that subjects who acted with confidence in the

conditions laid-down in advance by the state were confronted with an

entirely different stance on the part of the State a mere day before the

expiration of the mentioned deadline.
 

In

this connection the Constitutional Court refers to the decisional law

of the European Court for Human Rights in Strasbourg (hereinafter ECHR)

relating to the application of Art. 1 of Protocol No. 1 to the

Convention for the Protection of Human Rights and Fundamental Freedoms. 

According to this article: „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.“
 

The

concept of “possessions” in the first part of Article 1 of Protocol No.

1 has an autonomous meaning which is not limited to the ownership of

material goods and is independent from the formal classification in

domestic law (see the decision of the ECHR in the case of J. Broniowski

versus Poland, from 2002).  It might include both „existing

entitlements“ and property values, including claims, on the basis of

which the complainant might assert that he has a „legitimate

expectation“ (ésperance légitime) in attaining the effective enjoyment

of a property rights (see the case Gratzinger and Gratzingerová versus

the Czech Republic from 2002 or the case Zvolský and Zvolská versus the

Czech Republic from 2001).
 

The

object of protection in the mentioned article is thus not only

acquired, that is existing property, but also the legitimate expectation

of the acquisition of such property.  It is undisputed that each of the

subjects who, up until 30 June 2001, abided by the rules in § 879c of

the Civil Code had just such a legitimate expectation.  They did not

acquire the property solely due to the fact that the legislature acted

arbitrarily by changing the rules one day before the lapse of the

mentioned one-year period.
 

It

appears worthwhile at this juncture to make reference to the particular

manner in which the law of property in land evolved in the former

Czechoslovakia after 1948.  In an effort to attain the collectivization

of the land the State gradually created various „institutes of use“ in

land, which were meant to displace private property, ideologically

considered to have been historically obsolete.  In the case of land

owned by the State, there were such institutes of use, in particular the

„provisional administration of national property“, „the right to manage

national property“, which were also designated as „the administration

of national property“, „the right of permanent use of immovable national

property“ or the „right of personal use of a plot of land“.
 

The

provisional administration of national property was regulated by

Regulation No. 61/1986 Coll.  The right to manage national property, or

its administration, was governed by § 63 and following of Act No.

109/1964 Coll. (the Management Code) and the regulation implementing

this statute, No 119/1988 Coll.
 

The

right of permanent use of immovable national property was also

regulated by the Management Code, specifically § 70 para. 1 thereof,

according to which a portion of the national property could be

transferred, free of charge, to the permanent use of some organization

other than the State, in particular a cooperative or a civil

association.  The right of personal use of a plot of land was regulated

in § 198 and following of Act No. 40/1964 Coll., that is, the Civil

Code.
 

Regardless of the fact

that these institutes were designated as ones of use, in essence they

were institutes corresponding to the right of property, or substituting

for the right of property.  This was so in particular for „the right of

permanent use of immovable national property“ and „the right of personal

use of a plot of land“.  Even the legislature was cognizant of this

fact, as one of the first steps it took when restoring the classic

property institutes was to amend the Civil Code, effected by Act No.

509/1991 Coll., as a result of which the then existing right of personal

use of a plot of land was converted into property held by natural

persons (§ 872 of the Civil Code).
 

In

the area of the right of permanent use of immovable national property

under § 70 of the Management Code, there was a somewhat more complex

development that endured considerably longer.  In relation to this

property, § 876 para.1 of the Civil Code, which was likewise inserted by

Act No. 509/1991 Coll., provided that, until such time as a special act

is issued, the relations of permanent use under § 70 of Act No.

109/1964 Coll., the Management Code, should be judged in accordance with

the laws then in effect.
 

In

this instance as well the legislature made it possible to convert this

right into a property right, which it did in Part Five of Act No.

103/2000 Coll., which amended the Civil Code by the insertion of §

879c.  Further elaboration was then added by Act No. 367/2000 Coll.,

which with effect from 1 January 2001 inserted two new provisions into

the Civil Code, §§ 879d and 879e.
 

As

was already stated above, the right to the delivery of title to a plot

of land, which was established by § 879c and following of the Civil

Code, would have arisen only as of 1 July 2001.  No property rights were

divested in consequence of the repeal of the mentioned provision of the

Civil Code, as effected by the contested Part Two of Act No. 229/2001

Coll.; this was not a case of the deprivation of property.  On the other

hand, up until 30 June 2001 the subjects upon whom the benefaction of §

879c of the Civil Code was conferred lived in the legitimate

expectation that on the day following they would, without charge, become

the owners of the affected plots of land.  This expectation was

genuine, entirely legitimate, and very strong, a conclusion which is

supported by, among other things, the above-given overview of the

conversion of certain relations of use in plots of land into property

relations.
 

On the basis of

the considerations laid out above, the Constitutional Court has come to

the conclusion that the manner in which the legislature proceeded

constituted an encroachment upon the legitimate expectations of the

above-mentioned subjects, in the sense of Article 1 of Protocol No. 1 to

the Convention for the Protection of Human Rights and Fundamental

Freedoms.
 

Under the

circumstances that there has been an encroachment, it is necessary to

review whether this encroachment was conditioned by the existence of a

public interest.  Any sort of interference with the enjoyment of a right

or freedom recognized by the Convention must in any case pursue a

legitimate aim.  The principle of a ‘fair balance‘, which is inherent in

Art. 1 of Protocol No. 1, presupposes the existence of a general

interest (see the case of Beyeler versus Italy from 2000).
 

In

its statement of views, the Assembly of Deputies asserted that its aim

in adopting Act No. 229/2001 Coll. was to remove interpretive problems

which had appeared in practice when applying § 879c of the Civil Code. 

In particular a question arose as to whether a plot of land passes into

ownership in the form it was registered under the plot number in the

land registry, as well as to ambiguity concerning plots of land in

relation to which, as of 1 January 2001, an easement came into being

pursuant to § 21 para. 5 and 7 of the Act on the Ownership of

Apartments.  It also concerned the preferential treatment of certain

subjects in the group of legal persons who, on 1 July 2000, had the use

of a plot of land owned by the State and the discrepancy consisting in

the failure to exclude the passage of ownership in an entire plot of

land, although only a very small portion thereof was connected with the

operation of a structure.  During the course of the mentioned one-year

time period, the legislature became aware of certain problems connected

with the passage of plots of land pursuant to § 879c of the Civil Code,

and, by amendment to the Act on the Property of the Czech Republic

effected by Act No. 229/2001 Coll., incorporated therein a complete

resolution of the problems of transformation of plots of land in the

permanent use of legal persons.  This point also emerges from the part

of the Explanatory Report relating to Part Two (amendment to the Civil

Code) of Act No. 229/2001 Coll., according to which the aim was to

repeal the existing rules, which would not take effect until 1 July

2001, and comprehensively resolve the transfer of plots of land free of

charge in the amendment to Act No. 219/2000 Coll., on the Property of

the Czech Republic and its Representation in Legal Relations.
 

However,

Act No. 229/2001 Coll. resolved the “comprehensive assignment of plots

of land free of charge” such that it enabled one group of select

subjects to acquire plots of land free of charge and made it more

difficult for other groups to acquire them.  According to its own

designation, this Act is one amending the Act on Property of the Czech

Republic, No. 219/2000 Coll.  In reality, first and foremost it governs

the acquisition from the State of plots of land by residential

cooperatives, owners of family homes, owners of apartments, garages and

non-residential spaces in houses, if such structures stand on state

land.
 

Whereas § 879c of the

Civil Code enabled all non-State legal persons who held permanent rights

of use in plots of State land pursuant to § 70 of the Management Code,

to acquire property in those plots, as the result of Act No. 229/200l

Coll., solely the subjects listed in the immediately preceding paragraph

retained such right to acquire.  The remaining subjects, consumer or

manufacturing cooperatives and civic associations in particular, lost

this opportunity as the result of the repeal of § 879c of the Civil

Code, and their legal status in relation to the plots of land of which

they had use was considerably weakened.  Whereas, as long as § 879c

remained in effect, all subjects using plots of land under the regime of

§ 70 of the Management Code were of equal standing, the change ushered

in by Act No. 229/2001 Coll. introduced a basic inequality among them.
 

That

is, Art. IV paras. 1 and 2 of Act No. 229/2001 Coll., contained in Part

Four (Transitional Provisions), provide that any then existing

relationship of permanent use under § 70 of the Management Code, which

had not changed into a loan pursuant to § 59 para. 1 of Act No. 219/2000

Coll., on the Property of the Czech Republic and its Representation in

Legal Relations, was transformed, on the day this act took effect, into a

fixed-term loan lasting until 1 January 2004, inclusive.
 

Although,

pursuant to the rules concerning agreements on a loan found in § 659

and following of the Civil Code, such loan is free of charge, it is only

for limited period of time, in this case, until 1 January 2004, as

mentioned above.  These subjects have the opportunity, by proceeding in

conformity with § 59 para. 2 of Act No. 219/2000 Coll., to acquire

ownership of the plot of land free of charge, but only in the case that

the requirements of § 22 para. 2 of the same act are met, namely that an

item of property may be assigned free of charge only if such is in the

public interest, should an assignment free of charge be more economic

than some other disposition of the item, or if a special enactment so

provides.
 

As was

demonstrated above, the adoption of Act No. 229/2001 Coll. considerably

worsened the position of subjects who had a legitimate expectation under

§ 879c of the Civil Code.  Not only did they not acquire property

rights, but the regime of permanent use became one of temporary loan,

and the opportunity to acquire plots of land free of charge was

considerably worsened by the fact that it is tied chiefly to the public

interest, which is not however sufficiently defined.
 

While

it follows from the Constitutional Court’s constant jurisprudence that

it is a matter for the State to decide that it will bestow upon one

group less advantages than upon another, yet it may not proceed

arbitrarily, and it must be clear from its decision that it is acting in

the public interest and not, for example, in order to conceal

deficiencies in the administration of public affairs (see judgment no.

Pl. ÚS 17/99, published as 3/2000 Coll.).  After all the Assembly of

Deputies itself confirmed in its expression of views that the aim of its

amendment was, among other things, to resolve interpretive problems

connected with the future application of § 879c of the Civil code, which

had been adopted less then a year earlier.
 

The

contested amendment thus changed the equal status of the affected

subjects, which had continued to exist until 30 June 2001, into that of

inequality among individual groups of these subjects.  In the

Constitutional Court’s conclusion, this inequality does not correspond

to any public interest.  The interest in providing an advantage to one

group of subjects and simultaneously disadvantaging a second group,

under the circumstance that all subjects stood at the same starting

position of § 879c of the Civil Code, cannot qualify as such a public

interest.  The Constitutional Court judges an inequality introduced in

this way, which cannot be said to correspond to a public interest, to be

a violation of Art. 1 of the Charter of Fundamental Rights and Basic

Freedoms, which expresses the principle of equality in rights.
 

As

concerns an encroachment upon the right to the peaceful enjoyment of

possessions under Art. 1 of Protocol No. 1, in the matter of Beyeler

versus Italy from 2000, the ECHR stated:  „In order to be compatible

with the general rule set forth in the first sentence of Article 1, such

an interference must strike a ‘fair balance‘ between the demands of the

general interest of the community and the requirements of the

protection of the individual's fundamental rights.  Furthermore, the

issue of whether a fair balance has been struck becomes relevant only

once it has been established that the interference in question satisfied

the requirement of lawfulness and was not arbitrary”
 

In

the same matter the ECHR reiterated that lawfulness represents a basic

prerequisite for measures resulting in an encroachment to be compatible

with Art. 1 of Protocol No. 1.  That provision also requires that an

interference by a state body upon the right to the enjoyment of property

be statutorily-based.  The principle of lawfulness also entails the

existence of sufficiently accessible, precise, and foreseeable domestic

law norms (see the matter of Hentrich versus France 1994).
 

In

light of the above-mentioned principles by which the ECHR case-law is

governed, the Constitutional Court is persuaded that the provisions of

Act No. 229/2001 Coll. proposed for annulment do not meet the

above-mentioned criteria of legality, especially not the principle of

foreseeability.  The legislature’s encroachment exhibit strong features

of arbitrariness.  Such a means of proceeding disrupts trust in law,

which is one of the elementary attributes of the law-based state.  The

legislature’s manner of proceeding did not correspond to the basic

principles of a law-based state, which include the tenets of the

foreseeability of laws, of their comprehensibility, and of their

internal consistency.
 

The

Constitutional Court thus concludes that the above-described manner in

which the legislature proceeded resulted in a violation of Article 1 of

Protocol No. 1 to the Convention for the Protection of Human Rights and

Fundamental Freedoms.  In keeping with the legal rules laid down in §

879c of the Civil Code, the affected subjects anticipated, from 1 July

2000 until 30 June 2001, that on the day following, that is on 1 July

2001, property rights would accrue to them in the plots of land in which

until then they had held a right of permanent use.  The day before the

said one-year period was to expire, however, the amendment to the Act

introduced a completely different outcome, as averted to above.
 

The

amendment to the Civil Code effected by Part Two, Art. II of Act No.

229/2001 Coll., as described above, also violated one of the basic

principles of the law-based state, namely the principle of legal

certainty and of trust in law, as emerges from Art. 1 para. 1 of the

Czech Constitution.  In view of the fact that the legislature changed

the rules virtually the day before the expiration of the time period

laid down for the acquisition of the right, it renounced its moral

obligation to set an example in terms of respect for law.
 

After

weighing all mentioned grounds, the Constitutional Court has decided to

grant the petition and has, pursuant to § 70 para. 1 of Act No.

182/1993 Coll., on the Constitutional Court, annulled the contested

statutory provision due to its conflict with Art. 1 of Protocol No. 1 to

the Convention for the Protection of Human Rights and Fundamental

Freedoms, with Article 1 para. 1 of the Czech Constitution, and with

Article 1 of the Charter of Fundamental Rights and Basic Freedoms.
 

In

norm control proceedings, the Constitutional Court acts as a „negative

legislature“, authorized, in the case that it grants a petition, solely

to derogate from the contested legal enactment (see judgment No. Pl. ÚS

21/01 – published as No. 95/2002 Coll.).  Consequently, the annulment of

the contested enactment may also result solely in its „elimination“

from the legal order of the Czech Republic, and not to the effective

establishment of a new rule in the form of the „revival“ of an already

repealed enactment.
 

This

particular case, however, concerns the annulment of a derogating

provision of Act No. 229/2001 Coll.  In this connection, the

Constitutional Court refers to its judgment No. Pl. ÚS 5/1994 –

published as No. 8/1995 Coll.  In that judgment the Constitutional Court

annulled point 198 of Act No. 292/1993 Coll., which amended and

supplemented Act No. 141/1961 Coll., on Criminal Court Proceedings (the

Criminal Procedure Code).  Point 198 of the said act removed from the

Criminal Procedure Code its § 324, which governed decision-making on the

modification of the manner in which sentences are carried out.  The

referred to derogation of the derogating provision, point 198 of Act No.

292/1993 Coll., resulted in the „rehabilitation“ of § 324 of the

Criminal Procedure Code, which remains a part thereof until today.  The

Court thus affirms the petitioner’s view that the annulment of Part Two,

Art. II of Act No. 229/2001 Coll. revives the state of affairs

established by §§ 879c, 879d, and 879e of the Civil Code.
 

Naturally

this fact could result in a considerable amount of legal uncertainty

coming into being, not only in relation to the rights of subjects to

which the rules in §§ 879c to 879e of the Civil Code apply, but even for

third parties.  Accordingly, the Constitutional Court has decided to

defer the coming into effect of the annulment of the contested

provisions of Act No. 229/2001 Coll. until 31 December 2004, in order to

allow the Parliament of the Czech Republic a sufficiently long period

of time in which to adopt a appropriate legal rule.

Notice: There is no appeal against a judgment of the Constitutional Court.

Brno, 9 March 2004