2004/03/10 Pl. ÚS 12/03: Minimum Penalty Amount

10 March 2004

HEADNOTE

Under

certain circumstances a fine can amount to interference in a

fundamental right under Art. 11 par. 1 of the Charter of Fundamental

Rights and Freedoms, that is, if it interferes with an individual’s

property relationships with considerable intensity. Incorporating a

minimal penalty amount into the statute basically pursues a legitimate

aim, because this permits distinguishing the gravity or danger of

various types of unlawful conduct. It can be a certain means of

protection from possible discrimination; only the other hand, however,

it leads to limiting the ability of the administrative body to take into

account the specific circumstances of the case, the person of the

offender and his economic level. Setting and increasing the lower limit

for penalties does not always permit proportional intervention, and in

relation to the persons who are penalized by a fine, it can sometimes be

of a liquidatory nature.


CZECH REPUBLIC
CONSTITUTIONAL COURT

JUDGMENT


IN THE NAME OF THE CZECH REPUBLIC

 


The

Plenum of the Constitutional Court, composed of JUDr. Pavel Rychetský,

JUDr. František Duchoň, JUDr. Vojen Güttler, JUDr. Pavel Holländer,

JUDr. Dagmar Lastovecká, JUDr. Jiří Malenovský, JUDr. Jiří Mucha, JUDr.

Jiří Nykodým, JUDr. Pavel Varvařovský, and JUDr. Miloslav Výborný, ruled

on a petition from the Regional Court in Ústí nad Labem, Liberec

branch, seeking the annulment of part of § 106 par. 2 of Act no. 50/1976

Coll., on Zoning and the Buidling Code (the Building Act), as amended

by Act no. 83/1998 Coll., as follows:

 

The

words “from CZK 200,000” in § 106 par. 2 of Act no. 50/1976 Coll., on

Zoning and the Building Code(the Building Act), as amended by Act no.

83/1998 Coll., are annulled as of the day this judgment is promulgated

in the Collection of Laws.

 


REASONING
 

On

27 May 2003 the Constitutional Court received from the Regional Court

in Ústí nad Labem, Liberec branch, a petition under Art. 95 par. 2 of

the Constitution of the Czech Republic (the “Constitution”) to annul

part of § 106 par. 2 of Act no. 50/1976 Coll., on Zoning and the

Building Code (the Building Act), as amended by of Act no. 83/1998

Coll., (the “Building Act”), beginning with the words “from CZK

200,000,” due to inconsistency with Art. 1 of the Constitution, Art. 1

and 11 par. 1 of the Charter of Fundamental Rights and Freedoms (the

“Charter”) and Art. 1 of the Additional Protocol to the Convention for

the Protection of Human Rights and Fundamental Freedoms (the “Additional

Protocol”).
 

In the petition

the Regional Court recapitulates the proceedings which preceded its

petition. During building proceedings, the Fund for Children and Youth

“in liquidation” was given a fine of CZK 200,000 for not completing

urgent safety works, consisting of enclosure fencing and partial

stabilization of a roof truss and “bracing it against wind,” as well as

other safety works labeled as a violation of the obligation imposed by §

106 par. 2 let. g) of the Building Act. In administration proceedings

and in a complaint against an administrative decision imposing a fine,

the Fund for Children and Youth objected that it performed the works to

the extent it was able, and that the collapse of part of the roof was

caused by exceptionally adverse weather. It pointed out that, as a state

organization in liquidation, it did not have money for new investments.

The Regional Court believes that the lower limit of a fine, CZK 200,000

does not permit taking the cited situation into account, and in

particular the fact that, under Art. I point 4 of Act no. 364/2000

Coll., on Dissolution of the Fund for Children and Youth and Amending

Certain Acts, the liquidator acting in the name of the fund can assume

new obligations only if they are directly connected to “termination of

uncompleted obligations.” The Regional Court believes that the words

“from CZK 200,000” in § 106 par. 2 of the Building Act, setting the

lowest fine for defined infractions in the building field are

incompatible with the cited articles of the Constitution, the Charter

and the Additional Protocol. It finds its arguments in the conclusions

in the Constitutional Court judgment of 13 August 2002 promulgated under

no. 405/2002 Coll. The courts points to the imbalance between the

wordings of par. 2 and 3 of § 106 of the Building Act. In appendices the

court submits the complaint and the decisions by the building

administration bodies which it contests.
 

On

4 June 2003 the Constitutional Court called on the Chamber of Deputies

and the Senate of the Parliament of the Czech Republic for position

statements and asked the regional court to lend it its file.
 

In

its position statement, the Chamber of Deputies recapitulates the

court’s petition, including a reference to the existing case law of the

Constitutional Court and the course of the legislative process. The

present wording of § 106 par. 2 of the Building Act was amended by Act

no. 83/1998 Coll.; the draft was proposed by the government of the CR.

According to the background report, the amendment of §§ 105 and 106

resulted from the need to fundamentally change the level of fines for

building infractions found in the comment proceedings and to set a range

of fines for offences and administrative infractions . Setting stricter

penalties was supported by certain towns, which have the most

experience with failure to observe building regulations. The draft act

was approved by the prescribed majority of deputies on 13 February 1998,

the Senate approved it on 18 March 1998, the president signed it on 6

April 1998, and the Act was duly promulgated. The legislative assembly

acted in the belief that the passed Act was consistent with the

Constitution, the constitutional order, and international treaties. It

is up to the Constitutional Court to evaluate the constitutionality of

the contested provision.
 

In

its position statement on the petition, the Senate also states that due

to the extensive amendment of the Building Act, effective as of 1 July

1998, there was an effort to set stricter penalties for violation of

obligations imposed by the Act for purposes of tightening observance of

regulations in the construction and use of buildings. In the interests

of achieving this aim, the passage of the Act considerably narrowed the

scope of the relevant administrative body’s discretion, but did not

remove it entirely. The administrative body is to continue to weight the

circumstances of a case and take them into account when setting a fine.

The Senate points out that it accepted this intention of the

petitioner, and on 18 March 1998 approved the draft act in the form

passed by the Chamber of Deputies. In discussion the draft, it did not

find, as it already stated in its position statement to the petition

under file no. Pl. ÚS 3/02, constitutional grounds to withhold consent.

It is up to the Constitutional Court to evaluate the contested

provision, taking into account the judgment published under no. 405/2002

Coll., which concerned the lower limit for fines under § 106 par. 3 of

the Building Act. In an appendix the Senate sent part of the transcript

of the discussion of this amendment.
 

The

way in which Act no. 83/1998 Coll., which newly set fines for

infractions in the field of construction administration, was passed has

already been subject to review by the Constitutional Court when it dealt

with the matter under file no. Pl. ÚS 3/02. The results authorize

review of the petition on the merits, as the Constitutional Court stated

that the Act was passed and promulgated in the constitutionally

prescribed manner, within the bounds of constitutionally prescribed

jurisdiction, and the quorums specified in Art. 39 par. 1 and 2 of the

Constitution existed.
 

The

starting point for the Constitutional Court’s judgment, if it is not to

deviate fundamentally from its previous case law, is the conclusions

expressed in the cited judgment of 13 August 2002 in the matter under

file no. Pl. ÚS 3/02 (no. 405/2002 Coll.) on a petition from the

Regional Court in Hradec Králové to annul the words “from CZK 500,000”

in § 106 par. 3 of the Building Act.
 

In

that judgment, the Constitutional Court stated that incorporating a

minimal penalty amount into the statute basically pursues a legitimate

aim, because this permits distinguishing the gravity or danger of

various types of unlawful conduct far more clearly than was possible by

setting only an upper limit. A subsidiary consequence of this step is

that this limits the room for administrative discretion by the relevant

state bodies, which has positive consequences in, for example, the fact

that it unifies to a certain extent the level of punishments imposed or

limits the room for arbitrary or corrupt conduct by administrative

bodies. Thus, it can be a certain means of protection from possible

discrimination; only the other hand, however, it equalizes the gravity

of various unlawful conduct, to a greater or lesser degree, which leads

to limiting the ability of the administrative body to take into account

the specific circumstances of the case, the person of the offender and

his economic level.
 

The

Constitutional Court concluded that under certain circumstances a fine

can amount to interference in a fundamental right under Art. 11 par. 1

of the Charter. A fine can be considered interference with a

constitutional law dimension if it interferes with an individual’s

property relationships with considerable intensity. Therefore, the

Constitutional Court evaluated the aim of interference in relation to

the means used, and the measure for this evaluation was the principle of

proportionality. Setting progressive levels of penalization through

increasing the maximum amount of fines can achieve the intended aim, and

in view of adequate room to take into account the circumstances of a

particular case, it also permits meeting the condition of

proportionality of interference. Naturally, setting and increasing the

lower limit for penalties, minimizing this room for discretion, does not

always permit proportional intervention, because, in relation to the

persons who are penalized by a fine, it can sometimes be of a

liquidatory nature.  For the abovementioned reasons, the Constitutional

Court annulled part of § 106 par. 3 of the Building Act by its judgment

in the matter under file no. Pl. ÚS 3/02.
 

In

the cited judgment, the Constitutional Court observed the rule of being

limited by the proposed judgment in the petition, and thus could not

annul the now contested part of § 106 par 2. However, it pointed out

that the overall system could be violated and inequality introduced by §

106 par. 2 of the Building Act, in which the lower limit of fines

remained. It also indirectly expressed the expectation that the

legislature would also review its constitutionality.
 

Thus,

review of the petition filed by the Regional Court in Ústí na Labem,

Liberec branch, can not be substantially different. The lowest

statutorily set fines for legislatively-defined “medium” serious

violations of buildings regulations under § 106 par. 2 of the Building

Act, for violations of buildings regulations legislatively defined as

being of “medium” gravity, can, in the cases that a regional court

handles, amount to the same unconstitutional interference which the

Constitutional Court already found to exist. The difference between the

lowest fine level of CZK 500,000 in the case already adjudicated and CZK

200,000 in the case now under review is not substantial. A minimum fine

of CZK 200,000 for infractions defined in § 106 par. 2 of the Building

Act can, in many cases, be just as liquidatory as a fine of CZK 500,000

Kč for infractions which the legislature considers “more serious,”

defined in § 106 par. 3 of the Building Act. Moreover, the continued

existence of the contested provision would confirm an imbalance between

penalties for otherwise serious infractions of building law envisaged by

the Building Act as amended after the Constitutional Court’s

intervention in 2002.
 

Beyond

the framework of the foregoing arguments, the Constitutional Court

emphasizes that it did not review the circumstance of the individual

application of administrative punishment which occurred in the preceding

administrative proceedings, as proceedings on a petition to annul part

of a statute under Art. 87 par. 1 let. a) of the Constitution are a

means of abstract inspection of norms. The Constitutional Court’s

conclusion does not anticipate the result of specific review and

proceedings on the infracting conduct by the Fund for Children and Youth

“in liquidation” which is now taking place before the Regional Court in

Ústí nad Labem, Liberec branch. Likewise, the Constitutional Court can

speak only peripherally concerning the reference to limiting the Fund’s

administrator under the legal framework given by a special statute (this

is, of course, similar with, e.g., bankruptcy administrators). The

prohibition on assuming new commitments can not prevent fulfilling

obligations in an important public interest. Obligations arising from

regulations which ensure important public interests (here the Building

Act) must take precedence before a framework which determines the

handling of property, or that framework must be interpreted in such a

manner as to permit the fulfillment of those obligations. The argument

which consists of the opinion that a legal entity in liquidation has a

lower level of responsibility for the condition and administration of

property which it owns, being dependent on the momentary property and

organizational situation, could create de facto inequality between the

content of property rights for individual owners.

 

In

view of the cited arguments, largely already articulated in the

Constitutional Court’s case law, the Constitutional Court believes that

the contested provision, or part of it, is incompatible with the

principles of a state governed by the rule of law, the Charter and Art. 1

of the Constitution, and is inconsistent with Art. 1 and Art. 11 par. 1

of the Charter and Art. 1 of the Additional Protocol. Therefore, the

Constitutional Court had no choice but to annul it, under § 70 par. 1 of

Act no. 182/1993 Coll., on the Constitutional Court, as amended by

later regulations.

Notice: Judgments of the Constitutional Court can not be appealed.


Brno, 10 March 2004