2009/04/28 - Pl. ÚS-st 27/09: Rent Control

28 April 2009

HEADNOTES

I.

The general courts may decide on an increase in rent for a period of

time from the bringing of the action until 31 December 2006. General

courts may not increase rent for the period prior to the bringing of the

action, as the same is prevented by the nature of the decision with

constitutive effects; an increase in rent for a period from 1 January

2007 may not be granted due to the fact that since that date a

unilateral increase in rent is allowed by § 3 para. 2 of Act No.

107/2006 Coll. on Unilateral Increase in Rent for Apartments, and on

Alteration to Act No. 40/1964 Coll., the Civil Code, as amended by later

regulations.

II. Actions by landlords (owners of apartments)

against the state for compensation for loss [supported by Act No.

82/1998 Coll. on Liability for Loss Caused by Execution of Public Power

by a Decision or Incorrect Official Procedure and on Alteration to the

Act of the Czech National Council No. 358/1992 Coll. on Notaries Public

and their Operations (Notary Rules)] which allegedly occurred as a

result of long-term unconstitutional inactivity by Parliament,

consisting of its failing to adopt a special legal regulation defining

cases in which a landlord is entitled to unilaterally increase rent,

payment for services relating to use of an apartment and to alter other

conditions of a lease contract (Judgment of the Constitutional Court

dated 28 February 2006, file No. Pl. ÚS 20/05), must be evaluated by the

general courts from the viewpoint of their right to compensation for

mandatory limitation upon property rights in accordance with Article 11

para. 4 of the Charter of Fundamental Rights and Basic Freedoms, and, in

such a sense, the general courts must provide the parties to the

proceedings with procedural room for them to state their opinions on the

above-specified alteration to legal evaluation. A claim against the

state for compensation for mandatory limitation upon property rights in

accordance with Article 11 para. 4 of the Charter of Fundamental Rights

and Basic Freedoms is of a subsidiary nature to the claim by the

landlord of an apartment against the tenant for an increase in rent only

for a period beginning on the date on which the action was brought. For

the period of time preceding such a date, the landlord of an apartment

may exercise their claim to compensation for mandatory limitation upon

property rights directly against the state.
 



CZECH REPUBLIC

CONSTITUTIONAL COURT

JUDGMENT


IN THE NAME OF THE CZECH REPUBLIC

 

The

Constitutional Court Plenum, composed of Pavel Rychetský, the Chairman

of the Court, and Justices Stanislav Balík, František Duchoň, Vlasta

Formánková, Vojen Güttler, Pavel Holländer, Ivana Janů, Vladimír Kůrka,

Dagmar Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Miloslav

Výborný, Eliška Wagnerová, and Michaela Židlická, adopted, on 28 April

2009, in accordance with § 23 of Act No. 182/1993 Coll. on the

Constitutional Court, in the case of a legal opinion of the First Panel

of the Constitutional Court in the case registered under file No. I. ÚS

2220/08, which deviates from legal opinions of the Constitutional Court

declared in a Judgment dated 9 September 2008, file No. IV. ÚS 175/08,

and a Judgment dated 4 December 2008, file No. III. ÚS 3158/07, the

following opinion:
 

I.

The ordinary courts may decide on an increase in rent for a period of

time from the bringing of the action until 31 December 2006. Ordinary

courts may not increase rent for the period prior to the bringing of the

action, as the same is prevented by the nature of the decision with

constitutive effects; an increase in rent for a period from 1 January

2007 may not be granted due to the fact that since that date a

unilateral increase in rent is allowed by § 3 para. 2 of Act No.

107/2006 Coll. on Unilateral Increase in Rent for Apartments, and on

Alteration to Act No. 40/1964 Coll., the Civil Code, as amended by later

regulations.

II.

Actions by landlords (owners of apartments) against the state for

compensation for loss [supported by Act No. 82/1998 Coll. on Liability

for Loss Caused by Execution of Public Power by a Decision or Incorrect

Official Procedure and on Alteration to the Act of the Czech National

Council No. 358/1992 Coll. on Notaries Public and their Operations

(Notary Rules)] which allegedly occurred as a result of long-term

unconstitutional inactivity by Parliament, consisting of its failing to

adopt a special legal regulation defining cases in which a landlord is

entitled to unilaterally increase rent, payment for services relating to

use of an apartment and to alter other conditions of a lease contract

(Judgment of the Constitutional Court dated 28 February 2006, file No.

Pl. ÚS 20/05), must be evaluated by the ordinary courts from the

viewpoint of their right to compensation for mandatory limitation upon

property rights in accordance with Article 11 para. 4 of the Charter of

Fundamental Rights and Basic Freedoms, and, in such a sense, the

ordinary courts must provide the parties to the proceedings with

procedural room for them to state their opinions on the above-specified

alteration to legal evaluation. A claim against the state for

compensation for mandatory limitation upon property rights in accordance

with Article 11 para. 4 of the Charter of Fundamental Rights and Basic

Freedoms is of a subsidiary nature to the claim by the landlord of an

apartment against the tenant for an increase in rent only for a period

beginning on the date on which the action was brought. For the period of

time preceding such a date, the landlord of an apartment may exercise

their claim to compensation for mandatory limitation upon property

rights directly against the state.


REASONING


I.
 

1.

By the constitutional complaint filed, the petitioner contested a

resolution of the Supreme Court dated 11 March 2008, file No. 25 Cdo

2864/2006-82, a judgment of the Municipal Court in Prague dated 1 June

2006, file No. 20 Co 135/2006-71, and a judgment of the District Court

for Prague 1, dated 25 January 2006, file No. 24 C 169/2005-48.

According to the work schedule, the case was assigned to the First Panel

and is registered under file No. I. ÚS 2220/08; Ivana Janů is the

Justice Rapporteur.
 


II.
 

2.

File of the District Court No. 24 C 169/2005 specifies that the

petitioner, by an action dated 13 July 2005 against the Czech Republic,

claimed compensation for loss caused by incorrect official procedure, of

the amount of CZK 4,627,970 with ancillary rights, which allegedly

accrued to the petitioner as a loss resulting from unlawful and

unconstitutional control of rent, this for a period of time from 2002 to

2004. The court of first instance dismissed the action, the court of

appeal confirmed this court’s decision, and the Supreme Court denied an

appeal on a point of law, as the Supreme Court concluded that none of

the legal issues brought by the petitioner are of significant legal

importance. For the sake of completeness, it must be added that cases

identical in principle are also being solved by the Constitutional Court

under file No. I. ÚS 566/05 and file No. I. ÚS 1109/08.
 


III.
 

3.

When dealing with the constitutional complaint, the First Panel of the

Constitutional Court reached the following legal opinions:
- the landlord may demand an increase in rent from the tenant only with effectiveness from the filing of the action;
-

the landlord has, in relation to the period of time specified by the

action, the right against the state for compensation for mandatory

limitation upon property rights under Article 11 para. 4 of the Charter

of Fundamental Rights and Basic Freedoms (hereinafter referred to only

as the “Charter”), which is not subsidiary in relation to the exercise

of the action for the increase in rent against the tenant, since the

petitioner could not claim such an increase for a period of time prior

to filing this action.
With respect to the fact that the First

Panel, by such conclusions, intended to deviate from legal opinions

declared in other Judgments of the Constitutional Court (see below for

details), the Panel submitted the case, in accordance with § 23 of Act

No. 182/1993 Coll. on the Constitutional Court, to the Constitutional

Court Plenum. In this, the Panel was guided by the following

considerations.

4. The Constitutional Court has dealt with the

issues covered by the constitutional complaint several times in the

past. In a Judgment dated 28 February 2006, file No. Pl. ÚS 20/05 (N

47/40 SbNU [Collection of Judgments and Rulings] 389, 252/2006 Coll.*) –

in which the Constitutional Court also refers to previous case law

history – the Court concluded that “The text itself of § 696 par. 1 of

the Civil Code, which merely expects the passage of new regulations, is

not unconstitutional; what is unconstitutional is the long-term

inactivity of the legislature, which has led to the constitutionally

unacceptable inequality, and whose final result is the violation of

constitutional principles; … under certain conditions the consequences

of a gap (a missing legal regulation) are unconstitutional, in

particular when the legislature decides that it will regulate a

particular area, states that intention in law, but does not pass the

envisaged regulations. The same conclusion applies to the case where

Parliament passed the declared regulations, but they were annulled

because they did not meet constitutional criteria, and the legislature

did not pass a constitutional replacement, although the Constitutional

Court gave it a sufficient period of time to do so (18 months)” With

respect to the fact that the long-term inactivity of the state (the

legislature as a representative of one branch of public power of the

state) which did not adopt any arrangement for a unilateral increase in

rent, is in conflict with the constitutional order, the Constitutional

Court concluded that the ordinary courts may not dismiss the actions by

landlords, on the contrary, they must decide on the increase in rent.

The amount of rent should correspond to local conditions in such a way

that no discrimination takes place between the landlords (as well as the

tenants) of apartments with controlled rent and the landlords (tenants)

of apartments with “market” rent.

5. In a Judgment dated 6 April

2006, file No. I. ÚS 489/05 (N 80/41 SbNU [Collection of Judgments and

Rulings] 59) – the basis of which consisted of the fact that the

petitioner as the plaintiff demanded that the difference between the

controlled and “market” rent (not an increase in rent or compensation

for loss) be paid – the Constitutional Court further developed the ideas

declared in the Judgment of the Plenum quoted above. The Constitutional

Court pointed out that making a decision to increase rent is a

sensitive matter socially and further stated that “by decision making on

the amount of rent, the ordinary court, by a constitutive decision (pro

futuro), will refine objective law (in this context, the premise of the

District Court is correct that it is not possible to claim payment for

the difference between standard and controlled rent for a past period of

time). With respect to the extraordinary nature of this procedure

established by verdict (I.) of Judgment file No. Pl. ÚS 20/05, the Court

must grant the parties sufficient room for familiarisation with the

principles of the law refined by the Court, and for utilisation of

adequate instruments, including possible alteration to the proposed

judgment, and the option to reach a compromise. In this respect, the

plaintiff must receive from the ordinary court appropriate instructions,

this even beyond the scope of the general obligation to give

instructions established by § 5 of the Civil Procedure Code”. With

respect to the liability of the state for material detriment caused by

not adopting the anticipated legal arrangement, emphasised in verdict

(I.) of Judgment file No. Pl. ÚS 20/05, the Constitutional Court in

Judgment file No. I. ÚS 489/05 inferred that “if a landlord’s justified

claim is not met to the full extent, the landlord will have no other way

left but to exercise against the state a demand for compensation for

loss”.

6. The obligation of the courts to take pro futuro

decisions, in a constitutive manner, on an increase in rent was further

specified by the Constitutional Court in a Judgment dated 9 September

2008, file No. IV. ÚS 175/08. In this, the Court stated that “if such a

condition is to make reasonable sense, the commencement of the term for

decision making on an increase in controlled rent from apartments must

be determined as the moment of filing the action to a ordinary court”.

The above-quoted decision then derives, from Judgment file No. I. ÚS

489/05, a requirement for subsidiarity of compensation for the loss

against the state once effective procedural means aimed against the

tenants for protection of the right have been exhausted.

7. The

notion of subsidiarity of a claim to compensation for loss against the

state is generally correct, however, in Judgment file No. I. ÚS 489/05

it was formulated for facts of a case other than as is understood by

Judgment file No. IV. ÚS 175/08. Here it is necessary to note that a

case administered under file No. IV. ÚS 175/08 included a dispute on

compensation for loss in accordance with Act No. 82/1998 Coll. on

Liability for Loss Caused by the Execution of Public Power by a Decision

or Incorrect Official Procedure, and on Alteration to the Act of the

Czech National Council No. 358/1992 Coll. on Notaries Public and their

Operations (the Notarial Code), as amended by later regulations,

consisting of the difference between controlled and standard rent. By an

action filed in February 2006, the petitioner demanded compensation for

loss for a period from July 2002 to November 2005, i.e. for a period of

time prior to filing the action. When the Constitutional Court, under

these circumstances, considered the obligation to exhaust effective

remedies against the tenant, it suggests the Court proceeded from the

opinion that the landlord also had a claim against the tenant for a

period prior to filing the action. This opinion was then explicitly

expressed by a Judgment dated 4 December 2008, file No. III. ÚS 3158/07:

“…the requirement addressed to the ordinary courts in key Judgment file

No. Pl. ÚS 20/05, i.e. that ‘in spite of an absence of an arrangement

anticipated by § 696 para. 1 of the Civil Code, they must take a

decision on an increase in rent, this depending on local conditions and

in such a way that various groups of legal entities are not

discriminated against’, cannot be diminished merely to ‘future’ legal

relationships, or, there is no reason not to connect this with claims

whereby landlords demanded ‘rent’ beyond the scope of the rent

stipulated in the lease contract, for a specified past period of time.”
 


IV.
 

8.

However, the First Panel did not identify itself with the legal opinion

described in the previous paragraph and submitted the case to the

Plenum so that the same may form an opinion; and the Plenum, by a

required majority of votes, did so. The subject of the assessment by the

Plenum consisted of two closely related issues: a) from which time the

landlord may be granted increased rent; b) existence of the claim to

compensation for mandatory limitation upon property rights and its

subsidiarity.

9. According to the conviction of the

Constitutional Court, the landlord has no claim against the tenant for

payment of the difference between controlled and standard rent for the

period of time prior to bringing the action. Support for this opinion

may in no way be sought in Judgment file No. I. ÚS 489/05 (see above),

which, on the contrary, specifically states that “the premise of the

District Court is correct that it is not possible to claim payment for

the difference between standard and controlled rent for a past period of

time.”

10. Firstly, legal opinion allowing the possibility to

demand that the tenant pays the difference between controlled and

standard rent for the past period of time, that is prior to filing the

action, does not properly consider the nature of the decision to

increase rent. A judgment on an increase in rent is a constitutive

decision, which is also explicitly acknowledged by Judgment file No. Pl.

ÚS 20/05 (see above). Naturally, the ordinary courts do not refine

objective law in such a sense that court judgments in individual cases

become a source of generally binding rules of behaviour; however, they

do alter the substantive-law lease relationship between a specific

landlord and a specific tenant, depending on specific local conditions.

The nature of the constitutive decision implies that the same may affect

the substantive law relationships only with respect to the future, i.e.

from the moment when the same becomes legally binding, unless the law

expressly determines otherwise. Substantive law relates an origination,

an alteration, or termination of a relationship of substantive law with

the legal fact consisting of such a decision itself; that is why it is

logical that an alteration to the substantive law relationships may

occur only from the time when such a legal fact originates and begins to

produce effects which are related to the same.

11. The decision

on an increase in rent constitutively affects an existing legal

relationship between a tenant and a landlord by changing the contents of

the same in terms of the amount of rent. From this viewpoint,

increasing rent “back into the past” (that is retroactively) is a clear

contradiction in terms, not corresponding to the nature of a

constitutive decision; in addition to this, it would also represent

genuine retroactivity which is not acceptable in a law-based state, as

the court would retroactively transform the contents of the legal

relationship between a landlord and a tenant, and impose on the tenant

an obligation to pay higher rent additionally for such a period of time

in which the tenant had no such obligation.

12. The only

theoretically consistent approach would then be a conclusion that the

alteration to the contents of the lease relationship (the change in the

amount of rent) occurs only as late as when the judgment that pronounces

an increase in rent for the future becomes legally binding (from the

date of filing the action). With respect to the fact that increasing

rent by way of judicial decision was a completely extraordinary remedy,

the applicability of which was preconditioned by the Constitutional

Court by the impossibility of increasing rent pursuant to a special

legal arrangement, it would mean that actions on the increase in rent

which have yet to be decided upon, would have to be denied as, since 1

January 2007, rent may be increased in accordance with Act No. 107/2006

Coll. on Unilateral Increase in Rent for Apartments and on Alteration to

Act No. 40/1964 Coll., the Civil Code, as amended by later regulations.

However, such a conclusion would also mean that not even an action on

an increase in rent would be an effective remedy for rectifying the

unconstitutional condition which was established by the legislature (the

state) by its long-term inactivity. Therefore, it is possible to

approve Judgment file No. IV. ÚS 175/08 insofar that the moment of

increase in rent is related to the date of filing the action; this

solution is also acceptable from the viewpoint of the tenant, who can,

from the given moment in time, take the given increase in rent into

account. It is also possible to fully agree with a dissenting opinion

given by Professor Musil concerning Judgment file No. III. ÚS 3158/07,

this being that only since that moment may the tenant realistically

react to factual and legal arguments exercised by the landlord within

the given action whereby increase in rent is requested; connection of

the commencement of the possibility to increase rent with the filing of

the action takes into account the autonomous interests of both parties

and complies with the principle of proportionality. That is why an

exception from the effects of a constitutive decision may be accepted,

justified by constitutional aspects, such an exception being otherwise

possible only on the basis of express statutory arrangement; such

different regulation results from Judgment of the Constitutional Court

file No. Pl. ÚS 20/05 (see above), which, with its effects erga omnes –

under the extraordinary circumstances described – actually fulfils the

function of an act. However, no reasons can be found for an increase in

rent prior to the date of filing the action; such reasons do not even

result from constitutional argumentation or from the nature of

constitutive decisions. This issue may thus be closed in such a manner

that the ordinary courts may decide on an increase in rent for the

period of time from filing the action until 31 December 2006. Rent for

the period of time prior to the action being filed may not be increased

by the ordinary courts, since this is prevented by the very nature of

the constitutive decision; an increase in rent for the period of time

after 1 January 2007 is also not possible, since unilaterally increasing

rent from this date was made possible by § 3 para. 2 of Act No.

107/2006 Coll.

13. In relation to the second clause of the

Opinion, the Constitutional Court declares their approval to override

the legal opinion specified in Judgment file No. IV. ÚS 175/08. Even

though the Constitutional Court declared, in Judgment file No. Pl. ÚS

20/05, the unconstitutionality of long-term inactivity by the

legislature, consisting of non-adoption of the statutory arrangement to

make a unilateral increase in rent possible, no claim to compensation

for loss against the state may be inferred from this given decision.

From the viewpoint of evaluating the fundamental right to compensation

for loss against the state, it is necessary to proceed from Article 36

para. 3 of the Charter. This provision guarantees the right to

compensation for loss caused to the given party by an unlawful decision

of the court of justice, another body of the state, or public

administration body or incorrect official procedure. However, from this

standpoint, Parliament cannot be considered to be a public

administration body, court of justice or any other comparable body of

the state. In particular, this is true in the case when Parliament

exercises its legislative powers. Liability for the exercise of such

powers is firstly of a political nature. The boundaries of free

discretion of the legislature are determined by the constitutional

order, however, the result of exceeding the same amounts to a

possibility to annul an act or declare its unconstitutionality by the

Constitutional Court. Such intervention by the Constitutional Court may,

under certain conditions, influence the rights of individuals which

were infringed as a result of such an act or a gap in an act (such as

non-applicability of an act in the given case), however, it does not

establish an individual’s claim to compensation for loss.

14.

Thus, when the Constitutional Court stated a possible claim to

compensation for loss against the state in Judgment file No. I. ÚS

489/05 and likewise in Judgment file No. IV. ÚS 175/08 (for both, see

above), the Constitutional Court aimed such a claim in relation to a

lapse by the ordinary courts which would not provide protection to the

fundamental right of the landlords concerned, by dismissing their

justified claims to an increase in rent. A claim so conceived to

compensation for loss in no way deviates from the wording of Article 36

para. 3 of the Charter, or a claim to compensation for loss, as is

defined by Act No. 82/1998 Coll. If then the relevant body annuls a

legally binding decision of a court, as a result of which such a court

did not comply with their obligation to decide on the increase in rent

as specified by Judgment file No. Pl. ÚS 20/05, the landlord may claim

against the state for compensation for the loss they incurred as a

result of such an unlawful decision. Yet, the Constitutional Court

believes that, in relation to the specified period of time prior to

filing the action, the landlord has a different legal title, this being

the right to compensation for mandatory limitation upon property rights

under Article 11 para. 4 of the Charter.

15. Boundaries of

admissibility of limitation of property right must be understood within

the context of origination and development of the lease relationships in

question. As long ago as in a Judgment dated 22 March 1994, file No.

Pl. ÚS 37/93 (N 9/1 SbNU [Collection of Judgments and Rulings] 61;

86/1994 Coll.), the Constitutional Court found that transformation of

the right of personal use of an apartment into a lease relationship

under § 871 of the Civil Code is constitutionally conforming. In this

connection, the Constitutional Court referred to the fact that, at the

time when legal effects under the specified provisions took place, there

was public interest in transforming former user relationships to

apartments to the institute of protected leases, which would form an

acceptable condition of legal certainty for all hitherto legal

relationships to apartments that were established on the existence of a

right of personal use of an apartment. Evaluating the existence of

public interest, however, requires its time aspect be taken into

account. Even though it is not possible to find a specific limit from

which it was not possible to consider a limitation of property right as a

result of control of rent as constitutionally conforming, the case law

of the Constitutional Court from past to present, with respect to

derogative Judgments dated 21 June 2000, file No. Pl. ÚS 3/2000 (N 93/18

SbNU [Collection of Judgments and Rulings] 287, 231/2000 Coll.), dated

20 November 2002, file No. Pl. ÚS 8/02 (N 142/28 SbNU [Collection of

Judgments and Rulings] 237, 528/2002 Coll.), and dated 19 March 2003,

file No. Pl. ÚS 2/03 (N 41/29 SbNU [Collection of Judgments and Rulings]

371, 84/2003 Coll.), as well as Judgment file No. Pl. ÚS 20/05,

indicates that such a conclusion was not possible to accept as far back

as the year 2000. For this reason, the Constitutional Court addressed

the issue of whether or not the limitation of property rights as a

result of control of rent reached (within the period of time to which

the petitioner relates their claim) such intensity that it must be

considered as a mandatory limitation upon property rights as specified

by Article 11 para. 4 of the Charter.

16. In accordance with

Article 11 para. 4 of the Charter, mandatory limitation upon property

rights is permitted in the public interest, on the basis of law and for

compensation. The above-specified Article must not be understood as a

fundamental right to compensation for any limitation of property rights

determined by law. The contents of the constitutionally guaranteed right

to own property as specified by Article 11 of the Charter, as well as

the right to peaceful enjoyment of possessions in accordance with

Article 1 of the Protocol to the Convention for the Protection of Human

Rights and Fundamental Freedoms, are not boundless and are subject to

numerous limitations which may be considered, from the viewpoint of

constitutional guarantees, to be immanent to its constitutional and

statutory definition. This means that the law may generally specify

limits to property rights, without such limitation being related to the

right to compensation. Mandatory limitation upon property rights, as

well as expropriation under Article 11 para. 4 of the Charter, must then

be related only to certain qualified cases of limitation.

17.

Without the Constitutional Court considering it necessary to define the

attributes of such qualified limitation in a full and exhaustive manner,

it may be generally inferred that one of these attributes consists of

limitation of property rights beyond the scope of the obligations

generally imposed by law for all subjects of property rights under

compliance with the principle of equality. Mandatory limitation upon

property rights under Article 11 para. 4 of the Charter represents

limitation of property rights of a specific owner beyond the scope of

the limitations resulting generally for subjects of property rights, or

which fall only on some owners; however, this unequal position is in

accordance with the principle of equality as a result of the existence

of circumstances sufficiently justifying such inequality. The above may

be demonstrated using the example of “legal easements”, when the

obligation to tolerate, for example, the building of a pole for power

transmission on one’s land, must be viewed as a limitation beyond the

scope of general limitation of property rights implied by the law, which

affects only some owners who are not able to influence their

“disadvantageous position” by expression of their own will. The fact

that in their very case limitation takes place is not given immanently,

but as a result of a specific evaluation of the relevant body of public

power, on the basis of which such a limitation takes place.

18.

The second precondition admitted by the Constitutional Court in

connection with this is the intensity of the limitation of property

rights, which may be defined by several factors, particularly by the

scope of the limitation as such, and by the term of such a limitation,

that is whether such a limitation is temporary or permanent. The

Constitutional Court, in Judgments file No. Pl. ÚS 3/2000 and file No.

Pl. ÚS 8/02, referred to unconstitutionality of the unequal position of

two groups of owners, when one group of owners is obliged to bear the

costs of a social policy of the state in the field of housing. This

inequality has a rational basis from the viewpoint of determination of

the landlords concerned, as it is related to the lease relationships

originating from transformation of the right of private use of an

apartment. However, no reasonable cause may be found in relation to the

obligation of the owners to bear the cost of housing the tenants. While

this cause was given at the time of transformation of the right of

private use of an apartment into a lease relationship, it cannot be

found at the time when the Constitutional Court stated, and this

repeatedly, that the control of rent in accordance with Decree No.

176/1993 Coll. on Rent for Apartments and Payment for Services Relating

to Use of an Apartment, as amended by later regulations, is

unconstitutional; in this connection, possible violation of property

rights of a number of landlords was pointed out by the Constitutional

Court as well. Limitation of the property rights of this group of owners

restricted the constitutionally guaranteed property rights of some

landlords in a considerable way beyond the scope of limitation of the

property rights determined for all owners. Yet, with respect to the

scope of the costs incurred by individual landlords, without such

landlords being able to gain any benefit from such costs, and to the

long-term nature of this status particularly caused by the long-term

unconstitutional inactivity by Parliament, which adopted an act allowing

a unilateral increase in controlled rent only as late as four years

after the expiry of the term granted by the Constitutional Court

pursuant to Judgment file No. Pl. ÚS 3/2000, such a limitation must be

viewed as intense to such a degree that the same must be subsumed under

Article 11 para. 4 of the Charter.

19. Article 11 para. 4 of the

Charter in itself does not contain any more detailed arrangement of a

number of practical issues, such as with which state body it is

necessary to exercise the claim, in which terms, etc. Consequently, it

is necessary to proceed in analogy pursuant to a regulation which is, in

terms of its contents and purpose, the closest, that being Act No.

82/1998 Coll. on Liability for Loss Caused by Execution of Public Power

by a Decision or Incorrect Official Procedure and on Alteration to the

Act of the Czech National Council No. 358/1992 Coll. on Notaries Public

and their Operations (Notary Rules).

20. The Constitutional Court

adds that in the case of a claim to compensation for mandatory

limitation upon property rights under Article 11 para. 4 of the Charter,

the issue of its subsidiarity must be examined. Subsidiarity of one

claim towards another comes into consideration only in such cases when

two claims at least partially overlap (a typical example being when a

claim to compensation for loss and claim to a release of unjustified

enrichment are mutually competing). In the case administered as file No.

IV. ÚS 175/08, however, no competition of claims was actually involved.

In fact, the landlord could not require that the tenant pay the

difference between the standard and controlled rent for the past period,

but could require from the tenant merely the increase in rent from the

date of filing the action. Compensation for loss, which was claimed by

the petitioner in the proceedings before ordinary courts, was aimed

against the state and related solely to the period of time from 2002 to

2005, which has expired. This clearly shows that the landlord had no

competing claim to compensation against the tenant for such a period of

time, and similarly did not have any right to an increase in rent for

such a period of time. The claim to compensation for mandatory

limitation upon property rights against the state is evidently related

to a different entity and different legal title, and, therefore, the

same can not be excluded with reference to subsidiarity of the claim to

compensation for loss against claims which the landlord should allegedly

have against the tenant.

21. The considerations specified above

infer that it is necessary to consistently evaluate which claim is

exercised by the landlord. If the claim consists of compensation for

mandatory limitation upon property rights for a period of time prior to

filing the action against the tenant – such as in the case addressed by

the First Panel under file No. I. ÚS 2220/08, when the action against

the state was filed on 13 July 2005, and the petitioner required

compensation for the time from 2002 to 2004 – such a claim cannot be

preconditioned by their obligation to first exercise effective remedies

to protect the right against the tenant, since the landlord has no such

claim against the tenant for the given period of time. The landlord has a

right against the tenant for higher rent only on the basis of a

decision of a court, the constitutive effects of which – with respect to

the constitutional relations explained above – do not occur ex nunc,

but are attached to the date of filing the action; however, in no case

to the past, that is to the time prior to filing the action.

22.

The issue of whether a specific claim of the petitioner to compensation

for mandatory limitation upon property rights under Article 11 para. 4

of the Charter was existent in the case in question remains to be dealt

with by the ordinary court, which must evaluate the degree of

infringement of their fundamental right to own property as a result of

controlled rent, as well as whether the above-specified conditions for

origination of the right to compensation were fulfilled in their case.

The unconstitutionality of the legal arrangement of controlled rent

alone did not mean that a fundamental right of landlord (owner of an

apartment) was violated in each individual case. It is also proper to

point out that the amount of the claim to compensation for mandatory

limitation upon property rights under Article 11 para. 4 of the Charter

does not need to be identical to the difference between standard and

controlled rent. Ordinary courts thus must not dismiss claims to

compensation against the state a priori; on the contrary, they must

respect the conclusions specified above and evaluate the particular

individually exercised claims. In such a sense, the alleged claim of the

landlord (owner of an apartment) must be correctly evaluated from the

aspect of the right to compensation under Article 11 para. 4 of the

Charter. In this sense, ordinary courts are obliged to create, as

specified by § 118a of the Civil Procedure Code, sufficient procedural

space so that both parties to the proceedings may give their opinions

concerning the new legal evaluation, and possibly present new evidence

or raise new objections.

23. The Constitutional Court also

emphasises that in no case the Court considers the matter to be

definitely resolved; on the contrary, the Constitutional Court raises a

strong appeal to the legislature for them to deal – again and this time

in a systematic manner – with the issue of controlled rent, and take

into account the remedies which, for example, were adopted by the Polish

legislature as a response to the decision of the European Court of

Human Rights in the case of Hutten-Czapska, i.e. in a pilot case related

to control of rent in Poland, which, for a long time, showed

deficiencies in terms of constitutional law similar to the control of

rent in the Czech Republic. In connection to this, Poland adopted, in

2006, a statute whereby it was made possible to increase rent at a

greater pace up to such an amount that would be sufficient to cover

maintenance costs, including achievement of return of invested capital

and reasonable profit, and, furthermore, adapted the civil law liability

of municipalities for loss incurred by an owner due to non-provision of

a council flat to a tenant who, due to their low income, becomes

entitled to a council flat provided by the municipality. From this

standpoint, the intention of the Polish government of 2008 may be

positively evaluated, the objective of which was to establish a system

of compensation contributions provided to the owners of property subject

to the system of controlled rent in the years from 1994 to 2005 [cf.

judgment (amicable settlement) of the European Court of Human Rights,

dated 28 April 2008, in the case of Hutten-Czapska v. Poland, No.

35014/97, clauses 14 to 26].
 

 



In

accordance with § 14 of Act No. 182/1993 Coll. on the Constitutional

Court, as amended by later regulations, Justices Vlasta Formánková,

Pavel Holländer, Vladimír Kůrka, Jiří Mucha and Jiří Nykodým took

dissenting opinions to the Opinion of the Plenum; Justices Ivana Janů

and Eliška Wagnerová took dissenting opinions merely in relation to the

reasoning of the Opinion of the Plenum.

Dissenting Opinion of Justice Vlasta Formánková
 

Clause

I of the majority Opinion is, as I am convinced, superfluous, since the

same declares what is evident even without explicit formulation by the

Constitutional Court.

In relation to inadmissibility of an

increase in rent for the period prior to the filing of the action to a

ordinary court, I would like to remark that this conclusion is based, in

my opinion, with one exception, on the hitherto case law of the

Constitutional Court, both from Judgment file No. Pl. ÚS 20/05 and from

subsequent case law, which is, in terms of types of individual

Judgments, represented by Judgments file No. I. ÚS 489/05, file No. IV.

ÚS 111/06 (N 102/41 SbNU [Collection of Judgments and Rulings] 303) and

others (such Judgments expressed decisions in cases in which the

landlord sued the tenant for an increase in rent), and Judgments file

No. IV. ÚS 175/08, file No. IV. ÚS 156/06, and others (such Judgments

expressed decisions in cases in which the landlords sued the state for

compensation for loss). This line of decision making is, to a certain

degree (from the viewpoint of time for which higher rent, or an increase

in rent, may be claimed), disturbed by Judgment file No. III. ÚS

3158/07, which also represents the above-mentioned exception; however,

this was later provided (in light of Judgment file No. IV. ÚS 175/08)

with an interpretative guideline by Judgment file No. IV. ÚS 2525/07.
    
I

strictly disagree with clause II of the Opinion in question. As for

non-existence of liability on the part of the state, I side with the

conclusions expressed by dissenting Prof. Holländer.

In addition

to this, I would like to add that, in my opinion, an effective remedy

was in existence from 1 January 2002 to 31 December 2006, whereby the

landlord could assert higher rent (an increase in rent). This remedy

consisted of an action by the landlord against the tenant, and this

beyond doubt even before the Constitutional Court repeatedly and

explicitly declared such a fact, commencing with Judgment file No. Pl.

ÚS 20/05. This conclusion is proven in particular by a Judgment of the

Constitutional Court, file No. Pl. ÚS 2/03 dated 19 March 2003, in which

the Constitutional Court declared that “unless constitutionally

conforming control of rent is established in the Czech legal order, the

Constitutional Court has no other option left but to discharge the

obligations imposed on the Constitutional Court by the Constitution and,

at least in individual cases, ensure the functioning of principles

based on the constitutional order of the Czech Republic, and possibly

relevant international treaties, even when such a solution is

insufficient, non-systematic and, in principle, only provisional, when

the only true answer is clearly to adopt a relevant legal regulation as

implied by the previous Judgment of the Constitutional Court”. When the

ordinary courts did not grant such actions by landlords (against their

tenants), the landlords had the possibility of asserting their claims by

way of constitutional complaint. From the date of promulgation of

Judgment file No. Pl. ÚS 20/05, there were surely no further lingering

doubts whatsoever that such an action represents an effective remedy for

an unconstitutional situation. This conclusion may be arrived at also

from the viewpoint of paragraph 12 of the reasoning of the Opinion in

question. For the reasons stated above I am convinced that prior to any

liability claim being made against the state, it is necessary to insist

that a claim must be exercised against a tenant. This is also suggested,

in addition to the present case law of the Constitutional Court, by the

fact that the relationship between the landlord and the tenant is an

obligation relationship.

Under a circumstance when the majority

Opinion frames the existence of a claim against the state to

compensation for mandatory limitation upon property rights, I believe

that any claim against the state for a period of time starting on the

date of promulgation of Judgment file No. Pl. ÚS 20/05 must be

preconditioned by filing an action against the tenant. Although the

formulation of the Opinion in question does not exclude this condition, I

believe that the Opinion in question should have explicitly contained

the same, as the present formulation may lead to a conclusion that also

claims to the period following promulgation of Judgment file No. Pl. ÚS

20/05, when the landlord failed to file an action against the tenant,

may be exercised (directly) against the state. However, it is not at all

possible to agree with the same, despite the fact that the Opinion in

question does frame the claim of the landlord against the state.

For

all these reasons, I cannot agree with Opinion of the Constitutional

Court file No. Pl. ÚS-st. 27/09; I believe that the procedure expressed

in Judgments of the Fourth Panel of the Constitutional Court file No.

IV. ÚS 175/08 and file No. IV. ÚS 2525/07 is that which provides a just

and constitutionally harmonic solution.
 



Dissenting Opinion of Justice Pavel Holländer

The

Opinion in question establishes, at a general legal level, the

liability of the state (legislature) for non-acceptance of a derogative

Judgment of the Constitutional Court outside the constitutional and

statutory framework; at a specific level, liability for non-acceptance

of derogative Judgments of the Constitutional Court in the case of

de-control of rent. The Opinion distinguishes between subsidiary and

direct application of such liability. Subsidiary application is based on

a fruitless application of the claim against the tenant for a period of

time from the date of filing an action with a ordinary court, thus this

establishes “a claim against the state for compensation for mandatory

limitation upon property rights in accordance with Article 11 para. 4 of

the Charter of Fundamental Rights and Basic Freedoms”. The title of the

landlord for direct application of “the claim to compensation for

material detriment against the state” for reason of the non-acceptance

of legal opinion of the Constitutional Court expressed in the derogative

Judgment, is then established by the Opinion for the period of time

preceding the date of bringing the action against the tenant.

In

the Czech legal order, Act No. 82/1998 Coll. on Liability for Loss

Caused by Execution of Public Power by a Decision or Incorrect Official

Procedure and on Alteration to the Act of the Czech National Council No.

358/1992 Coll. on Notaries Public and their Operations (Notary Rules),

as amended by later regulations, regulates liability for loss caused by

execution of public power by a decision or incorrect official procedure,

that is for loss caused by an act of applying law, or by procedure by a

body of public power, the purpose of which is application of the law,

and which, as a principle, results in an act of applying the law.

Application of legislative (law-forming) powers, however, does not

constitute an official procedure – the result of the same is not an

application or act of application of the law, but a statute (or a

similar legal regulation). The procedure of adopting statutes, however

it is subject to constitutional and legal procedure, is principally

different from the procedure of applying the same. In the constitutional

system of the Czech Republic, at the level of constitutional

arrangement or at the level of statutory arrangement, the liability of

the state (Parliament) for non-acceptance of legal opinion declared in

the derogative Judgment of the Constitutional Court, and for detriment

which was caused as a result of such a circumstance to a certain group

of entities, is thus not anticipated.

The brief recapitulation

given above clears the way for the following questions: the first is an

issue of standard approach to the liability of the state in democratic

countries, this being whether constitutional systems of democratic

countries anticipate liability for detriment caused by legislature by

not accepting case law of constitutional courts. Another issue is that

of the competence of the Constitutional Court – in the case of absence

of a constitutional and statutory arrangement – to establish such

liability in terms of case law. The third issue is one of admissibility

of the procedure analogous to the arrangement contained in Article 41 of

the Convention on the Protection of Human Rights and Fundamental

Freedoms (hereinafter referred to only as the “Convention”), which

establishes an institute of “just satisfaction” for the petitioner in

the case of violation of the Convention by a decision or a measure by a

judicial or any other body of the contracting party to the Convention,

while such a violation may be constituted by either domestic law or

application of the same. The final issue is the possibility of analogous

procedure by the European Court of Justice in the cases of liability of

the state for violating an obligation to implement European law.

The

usual approach of the constitutional or statutory arrangement for the

liability of the state for loss caused by the operation of the state in

the position of an entity of public law is based on two pillars.

Historically, the first of them is the liability analogous to fiscal

liability of a legal entity of public law, this irrespective of the

unlawfulness of actions of its body (for example, liability with respect

to financial supervision). The other consists of liability for a

specific decision, or procedure of a specific executor of state power

[footnote No. 1]. After the Federal Constitutional Court of the Federal

Republic of Germany annulled, as a result of the absence of

constitutionally established federal powers, a statutory arrangement for

the liability of the state, the thus interpreted liability of the state

in the Federal Republic of Germany is established through partial legal

arrangements.
    
In accordance with the explicit arrangement in

Article 23 of the Constitution of the Austrian Republic, the

federation, countries, districts or municipalities and other

corporations and institutes of public law are liable for loss caused

through enforcement of law. As regards whether the law governing the

liability of the state should be framed at the most general level,

“apart from other points, whether it should be inferred additionally in

cases of unconstitutional inactivity of the legislature, is a topic of

open discussion” [footnote No. 2].

The author of this dissenting

opinion has not found a constitutional or statutory arrangement of such

liability of a state in any country of the European Union; from the

viewpoint of a comparative method beyond the scope of Europe, the same

may be found in the judicial practice of Argentina [footnote No. 3].

This doctrine is based on a system of diffuse control of

constitutionality, within the scope of which – with effects inter partes

– each Argentinean court may designate a statute as unconstitutional.

In practice, it is employed despite the fact that the Federal Court

designated the same as possible abuse of the relationship between the

judicial and legislative powers, and referred to possible extensive

negative consequences on the state’s finances [footnote No. 4]. An

illustration of practical application of the above-mentioned doctrine is

a case concerning validity of an act which banned putting wine into

bottles smaller than 930 cc and larger than 1,500 cc outside the place

of origin of the wine; while in the first of the judicial decisions

delivered, the action by the company filling bottles was dismissed on

the grounds that the law does not prohibit filling bottles with wine,

but merely carrying out this activity (sic!); in the second – modifying –

decision the court granted the plaintiff compensation for loss

[footnote No. 5].

Therefore, the first issue may be closed: at

the level of constitutional and statutory arrangements, as well as in

the doctrine, the European context allows no room for the existence of

principle of liability of a state for “unconstitutional silence by the

legislature”, consisting of the liability to compensate for loss. The

reason for this is differentiation of legal and political

responsibility. If such – undesirable – condition occurs, in which the

legislative authority does not accept, within the scope of legislative

activity, a constitutional-law instruction declared by the

Constitutional Court in a derogative decision, it is a basis for a

reason for enforcing political responsibility not only by parliamentary

opposition, but also by voters in an election, civic society, and in an

extreme case, by civil disobedience. At this point, Jasper’s warning

should be referred to, concerning the confusion of various types of

liabilities (guilt) [footnote No. 6]. In addition to this basic

argument, another one consists of unpredictable effects on public

finances in the case of precedential operation of a legal opinion

pronounced in the Opinion. In addition, the judicial power in a

democratic parliamentary system is not there to restrict the process of

democratic adoption of acts, an essential part of which is also formed

by non-adoption of bills of acts (bills of the act governing the lease

relationships were repeatedly submitted to Parliament of the Czech

Republic, however, they were not adopted. These included a governmental

bill of an act on rent proposed to the Chamber of Deputies on 20 March

2003, a bill by a group of members of Parliament dated 22 June 2004,

another bill by the Government dated 26 July 2005 which was adopted by

the Chamber of Deputies on 2 January 2006 and returned by the Senate on 3

February 2006, then adopted through repeated voting of the Chamber of

Deputies on 14 March 2006 and promulgated in the Collection of Laws

under No. 107/2006 Coll.). In this connection, it is impossible not to

see the helplessness of the Opinion which (clause 15) states “it is not

possible to find a specific limit from which it was not possible to

consider a limitation of property right as a result of control of rent

as constitutionally conforming”. If the Constitutional Court is not able

to identify such a limit, then how can the ordinary courts do it with

respect to actions according to the last sentence of verdict (II.) of

the Opinion? (If the majority of the Plenum anticipates that the

institute of limitation – § 26 of Act No. 82/1998 Coll. – is used for

the exercise of the specified “claim”, commencement of the limitation

period may be given solely by adopting an opinion.) In addition, the

Opinion brings ambiguity and uncertainty into the decision making of the

ordinary courts, by establishing a “claim” or “claims”, in the absence

of aspects of their specification, as well as procedural conditions for

the exercise thereof.

The constitutional-law reasoning of the

Opinion also raises doubts. Clause 13 of the same contains a thesis

according to which “the unconstitutionality of long-term inactivity by

the legislature” does not establish entitlement to “compensation for

damage” as specified by Article 36 para. 3 of the Charter, and under

clause 18, such inactivity establishes the above-specified consequence

merely in the case of violation of the fundamental right under Article

11 para. 4 of the Charter. Through this, the majority of the Plenum

selected, from the entire system of the fundamental rights and basic

freedoms, merely a single fundamental right, i.e. property right, for

the “claim” constituted by such a majority; as a result of this it would

be true that the unconstitutionality of long-term inactivity by the

legislature which would result in a violation of the fundamental right

to life, personal liberty, human dignity, liberty of movement and the

freedom of the choice of residence, freedom of thought, conscience, and

religious conviction, freedom of expression etc., would not be capable

of establishing the “claim” constituted by the Opinion.

From all

that mentioned above, the answer to the second issue may be derived:

the Opinion establishes an alteration to the constitutional order,

creates a constitutional sanction against the legislature, an alteration

which is not based on a democratic consensus anticipated by Article 39

para. 4 of the Constitution of the Czech Republic.

There is

extraordinarily extensive expert literature concerning the “sanction

mechanism” according to the Convention, as well as according to the case

law of the European Court of Justice. The purpose of the former is to

guarantee compliance with fundamental rights and basic freedoms, the

purpose of the latter is compliance with European law by the member

countries of the European Union, but both are of a supranational nature.

This circumstance represents a basic argument against an analogous

application in domestic law.

Even though I share with the

majority of the Constitutional Court Plenum the critical viewpoint on

Parliament of the Czech Republic in the case of non-compliance with the

legal opinion declared in the derogative Judgments concerning the issue

of de-control of rent, I believe, for reasons specified above, that the

way of reaction chosen is contradictory to both the constitutional order

and the Act on the Constitutional Court.
_________________________
1)

See G. Brüggemeier, Haftungsrecht: Struktur, Prinzipien, Schutzbereich:

Ein Beitrag zur Europäisierung des Privatrechts. Berlin-Heidelberg

2006, p. 164 et seq. Similarly, on liability of the state in Great

Britain and France, see D. Fairgrieve, State liability in tort: a

comparative law study. Oxford 2003.
2) W. Berka, Lehrbuch Verfassungsrecht. Vienna 2006, p. 222.
3) U. Junge, Staatshaftung in Argentinien. Tübingen 2002, p. 206 et seq.
4) Ibid, p. 207.
5) Ibid, p. 212.
6) K. Jaspers, Die Schuldfrage. Czech Translation: “Otázka viny”. Prague 2006.

 



Dissenting Opinion of Justices Vladimír Kůrka, Jiří Mucha and Jiří Nykodým  

 


I. Case law prior to the Opinion Pl. ÚS-st. 27/09 (hereinafter referred to only as the “Opinion”)
 

1.

With respect to forming opposition to the Opinion, it is relevant to

turn attention primarily to what has been declared until now within the

walls of the Constitutional Court, and supporting arguments.

2.

Two types of proceedings administered before the ordinary courts,

related to each other, are affected; firstly, disputes of landlords

against the state for compensation for loss; secondly, disputes of

landlords against tenants for special claim to consideration beyond the

scope of the agreed (controlled) rent (hereinafter, for simplification,

“for increase in rent”).

3. As for the first area, the

Constitutional Court has issued several Judgments (in particular by the

Second Panel and Fourth Panel of the Constitutional Court) and several

Resolutions (by the Third Panel of the Constitutional Court); the former

are based on (and partly copied from) Judgment file No. IV. ÚS 175/08

(see, for example, file No. II. ÚS 1133/08, IV. ÚS 156/06), the latter

on Resolution file No. III. ÚS 294/06 and III. ÚS 2319/08. Both groups

include relatively numerous decisions; the form of a resolution in the

Third Panel of the Constitutional Court has been chosen due to the fact

that the first of them was issued following Judgment file No. IV. ÚS

175/08, and clearly unjustified nature of the constitutional complaint

could be based on the fact that the alleged violation of

constitutionally relevant rights had been (with a negative result)

examined by the Constitutional Court earlier.

4. A leitmotif

(and a decisive reason) for both groups of decisions is – in relation to

the claims against the state – the application of the principle of

their subsidiarity as a principle which generally reflects the

relationship of priority of settling obligation relationships

(instruments from the same), with the concept of compensation for loss

being potentially applicable only consequently. The common attribute of

both groups of decisions is then the conclusion that the landlord with

their claim (reflecting their discontent in terms of finances in a lease

relationship with merely controlled rent) must primarily turn to the

tenant. The difference of procedural results between the Judgments and

Resolutions is, within the matters under consideration, insignificant

since the same does not relate to “decision making reasons” (i.e.

conformity in enforcing the above-specified principle of subsidiarity of

a claim to compensation), and is an expression – merely – of divergence

in the procedural instruction to the petitioner as to how to proceed

further; in the first case they are directed at the alteration in the

person of the defendant (to the benefit of the tenant) and the action as

for its subject (within the scope of the present proceedings); in the

second case, they are directed at filing another action against another

entity (a tenant).

5. Since the application of the principle of

subsidiarity for concepts of compensation for loss logically anticipates

the existence of effective instruments for primary settlement of the

actual relationship of obligation between a landlord and tenant, it was

inevitable to face an opinion of a corresponding requirement, addressed

to ordinary courts, for “refinement of the law” in Judgment file No. Pl.

ÚS 20/05, this in such a form which was later, beginning with Judgment

file No. I. ÚS 489/05, expressed as refinement of the law by a

“constitutive decision pro futuro”. This need has arisen due to the fact

that the specified opinion – when the same was interpreted by ordinary

courts from verbal expression and in relationship to traditional

institutes of procedural law – possessed essentially liquidating effects

in all proceedings which were commenced against the tenants and in

which the landlords sued for an “increase in rent” for a past period;

however, considerable attention is logically turned to this in the

enforcement of the principle of subsidiarity of claims to compensation

for loss, since the possibility of administering the same is a

precondition for the above-mentioned effectiveness of concepts other

than those of compensation for loss [for example, Resolution dated 15

May 2008, file No. 28 Cdo 1342/2008-70 is illustrative, in which the

Supreme Court explained that “it is not possible to affirm legal opinion

of the court of appeal, that if there was no special legal regulation

allowing unilateral increase in rent, the existence of which was

presumed by the provisions of § 696 para. 1 of the Civil Code in the

wording valid until 30 March 2006, the ordinary court was not entitled

to determine the amount of rent”, however “if the settled case law of

the court of appeal on a point of law, as well as of the Constitutional

Court, specifies that rent may be determined by a constitutive decision

(pro futuro), but the increased rent cannot be claimed retroactively,

which in the case under consideration was done by the plaintiff, then

the contested judgment (note: a dismissive judgment) in its verdict is,

in effect – from this viewpoint – correct in terms of the matter.”].

6.

In Judgment file No. IV. ÚS 175/08, this is conducted, against Judgment

file No. I. ÚS 489/05, through a consideration that “if a condition

pronounced therein is to have reasonable sense, it is necessary to

determine the commencement of the period for decision making on the

increase in controlled rent for apartments as the moment of filing the

action to a ordinary court”. A Judgment dated 4 December 2008, file No.

III. ÚS 3158/07, issued in a dispute between a landlord and tenant on

“increase in rent” for a past period of time, and which is connected –

in the above-indicated correlation of both concerned types of

proceedings – with dismissive decisions of the Third Panel of the

Constitutional Court as for disputes on compensation for loss, presents

an interpretation more effective insofar that it is admitted that a

“requirement addressed to the ordinary courts in key Judgment file No.

Pl. ÚS 20/05, i.e. that they, in spite of the absence of an arrangement

presupposed in § 696 para. 1 of the Civil Code, must take decisions on

increase in rent, this depending on local conditions and in such a way

that no discrimination between various groups of legal entities takes

place”, cannot be reduced only to future legal relationships, or there

is no reason not to connect this with claims whereby landlords claimed

“rent” beyond the scope of the rent stipulated in the lease contract,

for a defined past period of time (that is also prior to the filing of

the action).

7. In this Judgment, the Third Panel of the

Constitutional Court also noted that in all cases when the

Constitutional Court proceeded to cassation of the dismissive decisions

of ordinary courts, the subject of the proceedings consisted of “rent”

for a past period of time, which is true also for the case examined by

critical Judgment file No. I. ÚS 489/05, as well as other cases (file

No. II. ÚS 121/06, II. ÚS 361/06 and IV. ÚS 111/06). Strictly speaking,

upon consistent enforcement of refinement of the law constitutively for

the future, dismissive decisions of ordinary courts, be it for other

reasons, would have to successfully pass before the Constitutional Court

(just as in the above-mentioned resolution by the Supreme Court dated

15 May 2008, file No. 28 Cdo 1342/2008-70).

8. The

above-specified understanding of Judgment file No. I. ÚS 489/05 (and

Judgments based on the same) is conceived here merely as an

interpretation, or shift in interpretation, be this in Judgment file No.

IV. ÚS 175/08 or file No. III. ÚS 3158/07, therefore, it was not

necessary here to resort to procedures according to § 23 of Act No.

182/1993 Coll. on the Constitutional Court. It seemed that the

consequences of case decision file No. I. ÚS 489/05 have been replaced

in the decision making practice of the Constitutional Court, and that

the Constitutional Court no longer intends to rectify, within

relationships between landlords and tenants, the ordinary courts

regarding specification of the given claims, or that the originally

exercised claims “for the past period of time”, possibly also prior to

the filing of the action, are again acceptable (cf. Judgment dated 2

March 2009, file No. IV. ÚS 2525/07). It is worth pointing out that, at

the time of issuing the decisions opposed by the Opinion, which are

those of the Third Panel of the Constitutional Court and the Fourth

Panel of the Constitutional Court (in the second half of 2008), actions

by the landlords (against the tenants) conceived by the same were still

an effective remedy of protection of the same, this (at least

relatively) even for “new” actions then possibly filed.

9. In

the proposed Opinion presented, which was later adopted by the majority

of the Plenum, the First Panel of the Constitutional Court, however,

took a different view.



II. On the first sentence of the statement of law (I.) of the Opinion
 

10.

The Opinion again (retrospectively) advocates the Judgment by the

petitioners, file No. I. ÚS 489/05, even though it acknowledges now that

the attribute of a constitutive decision (later a decision “with

constitutive effects”), which is attached to a judicial decision in the

nature of “refinement of the law”, leads “theoretically” necessarily to

the fact that the “modification in the contents of the lease

relationship” established by the same might operate only as from the

time when such a decision becomes finally legally binding. The Opinion

also acknowledges that refinement in a “constitutive pro futuro” manner

in accordance with Judgment file No. I. ÚS 489/05 could lead to

practical difficulties, since actions which have not been decided upon

until now would have to be dismissed after 1 January 2007 (see clause 12

of the Opinion). Therefore, it is newly presented that pro futuro may

also apply to the past, which has also been admittedly considered in

Judgment file No. IV. ÚS 175/08, as well as file No. III. ÚS 3158/07;

however, a “future” application “to the past” is admitted only from the

time of filing the action (by the landlord against the tenant), but not

earlier, which favours such interpretation of Judgment file No. I. ÚS

489/05 that was submitted by the Fourth Panel of the Constitutional

Court (in Judgment file No. IV. ÚS 175/08) and, on the contrary, opposes

the interpretation of the Third Panel of the Constitutional Court (in

Judgment file No. III. ÚS 3158/07). However, it is neglected that the

Judgment of the Fourth Panel of the Constitutional Court did not have

any other ambitions than, for the purpose of the case examined by them

and solution pursued by them, suppressing – the actual – otherwise

obstructing effect of Judgment file No. I. ÚS 489/05, on the basis of

which the ordinary courts, after having learnt of the existence of such a

Judgment, following the usual proceedings taking several years and

including expert opinions on the issue of the differences between

“market” rent and controlled rent, were, in no time, dismissing actions

from the landlords, reasoning that it is not possible to go back “to the

past” (again see a resolution of the Supreme Court dated 15 May 2008,

file No. 28 Cdo 1342/2008-70 or a judgment of the Regional Court in

Hradec Králové – Pardubice branch dated 23 January 2007, file No. 23 Co

68/2006-139, which was the subject of the constitutional complaint in

the case of Constitutional Court file No. Pl. ÚS 7/07).

11.

However, the Opinion does not give any reasons why it should be so (that

is why “pro futuro” admittedly also means “back to the past”, but not

further back than from the time of filing the action); it is not at all

clear what is the reason for which – once a constitutive decision may be

effective to the past – it is only and exactly from the commencement of

the proceedings and not from any other moment in time, whether earlier

or later. When it referred to the circumstance of otherwise ineffective

actions, then it is necessary to say that (for the same reasons as are

specified under clause 12 of the Opinion) the same will also apply to

actions filed after 1 January 2007, and thus the chosen deviation from

“constitutive nature pro futuro” does not bring any considerable effect

to the reasoning of the same. Not even the reference to the dissenting

opinion of Justice J. Musil to Judgment file No. III. ÚS 3158/07 that

“as late as from this moment, the tenant may really respond to factual

and legal arguments exercised by the landlord within their action”, is

convincing, be it for only that primitive reason that the tenant sued

does not learn of these “arguments” as early as upon filing the action,

but only as late as by delivering a copy of the same (that is

“accidentally” later), however and on the contrary, usually earlier,

from the predictable call prior to the proceedings by the landlord

requesting voluntary payment of the “increased” rent. For that matter,

the actually administered proceedings do not show that the tenant sued

would ever “respond” in a manner other than precisely the defence that

the ordinary courts must in no way interfere with a contractually

effected lease relationship (note: similarly it is not known that a

tenant, following the delivery of a copy of the action, would “respond”

in such a way that the same would exchange an apartment with controlled

rent for another one – logically – with non-controlled rent, i.e. a more

expensive one). The “constitutional aspects”, however being allegedly

applied (clause 12 of the Opinion), appear in no place other than that

specified above.

12. It is proper here to remark again what is

noted under clause 7 above, that in cases when the Constitutional Court

proceeded to cassation of dismissive decisions of the ordinary courts,

the subject of the proceedings consisted of “rent” for a past period of

time (see, for example, file No. IV. ÚS 611/05, file No. II. ÚS 121/06,

II. ÚS 361/06 and IV. ÚS 111/06), and the Court, by opposing the

conclusions of the ordinary courts that the “rent” (usually capitalised

for a specific defined period of time prior to the filing of the action)

may not be granted, implicitly demonstrated (when they did not apply

another opinion on the nature of a possible claim) that, on the

contrary, such “rent” for the past period of time may successfully be

sued for, and later plaintiffs were naturally inspired by this.

13.

Besides, the key Judgment, file No. Pl. ÚS 20/05, is based on the same

actual basis of the action by a landlord (against a tenant), provided

that the subject of the same consisted of payment of the difference

between standard” rent “according to expert opinion” and the rent paid

(controlled) “for July 2003”. A task for the ordinary courts – founded

on this basis – that “in spite of absence of the arrangement anticipated

in § 696 para. 1 of the Civil Code” they must decide “on an increase in

rent”, was pronounced by the Constitutional Court with the knowledge

that a “proposal from the Government of the Czech Republic to pass a

statute on unilateral increasing of apartment rent” was prepared, but

also with a reminder that it may contain rules applicable only pro

futuro; by this the Court indicated that the “judicial route” is

directed – specifically – to the past.

14. As for the effects of

judicial “refinement of objective law” (file No. I. ÚS 489/05) to the

past, refused by the Opinion, it is also appropriate to refer finally to

the fact that Judgment file No. Pl. ÚS 20/05 is not the first one

whereby the Constitutional Court manifested a viewpoint similar to the

same; the statement of law of this Judgment, amongst other points,

refers to the fact that the Constitutional Court has already “opened the

way … through its (note: previous) decisions” for the ordinary courts

for “decision making” operations under the circumstance of the

“non-existence of a relevant legal arrangement”. In Judgment Pl. ÚS 2/03

dated 19 March 2003, it is indeed stated that “with respect to the

above-stated unconstitutionality of the legal condition (and for the

above-specified legal particulars of lease contracts with controlled

rent), unless constitutionally conforming control of rent is established

within the Czech legal order, the Constitutional Court shall have no

other means left than to acquit its obligations resulting from the

Constitution and, at least in individual cases, ensure the functioning

of principles resulting from the constitutional order of the Czech

Republic, and possibly relevant international treaties, even though such

a solution is insufficient, unsystematic, and in principle only

provisional, where evidently the only true basic point is adoption of

the relevant legal regulation as specified by the previous Judgment of

the Constitutional Court.”

15. It is evident that the actions

before the ordinary courts on “additional payment of rent” for the

defined past period of time, that is prior to the filing of the action

(see clauses 7 and 9 above), often for the period from 2003 to 2005,

found support in the above-quoted Judgment (as in earlier Judgments,

file No. Pl. ÚS 3/2000, file No. Pl. ÚS 8/02), or the plaintiffs were

filing the same with such support, and the ordinary courts (for other

reasons) dismissed the same. When the Constitutional Court – to the

contrary – annulled such decisions, a signal completely different from

that conveyed from the Opinion now adopted was sent.

16.

Contemplations on what properly is “pro futuro” are based by the Opinion

on the statement that judicial refinement of the law is expressed in a

“constitutive” judicial decision (file No. I. ÚS 489/05); since the same

is allegedly an expression of explicit acknowledgement by Judgment file

No. Pl. ÚS 20/05, another argument to the benefit of the constitutive

nature of the decision of the courts “on increase in rent” is therefore

not given. The truth is merely that the above-specified Judgment states

that the Constitutional Court requires the ordinary courts to provide

the landlords with proportional protection in such a manner that they

will not dismiss their actions requiring “determination of increased

rent”, which is, however, obviously a vague statement, without any

ambition of procedural completeness; specifically, if the Judgment

further states explicitly that the Constitutional Court “refrains from

offering a specific decision-making procedure and thereby replacing the

mission of the ordinary courts”. An attribute of the “constitutive

nature” of judicial decisions is, therefore, not conveyed therefrom.

17.

Restriction of the “pro futuro” effects to only certain “past periods”

is thus justified by the Opinion by the “constitutive nature” of

judicial intervention into the relationships of the landlord and the

tenant; however, such a “constitutive nature” is not substantiated in

any way, it is only proclaimed. Besides, it is clear at first sight that

this attribute has neither place nor reason here. For illustration

only: constitutive decisions include, for example, a decision on

divorce, legal incapacity, cancellation and settlement of co-ownership,

settlement of claims arising from unauthorised building, etc., and the

question is thus asked whether the decision to which the ordinary courts

are now guided in the relations presently examined may be compared to

any of them.

18. Viewpoints that the solution adopted in

Judgment file No. III. ÚS 3158/07 is unconstitutional due to its

intervention in the past ignore the fact that intervention by way of a

“constitutive nature” into a lease contract is visibly more invasive (by

the judicial decision replacing one of its essential elements, i.e.

agreement on the amount of rent), this in particular in the context of

the emphasis which is otherwise placed by the Constitutional Court on

“the parties' free will and freedom of contract”, which are granted a

“constitutional dimension” (see Judgment file No. Pl. ÚS 20/05). One or

the other is suppressed indubitably and more significantly by a direct

impact to the contract than by imposing an external obligation to amend

what is otherwise – as contents of the contract – protected.

19.

Therefore, in Resolutions file No. Pl. ÚS 7/07, file No. III. ÚS

294/06, as well as in the criticised Judgment file No. III. ÚS 3158/07,

the Constitutional Court attempted to establish (interpret) “the

constitutive nature” of refinement of the law (pursuant to file No. I.

ÚS 489/05), not in the traditional procedural sense, but in the sense of

a declaration, possibly via ascertainment of a “new”, “further”

monetary obligation (beyond the scope of the obligation resulting from

the lease contract), related to the period of time defined by the

action, or until the decision of the court.

20. The Opinion also

fails to closely deal with how the proposed judgment by the landlord

against the tenant (the acknowledging one) should actually look; it only

says that something should be determined “from the bringing of an

action”, this most likely as an “increase in rent”. However, it is not

at all clear which procedurally anticipated action is concerned, while

this very point is crucial for the plaintiff; the landlord may not fail

to respect the provisions of § 80 clauses a) through c) of the Civil

Procedure Code.

21. A decision on “increased rent” relating to

the future can be conceived, according to viewpoints in clauses 10 and

11 of the Opinion, either as “determination” that the rent amounts to a

specific sum determined by the court, or as an imposition of an

obligation to pay a “newly” determined sum for rent per month. In the

first case, however, this would be an action which does not have any

support in procedural law [here, determination of the right or legal

relationship according to § 80 clause c) of the Civil Procedure Code is

naturally not involved], and its basis is not given even from Judgment

file No. Pl. ÚS 20/05 (see clause 16 above). The second version is

preconditioned by the fact that the obligation to discharge the

increased rent determined by the court is of the nature of “repetitive”

discharge, that is one comparable with discharge of alimony, another

allowance, etc.; however, this obligation is definitely not of such a

nature.

22. On the contrary, actions anticipated by Judgment III.

ÚS 3158/07, Resolution III. ÚS 294/06 and others are procedurally

doubtless, since they have features of actions for discharge under § 80

clause b) of the Civil Procedure Code, and their substantive-law basis,

is supported by Judgments of the Constitutional Court referred to by Pl.

ÚS 20/05, specifically file No. Pl. ÚS 3/2000, file No. Pl. ÚS 8/02, or

Pl. ÚS 2/03, if their leitmotif is ascertainment that the landlords

are, by persistent control of the rent, unconstitutionally (by absence

of regulations anticipated in the then § 696 para. 1 of the Civil Code)

afflicted in terms of exercise of their property rights, and that

something – later “in a judicial way” – must be done about it in the

sense of adequate rectification (see clause 14 above).

23. As

was mentioned in clause 19 above, in decisions of the Third Panel of the

Constitutional Court, this claim is understood as a declaration of a

“new”, “other” monetary obligation (beyond the scope of that which

results from the lease contract) related to the time specified by the

action, or prior to the court making a decision. This is in the belief

that it is not in collision with opinions applied in the previous

Judgments of the Constitutional Court (enumerated in Judgment file No.

III. ÚS 3158/07), specifically in a Judgment dated 8 February 2006, file

No. IV. ÚS 611/06, dated 26 July 2007, file No. II. ÚS 361/06, or dated

8 June 2006, file No. II. ÚS 93/05. In the Judgment mentioned last, the

Constitutional Court stated that the violation of the right to judicial

protection – and in the final consequence also violation of the right

to protection of property – was caused by the ordinary courts by their

dismissing the petitioner’s action, with reference to non-existence of a

special legal regulation anticipated in § 696 para. 1 of the Civil

Code, that is a regulation allowing unilateral increase in rent by a

legal act by the landlord, even though their only possible defence was

action against the tenant on capitalised monetary discharge for a past

period (here, the Constitutional Court was even thinking about

unjustified enrichment).

24. In order to understand how the Third

Panel of the Constitutional Court conceived the contents of the

potential claim of the landlord against the tenant, it is again enough

to quote a section from Judgment III. ÚS 3158/07: “In the following

proceedings, the ordinary courts will have to adopt such interpretative

standpoints which will ensure the mutually balanced protection of both

entities in the decisive legal relationships, as this requirement was

treated in all previous (and above-mentioned) decisions of the

Constitutional Court. They will also address how the petitioner reasoned

the claim made; that they pursue a claim from obligation relationships

(not unjustified enrichment) and that it is necessary, within the

intentions of Judgment file No. Pl. ÚS 20/05, under the condition of a

legal gap (caused by the non-existence of a regulation pursuant to § 696

para. 1 of the Civil Code), to get an idea how this gap would be filled

by the legislature, had the same not be inactive.” But the

Constitutional Court also stated that it would be up to the petitioner

to prove how the action corresponds to such aspects, such an action

being formed, as regards the amount of the exercised claim, on the basis

of determining “market” rent “in the given location”.

25. Since

the Constitutional Court has always proceeded from the non-existence of

regulations in accordance with the then valid § 696 para. 1 of the

Civil Code (and from the need to “bridge” this gap with judicial

engagement), then it is logical (and useful) to think about “old” claims

– at least – in much the same way as about “new” claims which were

established by regulations issued later (Act No. 107/2006 Coll.). Here,

it may be instructive that the structure of the claims to “increased”

rent is derived from a request given by the landlord, and if the tenant

does not pay the higher rent, the landlord will sue the tenant for the

payment of capitalised rent for the past period of time determined by

them (from the lawful effectiveness of the request to the determined

moment of “non-payment” prior to filing the action); in this case, the

tenant has a defence that the landlord’s request has no legal basis, or

they will question the “validity” of the increase in rent by their own

action (cf. § 3, 5 and 6 of Act No. 107/2006 Coll. )

26. The

concept of “old” claims concerned by the Third Panel of the

Constitutional Court evidently conforms with this; however, viewpoints

declared by the Opinion definitively suppress this arrangement.

27.

It is proper to summarise: the conclusion declared in the first

sentence of statement of law (I.) of the Opinion is not only incorrect

(its reasoning will not stand in law) but also purposeless; instead of

pursuing a practical and balanced settlement of legal relationships in

question, it, on the contrary, liquidates possibilities which existed

and were appropriate to the same, this without any adequate reasoning.

This is done so at the expense of a repeated (and crucial) turn in the

case law of the Constitutional Court, which until now – so it seems –

also brought about an alignment of decision making of the ordinary

courts. From now on, all will be different again, which is malignant

insofar that previously commenced proceedings of landlords against

tenants are still in progress. The notion lingers that this was done

only in order to open an avenue to claims against the state, which is

established by the second sentence of the statement of law (II.) of the

Opinion, and the Constitutional Court will with difficulty rid itself of

a suspicion that this is a reaction primarily to the fact that

Parliament did not respect the Constitutional Court’s opinions expressed

earlier.



III. On the second sentence of the statement of law (II.) of the Opinion
 

28.

It was mentioned above (clause 2) that the dispute of landlords against

tenants is related to disputes administered before the ordinary courts

between the landlords against the state “on compensation for loss”; this

was true until the adoption of the Opinion which – anew and totally

originally – subsumes these disputes to the evaluation “from the

viewpoint of their right to compensation for mandatory limitation upon

property rights in accordance with Article 11 para. 4 of the Charter of

Fundamental Rights and Basic Freedoms”. With respect to evaluating the

mutual relationship of these two disputes (claims), this is a minor

alteration, and, therefore – in opposition to the Opinion – the

essential facts which were pronounced by the Constitutional Court

earlier (in Decisions of the Third Panel and Fourth Panel of the

Constitutional Court, as well as the Second Panel of the Constitutional

Court), will be applied by analogy.

29. Both Judgment file No.

IV. ÚS 175/08 and Judgment file No. III. ÚS 3158/07 proceed from the

principle of subsidiarity of concepts of compensation for loss towards

the concepts of actual settlement of the obligation relationship in

question. In the latter of the above-mentioned Judgments, this is done

via discretion (see clause 4 above) that the general principle is thus

reflected “that in order to rectify a defect in a legal relationship of

obligation, it is necessary to primarily utilise such reparation

instruments which are intrinsic to their contents and corresponding

(obligation) legal instruments, and only then, if the same are not

capable of ensuring complete rectification, is it possible to consider

instruments external to such a relationship, including the institute of

compensation for the loss if statutory conditions for the application of

the same are fulfilled”. The circumstance that future claims to

compensation for loss should be assessed as compensation for mandatory

limitation upon property rights obviously changes nothing; besides, the

Opinion itself behaves equally (see clauses 5, 7 and 19 of the Opinion,

or the second sentence of the second statement of law). Compensation for

loss against the state is, in both such Judgments (as well as

Resolutions file No. III. ÚS 294/06, file No. III. ÚS 2319/08 and

others), considered only hypothetically, “if the same happens to come to

consideration”, without reflecting in whatever manner the existence and

nature (title) of a possible claim.

30. The principle of

subsidiarity of (compensatory) claims based on compensation for loss is a

general principle which simply must be objectively known to each

plaintiff, and has absolutely no connection whatsoever to specific

difficulties as regards “refinement of the law” to the benefit of

landlords in relation to the tenants. The landlords thus could (and

should) have always known that primarily they are to pursue a reprisal

on their partners in the decisive obligation relationship, since that is

true according to general legal principles. The fact that the law is to

be “refined” under the circumstance of non-existence of an otherwise

anticipated legal norm, was (explicitly) proclaimed “publicly and for

everyone” in a judgment of the Supreme Court dated 14 November 2002,

file No. 21 Cdo 2104/2001 (No. 63/2003 of the Collection of Judicial

Decisions and Opinions) and, as for specifically affected legal

relations, the same is given at the latest by Judgment of the

Constitutional Court file No. Pl. ÚS 2/03, dated 19 March 2003.

31.

The Opinion, even though it acknowledges (clause 7) that “the notion of

subsidiarity of a claim to compensation for loss against the state is

generally correct”, excludes utilisation of the same – and this merely –

due to the fact that a specific landlord against a tenant (according to

the opinion that they may be sued only pro futuro) had no action

against the same any longer, wherefore case file No. IV. ÚS 175/08

professedly “involved no competition of claims”. This, however, could

stand only in the instance when there is objectively no legal instrument

against the tenant, which is naturally not true here, because, even

from the viewpoint of the Opinion, there is surely no reason to believe

that a landlord would have no claim against a tenant in the past; after

all, a claim “for higher rent” which is “attached to… filing the action”

is admitted (and even formed). The landlord then could bring such an

action earlier, and, therefore, could also achieve settlement of their

relation to the tenant from such an earlier date (still, actions were

indeed brought by landlords against tenants after Judgments by the

Constitutional Court dating from 2000 to 2003).
    
32. It is

true that the structure based on subsidiarity of the concept of

compensation for loss is matched by the existence of an effective

primary legal remedy from the actual obligation relationship; it is,

however, necessary to emphasise that this is valid generally, or in a

general doctrinal sense, naturally not in such a meaning that in each

specific situation when a landlord neglects their primary remedy of

protection for their right, or otherwise causes that the same ceases to

be effective, they may – exactly for this reason – call for subsidiary

remedy. The argumentation of the Opinion, however, contradicts this.

Upon reductio ad absurdum, it would have to be true that such landlords

who in the past litigated (and still litigate) with tenants, could have

saved themselves from such conduct (and not file the action), since

other landlords could have sued the state directly for the very reason

that they did not file an action against tenants, and – as is specified

in the Opinion – after 1 January 2007, can no longer sue the tenants

anyway.

33. When the Opinion (clause 20) implies that the claim

of a landlord against the state cannot be preconditioned by the landlord

firstly having to exercise effective remedies for the protection of the

right against the tenant (as the landlord against the tenant for the

past period has no such claim), then the Judgments of the Constitutional

Court completely abandon the until now respected principle of

subsidiarity of claims based on compensation for loss; if the landlord

has always available an action against the state “for long-term

inactivity of the legislature”, then it is illusory to consider a

situation according to the second and third sentences of the statement

of law (II.), since the landlord does not have (and actually has never

had) any logical reason for the action against the tenant. In other

words, despite the fact that the Opinion intends to outwardly respect

the principle of subsidiarity (clauses 7 and 20), they cause the

application of this principle to be solely dependent on the will of the

plaintiff, whether they bring or not a (primary) action from the

original obligation relationship; if they decide not to file such an

action, a “subsidiary” claim, not limited in time, against the state

commences as a matter of course (while – oddly enough – if they did file

an action, they would have such a claim against the state for a certain

period of time only).

34. If, according to the second and third

sentences of the statement of law (II.), “a claim against the state for

compensation for mandatory limitation upon property rights in

accordance with Article 11 para. 4 of the Charter of Fundamental Rights

and Basic Freedoms is of a subsidiary nature to the claim by the

landlord of an apartment against the tenant for an increase in rent only

for a period of time beginning on the date on which the action was

brought” (note: according to the opinion of the majority of the Plenum,

repeatedly expressed, this is an action against the tenant), and “for

the period of time preceding such a date, the landlord of an apartment

may exercise their claim to compensation for mandatory limitation upon

property rights directly against the state”, then all that has been

expressed above is manifested prominently in a logically connected

question, that is what will happen when the landlord has (never) filed

any action against the tenant… It is hard to comprehend what these two

sentences in such case actually convey.

35. The Opinion also

ignores the issue of whether the circumstance that a landlord has not

filed any action against the tenant (which opens the way against the

state “directly”) even though the landlord could have done so (as other

landlords in comparable situations have), has any effect on their claim

against the state, whether such a claim is somehow weakened, for

example, by such an amount which the landlord “failed to sue for

otherwise.”

36. Additionally, it is impossible not to raise

objections to evaluation of claims by landlords for compensation for

loss against the state “from the viewpoint of their right to

compensation for mandatory limitation upon property rights in accordance

with Article 11 para. 4 of the Charter of Fundamental Rights and Basic

Freedoms” in relation to the loss “which allegedly occurred as a result

of long-term unconstitutional inactivity by Parliament, consisting of

its failing to adopt a special legal regulation defining cases in which a

landlord is entitled to unilaterally increase rent”, to which the

Opinion calls. This due to the fact that establishment of liability by

the state for “inactivity”, i.e. “voting” or “not voting” in Parliament,

is exposed to a clearly relevant objection that the Constitutional

Court does not adequately distinguish between political responsibility

in one respect and legal responsibility in another, as well as that the

Court exceeds constitutional delimitation of relationships between the

individual powers, specifically their own power against legislative

power. Even though the Opinion evaded difficulties related to

subsumption of “long-term unconstitutional inactivity by Parliament” to

the facts of the case of the state’s liability for loss, established in

Act No. 82/1998 Coll., as amended by later regulations, such an open

“constitutional” problem has not been lessened in any way by

constructing liability for compensation under Article 11 para. 4 of the

Charter of Fundamental Rights and Basic Freedoms.

37. In

addition, the very point referred to by the Opinion, Article 11 para. 4

of the Charter, is, in terms of application, (more than) disputable,

since the same is typically aimed at such “mandatory limitations” upon

property rights which may be, in terms of their contents, compared to

expropriation (which both it treats), wherefore the logical basis of the

same consists of an active infringement of protected ownership by the

operation of the state and its bodies, in particular executive bodies,

this by way of their administrative acts. If this Article of the Charter

is apparently also usable for declaring constitutional non-conformity

of expropriation (nationalisation) norms (without compensation), this in

no way indicates that it could provide support for the passivity

(“inactivity”) of Parliament, be it long-term and unconstitutional.

38.

If the application of Article 11 para. 4 of the Charter does not stand,

then attention is again turned only to such basis for considerations on

liability of the state which are represented – and exclusively so – by

the provisions of Article 36 para. 3 of the Charter which, however,

establish merely the right to compensation for loss caused by an

unlawful decision of a court, other state body, or public administration

body, or incorrect official procedure; beyond this, there is no room

for liability of the state inferable from the constitutional order.

Therefore, this does not affect the legislative assembly, since the same

is naturally not comparable to the above-stated bodies; an act (or

absence of the same), as a product of its activity (inactivity), may be

in conflict with the Constitution, but liability of the state may not be

connected with the same, since it is identified neither with the

decision nor official procedure, and compliance with the condition of

“unlawfulness” is not at all given (see also clause 36 above).

39.

Besides, originality of legal evaluation of earlier claims by landlords

for compensation for loss against the state (in the sense of claims to

compensation in accordance with Article 11 para. 4 of the Charter)

brings about non-negligible difficulties in terms of how to define these

new claims with respect to contents of the same, or how they should be

interpreted by the ordinary courts. The Opinion, in key clause 22,

provides no comprehensible and guiding instruction for evaluating “the

degree of infringement of their fundamental right to own property as a

result of controlled rent…”, or it remains unclear how the ordinary

courts are to evaluate when the fundamental right to own property was

already affected and when not, when it is at the same time acknowledged

that the “unconstitutionality of the legal arrangement of controlled

rent alone did not mean that a fundamental right” of the petitioner “was

violated in each individual case” (at the same time, however, it is

common knowledge that revenue from rent was considerably diminished by

unconstitutional control of the same). When the Opinion points out that

“the amount of the claim to compensation for mandatory limitation upon

property rights under Article 11 para. 4 of the Charter does not need to

be identical to the difference between standard and controlled rent”,

it is as if the same, on the other hand, suggested that it actually may

be so. Clause 22 mentioned above does include that the ordinary courts

will evaluate, in individual cases, whether “the above-specified

conditions for origination of the right to compensation were fulfilled”,

but their enumeration usable in practice was not provided in a

convincing manner, not even from the preceding clauses 17 and 18.

40.

Naturally, it is possible to agree with the fact that the

Constitutional Court may leave “sub-constitutional details” to ordinary

courts; but when the Court, through its own discretion, established a

claim which is completely original and previously not introduced, the

Constitutional Court should exhibit, in a specific and understandable

manner, what was actually meant.

41. Finally, it is not possible

to overlook the potential (and dangerous) importance of the adopted

Opinion as a precedent; when the liability of the state was connected

with “unconstitutional inactivity” by Parliament, it may not be easy to

separate this base from its “unconstitutional activity”, specifically

declared by the Constitutional Court in the derogated provisions of the

act from which claims arose to the individual entities, such claims

being later granted by unenforceable judicial decisions (cf. § 71 para.

2, sentence following the semicolon, of Act No. 182/1993 Coll. on the

Constitutional Court).

42. For all these reasons, the second statement of law of the Opinion cannot be affirmed either.

 



Dissenting Opinion of Justice Ivana Janů concerning the Reasoning of the Opinion of the Plenum


1.

I agree with the statements of law which were arrived at by the

majority Opinion, as well as with the arguments relating to the

statement of law (I.). However, I do not consider argumentation relating

to the statement of law (II.) to be completely correct and exhaustive; I

am convinced that the Constitutional Court should have accentuated more

the liability of the state for loss which the state caused by its

unconstitutional inactivity; in the same way, there is no reason for

speaking about the “obligation to compensate for material detriment”,

when in fact this is nothing else than the liability of the state for

loss caused by the state (besides, loss is consistently defined as a

material detriment quantifiable in money). Also, I do not agree with the

statement that the remark on the liability for loss in Judgment file

No. I. ÚS 489/05 (possibly in other Judgments) was pronounced in

relation to the lapse on the part of the ordinary courts. In closer

detail, I wish to point out the following:

2. In accordance with

Article 1 para. 1 of the Constitution, the Czech Republic is a

sovereign, unitary, and democratic state governed by the rule of law,

founded on respect for the rights and freedoms of man and of citizens.

The fundamental rights which are guaranteed at constitutional level and

which enjoy the protection of judicial bodies (Article 4 of the

Constitution) include, among other items, property rights (Article 11 of

the Charter), or right to peaceful enjoyment of possessions (Article 1

of Protocol No. 1 to the Convention). If the protection of such rights

is to be complete, the legal order must provide effective legal remedies

in the case that the property domain of a person is infringed in an

unlawful manner. In other words, if, as a result of unlawful conduct,

material detriment occurred, the legal order must make it possible to

rectify such a detriment, irrespective of who caused the same; if the

legal order does not allow such rectification, it means that protection

of property rights, or the right to peaceful enjoyment of possessions,

is not complete, and is thus in conflict with Article 11 of the Charter

and Article 1 of Protocol No. 1 in connection with Article 13 of the

Convention.

3. The basic institute serving to remedy a material

detriment which was caused to a party by unlawful conduct, is liability

for loss. From this viewpoint it is necessary to deal with the question

whether, in the case of detriment caused to the landlords of apartments

with controlled rent by unconstitutional inactivity by the legislature,

preconditions for liability for loss are fulfilled in such way as they

have been consistently defined by legal theory for many years; if the

answer to this question is positive, the legal order must allow

rectification of such a situation, as was specified above.

4. At the level of theory, liability for loss is based on four basic preconditions:
a)    unlawful conduct or a loss-incurring event defined by law;
b)    loss;
c)    causal nexus between a) and b);
d)    culpability (if a subjective principle of liability is applied).

5.

The existence of preconditions specified under b) and c) will perhaps

not raise great doubts and, therefore, they may be left aside; this is

also confirmed by the majority Opinion, even thought the same evades

speaking about “loss”, and replaces this term with the periphrastic term

“material detriment”. Culpability as a precondition for liability by

the state for loss shall not be applied; this is clear not only from Act

No. 82/1998 Coll., but also from the very nature of the liability for

loss which is caused by public power. The key issue then remains the

fulfilment of the precondition under clause a), i.e. whether

non-adoption of an act on unilateral increase in controlled rent is or

is not unlawful conduct, this irrespectively of the legal category by

which the liability should be governed.

6. In this sense – in my

opinion – it may be believed that non-adoption of an act regulating a

unilateral increase in rent for apartments with controlled rent truly

constitutes unlawful conduct. This is clearly seen from the Judgments of

the Constitutional Court which were quoted in the Opinion, in which the

Constitutional Court stated that the inactivity by the legislature is

unconstitutional; if the same is unconstitutional, then even more so it

must be true that it is also unlawful, whereby the first precondition

for the liability for loss is fulfilled. The conclusion on

unconstitutionality, and thus also unlawfulness, is, in Judgment file

No. Pl. ÚS 20/05, supported by two basic arguments: firstly, the state

imposed on itself adoption of a special statutory arrangement of a

unilateral increase in rent in § 696 of the Civil Code; secondly, by

non-adoption of the above-mentioned statutory arrangement, the principle

of equality and protection of property rights were violated.

7.

In support of this conclusion, other arguments may be given. These would

also include ascertainment that by non-adoption of an act on unilateral

increase in rent, the principle of legitimate expectation has been

violated. If a valid and effective regulation was counting on the

existence of a special arrangement which would regulate a unilateral

increase in rent, then the landlords could indubitably rely on the fact

that such an arrangement would be adopted and they would be able to

proceed in accordance with the same. So established legitimate

expectation does not rest on any speculation, but on explicit provisions

of the law.

8. Non-adoption of the legal arrangement on a

unilateral increase in rent is also in conflict with Article 1 of

Protocol No. 1 to the Convention. Here it suffices to refer to case law

of the European Court of Human Rights quoted in the reasoning of the

majority Opinion.

9. It is possible to summarise that the

conclusion on unconstitutionality, and thus also unlawfulness of the

consequences of not adopting the act on a unilateral increase in rent,

is based on the following arguments: the legislature imposed on

themselves the obligation to regulate this issue directly within an act

but failed to do so; their inactivity resulted in violation of the

principle of equality and legitimate expectations. With respect to the

fact that also other above-mentioned preconditions for liability for

loss have been fulfilled, it is not possible to claim that the state

bears merely political responsibility and not legal responsibility. It

would be in strict conflict with the principles of a law-based state

(Article 1 para. 1 of the Constitution) if the legal order did not make

it possible to make good the material detriment caused to a party in

their constitutionally protected property domain by unlawful conduct.

Even more so, it is also true for the situation when unlawful conduct

was committed by the state itself. It is not relevant which body of the

state has a greater share in the unconstitutional condition. Liability

is borne by the state as a whole; the individual sections defined by the

theory of separation of powers are not sections mutually divided by a

deep abyss, but those between which public power is merely divided. The

purpose of the separation of powers is not to exclude or limit the

liability of the state as a whole, but only an effort to prevent the

concentration of power, which may bring about attempts to abuse the

same.

10. On the basis of the above considerations, I believe

that it would be possible to extensively interpret Article 36 para. 3 of

the Charter, and in accordance with this also § 13 of Act No. 82/1998

Coll., and thus to apply the above-specified regulation directly to the

liability of the state for detriment caused. Through this, the fact that

the state’s duty is of a nature of liability, as well as the fact that

not even the state’s legislature may act in a completely arbitrary

manner, would be better expressed.

11. Furthermore, I consider it

necessary to emphasise that there is no need to worry that the

obligation on the part of the state to provide compensation for material

detriment could be used (overused) excessively or as a precedent in

cases when somebody is convinced that Parliament should have adopted an

act but failed to do so. The liability of the state for material

detriment which the state caused by long-term unconstitutional

inactivity, consisting of non-adoption of a legal arrangement

anticipated by law, is an exceptional procedure which is applied merely

under completely extraordinary circumstances and it cannot be

mechanically related to other cases of non-adoption of a legal

regulation. I am not sure whether the majority Opinion expresses this

conclusion in an absolutely unambiguous way; in fact, it merely poses

two limiting conditions, these being violation of equality and the

intensity of limitation of property rights (given by the scope of

limitation and the period of its existence). Therefore, I deem it

necessary to bind the conclusion reached by the Constitutional Court

with unique specific circumstances of this case. Its specific nature

determined by control of rent results at least from the following

circumstances: non-adoption of the legal arrangement was

unconstitutional and thus also unlawful; the Constitutional Court

repeatedly and over a long time declared, in its binding Judgments, the

conclusion on unconstitutionality. In addition, adoption of a special

statutory arrangement of a unilateral increase in rent, as was mentioned

above, was imposed on the state by the state itself in § 696 of the

Civil Code. Non-adoption of the above-specified statutory arrangement

violated the principle of equality, principle of protection of property

rights and principle of legitimate expectations.

12. Finally,

the statement in clause 14 of the reasoning to the majority Opinion,

according to which “thus, when the Constitutional Court stated a

possible claim to compensation for loss against the state in Judgment

file No. I. ÚS 489/05 and likewise in Judgment file No. IV. ÚS 175/08 …

the Constitutional Court aimed such a claim in relation to a lapse by

the ordinary courts which would not provide protection to the

fundamental right of the landlords concerned, by dismissing their

justified claims to an increase in rent” is, in my opinion, not

particularly accurate. The legal opinion declared in file No. I. ÚS

489/05, according to which “if a landlord’s justified claim is not

satisfied to the fullest degree, the landlord shall have no option left

other than to exercise their requirement for compensation for loss

against the state”, may be interpreted only in the context of the

remaining contents of the reasoning of this Judgment. In this, the

Constitutional Court firstly explicitly excludes the existence of a

claim to payment for the difference between market and controlled rent

for a past period of time, and secondly, in connection with

considerations on increasing rent in the future, refers to social

sensitivity of this issue under the condition of non-existent social

housing. Consequently, it follows that a situation when a tenant does

not satisfy in full the justified claim of a landlord, does not mean a

difference between the rent for a past period of time, but a case when

the ordinary court decided on the increase in rent for the future,

however, the court has not increased the rent, with respect to social

reasons on the part of the tenant, to the level of justified claim of

the landlord. It is surely not possible to see any lapse by the court in

such a decision; to the contrary, its decision would be correct as (in

the situation described above) it is not possible to request the

landlord to bear the consequences of the poor social situation of the

tenant. The only way to rectify the loss caused in such a situation is

the possibility of the landlord to claim the remaining difference from

the state, on the basis of its liability for material detriment suffered

by the landlord.

13. In conclusion, I wish to add that nobody

contests the sovereignty of Parliament, the importance and weight of

their political responsibility as the elected representative of the

people within a representative democracy, which manifests independently

its political will by individual members voting on issues. However, it

must not be ignored that it is during the very independent conception of

this political will that members are bound by their oath to uphold the

Constitution and laws and to carry out their mandate to the best of

their knowledge and conscience (Article 23 of the Constitution).

Allegiance by the Constitution and laws clearly shows that the

responsibility of Parliament has clear legal aspects and does not

consist solely of political responsibility (Article 1 para. 1 of the

Constitution).

With respect to the issues now under

consideration, this means that if the consequences of inactivity by

Parliament in the long term interfere with the fundamental human right

consisting of protection of property, in a law-based state there is no

other way than that the state as a whole be held accountable, on the

basis of an explicit decision by the Constitutional Court.

The

Constitutional Court was called by constitutional legislature and

incorporated into the constitutional structure of a democratic law-based

state as a body responsible for the protection of constitutionality

(Article 83 of the Constitution) and its enforceable decisions have

effects erga omnes and are binding on all authorities and persons, i.e.

also the legislature (Article 89 of the Constitution).
 




Dissenting Opinion of Justice Eliška Wagnerová concerning the Reasoning of the Opinion of the Plenum


I. Introduction
 

1.

I do agree with the Opinion, I consider it to be a manifestation of the

responsible approach of the Constitutional Court to the solution of a

problem which has originated as a result of the perplexing inertia of

politicians at the level of both Government and Parliament. In my

Supplemental Dissenting Opinion I wish to express myself on the possible

concept of the obligation of the state to compensate for loss caused by

legislative power, which was not addressed by the reasoning of the

Opinion of the Plenum in a completely clear fashion, for reasons of

pursuing a consensus (which are reasons possible to respect).

2.

In terms of positive law, this matter has not been regulated, since Act

No. 82/1998 Coll. standardises liability for loss caused by executing

public power by a decision or incorrect official procedure, while the

provisions of § 5 of this Act then specify the definition of acts and

procedures for which the state is to be liable, as follows: the state is

liable under circumstances determined by this Act for loss which was

caused a) by a decision which was issued in civil proceedings, in

administrative proceedings, in proceedings under the Administrative

Procedure Code or in criminal proceedings; b) by incorrect official

procedure. The above-mentioned Act does not cover (or does not deal

with) decisions of Parliament made in the form of an act. Hence, from

the very absence of an explicit statutory arrangement, as well as from

the allegedly historical “untouchability” of Parliament, some (the

majority) infer the impossibility of conceiving the obligation of the

state to compensate for loss caused by the state (be it via statutory

acts or inactivity).
 


II. Historical fundaments of liability of the state for losses caused by legislative power
 

3.

The liability of public power as such did not exist in historical eras

when the state was not endowed with a legal personality, and when a

ruler was conferred with sovereignty. The personality of the state makes

it possible to perceive the relationships between an individual and the

state as legal relationships; earlier, as Jhering stated, law appeared

to be a policy of power, although, for example, Kelsen infers, from the

legal personality of the state, a legal impossibility of the state’s

position of power against individuals, and all relations of superiority

and subsidiarity are, according to Kelsen, only of a factual nature. Yet

it was acknowledged that a ruler’s sovereignty was also limited by the

acquired rights of persons. In a “police state”, characterised by

authoritative care of good order and general welfare, the sovereign did

not rule in their own interests and those of their dynasty, but in the

interests of society as a whole. Therefore, at such a time in the past,

borderlines in the form of acquired rights of individual persons were no

longer in existence. The vassals did not oversee civil servants, they

were only obliged to subject themselves to their orders. “Police”

statutes, unlike “judicial” statutes, did not establish subjective

rights for vassals, and, therefore, they were not enforceable through

court; for they were mere internal instructions or orders for civil

servants in relation to their superiors, they were not determined for

the vassals. The outlined structure of the exercise of power was not

applied only in absolutist monarchies, but was to be observed also in

post-revolutionary France. The sovereignty of the ruler was replaced by

the sovereignty of the people, which, however, was to contain the same

characteristics as their predecessor, meaning omnipotence and

unaccountability. Even the Declaration of the Rights of Man and of the

Citizen contained a principle of inviolability of ownership; each loss

caused to an individual by the operation of the administration was to be

compensated for. Yet, French legislature and case law were for a long

time hesitant to make this principle real.

4. The further

expansion of operations by the state, however, is bringing about ever

more numerous and grave detriments to individuals related to such

operations. At the same time, however, a sense of justice is growing.

The provision of compensation for loss to those who have suffered the

same as a result of operations of the state is beginning to be

considered a matter of virtuousness and of social solidarity. The era of

a law-based state, even though merely a formal one at that time, was

coming. The state bound itself with law, the state’s acts started to be

reviewed as for their lawfulness, disputes between the state and the

individual were decided on by courts. Theory on the liability of the

state developed and was to find – if possible – a stable balance between

collective and individual interests; respect to subjective rights and

concerns of the individuals were to be achieved, and the necessary

freedom for actions of the state in order to fulfil its tasks was to be

ensured. The intensity of the problem was growing, as it was considered

increasingly natural that the state should not be restricted only to

protecting its citizens, to ensuring internal and external security, but

that the state should and must include in its operations also the care

of interests of its citizens in the field of culture, and in the

economic and social spheres in particular. The central notion was that

the state, in relation to individuals, was not to be a source of losses,

at least unjust losses or losses disproportional to the benefits

provided by the state to individuals.

5. The issue of the

obligation of the state to provide compensation for loss caused by a

legislative act may be identified with the issue of the relation between

the state and the law. Ever since ancient times, there have been two

schools of thought, one of them proposing that the state is a sovereign

in relation to the law, the other declaring otherwise, inferring that

power is subject to higher law which defines its limits. The concept of

the contents of such higher law changed over the course of time, until

eventually, in the 18th and early 19th centuries, stabilisation occurred

with the contents including inherent rights of an individual (ius

cognatum) resulting from their human nature, and the rights acquired by

an individual (ius quaesitum), which originated in synergy with human

activities. In this, it was true that the rights of the latter group

(i.e. acquired rights) may be annulled or limited when in conflict with

general well-being or good, but only for compensation.

6.

Natural-law theories were abandoned during the 19th century, and

replaced with legal positivism, which removed the above-outlined basis

for the legislature being limited by “higher law”. Until the end of

World War I, the term “legal injustice” was considered a contradiction

in terms, since the basis of the prevailing doctrine was inimitable

sovereignty of the legislature. According to the prevailing doctrine as

well as practice, the acquired rights retained their meaning only for

determining the retroactive effectiveness of law. Legislation makes no

difference between individual rights, in terms of the possibilities of

modifying or even annulling them, according to the current need;

besides, the designation “acquired rights” has begun to disappear.

Pragmatism, maybe the cynicism, of materially non-corrected positivism

(in terms of values) is proven, for example, by the history behind

Article 129 para. 1 of the Weimar Constitution, which stipulated that

properly acquired rights of civil servants (Beamten) are inviolable.

When defending this in the Constitutional Committee, Hugo Preuss, the

author of the constitution, explained the purpose of this provision as a

necessity of dissipating anxieties of professional officers about

changes in the form of the state and the form of government, which, as

they feared, could affect their status. Therefore, it was necessary to

placate these indispensable experts. It must be added that there were

also opponents in terms of doctrinal opinion, who, in relation to

acquired rights, stated that even “when the law is tacit, it is

necessary to presume legal acknowledgement of a claim to compensation

for loss” [(Gierke – quoted according to J. Matějka, Povinnost státu k

náhradě škody způsobené výkonem veřejné moci (podle práva

československého, francouzského a německého) /Obligation of the State to

Compensate for Loss Caused by the Execution of Public Power (According

to Czechoslovakian, French and German Law)/, Prague, 1923, p. 24)], for

this is what justice demands.

7. The same opinion was also

originally held by the German Reich Court of Law, which, in a decision

dated 13 January 1883, stated: “In the case of deprivation of properly

acquired right through legislation, there is, according to general law, a

private-law claim against the state for full compensation, unless such a

claim is explicitly excluded by the legislature.” As the ideas of

positivism advanced and consolidated, case law of the Reich Court of Law

was changed. In a decision dated 26 October 1906, the Court stated:

“The law may, due to its unique rule, ask also for sacrifice without

recoupment; only when such a law itself prescribes compensation, the

same may be claimed.” (quoted in a translation by the author, according

to J. Matějka – see above, p. 24). On 4 November 1925, the Reich Court

of Law reached the conviction on judicial power for supervising

constitutionality in relation to statutes, whereby they considerably

contributed to disruption of doctrine on the sovereignty of Parliament,

but did not formulate liability for loss caused by unconstitutional

statutes (see B. P. Wróblewski, Die Staatshaftung für legislatives

Unrecht in Deutschland, Eine rechtshistorische, rechtsdogmatische und

rechtsvergleichende Untersuchung, Nomos, Baden-Baden, 2005, p. 41).

8.

French doctrine and case law of the 19th century took an invariable

opinion under which it was not possible to claim compensation for loss

due to activity (inactivity) by the legislature. A statute is considered

to be an act of sovereignty; and a sign of sovereignty is that the same

is binding upon anybody, without any claim to compensation. The Conseil

d'État has also maintained the doctrine and allowed compensation only

in the instance where the statute itself determined the same, in this

referring particularly to the principle of separation of powers, or the

separation of judicial power and legislative power (it is of interest

that, on the contrary, the Conseil d'État, at the beginning of the 20th

century, developed the liability of the state for loss caused by acts of

the executive in a very inventive way, which, according to the author,

is evidence of exaggerated adoration of a democratically elected

parliament, this being an attitude which also negatively influences the

possibilities of developing a constitutional judiciary). However, this

opinion was radically negated by Léon Duguit, today considered a

personality who considerably influenced opinions on public law. Duguit

believed that the base from which law grows consists of the fact that

people are social beings, endowed with universal sense or even an

instinct for solidarity and social interdependence. From these

instincts, Duguit inferred acknowledgement of certain rules of

behaviour, which are inevitable for mutual coexistence in society. The

state does not represent sovereign power. The state is only an

institution which originated merely as a result of the social needs of

people. States, as well as individuals, are bound by legal rules which

have their basis in social imperatives. The author himself refused to

consider his concept of law to be one of natural law, he supported it

with sociological points taken from Durkheim. However, he refused the

concept of subjective public rights and attempted to replace rights with

obligations. In his opinion, there is no other right than that to

discharge one’s obligation. Even property rights he understood only in

relation to their social function, that is as a power of an individual

finding themself in certain economic position to discharge an obligation

having a social purpose, as is required by their social status. The

term “law” is understood as independent of the term “state”; legal norms

bind a state in the same way as they bind an individual. It is actually

a norm which constantly undergoes change, depending on social

development, and only becomes “legal norm” as late as when – slightly

inaccurately defined – it is acknowledged by the individuals forming the

community. Positive statute is, in his opinion, only one of the forms

through which a legal norm is expressed. The function of law as a form

is merely to facilitate understanding what actually a legal norm is.

According to this scholar, if the legislature adopts an act, the

application of which results in detriment to a certain group of

citizens, they are at the same time legally obliged, if social

solidarity so requires, to explicitly grant compensation to the

aggrieved party. The same is also true in the case that the legislature

fails to issue the act, in spite of the fact that they, on the basis of

the development of social relationships, i.e. on the basis of objective

law, were obliged to do the same. According to Duguit’s opinions, courts

are obliged to gratify the claims raised for compensation for loss also

in instances when the law is tacit, in fact, even in the case when the

law explicitly excludes compensation. This is a logical consequence of

the opinion on the relation of law and statute. If a statute is in

conflict with objective law (in Duguit’s concept), the statute is not

valid, irrespective of whether there is or is not a body to declare such

invalidity. Each person is, according to the author of this theory,

entitled to refuse to obey such a statute, whereby, naturally, not even

courts are bound.

9. Duguit’s European contemporaries rejected

his opinions as introducing legal anarchism; his notions were frequently

abused by the Marxist theory of the state and law (see, for example,

the work of E. Pašukanis, the Soviet equivalent to C. Schmitt). The

interwar period was characterised by a belief that, even when the

contents of a statute do not correspond to the requirements of good

manners and justice, they still remain law, unless altered or annulled

in a prescribed manner by the relevant body. Law may establish and

abolish new social orders, and albeit, for reasons of justice, the law

should avoid causing detriment to individuals or groups of citizens

without serious reasons, then if the same happens, it is a matter (or

decision) not legal but political, whether or not law grants to the

afflicted party a claim to compensation for loss. Without explicit

statutory authorisation, according to the views then held, granting

compensation for loss would actually mean a possibility of implementing

judicial inspection of legislative acts through ordinary courts. The

task of courts was still, in Montesquieu’s words, to be the mouth of the

law; their (admitted) powers did not include modifying or amending

acts. An act properly promulgated is binding upon courts even when the

same does not adhere to constitutional requisites. If the constitution

allows review of constitutionality of an act by a special court, as was

the case pursuant to the Constitution of the First Czechoslovakian

Republic, such an act is valid until the verdict of the Constitutional

Court, as was stated, for example, by F. Weyr (Soustava československého

práva státního /System of Czechoslovakian Political Law/, 1921, p. 74

et seq.). In this, the then existing legislation provides a sufficient

number of examples of acts which refused to provide compensation or made

it possible to provide only symbolic, insufficient compensation (see,

for example, acts on land reform adopted in the period from 1919 to

1922). It was still presumed that the legislature was aware of their

privileged position and that democratic legislature was guided simply by

the pure idea of balancing private interests and general well-being.

“The more powerful the legislature is – and such is, in particular, in a

democratic form of state – the more they must be aware that the

greatest significance of a legal order for a citizen dwells in legal

certainty.” (J. Matějka, see above, p. 35). Illusoriness of such

premises was proven by the period of supremacy of National Socialism.

Equipped with a positivistic approach to law, in Radbruch’s words, the

legal profession stood helpless facing horrors until then unsuspected.
 


III. Liability of the state for loss caused by the legislature in the light of the principle of a material law-based state
 

10.

The most recent stage was ushered in with a post-war turn in

constitutional-law doctrine. Professor Emeritus of the University in

Bonn, who devoted many years to the issues of the state’s liability for

loss, wrote: “Rectification of state injustice (wrongs) is a fundamental

requirement of a law-based state. A law-based state is, according to

the order created by Basic Law, at least equal with the social state.

Therefore, it is absolutely inconceivable, and ultimately a

constitutional contradiction, when the social state redistributes

billions in the form of welfare benefits, and the law-based state, to

the contrary, preserves or leaves unresolved state injustices, due to

the demand on public finances.” (F. Ossenbühl, Neuere Entwicklungen im

Staatshaftungsrecht, Berlin/New York, 1984, p. 28). The principle of a

law-based state is a constitutional support for liability by the state

for loss generally and for loss caused by activity (inactivity) by

Parliament. Furthermore, a tendency is crystallising in literature which

infers, from liability on the part of the state for respect to and

protection of fundamental rights, that fundamental rights, when

violated, represent a separate and essential legal basis and immediate

support for an exercised claim [B. P. Wróblewski – see above, p. 49, see

also Judgment of the Constitutional Court file No. I. ÚS 85/04 (N

136/42 SbNU [Collection of Judgments and Rulings] 91)].

11. The

principle of a law-based state is also applied in specific situations

for the resolution of which a special legal regulation is lacking.

Specification of this principle is implemented through a number of

institutes and rules contained in the constitutional order itself, as

well as through case law and doctrine. However, not every solution

appearing to be “correct” and “just” may be justified by requirements

inferable from the principle of a law-based state. The concept of legal

liability of a law-based state for loss is based on the complementarity

of actions and responsibility. The principle of a law-based state

postulates compensation both for loss due to unlawful infringements by

various state bodies, and for interference of state power which imposes

on an individual, in accordance with law, special burdens to the benefit

of satisfaction of public interest.

12. It is clear that the

shift in constitutional-law thinking to the benefit of correctives of

all law, natural-law in terms of their origin (in the form of the

fundamental rights, and the idea of pursuit of justice), was brought

about by experience with the fact that the state may also commit

injustice under the semblance of law. The first plaidoyer on the

liability for legislative activity (inactivity) was presented by F.

Jeruzalem (SJZ 1950, p. 7). B. P. Wróblewski (see above, footnote 237,

p. 58) collected remarkably long overview of statements by personages of

German jurisprudence on the given issue, and consequently his statement

(ibid) that the ruling doctrine pleads for liability for loss caused by

legislation, and the basic point is seen in the above-mentioned

principle of a law-based state, sounds convincing.

13. Three

arguments are usually voiced against this opinion. The first,

positivistic, argument claimed non-existence of a positive legal title.

The other two are rather of a practical nature and relate to the issue

of maintenance of functionality of the state. Firstly, the proposed

liability for legislation has the potential to endanger the

decision-making freedom of Parliament, which would thus be deprived of

the necessary space for formulating a decision, and Parliament would be

reduced to a role of a mere administrator of higher norms. Next,

agreeing with liability for legislation would result in immeasurable

financial consequences which could bring the state to a point of

bankruptcy.

14. As for the first objection, it must be stated

that the constitutional order itself, through establishment of a

constitutional judiciary with the power of inspecting the

constitutionality of acts with the sanction consisting of annulling an

act if the same is found unconstitutional, furthermore, through

protection provided to fundamental rights of individuals against acts by

all branches of power, including legislative power (through accessory

proposal for annulling acts filed together with a constitutional

complaint), and finally through the principle of a material law-based

state, which operates both structurally and materially, in itself

reduced the arena for decision-making by the legislature. Naturally, the

basic condition for placing responsibility must be the Judgment of the

Constitutional Court on the unconstitutionality of the action by

Parliament, which is of a normative nature. Such a Judgment in no way

further places limits on Parliament, since the same only specifies the

existing constitutional arrangement (a positive one). Such a Judgment,

in certain cases, may only give a basis for a further consequence

resulting from finding unconstitutionality of an action (omission) of

legislation. The counterarguments specified above are also valid in

relation to the second objection. As for the third, it suffices to say

that in this very case it portends that the Czech Republic would be

severely penalised by the European Court of Human Rights, as is pointed

out by the Opinion in clause 23.
 


IV. Conclusion
 

15.

I am of the opinion that the very requirements resulting from the

principle of a law-based state may not be ignored even when interpreting

Article 36 para. 3 of the Charter, since the enforcement of the same is

the actual purpose of this provision. Therefore, a grammatical and

historical interpretation should not have been the only one to be

employed; in my opinion, a teleological interpretation was to be applied

so as to take into account all connections of the exercised claim

resulting from the requirements of the principle of the law-based state.

In such connections, it would not be possible to insist on problematic

traditional ideas from the French Revolution; it was necessary to reach a

conclusion that under the conditions of a material law-based state, it

is not possible to exclude Parliament from potential sources causing

loss attributable to the state. The inspiration for such an approach may

be found in some commentaries on Basic Law of the Federal Republic of

Germany, i.e. its Article 34 (von Danwitz, in Mangoldt/Klein/Starck

(Hrsg.), Das Bonner Grundgesetz: Kommentar, Art. 34, p. 1081, RN. 40 ff.

Article 34 protects the fundamental rights of citizens against

violation by the executive, judiciary, as well as legislation), the very

wording of which, evaluated in isolation, could also attract a limited

interpretation, which is held as the truth by other commentators of

Basic Law (such as Schmidt-Bleibtreu/Hofmann/Hopfauf) who stated that

Parliament does not exercise official power against third parties, but

acts solely in the interests of society as a whole, while, however, they

do not doubt Parliament as an executor of “public office” as was, in

other words, voiced by the Opinion.

16. Furthermore, I believe

that the verdict in Judgment file No. Pl. ÚS 20/05 should have been

understood as an additive verdict, which expanded legal reasons for

compensation for loss specified in Act No. 82/1998 Coll. with the

unconstitutional inactivity by Parliament declared by the Constitutional

Court. Such inactivity lasted from the date of enforceability of the

Judgment made in case file No. Pl. ÚS 3/2000, when Parliament did not

respect or completely ignored the deadline provided to them by the

Constitutional Court in the form of postponement of enforceability of

the Judgment by a year and a half. In this way, they considerably

limited or violated the property rights of owners of houses and

apartments, and interfered with the right to undisturbed privacy of

tenants, since Parliament, even after the expiry of the term determined

by the Constitutional Court, exposed the tenants to uncertainty

regarding their housing, which noticeably afflicted rights particularly

of the most vulnerable groups of tenants, who had to tolerate actions

being filed (albeit in the absolute majority of cases without success)

by owners of apartments, this without any option to ask public power for

help in the form of provision of social housing, which, however, has

not been legally regulated until today. This in spite of the fact that

in Judgment file No. Pl. ÚS 3/2000, the Constitutional Court explicitly

stated that “de-control of rent, including charges for services relating

to the use of the apartment, must be connected with the implementation

of the overall concept of housing policy of the state.” The

Constitutional Court, by specifying the constitutional order, then

defined constitutional limits within which the statutory arrangement of

the given issue must range, if the same is to be concerned as

constitutionally conforming. Not only did Parliament ignore the Judgment

specified above, they also ignored an additional two Judgments issued

on the same subject.

17. Hence, it is the very disregard of the

three Judgments of the Constitutional Court issued concerning the matter

of controlled rent, which I deem to be a sufficient reason for

application of consequences from the declared unconstitutionality of

Parliamentary inactivity by Judgment file No. Pl. ÚS 20/05. It is

necessary to find a defence against such recklessly demonstrated

marginalisation of one of the fundaments of a law-based state,

consisting of non-compliance with the Constitution of the Czech

Republic, whose Article 89 para. 2 determines that enforceable decisions

of the Constitutional Court are binding on all authorities and persons,

meaning also on Parliament. The point is that repeated non-compliance

with the Judgments of the Constitutional Court means destruction of the

functionality of relationships between the constitutional bodies

established by the Constitution. For relationships between state power

and citizens, this means the evocation of legal uncertainty, even though

the acts themselves, as the most significant product of Parliamentary

activities, are to be the source of their legal certainty. All these

facts and circumstances necessarily lead me to the conclusion that

Parliament, in this case, committed a grave violation of the very

principle of a law-based state, to the adherence to which they, as a

body of the Czech Republic, are bound by Article 1 para. 1 of the

Constitution of the Czech Republic. Under these circumstances,

attributing responsibility to the state appears to me to be completely

adequate.