The Constitutional Court found no 191 / 2010 Coll.
The Constitutional Court found of 27 April 2010 on the application for annulment of the provisions of § 12a (5) of the First Law No 328 / 1991 Coll., on bankruptcy and settlement, as in force on 8 August 2007
Valid
The Constitutional Tribunal found
Text versions:
16.06.2010
191
FIND
The Constitutional Court
On behalf of the Republic
On 27 April 2010, the Constitutional Court decided in plenary the composition of Stanislav Balík (Judge Rapporteur), František Duchoň, Vlasta Formánková, Vojen Güttler, Vladimir Krórek, Dagmar Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Pavel Rychetský, Miloslav Excellent, Eliška Wagner and Michaela Židlická on the proposal of the Supreme Court in Olomouc, for which JUDr Anna Hradilová acts of § 12a (5) of Act No 328 / 1991 Coll., on bankruptcy and settlement, in force on 8 August 2007, with the participation of the Chamber of Parliament of the Czech Republic and Senate as parties to the proceedings
as follows:
Motion denied.
Reasons
Recital of the applicant's proposal and argument
1. On 8 August 2007, the Constitutional Court received an application from the Supreme Court in Olomouc (hereinafter referred to as "the appellant ') in accordance with Article 95 (2) of the Constitution of the Czech Republic requesting the annulment of the provisions of § 12a of the first sentence of paragraph 5 of Act No. 328 / 1991 Coll., on bankruptcy and settlement, as amended, (hereinafter referred to as" the Act on bankruptcy and settlement'), i.e. as at 8 August 2007. The text of the contested provision reads: "Only the appellant and the appellants who intervened may appeal against the order rejecting the application for bankruptcy '.
2. In its application to initiate the procedure, the appellant of the High Court in Olomouc stated that, following the previous procedure initiated on the application by the creditor of the COOP bank, a. s., in liquidation, (or also "the creditor ') of the bankruptcy of the debtor INTER BUSINESS CONSULTING, a public limited company (hereinafter" the debtor'), by order No 37 K 31 / 98-241 of 16 December 2005, rejected the Bank's application for bankruptcy of the debtor's assets for lack of debtor's assets. In that judgment, the court of bankruptcy concluded that the claims due by the proposing bank against the debtor had been substantiated and that the debtor's liability to the other creditor Ing. V. F. The Court of First Instance found the debtor to be bankrupt for insolvency within the meaning of § 1 (2) of the bankruptcy and settlement law was also substantiated by the final judgment of the Regional Court in Brno. On the basis of the notification by the debtor of its assets made in the course of the proceedings, the replies of the debtors concerned to the accounts of the debtor, the Czech Land and the cadastral office concerning the property ownership and the finding that the debtor is not registered as the owner of the road vehicle, the Court of First Instance concluded at the same time that the debtor's assets were not sufficient to cover the costs of the bankruptcy, since the remuneration of the trustee, determined in accordance with § 7 of Decree No. 476 / 1991 Coll., implementing certain provisions of the Act on bankruptcy and compensation, in that time, was at least CZK 50 000. It therefore rejected the proposal under Section 12a (4) of the bankruptcy and settlement law. The rejection of the application was therefore notified by the Court of First Instance in the Commercial Journal, the City Office of Blansko, the Labour Office of Blansko and the Commercial Register of the Regional Court in Brno. The decision of the Regional Court in Brno of 16 December 2005 was also published and delivered in accordance with the procedure foreseen in § 13 (4), (5) and (7) of the bankruptcy and settlement law.
3. Against this decision, the debtor appealed by application dated 18 January 2006, lodged at the Court of First Instance on 19 January 2006. The substance of the appeal is the defence of the debtor, which still claims that the proposing bank did not have a claim due against the debtor as stated in the application and therefore did not have the right to submit a claim. The General Courts first examined the timeliness of the appeal lodged and the Olomouc Supreme Court, unlike the Regional Court in Brno, concluded that the appeal of 18 January 2006 was lodged in time, which was decided by Resolution No. 1 Ko 42 / 2006-291 of 29 March 2006. However, the Supreme Court in Olomouc cannot discuss and make a substantive decision on the appeal, since the bankruptcy and settlement law expressly excludes it.
4. The appellant stated that, in his view, the provisions of the Civil Code would apply mutatis mutandis within the meaning of Paragraph 66a (1) of the bankruptcy and compensation law for bankruptcy and settlement, unless otherwise provided for in that law. In particular, the bankruptcy and settlement law in § 12a provides for the right of appeal against the order on the declaration of bankruptcy and against the order which rejected the application for bankruptcy. Under Section 12a (5) of the bankruptcy and settlement law, only the appellant and the appellants who have intervened may appeal against the order rejecting the application for bankruptcy. The order rejecting the application for bankruptcy for lack of assets may also be appealed by the creditor, who shall prove that he has a claim for the debtor.
5. According to the appellant, the bankruptcy and settlement law does not give the debtor the right to appeal against any decision of the bankruptcy court which rejected the application for the bankruptcy of the debtor's assets, regardless of whether the proceedings were initiated at the request of the debtor or the creditor's proposal, regardless of the reasons for which the application for bankruptcy was rejected. The hypothesis of the rule of law contained in the first sentence of § 12a (5) of the bankruptcy and settlement law is clearly wrong. In fact, it prevents the debtor from acting both against the decisions of the bankruptcy court rejecting the creditor's application for bankruptcy of the debtor's assets because the debtor, with his defence against the creditor's application, has succeeded, as well as in the event that the creditor's application was found to be justified and that similar substantive consequences would affect the debtor as if the creditor's application had been complied with and the bankruptcy had been declared.
6. The appellant further stated that, where bankruptcy of the debtor's assets on the creditor's application was declared, the bankruptcy and settlement law in § 12a (2) allows the debtor to oppose such a decision. However, the debtor should not be deprived of the right to defend itself with a proper remedy, that is to say, by appeal, or against the judgment of the bankruptcy court under Paragraph 12a (4) of the bankruptcy and settlement law, by which the creditor's application for bankruptcy of the debtor's assets was rejected solely because of the lack of the debtor's assets. The rejection of the application for bankruptcy because of the lack of assets has similar and comparable consequences for the company in terms of substantive law as if the bankruptcy of the company's assets had been declared. Where, in such a case, the law excludes the removal of the debtor as an ordinary remedy, it prevents the debtor from seeking the protection of his rights in court in the light of Article 36 (1) of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as "the Charter ') and is contrary to the principle of equality of parties, as enshrined in Article 37 (3) of the Charter. The creditor could defend herself against the rejection of her motion by the Court of First Instance. However, the law excludes the defence of the debtor against the rejection of the proposal, although the proposal has been rejected in a way that cannot be regarded as a material success of the debtor. In this case, the borrower also finds himself in an unequal position compared to other debtors whose assets were declared bankrupt on the basis of a claim by the creditor. If the Court of First Instance had complied with the bank's application for bankruptcy in respect of the debtor's assets, the debtor could have resisted against the conclusions of the Court of First Instance on the evidence of the appellant's claim and the insolvency of the debtor. In rejecting an application for bankruptcy because of a lack of property, the law does not allow her to defend herself.
7. In its opinion, the appellant is bound by Article 95 (1) of the Constitution of the Czech Republic by an unambiguous text of the legal standard in the first sentence of Section 12a (5) of the Act on bankruptcy and settlement. The unambiguous text of the law does not give the appellant any possibility of constitutionally consistent interpretation. The right to challenge a judgment of the Court of First Instance by appeal is a right of procedure which is given or excluded by procedural rules. This right cannot be relied upon by interpretation of the substantive consequences of the contested decision. The appellant should therefore, in its view, reject the debtor's appeal under Article 218 (c) of the Civil Code. However, the legal power of the contested order will lead to the removal of the debtor from the commercial register. The debtor may thus be deprived of the possibility to oppose the decision of the Court of First Instance of 16 December 2005 by exceptional remedies under the Civil Code or by constitutional complaints pursuant to § 72 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended. The assessment of the compliance of the procedural standard contained in the first sentence of Section 12a (5) of the Act on bankruptcy and settlement with the constitutional order of the Czech Republic cannot be influenced by the exceptional possibility of renewal of a company deleted from the Commercial Register under Section 75b (2) of the Commercial Code.
8. The appellant concluded that the unconstitutional consequences resulting from the regulation of the right of appeal against the order of the bankruptcy court to reject the application for bankruptcy in the first sentence of Section 12a (5) of the bankruptcy and settlement law can only be avoided by cancelling that provision. There is no need to fear that this would open up the possibility for debtors to lodge appeals against bankruptcy court decisions rejecting creditors' claims to declare bankruptcy on the debtor's assets, for example because the debtor's bankruptcy was not proven. In such a case, it is sufficient to reject the debtor's appeal for interpretation which, even under the general rules of the Civil Code, has concluded that the right of appeal against a decision of the Court of First Instance does not have the right of the party whose rights were not affected by a decision of the Court of First Instance. On the basis of this interpretation, the parties are rejected if they have been brought against the decision of the Court of First Instance despite having succeeded in the proceedings before it.
9. The appellant stated that it is aware that, under the transitional provision of § 432 of Act No. 182 / 2006 Coll., on the bankruptcy and the methods of its resolution (insolvency law), the bankruptcy and settlement proceedings initiated before the application of this Act will apply the existing legislation and, therefore, after 1 January 2008, the bankruptcy courts will reject applications for bankruptcy of debtors' assets under § 12a (4) of the bankruptcy and settlement law if the application procedure is initiated by 31 December 2007. The right to challenge such a decision by appeal will be assessed by the Court of Appeal in accordance with § 12a (5) of the bankruptcy and settlement law after 1 January 2008.
10. The appellant therefore decided to use the procedure laid down in Article 95 (2) of the Constitution of the Czech Republic and Article 64 (3) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, and to submit the case to the Constitutional Court with a proposal that it should decide by constitutional decision that, in the provision of § 12a (5) of Act No. 328 / 1991 Coll., the first sentence of "Against the order to reject the application for bankruptcy may be appealed only by the appellant and the appellants who acceded to the proceedings', as set out in the judgment.
Observations of the parties
11. The Constitutional Court, in accordance with the provisions of Sections 42 (3), (4) and 69 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, (hereinafter referred to as "the Law on the Constitutional Court"), sent the proposal in question to the Chamber of Deputies and the Senate of the Parliament of the Czech Republic.
12. The Chamber of Deputies of the Parliament of the Czech Republic described in its observations the course of the legislative process when adopting Act No. 328 / 1991 Coll., on bankruptcy and settlement, and its amendments made by Act No. 94 / 1996 Coll. and Amendments made by Act No. 105 / 2000 Coll. It stated that Act No 328 / 1991 Coll., on bankruptcy and settlement, was approved by the Federal Assembly on 11 July 1991 and became effective on 1 October 1991. Paragraph 12a was incorporated into the law by an amendment implemented by Act No. 94 / 1996 Coll. and § 12a (5) by an amendment implemented by Act No. 105 / 2000 Coll. (Print 219). The House Press was tabled as a parliamentary proposal by Mrs Eva Dundáček and the text of the provision was already included in the proposal (Press 219 / 0). The first reading of the draft law took place on 30 June 1999 and the proposal was ordered to discuss the constitutional legal committee and the Economic Committee. The Constitutional Legal Committee discussed the proposal on 30 September 1999, when it suspended the hearing, and re-discussed it on 25 January 2000 (resolution of the Committee - Press 219 / 4), and recommended that the Chamber of Deputies approve the proposal as a comprehensive amendment. Paragraph 12a (5) was not affected by this comprehensive amendment in relation to the original text. The Economic Committee discussed the proposal on 17 January 2000 (Committee resolution - Press 219 / 3). The second reading of the draft law took place on 26 January 2000, the amendments were processed as print 219 / 5. The draft law was approved at the third reading on 28 January 2000, as amended by a comprehensive amendment to the constitutional legal committee. The Senate returned the bill to the Chamber of Deputies with its amendments which did not concern the wording of Paragraph 12a (5). The Chamber of Deputies voted on the proposal returned by the Senate on 4 April 2000 and gave its assent to the bill, as approved by the Senate, according to the House of Deputies. The Act was signed by the relevant constitutional authorities and declared in the Collection of Laws under No 105 / 2000 Coll. (number 32).
13. The Senate stated in its observations that the proposal was directed against the provisions which were inserted into the Act on bankruptcy and compensation by an amendment implemented by Act No. 105 / 2000 Coll., which the Senate discussed during its second term of office at the 16th meeting of 1 March 2000. The Senate adopted Resolution 302 which returned the bill to the Chamber of Deputies with amendments which did not, however, concern the provision in question. The bill was submitted to the Senate on 7 February 2000. He was ordered to discuss the constitutional and legal committee and the Committee on the Economy, Agriculture and Transport. The Constitutional Legal Committee discussed the draft law on 23 February 2000 and adopted Resolution 159 (mentioned in Press No 181 / 1), in which it recommended the Senate to return the bill to the Chamber of Deputies with amendments. The Committee on Economic, Agriculture and Transport also concluded at its meeting on 23 February 2000 to recommend the Senate to return the bill to the Chamber of Deputies with amendments (Resolution 247 mentioned in Press 181 / 2). The Senate discussed the bill at its 16th meeting of the second term. 52 senators voted in vote 143 of the 53 senators present, and 1 senator abstained. The Chamber of Deputies renegotiated the bill on 4 April 2000 at its 24th meeting. The draft law, as amended by the amendments adopted by the Senate, was approved by Resolution 902, when the order number 32 out of 181 was voted against in the vote and 81 Members were opposed. In the Senate committees and in the Senate plenary, the issue of the first section of Section 12a (5) of the Act on bankruptcy and settlement was not discussed. The Senate acted in the belief that the draft law was not contrary to constitutional order, on the contrary, from the point of view of the effectiveness of the procedural procedure, the entire provision of § 12a seemed rational.
Conditions of active legitimacy, admissibility of the proposal
14. The application was lodged by the Supreme Court in Olomouc in connection with the proceedings pending before it, and the withdrawal of the proposed provisions of the bankruptcy and settlement law is one of those which must be taken into account in the proceedings. This does not change the fact that, in the meantime since the submission of the proposal, Act No. 182 / 2006 Coll., which repealed with effect from 1 January 2008 the Act on bankruptcy and compensation, since, according to the provisions of § 432 of Law No. 182 / 2006 Coll., the existing legislation applies to bankruptcy and compensatory proceedings initiated before that Act.
Constitutional conformity of the legislative process
15. The Constitutional Court, in accordance with Paragraph 68 (2) of the Law on the Constitutional Court, examined whether the law and its amendment, where the appellant objects to the unconstitutionality of their provisions, had been adopted and issued within the limits of the Constitution of the Czech Republic in a specified jurisdiction and in a constitutionally prescribed manner.
16. From the observations of the Chamber of Deputies and the Senate of the Parliament of the Czech Republic, as well as from the relevant House Prints and the data on the voting process, the Constitutional Court found that the contested provision was adopted in the constitutional legislative process.
Own review
17. The Constitutional Court concluded that the merits of the application for annulment of the contested provision of the bankruptcy and compensation law were not given and therefore rejected the proposal for reasons following:
18. The Constitutional Court is based in its caselaw on the principle of minimising intervention. It also concluded that, if the existing legislation can still be interpreted in such a way that it can be considered compatible with the fundamental right to a fair trial enshrined in Article 6 (1) of the Convention on the Protection of Human Rights and Fundamental Freedoms, there is no reason for its annulment [cf., for example, the finding of the Constitutional Court of 26 April 2006 sp. zn. Contrary to the appellant who concludes in the proposal that the wording of the contested provision, first sentence of § 12a (5) of the bankruptcy and settlement law, does not give any possibility of constitutional conformity interpretation, the Constitutional Court concluded that such an option offers a teleological interpretation of the contested provision in the context of the whole of the bankruptcy and settlement law and, by way of exception, also of Act No. 99 / 1963 Coll., Civil Code, as amended.
19. The First Order of the Regional Court in Brno of 16 December 2005 No 37 K 31 / 98-241 reads: "The application for bankruptcy on the property of the debtor INTER BUSINESS CONSULTING, public limited company, Doubravice nad Svitavou, 28 October 239, ID: 15548431, is rejected for lack of the property of the debtor." Although from a grammatical point of view, it might seem to be one sentence, it is two statements, the first being the rejection of the application for bankruptcy, the second being a statement determining the reason for the rejection of the application for bankruptcy, which could be stated separately: "It is determined that the reason for the rejection of the application for bankruptcy is the lack of the debtor's assets."
20. The Constitutional Court failed to see that, in the terms of the period caselaw, the statements of the previous two resolutions in the case before the Regional Commercial Court in Brno and the Regional Court in Brno, under sp. ref. 37 K 31 / 98 of 24 July 2000 and 20 June 2003, were merely to reject the application for bankruptcy of the debtor's assets without including a statement on the ground of refusal. Only in the order of the Third Order of the Regional Court responded to the opinion of the Supreme Court, sp. rev. Rc. 52 / 98 (cf. Collection of Judgments and Opinions of the Supreme Court, 1998, 7, p. 358), according to which "if the court rejects the application for bankruptcy pursuant to § 12a (3) (now paragraph 4) of the Act, it will state the ground for refusal also in the operative part of the resolution '. The commentary literature then states that" the rejection of the application for bankruptcy due to a lack of assets has, contrary to other reasons, important substantive consequences' (cf. J. Kotoučová, Act on bankruptcy and settlement). Comment. Praha: C. H. Beck, 2002, str. 139).
21. Paragraph 12a (5) of the first sentence of the bankruptcy and settlement law precludes the debtor's appeal until the resolution rejecting the application for bankruptcy. This provision, which, according to the Constitutional Court, concerns only a variant of the rejection of an application for bankruptcy on the property of the debtor without a statement on the ground of refusal of the application, does not lack its logic as it is fully in line with the interpretative practice which the appellant himself points out that "the right of appeal against a decision of the Court of First Instance does not have a party whose rights were not affected by a decision of the Court of First Instance '. It is clear that the rights of the debtor are not affected by the simple rejection of the application for bankruptcy in respect of the debtor's assets, but only and exclusively by the statement on the ground of refusal of the application for bankruptcy.
22. Paragraph 12a (5) of the Second Act on bankruptcy and settlement foresees that, in addition to the "order to reject the application for a declaration of bankruptcy", both the "order to reject the application for a declaration of bankruptcy for lack of assets" is an option for the type of decision. With regard to the heading of potential appellants, the provisions of Paragraph 12a (5) second sentence only mention the extension of that heading in favour of the creditor, which will show that he has a claim on the debtor. The narrowing of the range of appellants in the case of a "simple 'order rejecting the application for bankruptcy shall not apply to the case of the order rejecting the application for bankruptcy for lack of assets. In addition to all the parties to the proceedings, an appeal may be lodged by a creditor who can prove that he has a claim on the debtor. It is therefore evident that the debtor can obtain, by appeal, a substantive examination of the case in the part of the operative part of the operative part of the statement" for lack of assets'.
23. Finally, the Constitutional Court notes that in the order of the Regional Court in Brno of 16 December 2005 No 37 K 31 / 98- 241 on the possibility of lodging an appeal was properly informed. The ruling of the General Court does not contain any evidence that the debtor's right to appeal is excluded.
24. The Constitutional Court, in addition to the above, adds that this constitutional interpretation of the contested provision will achieve the same objective as the appellant would like to achieve in the course of the annulment of the contested provision or of the declaration of its illegality, i.e. the possibility of revising the appeal in substance to the part of the operative part of the statement "for lack of property."
25. The Constitutional Court then, based on all the above facts, rejected the application for the consent of the parties without ordering oral hearing with reference to Article 70 (2) of the Law on the Constitutional Court.
President of the Constitutional Court:
JUDr. Rychetský v. r.
*) NB: Collection of finds and resolutions of the Constitutional Court, Volume 41, Found No. 92, p. 173, published under No. 419 / 2006 Coll.
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Regulation Information
| Citation | The Constitutional Court found no 191 / 2010 Coll., on the application for annulment of the provisions of § 12a (5) of the First Law No 328 / 1991 Coll., on bankruptcy and settlement, as in force on 8 August 2007 |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 16.06.2010 |
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| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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