The Constitutional Court found No. 303 / 2006 Coll.
The Constitutional Court's finding of 4 April 2006 on the application for annulment of Sections 23 (2) and (3) and 24 of Act No. 72 / 1994 Coll., which regulates certain co-ownership relations with buildings and certain ownership relations with apartments and non-residential premises and complements certain laws (the Housing Act), as amended
Valid
The Constitutional Tribunal found
Text versions:
22.06.2006
303
FIND
The Constitutional Court
On behalf of the Czech Republic
On 4 April 2006, the Constitutional Court decided in plenary Stanislav Balík, František Duchoň, Vlasta Formánková, Vojen Güttler, Pavel Holländer, Ivana Janů, Vladimir Krók, Dagmar Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Miloslav Excellent, Eliška Wagner and Michaela Židlická on the proposal of the original designer of the Supreme Court in Prague and the now draftsman of the Municipal Court in Prague pursuant to Article 95 (2) of the Constitution of the Czech Republic for the abolition of Sections 23 (2) and (3 and 24 of Act No. 72 / 1994 Coll.), which regulates certain joint ownership relations with the buildings and the non-byte premises,
as follows:
1. The motion of the Supreme Court in Prague is rejected.
2. Proposals of the Municipal Court in Prague are rejected.
Reasons
The appellant (note: Chamber of 15 Cmo of the Supreme Court in Prague), with his proposal of 13 January 2005, reached the Constitutional Court on 4 February 2005, requested the annulment of the provisions of Sections 23 (2) and (3) and 24 of Act No. 72 / 1994 Coll., which regulates certain co-ownership relations with buildings and certain ownership relations with apartments and non-residential premises, and supplemented certain laws (Law on Housing), as amended.
In the application, he stated that, by judgment of 9 January 2004 No 20 Cm 262 / 2000-28 of the Municipal Court in Prague in the action of the claimant Ing. P. K. against the defendant, Ing. T. K., the trustee of the bankruptcy of the insolvency estate cooperative K. s. r. r. o., rejected the action to exclude housing unit 1691 / 10 and co-ownership of plot 6935 / 179617 on plot 2589 at the address in R. ("housing unit '). The Court of First Instance did so on the ground that, although the applicant was called upon by the bankruptcy court to file a so-called" excitation action' within the meaning of Article 19 (2) of Act No 328 / 1991 Coll., on bankruptcy and settlement, as amended, and brought the action within the prescribed time limit, he was not actively legitimate since, as a result of the declaration of bankruptcy of the insolvency practitioner on 2 October 1998, the insolvency proceedings started on 1 June 1998 and remained the holder of the case.
The Supreme Court in Prague, as a court of appeal (appellant in proceedings before the Constitutional Court), found it appropriate to proceed pursuant to § 109 (1) (c) of the Civil Code, stay proceedings and refer the case to the Constitutional Court for a ruling.
The appellant stated that he was aware that, in a type-almost identical excination procedure, which also involved the defendant in the case, Volume 33, Found No 66, p. 155) was annulled in relation to another applicant (a legitimate natural person within the meaning of Sections 23 and 24 of Law No. 72 / 1994 Coll.) of the Regional Commercial Court judgment in Prague (now the Municipal Court in Prague) No 4, Cm 164 / 2000-15, the Supreme Court in Prague No. 13, Cmo 50 / 2001-37 and the Supreme Court No 560 / 2001-64. That decision of the Constitutional Court was based again on the Senate of the Supreme Court in Prague in an almost identical case, which was carried out under sp. cmo 127 / 2001, when assessing the veracity of the appeal against the ruling by the Municipal Court in Prague on 5 December 2000, No. Cmo 184 / 2000-13. Cases 15 Cmo 108 / 2004 (ref.: this case of the Supreme Court) and 13 Cmo 50 / 2001 are said to be two of the more proceedings in which the applicants seek the exclusion of housing units which, according to them, the defendant implicitly included in the list of bankruptcy purposes of the insolvency proceedings - the Housing Cooperative of K. S. R. The appellant (Chamber of 15 Cmo of the Supreme Court of Prague) is of the opinion that, contrary to the principles of equal protection of property and the prohibition of its abuse contained in Article 11 (second sentence of the first paragraph and second sentence of the third paragraph) of the Charter of Fundamental Rights and Freedoms published under No 403 / 2002 (ref.), the provisions of the Act No. 36 / 01, the Court of Justice, the Court of Justice of 26, the Court of Justice, the Court of Justice, the Court of Justice of Justice of 26, the Court of Justice of Justice, the law, the law, the law, the law, but [for example of the Constitutional Tribunal of the Constitutional Tribunal]. Those provisions allow a bankrupt debtor to transfer property free of charge - to the detriment of creditors - to members of a cooperative may, in the view of the appellant, result in a constitutionally unacceptable inequality of bankruptcy creditors.
The appellant stated that, at a certain degree of generalisation to the extent necessary for the case, the insolvency has two groups of creditors - both external and internal. Those bankruptcy creditors whose claims are due from ordinary obligations, tax, etc., may be regarded as external creditors by virtue of their claims on the existence of a member relationship with the insolvency, for example those against which the insolvency obligation arises under Act No. 72 / 1994 Coll. Moreover, the Constitutional Court considered the insolvency creditors to be cooperatives, as is apparent from its decision sp. zn. III. ÚS 258 / 03, which can be referred to briefly in this regard. The appellant (Chamber 15 Cmo of the Supreme Court in Prague) takes the view that the claims of the internal creditors are not "more legal 'than the actual claims of the creditors of the external creditors, and that therefore, in the absence of any other legal regulation, the provisions of the bankruptcy and settlement law governing the schedule (§ 30 et seq. of the bankruptcy and settlement law) are decisive for the extent and order of the satisfaction of individual claims. Opposite position, which, according to the appellant, might perhaps have been taken from the decision in sp. zn. III. The ÚS 258 / 03 would have necessarily led to the preference of one group of creditors (the cooperative group), which, objectively speaking, could have influenced the cooperative's conduct, even immediately before the bankruptcy, at a time when the cooperative was already in bankruptcy.
In the next analysis, the appellant outlines a solution based, in his own words, on the decision sp. zn. III. ÚS 258 / 03, which "accepts to a substantial extent." Its basis is essentially the existence of an obligation for cooperatives to pay the difference between the proportional satisfaction of their claim and the price of the housing unit. However, such a solution is, in the appellant's view, in the light of the conclusions reached in the sp. zn. III. The ÚS 258 / 03 shall be fully applicable only in respect of those cooperatives whose pre-bankruptcy claims have not been met; against others, provided that the provisions of Sections 23 (2) and (3) and 24 of the Housing Act are repealed as unconstitutional.
The appellant concluded that in the proceedings to determine whether the assets transferred by the bankrupt cooperative to cooperatives under § 23 and 24 of Act No 72 / 1994 Coll., two solutions are considered, in principle, to be included in the bankruptcy list:
1. One method is consistently based on the principle of priority § 23 and 24 and of Law No 72 / 1994 Coll. and, with reference to Decision sp. zn. III. ÚS 258 / 03, the Senate also came out of it on the basis of the principle of priority § 23 and 24 of the Act No. 72 / 1994 Coll. and, with reference to the decision sp. zn. III. ÚS 258 / 03, the Chamber of the Cmo Supreme Court in Prague, since it concluded that, if it was carried out in accordance with these provisions, the assets of the cooperatives acquired bankruptcy are not subject and cannot be used to satisfy the claims of bankruptcy creditors. Therefore, by judgment in sp. zn. 13 Cmo 127 / 2001, it decided to exclude cases from the bankruptcy register.
2. Senate 15 Cmo of the Supreme Court in Prague (which submitted this proposal) of the opinion on the need for preferential application of § 23 paragraphs 2 and 3 and § 24 of Law No. 72 / 1994 Coll. does not share and considers that the administrator can call for "ineffectiveness or invalidity of § 265 of the Commercial Code." If the trustee is actually successful, which is not necessarily always the case, the cooperative shall retain the right to transfer the assets, but not entirely free of charge, since this entitlement may be satisfied in principle only to the extent that the performance of the other creditors is obtained.
However, the implementation of this second method of solution is hindered by the opinion delivered by the Chamber of the Constitutional Court, which expressly stated in the decision of page III of the ÚS 258 / 03 that the application of Paragraph 15 (1) (c) of the bankruptcy and settlement law must be rejected, since for the free transfer of the housing unit pursuant to § 23 (2) and (3) and § 24 of Law No 72 / 1994 Coll. the transfer is granted ex ante and not by the express will of the debtor. It is this conclusion, if it should be generally valid for the assessment of the impact of paragraphs 23 (2) and (3) and 24 of the Law on the ownership of apartments for bankruptcy, that expressly justifies the Senate 15 Cmo making a proposal for their annulment because it is said that "in such interpretation these provisions infringe the principles enshrined in Article 11 of the Charter of Fundamental Rights and Freedoms'. However, if the plenary of the Constitutional Court in that regard were to depart from the opinion of the Third Chamber of the Constitutional Court (sp. zn. III. ÚS 258 / 03), there would probably be no reason for the annulment of Sections 23 (2) and (3) and 24 of Act No 72 / 1994 Coll.; in that case, in the appellant's view," without breaking constitutional principles, "it would be possible to choose the Charter of Fundamental Rights and Freedoms which does not contradict a solution such as those mentioned above. If, on the contrary, Parliament agrees with the argument contained in the finding in section III of the ÚS 258 / 03 and does not find the conditions for the annulment of Sections 23 (2) and (3) and 24 of Act No. 72 / 1994 Coll., it is likely to be appropriate to proceed in similar cases in the manner chosen by the Senate of the Supreme Court in Prague.
The Constitutional Court, in accordance with the provisions of § 42 paragraphs 3 and 4 and § 69 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, sent the proposal in question to the Chamber of Deputies and Senate of the Parliament of the Czech Republic and requested the written opinion of the Ministry of Local Development.
It is stated in the Chamber of Deputies of the Parliament of the Czech Republic that it is important to note, first of all, that Act No. 179 / 2005 Coll. was adopted by the Parliament of the Czech Republic in the meantime, amending certain laws in connection with the adoption of the Act on the abolition of the National Property Fund of the Czech Republic. This law contains in its part the twenty-ninth and thirty-fifth parts the amendment of Act No. 328 / 1991 Coll., on bankruptcy and settlement, respectively Act No. 72 / 1994 Coll., on the ownership of flats. By those amendments, it was fully consistent with the decision of the Constitutional Court of 6 May 2004, sp. zn. III, with effect from 30 April 2005. ÚS 258 / 03 expressly regulated the principle of the continuity of legal claims of natural persons - members of the cooperative, arising from the contested provisions of Act No. 72 / 1994 Coll., as regards the duration of those legal claims and how they are settled by the bankruptcy administrator. In this state of affairs, it is impossible to express the view that the legislature, when discussing this regulation, acted in the belief that the law adopted is in line with the Constitution, the constitutional order and the international treaties by which the Czech Republic is bound. The Chamber of Deputies concluded that it was up to the Constitutional Court to examine the constitutionality of the contested provisions in the context of the proposal submitted and to give its decision.
The Senate of the Parliament of the Czech Republic, in its observations, recalled the proposal to initiate the procedure and referred to the ratio of the decision of the Constitutional Court in sp. zn. III. ÚS 258 / 03 and in particular to the existence of Act No. 179 / 2005 Coll., amending certain laws in connection with the adoption of the Act on the abolition of the National Property Fund of the Czech Republic. It stated that the provisions of Sections 23 and 24 of the Housing Act had been amended four times since its inception, namely the finding of the Constitutional Court No. 280 / 1996 Coll. [Note.: by this finding sp. zn. Pl. ÚS 15 / 96 (Collection of Decisions, Volume 6, Found No. 99), the provision of § 22 (4) of the Housing Act), Act No. 97 / 1999 Coll., Act No. 103 / 2000 Coll. and Act No. 179 / 2005 Coll. Only the last of these changes are said to affect the issue under assessment. He also stated that, in the framework of Law No 179 / 2005 Coll., Parliament adopted amendments to the Act on bankruptcy and settlement and to the Law on the ownership of flats which, with effect from 30 April 2005, reflected in the provisions not by the appellant of the contested but by others, namely Article 27 of the Act on bankruptcy and settlement (Article XXIX (2)) and Article 30a of the Law on the ownership of flats (Article XXXI (2)). For the sake of accuracy, the Senate of the Parliament of the Czech Republic states that the proposed amendment also affected the provision of Section 24 of the Housing Act, in the material relating to the settlement of funds between the cooperative and the member. It was newly stated in § 24 (7) that there were rental funds and that only positive balances on the profit of the housing economy were settled. The Senate of the Parliament of the Czech Republic concluded that Parliament had acted as expected of the responsible democratic legislator, as it implemented the generally applicable ideas of the Constitutional Court expressed in the find of sp. zn. III. ÚS 258 / 03. In the light of the foregoing, it considers that Articles 23 (2) and (3) and 24 of the Housing Act are unfounded, but it leaves the Constitutional Court to examine and decide on the application.
In the opinion of the Ministry of Regional Development, reference is also made to Act No. 179 / 2005 Coll., which amends certain laws in connection with the adoption of the Act on the abolition of the National Property Fund of the Czech Republic, by which the legislator is alleged to have already solved the problem referred to by the appellant (§ 27 (7) of the amended version of the Act on bankruptcy and settlement and § 30a of the amended version of the Housing Act). Furthermore, the Ministry stated that by repealing Sections 23 (2) and (3) and 24 of Act No. 72 / 1994 Coll., on the ownership of apartments, it would create a completely unequal condition between those who, in accordance with the relevant provision of the Housing Property Act, called upon the cooperative to conclude the transfer agreement and entered into the agreement with the cooperative and those who, in accordance with the Act, suspended the conclusion of the transfer agreement for various reasons. The abolition of the provisions in question would, according to the Ministry, create a much greater inequality (in addition to the impact on the number of housing cooperatives) than the one which the Supreme Court in Prague seeks to remove by its proposal.
1. On 27 May 2005, the Constitutional Court received a proposal from the Municipal Court in Prague (Senate 15 Cm) requesting the annulment of the provisions of Sections 23 (2) and (3) and 24 of the Housing Act, namely the same provisions which were challenged by the Supreme Court in Prague. The case was dealt with by the Constitutional Court under sp. zn. The Constitutional Court found that the argument of the motion of the Municipal Court in Prague, delivered to the Constitutional Court on 27 May 2005, was fundamentally identical to that of the Supreme Court in Prague on 13 January 2005 (sp. zn. Pl. ÚS 5 / 05).
On 3 January 2006, the Constitutional Court received a further application from the Municipal Court in Prague under sp. zn. 99 K 21 / 98, requesting the annulment of the provisions of § 27 (7) of Act No. 328 / 1991 Coll., on bankruptcy and settlement, as amended, § 23 and 24 of Act No. 72 / 1994 Coll., on ownership of apartments, and § 22 (1) and § 24 of Act No. 42 / 1992 Coll., on the modification of property relations and settlement of property rights in cooperatives, as amended. The case was dealt with by the Constitutional Court under sp. zn.
In this context, the Municipal Court in Prague, in accordance with the provisions of § 35 (2) of the Law on the Constitutional Court, has acquired the right to participate in the hearing on the previously submitted proposal of the Supreme Court in Prague to abolish the provisions of § 23 (2) and (3) and § 24 of the Law on the ownership of apartments as an intervener in proceedings under sp. zl. ÚS 5 / 05.
2. On 19 January 2006, the application of the Supreme Court in Prague dated 13 January 2006 marked as the "withdrawal of the application 'held at the Constitutional Court under the sp. zn. The Supreme Court in Prague announced by this submission to the Constitutional Court and provided evidence in the annex that the action was withdrawn in the case before it under point 15 Cmo 1058 / 2004, so that the judgment of the Court of First Instance should be annulled and the proceedings should be terminated; he concluded that the conditions laid down in Paragraph 109 (1) (c) of the Civil Code were no longer met and therefore" the Supreme Court in Prague takes back its proposal in the Pl. ÚS 5 / 05 of 13 January 2005'.
Article 68 (1) of the Law on the Constitutional Court in the proceedings for the annulment of laws and other laws states that, if the application has not been rejected and there are no grounds for termination of proceedings in the course of proceedings, the Constitutional Court is obliged to discuss the application and decide on it without further proposals. Therefore, the principle of formal application applies to this type of proceedings before the Constitutional Court and the possibility of withdrawing the application to initiate proceedings by the appellant and terminating the proceedings for that reason is not foreseen by the law at all. The Law on the Constitutional Court only knows the legally effective recovery of the application (§ 77) and in the cases referred to in § 110 and 123. This is also the case with the established practice of the Constitutional Court.
However, as a result of the above described procedural developments, the Supreme Court in Prague has ceased to be a legitimate appellant since the draft contested provisions of the Housing Act will no longer apply in the context of its decision-making activities (cf. Section 64 (3) of the Constitutional Court Act). It was therefore necessary to reject the application in relation to the appellant as an application made by someone manifestly unauthorized [Paragraph 43 (2) (b) in conjunction with the provision of Paragraph 43 (1) (c) of the Constitutional Court Act]. In the present case, however, there was a specific situation as, on the basis of the above proposals for the annulment of the same provisions of the Housing Act, the Municipal Court in Prague had previously entered the proceedings as an intervener under Paragraph 35 (2) of the Law on the Constitutional Court. After the above-mentioned reason in relation to the Municipal Court in Prague had dropped out of the litispendence barrier, that court became the applicant and party to the proceedings in the case under point Pl. ÚS 5 / 05. According to the conviction of the Constitutional Court, this conclusion is necessary, although the proposals of the two chambers of the Municipal Court in Prague have already been rejected as inadmissible for the obstacle to litispendence. In fact, only such an interpretation corresponds - in that specific situation - to the material view of the law, since the Constitutional Court is rightly expected to decide on the fundamental issue at issue arising from the proposals of the General Courts (see, for example, p. 4 of this text (ref.
The above proposals of the Municipal Court in Prague are identical to the original proposal of the Supreme Court in Prague. Therefore, the Constitutional Court has no longer sent these proposals to the Municipal Court in Prague to the Chamber of Deputies and the Senate of the Parliament of the Czech Republic for comments, as this would be unnecessary.
For the sake of completeness, it is also necessary to add that, as regards the provisions contested in the application of the Municipal Court in Prague, notified to the Constitutional Court on 3 January 2006, in addition to the provisions of Sections 23 (2) and (3) and 24 of the Housing Act (i.e. the provisions of Section 27 (7) of Act No. 328 / 1991 Coll., on bankruptcy and settlement, as amended, of the Law on Housing and Section 22 (1) and of the Act No. 42 / 1992 Coll., on the treatment of property relations and the settlement of property rights in cooperatives, as amended, as amended), the Constitution of these statutory provisions will be dealt with by the Constitutional Court of Procedure under the Act.
The relevant provisions of the Housing Act which the appellant contests and requests to be repealed are:
(2) The cooperative is required to conclude a contract on the transfer of an apartment referred to in Article 24 (1) and (2) with a natural person - a member of a cooperative which is a tenant of an apartment and which has called on the cooperative pursuant to Article 24 of Act No. 42 / 1992 Coll., on the modification of property relations and the settlement of property rights in cooperatives, as amended by the legal measure of the Bureau of the Federal Assembly No. 297 / 1992 Coll., or will invite the cooperative to conclude a transfer agreement on ownership of that apartment by 30 June 1995. The contract must be concluded by 31 December 1995 at the latest, unless otherwise agreed. This is without prejudice to the provisions of foreign exchange regulations.
(3) Similarly, non-residential premises for which only a natural person - a member of a cooperative who is a tenant or its legal predecessor - has participated in the financing of their membership shall be treated as such.
(1) Where apartments, garages and ateliers in buildings owned or co-owned by cooperatives for the construction of which financial credit and other assistance has been granted under special regulations, 18) are owned by members of such cooperatives - natural persons whose rental relationship to the apartment, garage and studio has arisen after the payment of the member's share to those members or their legal predecessors, such transfers shall be free of charge.
(2) Paragraph 1 shall also apply to transfers of apartments, garages and ateliers in buildings which, at the date of application of this Act, were owned or co-owned by cooperatives designated as folk housing cooperatives under the former rules, 19) if they are transferred from the ownership or co-ownership of those cooperatives to the ownership of members - natural persons whose rental relationship to the apartment, garage and studio was established on the basis of the facts established by the law. 20)
(3) The provisions of paragraph 1 shall also apply to transfers of non-residential premises resulting from a decision to change the use of construction (21) from flats, garages and studios referred to in paragraphs 1 and 2.
(4) If the building is owned or co-owned by a cooperative of non-residential premises resulting from a decision to change the use of the building (7) from the common areas of the building, the cooperative shall, under contract, transfer that non-residential space when transferring units pursuant to paragraphs 1 and 2 to joint ownership of unit owners free of charge. The size of the co-ownership share shall be determined by the reciprocal ratio of the size of the floor area of the units to the total floor area of all units in the house, not taking into account the floor area of the non-residential area referred to in the first sentence. Similarly, as indicated in the previous two sentences, non-residential premises for which only the tenants of units in the building or house or their legal predecessors have participated in the financing by the Member States. Paragraph 1 shall also apply to such transfers of ownership of non-residential premises.
(5) The contract for the transfer of the unit concluded in accordance with paragraph 1 or 2 shall include an obligation on the acquirer to pay the cooperative an amount corresponding to outstanding loans with the facilities granted to the cooperative, covering the transferred apartment or, where applicable, the non-residential space (garage, atelier) at the date of the regular half-yearly repayment of the loan within the meaning of paragraph 6, and an obligation on the acquirer and the cooperative to settle the acquirer's obligations in relation to the cooperative. The ownership of the unit shall not be transferred until this commitment has been fulfilled. 22)
(6) The cooperative is obliged to use the funds raised in the relevant half of the year from the acquirer of the units to repay the lender's loan (23) (hereinafter "the bank '), together with the regular repayment of the loan corresponding to the same half-year, with the determination of which units the exceptional instalment relates. An integral annex to the transfer contract for ownership of the unit is a confirmation by the bank of the repayment of the corresponding part of the loan, identifying which units the loan repayment covered.
(7) The transfer of ownership of the cooperative's own unit shall consist of the mutual settlement of rental funds intended to finance the repair and maintenance of the building, or of the house and unit, and of the positive balances of funds arising from the profit of the housing holding (hereinafter referred to as "settlement funds') belonging to the transferred unit. Mutual settlement means the settlement of both outstanding balances and the settlement of arrears by the acquirer. Unspent settlement funds will be transferred by the cooperative to the legal person in charge of house management (§ 9 to 11). Paragraph 15 applies mutatis mutandis to the use of the funds transferred. In the event that the management of the house is not provided by a legal person, the cooperative shall transfer unspent funds to settle the owner of the unit.
(8) Where the transfer of a cooperative's ownership unit to the ownership of a member has taken place prior to the application of this Act, the cooperative and the owner of the unit shall be obliged to settle the settlement assets belonging to the transferred unit, mutatis mutandis, in accordance with paragraph 7, within six months of the date of application of this Act.
(9) The transfer of the unit referred to in paragraphs 1 to 8 shall cease to entail the membership of the acquirer in the cooperative without the right of reimbursement of the member's share of the unit or, where applicable, of the basic member contribution, if it was the source of financing for the house with the units transferred. However, membership of a cooperative shall not cease if the participation of the member in the cooperative, even after the transfer of the unit, reaches at least the amount of the basic member contribution.
(10) The settlement share of the acquirer of the unit to which the unit was transferred pursuant to paragraphs 1 to 5 and the membership of the cooperative has ceased shall be determined in accordance with Section 233 of the Commercial Code.
The Constitutional Court also examined, in accordance with Paragraph 68 (2) of the Law on the Constitutional Court, whether the law, the inconstitutionality of which the appellant contends, was adopted and issued within the limits of the Constitution laid down by competence and in a constitutional manner.
It should be noted that the question of the so-called formal constitutionality of the Housing Act has already been dealt with by the Constitutional Court in the proceedings conducted under sp. zn. From the observations of the Chamber of Deputies and the Senate of the Parliament of the Czech Republic, as well as from the House of Deputies, the reports, the relevant resolutions and data on the voting process of the two chambers, he found that Act No. 72 / 1994 Coll. (Housing Act) was adopted and issued by the Constitution in the prescribed manner and within the limits of the Constitution provided for in Article 39 (1) and (2) of the Constitution of the Czech Republic (hereinafter the Constitution). The draft law, later published under No. 72 / 1994 Coll., was submitted to the Chamber of Deputies by the Government of the Czech Republic. The Act was adopted by the Chamber of Deputies of the Parliament of the Czech Republic at its 17th meeting on 24 March 1994 (Resolution No 355 of the Chamber of Deputies, House Prints No 599 and No 724), as amended by the approved amendments. The Act was then signed by the President of the Chamber of Deputies, the President of the Republic and the Prime Minister in accordance with Article 51 of the Constitution and was published in the Collection of Laws of 22, 1994. It took action on 1 May 1994. Also the amendments to the law in question, which partly concerned the contested provisions (Act No. 97 / 1999 Coll. and Act No. 103 / 2000 Coll.), were adopted and issued by the Constitution in the prescribed manner and within the limits of the Constitution established by the competence (note: i.e. before the present proposal).
The Constitutional Court, having re-examined these formal findings, concluded that the application was not justified after examining the substance of the case.
1. In the present case, it is clear that the appellant disagrees, in particular, with the view of the Constitutional Court already expressed in the cited finding (sp. zn. III. ÚS 258 / 03) that the application of § 15 (1) (c) of the bankruptcy and settlement law must be rejected (in the present case) because, in the case of the free transfer of the housing unit pursuant to § 23 (2) and (3) and § 24 of Law No 72 / 1994 Coll., the application of the transfer is granted ex ante and not by the express will of the debtor. As already stated above, it is precisely this conclusion that, if it is generally applicable for the assessment of the impact of paragraphs 23 (2) and (3) and 24 of the Law on the ownership of apartments on bankruptcy, the appellant is "expressly" justified by the application for annulment of the contested provisions of the Law on the ownership of flats, because, in his view, "in such interpretation these provisions infringe the principles enshrined in Article 11 of the Charter of Fundamental Rights."
First of all, the substance of the appellants' objections is essentially concentrated in its opposition to the interpretation of the provisions of the Law on Housing by the Constitutional Court, which, according to the appellant's assertion, was also accepted by another Senate of the Supreme Court in Prague (Chamber 13 Cmo). The proposal therefore - in fact - does not go directly against the contested provisions of the Housing Act, or does not call into question - without further questioning their constitutionality, but imputes their interpretation, in addition to the provisions of another, albeit closely related, law (bankruptcy and settlement law).
[It can be recalled at this point that the Constitutional Court, in proceedings for the annulment of the laws referred to in Article 87 (1) (a) of the Constitution, assesses the conformity of the contested provisions with the constitutional order of the Czech Republic and on the basis of a proposal from the General Court, without, at the same time, dealing with a specific case in respect of which the application has been made and without directly expressing itself to the various interpretations made by the various general courts. Its task is not to unify the case-law, but to give an authoritative assessment of whether the contested provisions will stand up from the point of view of constitutionality or whether their constitutionally conformal interpretation is possible. However, for all institutions and persons, within the meaning of Article 89 (2), there are binding grounds - resulting from the constitutional analysis of the case - contained in the statement of reasons for the finding, even if the rejection of the application for annulment of the contested provisions of a law. Any argument that the Constitution does not know the right of the Constitutional Court to provide a binding interpretation of the Constitution cannot be accepted. Although the Constitutional Court is not entitled to provide a binding interpretation of the Constitution in general, at any time, and to anyone, where it acts on the basis of its competence, its activity is, after all, nothing but a binding interpretation of the Constitution. Therefore, when dealing with the constitutionality of the law at the initiative of the General Court, it also deals with the interpretation of the Constitution. The Constitutional Court therefore submitted the provisions of the Housing Act - challenged by a properly formally submitted and content-based proposal by the Supreme Court in Prague - to check their compliance with the constitutional order of the Czech Republic.]
2. In this regard, it should be noted, first of all, that the plenary of the Constitutional Court does not find any reason to deviate from the conclusions already expressed in the preamble to the Senate finding, sp. zn. III. ÚS 258 / 03, although the Senate decided on a specific constitutional complaint. It is therefore appropriate to repeat the basic thesis on which the conclusions of that finding are built.
In general terms, the Constitutional Court pointed out, inter alia, that the purpose and purpose of the bankruptcy and settlement law (Section 1) is to organise the property ratios of the debtor who is in bankruptcy, that is, if more than one creditor is unable to fulfil his obligations due for a longer period; This applies even if the natural person, if he is an entrepreneur, and the legal person is overindebted. The tender is mainly subject to the property (bankruptcy nature) which belonged to the debtor on the date of the bankruptcy declaration, and also to the assets of other persons, in particular those acquired on the basis of inefficient legal acts of the debtor (Section 6 of the bankruptcy and settlement law). Under Paragraph 222 (1) of the Commercial Code, the cooperative is responsible for the breach of its obligations by its entire assets. It follows that it also includes housing units owned by the cooperative, although the members of the cooperative are entitled under Sections 23 and 24 of the Housing Act. According to Section 23 and 24 of the Housing Act, members of the cooperative, subject to certain conditions, are entitled to the free transfer of the housing unit from the ownership of the cooperative to their ownership. Under the conditions laid down in Section 20 of the bankruptcy and settlement law, the insolvency creditors are entitled to claim their claims, and according to Section 7 of that Act, any person who claims against the insolvency. The subject of the claim may also be a case, i.e. also an apartment, while the bankruptcy and settlement law also provides for the possibility of satisfying the claim of the insolvency creditor in custody of the case to which the security of his claim is attached (§ 28 (1)). Therefore, if the insolvency creditor of the insolvency cooperative applies its claim properly, he is also a member of the cooperative to whom the claim resulting from the provisions of Sections 23 (2) and 24 (1) of the Housing Act applies.
The Constitutional Court also noted in the present finding that the rules of the contractual types fall within the competence of the democratic legislator in the field of private law. Such a contractual type must be considered as meeting the legally specified conditions, as well as the free transfer of the housing unit from the ownership of the cooperative to the member of the cooperative who is the tenant of the apartment (Sections 23 (2) and 24 (1) of the Housing Act).
The Constitutional Court further considered - in proceedings under sp. zn. III. ÚS 258 / 03 - It is also necessary to analyse the arguments of the General Court according to which, in the case at hand, the application of Paragraph 15 (1) (c) of the bankruptcy and settlement law is justified. Under that legal provision, where bankruptcy has been declared, the legal acts of the debtor carried out in the last six months prior to or after the application for bankruptcy has been submitted to the bankruptcy declaration by which he transfers the assets, rights and other property from his assets to other persons free of charge are ineffective against creditors. The Constitutional Court has stated that the purpose of that legal provision is to establish an inconsistency and ineffectiveness of the act of preventing transfers of the debtor's assets to a third party at the expense of creditors in case of doubt about his good faith. However, the Constitutional Court stressed that such a situation is not the case for the free transfer of the housing unit pursuant to § 23 (2) and § 24 (1) of the Housing Act. In the present case, the waiver of the transfer is given not by the expression of the debtor's free will, but by the former. Therefore, the application of Paragraph 15 (1) (c) of the bankruptcy and compensation law in the present case was found to be inconsistent with the purpose and purpose of the measure and rejected it as such. On the question of the tension between literal and teleological interpretation of the law, the Constitutional Court, referring to its constant case-law, repeated that its application is based solely on language interpretation; the language interpretation represents only the initial approach to the applied legal standard, it is the starting point for clarifying and clarifying its meaning and purpose (for which a number of other procedures are also used, such as logical and systematic interpretation, interpretation e ratione legis, etc.). The Constitutional Court pointed out as a principle that the court is absolutely not bound by the verbatim wording of the legal provision, but may and must derogate from it when, for serious reasons, this requires the purpose of the law, the history of its formation, the systematic link or any of the principles underlying it in the constitutionally constitutional legal order as a significant whole. However, there is a need to avoid libel; the court's decision must be based on rational arguments.
The Constitutional Court also now persists on the legal conclusions thus expressed as regards interpretation and application of the draft contested provisions of the Housing Act, as these conclusions are applicable in the case under appeal. In the quoted finding under sp. zn. III. ÚS 258 / 03 The Constitutional Court has stated what the constitutional interpretation of these provisions is; Therefore, the Constitutional Court has not acknowledged the relevance of the appellant's view of the alleged unfounded preference of one group of creditors (and the discriminatory consequences of such an interpretation against the other group). If, in such cases, the rule is that the members of the cooperative have a legal right to free transfer of the housing unit from the ownership of the cooperative to their ownership, and that such transfer is not a manifestation of the free will of the debtor but is given by the former, then the interpretation taken by the Constitutional Court in the case sp. zn. III. The ÚS 258 / 03 in its entirety (which, in consequence, concludes that the assets acquired in this way cannot be used to satisfy the claims of other insolvency creditors) is essentially determined by the nature of the substance (argument of intrinsecum). From a constitutional point of view, it is generally the case that, from many conceivable interpretations of the law, one that respects constitutional principles must always be used, and that the repeal of the law on non-constitutionality is only to the extent that it is not possible to apply the provision in question without violating constitutionality. However, this is not the case in the case under trial.
3. (a) However, another argument may be made or other circumstances may be mentioned in favour of the above conclusions. The case under examination is, as is clear from the observations of the parties, specific in that, following the application for annulment of the contested provisions of the Housing Act, legislative developments have taken place when the legislator - according to his own words - (see the observations of the two chambers of Parliament) "expressly amended the principle of continuity of legal claims of natural persons - members of the cooperative, resulting from the contested provisions of Law No. 72 / 1994 Coll., as regards the duration of these legal claims and the manner in which they were settled by the Constitutional Tribunal '(cf), or" implemented generally applicable ideas of the Constitutional Court, expressed in Case III. ÚS 258 / 03' (Opinion of the Chamber of the Parliament of the Czech Republic). It was a law of 28 April 2005 No 179 / 2005 Coll., amending certain laws in connection with the adoption of the Act on the abolition of the National Property Fund of the Czech Republic.
In section twenty-ninth of this Act, the Act on bankruptcy and settlement is amended by supplementing paragraph 7 in Section 27, which includes footnote 8 (Reference to Sections 22, 23 (1) and (3) and 27 of the Housing Act), No 9 (Reference to Sections 23 to 28 of the Housing Act) and No 10 (Reference to Section 22 of the Housing Act) now reads:
"Contractual pre-purchase rights are not bound by the AIFM. The administrator is bound by the statutory pre-purchase law and the rights of tenants in accordance with the Special Law 8). Housing and non-residential premises owned by housing cooperatives, which are restricted by the law of natural persons - members of the cooperative that are tenants of apartments or non-residential premises, for the exclusive acquisition of ownership of such apartments or non-residential premises pursuant to § 23 paragraphs 1 and 3 and § 24 of Act No. 72 / 1994 Coll., on the ownership of flats, as amended, must first offer for free transfer to persons entitled to the exclusive acquisition of ownership under the conditions laid down by special law (9). The administrator is obliged to perform all the operations required to transfer these flats and non-residential premises. For this, the persons entitled to the exclusive acquisition of ownership shall be entitled to reimbursement of the costs necessarily incurred in carrying out all the necessary operations and the remuneration provided for under the special legislation. If the person entitled to the exclusive acquisition of ownership does not accept such an offer within three months of its receipt, the administrator shall proceed to monetization, the provisions of the Special Law on the Protection of Lease Rights (10) being no longer used in such cases. '
As a general rule, this amendment means a legislative trend, which is clearly directed against the author's opinion. Moreover, if the trustee is obliged, according to the amendment, to offer the relevant entities a free transfer of the flat, it is all the more likely that it would not be possible to include in the bankruptcy even those apartments whose free transfer to the members of the cooperative by contract between the bankruptcy (cooperative) and the member of the cooperative actually took place.
(b) In part 30 of Act No. 179 / 2005 Coll., there was then a change of the Law itself on the ownership of apartments, since a new § 30a was added under the current § 30, which, including footnote 27a (reference to the bankruptcy and settlement law), reads:
"The provisions of this Act relating to the owner of the building, unit or plot, or co-ownership of the land or housing cooperative, shall also apply to the liquidator under the special bankruptcy and compensation law 27a), including provisions on transfers of ownership of the building, unit and land and, where applicable, of the joint ownership of the land. '
Finally, in the same part of Act No. 179 / 2005 Coll. there was a change by adding the words "rental 'and" positive balances' to the contested provision § 24 (7) of the First Law on ownership of flats No. 72 / 1994 Coll. for the words "mutual settlement of funds'. The relevant parts of Act No. 179 / 2005 Coll. were already effective on the day of its publication, i.e. on 30 April 2005. The Constitutional Court thus found that the provisions of the law contested by the opening of proceedings were later amended by the Act cited, but only slightly (in four words) in a single paragraph of the comprehensive provision (Section 24 (7) of the First Law on Housing). It should be noted that the amendments in question did not alter the content or the meaning of the contested provisions, and their slightly amended wording did not differ materially from the earlier wording, as they were merely detailed. The Constitutional Court thus concludes that, in this situation, there are no grounds for the termination of the procedure under Paragraph 67 of the Law on the Constitutional Court, since the contested provisions of the Law on the ownership of apartments by Act No 179 / 2005 Coll. (with a minor exception, as described above in this paragraph) was not affected and did not expire before the end of the proceedings before the Constitutional Court. In essence, a comparable view was expressed by the Constitutional Court in the case sp. zn.
As far as the substance of the case is concerned, it is sufficiently clear from the above - without a comprehensive comment - that the legislator has also found the relevant views expressed by the Constitutional Court in the cited finding in section III of the ÚS 258 / 03. The legislation in question, which must be assessed in a comprehensive manner, was therefore only legislated by Law No 179 / 2005 Coll. in the sense of the interpretation already cited by the Constitutional Court, without prejudice to its content and meaning.
For all these reasons, the Constitutional Court considered that the contested provisions, namely Sections 23 (2) and (3) and 24 of Act No. 72 / 1994 Coll., as amended, are not contrary to Article 11 of the Charter of Fundamental Rights and Freedoms, which the appellant refers to, and for other reasons are not unconstitutional.
The Constitutional Court therefore notes that the reasons for the annulment of Sections 23 (2) and (3) and 24 of Act No. 72 / 1994 Coll., which govern certain co-ownership relations with buildings and certain ownership relations with apartments and non-residential premises and supplement certain laws (the Housing Act), as amended, are not given.
Therefore, the proposals of the Municipal Court in Prague were rejected in accordance with § 70 (2) of Act No. 182 / 1993 Coll., on the Constitutional Court.
The Constitutional Court - with the consent of the parties - waived oral hearing because it considered that further clarification could not be expected from the hearing.
President of the Constitutional Court:
v. JUDr. Holländer v. r.
Vice-President
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Regulation Information
| Citation | The Constitutional Court found No. 303 / 2006 Coll., on the application for annulment of § 23 paragraphs 2 and 3 and § 24 of Act No. 72 / 1994 Coll., which regulates certain co-ownership relations with buildings and certain ownership relations with apartments and non-residential premises and complements certain laws (the Housing Act), as amended |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 22.06.2006 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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