Found at the Constitutional Court of the Czech Republic No. 63 / 1997 Coll.
Findings of the Constitutional Court of the Czech Republic of 4 February 1997 concerning the application for annulment of the provisions of § 45 paragraph 3 of the third sentence of Act No. 92 / 1991 Coll., on the conditions for the transfer of State assets to other persons, as amended
Valid
Text versions:
03.04.1997
63
FIND
Constitutional Court of the Czech Republic
On behalf of the Czech Republic
The Constitutional Court of the Czech Republic decided on 4 February 1997 in plenary on the proposal of the Regional Court in Ostrava to repeal the provisions of § 45 paragraph 3 of the third sentence of Act No. 92 / 1991 Coll., on the conditions for the transfer of State assets to other persons, as amended
as follows:
Motion denied.
Reasons
On 20 August 1996 the Constitutional Court of the Czech Republic received a proposal from the Regional Court in Ostrava to abolish the provision of § 45 paragraph 3 of the third sentence of Act No. 92 / 1991 Coll., on the terms of transfer of the State's assets to other persons, as amended.
Senate 15 What the Regional Court of Ostrava has concluded in its appeal proceedings in the case under Article 10 of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution '). On the basis of Article 95 (2) of the Constitution and Article 64 (4) of Act No. 182 / 1993 Coll., on the Constitutional Court, the Regional Court in Ostrava, by order of 28 April 1995 sp. zn. 15 Co. 331 / 94, which acquired legal power on 31 July 1995, has therefore suspended the procedure laid down in § 109 (1) (b) o. s.
In the case decided by the Regional Court in Ostrava (sp. zn. 15 Co. 331 / 94), the applicant R., the company of trade and services, the public commercial company, in the appeal requested the annulment of the judgment of the Karviné Regional Court of 23 March 1994, sp. zn. 29 C 250 / 93, which rejected the applicant's application to impose an obligation on the defendant Z.O., a.s., to allow the claimant to use uninterrupted storage and property, established by the contract of 7 October 1991, for the duration of the contract (i.e. until 31 December 2001). In the proceedings before the General Courts, the applicant argued that until Act No. 210 / 1993 Coll., which was amended by Act No. 92 / 1991 Coll., the method of concluding contracts for the lease of property and non-residential premises was in no way limited. In his view the literal interpretation of the provision of § 45 (3) of the third sentence of Act No. 92 / 1991 Coll., as amended (including Act No. 210 / 1993 Coll.) would mean accepting retroactivity, which would constitute a contradiction with the Constitution.
The contract for the lease of non-residential premises and property concluded with the legal predecessor of the defendant Z.O., p., thus considered the applicant to be valid regardless of the fact that the transformation of the state firm in which the lease contract was made was carried out by the property of the company and subsequently by the National Property Fund entered into the public limited company Z.O. On the contrary, the defendant referred to the verbatim wording of § 45 (3) of Act No. 92 / 1991 Coll., as amended.
In accordance with the legal opinion of the Court of First Instance and the Regional Court in Ostrava, the question of the case under consideration is whether the lease relationship based on the contract of 7 October 1991 was terminated as a result of the amendment of Act No. 92 / 1991 Coll., implemented by Act No. 210 / 1993 Coll., on 1 October 1993 (i.e. the date on which the relevant part of the property in question was effectively excluded - the warehouse the use of which the lease agreement concerned - from the state firm).
The Regional Court in Ostrava states in its proposal that, at the time the applicant entered into the contract with the State Company in question, Law No 92 / 1991 Coll. did not contain any restrictive provisions on the possibility of public undertakings to lease assets to natural or legal persons. It also points to the fact that it was specifically addressed by the amendment to that law, Act No 92 / 1992 Coll. effective from 28 February 1992, which, from the date of its effectiveness, limited the possibility of public undertakings to conclude lease contracts for the use of assets to which they exercised the right to operate, for the period up to the date on which the assets were transferred to the relevant fund. Recalling the development of the legislation, the Regional Court in Ostrava cites the new version of § 45 (3) of Act No. 92 / 1991 Coll., as amended by Act No. 544 / 1992 Coll., of which with effect from 18 December 1992 the date of 28 February 1992 was deleted, from which the previous regulation was limited by the above-mentioned disposition permission of state enterprises. Finally, it cites in its proposal the wording of that provision according to the amendment of Act No. 92 / 1991 Coll. implemented by Act No. 210 / 1993 Coll. (with effect from 13 August 1993), which expressly provides for the termination of the right to use the assets of the former state undertakings resulting from contracts concluded before 28 February 1992. For the sake of completeness, the proposal states that Article 45 (3) of Act No. 92 / 1991 Coll., as amended by Act No. 210 / 1993 Coll., amended by Act No. 306 / 1993 Coll. and No. 224 / 1994 Coll.
The Regional Court in Ostrava is of the opinion that the provision of § 45 paragraph 3 of Act No. 92 / 1991 Coll., as amended by Act No. 210 / 1993 Coll., is retroactive in nature if, according to its last sentence, it also interferes with the right to use property arising from contracts concluded before 28 February 1992. It draws attention to the fact that this is an intervention in property law (right to use property) established by contract at a time when the conclusion of lease contracts to the State's assets for a longer period of time was legally lawful. With reference to Article 1 of the Constitution and, in the alternative, to the finding of the Constitutional Court of 24 May 1994 (No 131 / 1994 Coll.), the Regional Court of Ostrava considers the contested provision to be contradictory with one of the fundamental principles of the rule of law, with the principle of legal certainty.
The proposal also distinguishes between two cases of retroactive consequences of § 45 paragraph 3 of Act No. 92 / 1991 Coll., as amended. The first is that according to that provision the rental ratio of Act No. 92 / 1991 Coll., as amended by Act No. 210 / 1993 Coll., disappeared before the entry into force of Act No. 210 / 1993 Coll. (i.e. before 13 August 1993), the second is that when the lease was terminated after that date (as was the case in the case of the general courts decided). In both cases, in the view of the Regional Court in Ostrava, a retroactive action of the contested legal provision is taking place.
In view of the arguments contained in the Constitutional Court's finding of 22 March 1994 (No 86 / 1994 Coll.), the Regional Court in Ostrava considers that the retroactive application of § 45 (3) of Act No. 92 / 1991 Coll., as amended, does not export a public interest note or public good. In his view, a similar retroactive intervention could be justified in substance in the removal of inequalities arising from relations established at a time of limited contractual freedom of the parties and legally based inequality of the entities in the contractual relations of the entrants. The "rectification" of the law, adopted by the democratically elected Parliament, only after a relatively long period of its effectiveness, knowing that it was already the third attempt to address the issue of long-term leases of property defined in § 1 of Act No. 92 / 1991 Coll., is therefore considered to be an inadmissible breach of the principle of legal certainty.
Furthermore, from the point of view of the principle of protecting citizens' confidence in the law, the Regional Court in Ostrava draws attention to the fact that legal entities, acting in good faith, are affected by retroactive treatment also in economic terms, because the prospect of long-term use of leased property may have a higher economic value than the value of the agreed rent. In the appellant's view, retroactive legislative intervention would be justified only by providing appropriate compensation to the tenants affected.
Pursuant to Articles 42 (3) and 69 of Law No 182 / 1993, the Constitutional Court sent a proposal to the Chamber of Deputies. The President of the Chamber of Deputies of the Parliament of the Czech Republic Ing. Miloš Zeman confirmed, in accordance with the requirements contained in the provision of § 68 paragraph 2 of Act No. 182 / 1993 Coll., that Law No. 210 / 1993 Coll. was approved by the necessary majority of Members of the Chamber of Deputies of the Parliament of the Czech Republic on 8 July 1993, signed by the relevant constitutional authorities and duly declared. It has expressed its conviction that the contested provision is compatible with the constitutional laws and international treaties pursuant to Article 10 of the Constitution.
He also pointed out that the adoption of Act No 210 / 1993 Coll. reacted to the various difficulties encountered in the practical implementation of the major privatisation, and given the unconventional solution to the problem of the transfer of state assets into the private sphere, it is understandable that the legislator could not remember all the difficulties that would accompany the process. According to the President of the Chamber of Deputies of Parliament for this reason, the legislature 'failed to take restrictive measures on the possibility of public undertakings leasing assets to natural or legal persons', but "as soon as it became aware of this fact, it adopted in the form of several amendments to Law No 92 / 1991 Coll. the corresponding legislation which sought to deal with this situation, in response to the fact that, until the entry into force of these amendments, public undertakings entered into such rental contracts'. It considers the reason for that legislative procedure in its opinion that, without solving the problem, the privatisation process of state enterprises would be very complicated.
Furthermore, it is considered that the contested legal provision does not have retroactive effect and therefore does not interfere with the rights arising before 28 February 1992, when it merely regulates legal relations with future effectiveness in a new way. Its legal effects can therefore only be characterised as false retroactivity, while the provisions of legislation of such a nature do not conflict with the principles of the rule of law.
Act No. 92 / 1991 Coll., which entered into force on 1 April 1991, did not limit the scope of the available authorisations of public undertakings for the conclusion of lease contracts for the use of property for which they exercised the right to operate.
The amendment of the Act implemented by Act No. 92 / 1992 Coll. (with effect from 28 February 1992) in Paragraph 45 (3) of the Act laid down the following provisions:
"(3) Undertakings may conclude lease contracts and other contracts for the use of the assets referred to in Article 1 by other persons only until the date of transfer of the assets to the fund concerned. Should those contracts be concluded for a longer period after 28 February 1992, the right to use the property shall cease to exist on the date of its transfer to the fund concerned. ';
Act No. 544 / 1992 Coll., by which Act No. 92 / 1991 Coll. was re-amended, with effect from 8 December 1992, laid down the new wording of § 45 (3):
"(3) Undertakings may conclude lease contracts and other contracts for the use of the assets referred to in Article 1 by other persons only until the date of transfer of the assets to the fund concerned. Should those contracts be concluded for a longer period, the right to use the property shall cease to exist on the date of its transfer to the fund concerned. ';
Finally, in the third order, the amendment of Act No. 92 / 1991 Coll. implemented by Law No. 210 / 1993 Coll. amended with effect from 13 August 1993 the provisions of § 45 (3) to the following code:
"(3) Undertakings may conclude lease contracts and other contracts for the use of the assets referred to in Article 1 by other persons only until the date of the cancellation of the undertaking without the liquidation or exclusion of part of the assets of the undertaking pursuant to Article 11 (1). Should those contracts be concluded for a longer period, the right to use the property shall cease on the date of the cancellation of the undertaking without liquidation or the date on which part of the property of the undertaking is excluded; This does not apply if there are contracts for the rental of non-residential premises for which a right under a special provision has been established, 13) and for the lease of apartments. On that date the right to use the property resulting from contracts concluded before 28 February 1992 shall also cease. '
[Note 13) refers to Section 15 of Act No. 427 / 1990 Coll., on transfers of State ownership to other legal or natural persons, as amended.]
The above-mentioned form of provision of § 45 (3) of Act No. 92 / 1991 Coll. was not affected by the Act No. 306 / 1993 Coll. and No 224 / 1994 Coll., which amended and supplemented Act No. 92 / 1991 Coll. and thus constitutes the existing Decree § 45 (3) of Act No. 92 / 1991 Coll., as amended.
The fundamental principles defining the category of rule of law include the principle of protecting citizens' trust in law and the related principle of prohibiting the retroactive application of legal standards.
The legal theory and practice make the difference between the right and the wrong retroactivity, while the definition of this distinction by the legal doctrine is generally accepted.
From a number of definitions, the definition of E. Tilsch, which defined the right and wrong retroactivity as follows: "The true retroactivity of the new law is only there when it is active for the past... Incorrect feedback... is here when a new law dictates that it should also be used in the old legal circumstances already established, but only since the new law began, or even later." (E. Tilsch, Civil law. General section, Prague 1925, p. 75 - 78.)
The real retroactivity then "involves essentially two distinct situations', firstly" the fact that the new regulation gave rise to (new legal) relations prior to its effect under the conditions which it had only set out subsequently ', and secondly' the amendment may change the legal relations arising under the old legislation, even before the new law is effective '. (L. Silent, To the temporal scope of the amendment to the Civil Code, Lawyer, No 12, 1984, p. 1104.)
Therefore, for genuine retroactivity, lex posterior cancels (does not recognise) legal effects at the time of the effectiveness of the legis priority, or causes or combines the rights and obligations of entities with facts that were not legal in nature at the time of the effectiveness of the legis priority.
In the case of retroactivity, it is incorrect: "while the new law does not create legal consequences for the past, it either elevates past facts as a condition for future legal consequences (simple exclusivity), or modifies legal consequences for the future under earlier laws based on... The false retroactivity of the law merely means that the new law captures (legally qualified) past facts or that it touches (modifies, cancels) existing legal consequences, i.e. the fact that the founder of the law attaches to the future other rights and obligations than the existing legislation. This is therefore an intervention of the new law, both in previous facts and in so-called rights acquired. '(A. Walk, Retroactivity of the Law. In: Dictionary of public law. St. III, Brno 1934, p. 800.)
In general, in cases of a time conflict between the old and the new legal standard, false retroactivity applies, i.e. from the effectiveness of the new legal standard even legal relations arising under the repealed legal standard are governed by the new legal standard. The emergence of legal relationships existing before the entry into force of the new legal standard, the legal requirements arising from such relationships, as well as the legal acts carried out, is governed by the repealed legal standard (the result of the opposite interpretation of the conflict of laws would be genuine retroactivity). The principle of protecting past legal facts, especially legal acts, applies here.
It follows from the principle of protecting citizens' trust in law that the principle of inadmissibility of retroactivity cannot be based on the retroactive application of legal standards which do not constitute an intervention in legal certainty or acquired law. An example of such retroactive action is a situation in which, provided that there are different criminal rules at the time of the act and at the time of the decision on it, the act is assessed in accordance with legislation which is more favourable to the perpetrator (Article 40 (6), second sentence, of the Charter of Fundamental Rights and Freedoms).
In the context of the analysis of the principle of retroactivity, it is also necessary to address the question of possible exceptions to the inadmissibility of the retroactivity of legal standards. It is necessary to distinguish between the assessment of inadmissibility of genuine and false retroactivity.
In the case of retroactivity, the principle of general inadmissibility, from which there are strictly limited exceptions to admissibility, in the case of retroactivity, the principle of general admissibility, from which there are exceptions to its inadmissibility, applies.
The true retroactivity "can be justified at most where the legal obligation for the past previously established as at least a moral obligation has been felt '. (A. Walk, Retroactivity of the Law. In: Dictionary of public law. St. III, Brno 1934, p. 800.) In this context, it was stated, in substance, that the term of application of the Statute of the International Military Tribunal in Nuremberg was" if this is a retroactive law, then we declare that it corresponds to the very higher standards of justice which, in practice, have laid down certain limits for the retroactive application of the law in all civilised countries', the criterion of the admissibility of retroactivity being regarded as "a sense of justice which is owned by this world and which will be trampled down if war criminals remain unpunished after World War II." (Opening speech of the lead prosecutor for Great Britain Hartley Shawcross, in: Nuremberg Process, Prague 1, 1953, p. 206) We also find a similar view in the current legal theory: "In general, it is possible to deviate from the principle of non-retroactivity in an exceptional way, by explicit positive provisions. As can be seen from history, the reason for such procedures was a situation where legal certainty would be in direct conflict with social security and legal awareness, as was the case in the case of retrieval decrees. The retroactive application of the Act to civil law conditions could also be justified by public policy (ordre public), in particular if it would be affected by absolutely mandatory provisions issued as a result of a certain marginal situation of the transformation of values in society." (L. Silent, op. cit. p. 1102).
The criterion of the admissibility of exceptions to the principle of prohibition of genuine retroactivity is the legislative principle "protecting legitimate trust in the stability of the rule of law." (A. Walk, Basics of Intertemporal Law, Brno 1928, p. 111.) A legitimate trust cannot be considered if a legal entity with retroactive regulation must or must have counted. An example of such a situation is the application of a legal standard in direct conflict with the fundamental, generally recognised principles of humanity and morality: "In our legal order we can justify by reference to previous ruling moral beliefs, e.g. the retroactive validity of odd laws (see § 13 of Act No. 47 / 1881), § 10 of Act No. 275 / 1914 of the Act, § 105 of the Act)." In: Dictionary of public law. St. III, Brno 1934, p. 800.)
The prohibition on the retroactivity of legal standards in the field of criminal law is expressly provided for in Article 40 (6) of the Charter of Fundamental Rights and Freedoms, its activities for other sectors of law must be derived from Article 1 of the Constitution.
In its case-law, the Constitutional Court of the Czech and Slovak Federal Republic, in the sp. zn. Pl. ÚS 78 / 92 (Collection of resolutions and findings of the ÚS, 1992, no 16), also the Constitutional Court of the Czech Republic, also in the Found of sp. zn. IV. ÚS 215 / 94 (Collection of findings and resolutions of the ÚS, 3, 227n).
In the first of the above findings, the Constitutional Court of the Czech and Slovak Federal Republic stated that the principles of the rule of law required, in any possible case of retroactivity, express expression in the constitution or in the law in order to rule out the possibility of retroactive interpretation of the law and, at the same time, require in the law to deal with retroactivity related consequences so that the rights acquired are properly protected.
The inadmissibility of retroactivity or retroactive interpretation was emphasised in the second of these decisions by the Constitutional Court of the Czech Republic: "The characteristics of the rule of law are inseparably the principle of legal certainty and the protection of the citizen's trust in law. This procedure shall include a prohibition on the retroactivity of legal standards or their retroactive interpretation. '
In the present case, two questions must be answered. The first is whether Paragraph 45 (3) of Act No. 92 / 1991 Coll., as amended, can be described as retroactive and, if so, whether the retroactivity is right or wrong.
In the event of a positive answer, the question is the second constitutional acceptability or inacceptability of a retroactive legal standard.
Act No. 92 / 1992 Coll. (with effect from 28 February 1992) in the newly amended provision § 45 (3) limited the disposition of public undertakings to enter into lease contracts on matters for which they exercised the right to operate. The amendment implemented by Act No. 544 / 1992 Coll., which, by the wording of the provisions of Paragraph 45 (3), deleted the reference to the date of effectiveness of the previous amendment, opened up the possibility of retroactive interpretation for rental conditions that arose before 28 February 1992.
The amendment of Act No. 92 / 1991 Coll. implemented by Act No. 210 / 1993 Coll. contains a dictation according to which, on the date of the cancellation of the company without liquidation or the date of the exclusion of part of the property of the company, the right to use the property arising from contracts concluded before 28 February 1992 (i.e. concluded before the Act No. 92 / 1992 Coll., which imposed restrictions on the right of disposal of public undertakings to conclude lease contracts on the matters for which they exercised the right to operate).
The actual retroactive effect would be present for the contested provision only if it concerned cases where the lease was made out of contracts concluded before 28 February 1992 and the company was wound up without liquidation or a part of the company's assets was set aside before the entry into force of Act No. 210 / 1993 Coll. (i.e. before 13 August 1993), which would also be subject to the date of termination of the lease.
A distinction must be made between cases in which compliance with the provisions of the law with the constitutional order can be ensured by its constitutionally conformal interpretation and where this cannot be done and it must be abolished. The Court of First Instance is absolutely not bound by the verbatim wording of the legal provision, but may and must derogate from it where, for serious reasons, it requires the purpose of the law, the history of its formation, a systematic link or one of the principles which have its basis in a constitutional legal order as a significant whole. In doing so, it is necessary to avoid any leisurely; the court's decision must be based on rational arguments.
In the case of Article 45 (3) of Act No. 92 / 1991 Coll., as amended, its compliance with constitutional laws and international treaties under Article 10 of the Constitution can be ensured by interpretation. This means that that provision must be interpreted as meaning that the lease arrangements arising from contracts concluded before 28 February 1992 by Act No. 92 / 1991 Coll., as amended by Act No. 210 / 1993 Coll., in the event of cancellation of an undertaking without liquidation or exclusion of a part of the property of the company before 13 August 1993, expire only after the entry into force of Act No. 210 / 1993 Coll. (or their scheme is governed by Act No. 544 / 1992 Coll., amending Act No. 92 / 1991 Coll. from 8 December 1992 to 13 August 1993).
It remains therefore to be resolved the question of the constitutional acceptability of false retroactivity § 45 (3) of Act No. 92 / 1991 Coll., as amended, which, after its entry into force, changed or abolished the legal circumstances arising from the legis priority.
The abolition of the old and the adoption of new legislation is necessarily linked to interference with the principles of equality and the protection of the citizen's trust in law. This is due to the protection of other public interests or fundamental rights and freedoms. The assessment of this conflict by the aspect of proportionality with regard to intertemporality should lead to a conclusion on the type of legislative solution for the time-conflict of legislation. Proportionality can be characterised by the fact that a higher degree of intensity of public interest, or the protection of fundamental rights and freedoms, justifies a higher degree of intervention in the principles of equality and the protection of the citizen's trust in law by new legal regulations. At the same time, there is a maximum which, in the event of restrictions on fundamental rights, or freedom to investigate its substance and meaning (Article 4 (4) of the Charter of Fundamental Rights and Freedoms). Thus, not only the degree of difference between new and old legislation, but also the social urgency of introducing new legislation, etc.
Thus, the legislator's decision on how to resolve the time conflict between the old and the new rules from a constitutional point of view is not a matter of chance or of pleasure. It is a matter of considering a conflict of constitutional principles. In this context, the legal theory to address false retroactivity states that this is "strictly permissible. However, it may also be constitutionally inadmissible if this affects confidence in the facts and the importance of legislative wishes to the public does not exceed or reach the individual's interest in the continued existence of existing law." (B. Pieroth, Rückwirkung und Übergangsrecht. Verfassungsrechtliche Maßstäbe für intertemporale gesetzgebung, Berlin 1981, p. 380 - 381.)
In assessing the compliance of the contested provision, which is acting with the effects of false retroactivity, with constitutional laws and international treaties pursuant to Article 10 of the Constitution, the intensity of public interest must be considered for the successful implementation of "large" privatisation (in which existing leases reduce the attractiveness of privatised firms to the acquirer and thus the feasibility of privatisation), with a degree of interference in the principles of equality and protection of the citizen's trust in law, i.e. the degree of protection of charitable tenants of non-residential premises and assets of former state enterprises.
The privatisation of state-owned enterprises as part of the economic transformation of a centrally managed communist economic system into a system based on freedom of ownership and market economy constituted and constituted, from the point of view of the constitutional fulfilment of Article 1 of the Constitution, Article 1, Article 2 (1), Article 3 (1), Article 11 (1) of the Charter of Fundamental Rights and Freedoms. The degree of public interest in achieving that objective justifies some interference with the principles of equality and the protection of the citizen's trust in law in terms of accepting false retroactivity.
From the point of view of the case under examination, Article 45 (3) of Act No. 92 / 1991 Coll., as amended by Act No. 210 / 1993 Coll., means that the lessee of non-residential premises or other assets for which the State companies exercise the right to manage, had to be aware, after 13 August 1993, that, on the date on which the company was wound up without the liquidation or removal of a part of the company's assets (i.e. the change of owner), the lease ratio entered into before 28 February 1992 would cease and could, or had to be counted on that fact. A similar approach was adopted by the legislator in the case of legal consequences of restitution when, in Act No. 116 / 1990 Coll., as amended, the reasons for the termination of the lease of non-residential premises, closed for a fixed period, the notice also included the issue of real estate according to the restitution laws (No. 403 / 1990 Coll., as amended, and No. 229 / 1991 Coll., as amended).
In the light of the above reasons, the Constitutional Court rejected the application of the Regional Court in Ostrava to abolish the provisions of § 45 (3) of the Third Act No. 92 / 1991 Coll., as amended, pursuant to § 70 (2) of Law No. 182 / 1993 Coll. rejected.
President of the Constitutional Court of the Czech Republic:
JUDr. Kessler v. r.
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Regulation Information
| Citation | Found by the Constitutional Court of the Czech Republic No. 63 / 1997 Coll., on the application for annulment of the provision § 45 paragraph 3 of the third sentence of Act No. 92 / 1991 Coll., on the conditions for transfer of the State's assets to other persons, as amended |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 03.04.1997 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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