AS TO THE ADMISSIBILITY OF
by Henryk ROGOZIŃSKI and Others
The European Court of Human Rights (Fourth Section), sitting on 3 November 2009 as a Chamber composed of:
David Thór Björgvinsson,
Mihai Poalelungi, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having regard to the above application lodged on 20 March 2004,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,
Having deliberated, decides as follows:
The applicants, Mr Henryk Rogoziński, Mr Marek Bartkowski and Mr Andrzej Kulecki are Polish nationals who were born in 1950, 1948 and 1946 respectively and live in Gietrzwałd. They were represented before the Court by Mr L. Obara, a lawyer practising in Olsztyn. The Polish Government (“the Government”) were represented by their Agent, Mr J. Wołąsiewicz.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
In 1992 the applicants agreed with the local branch of the State-run electricity supply company (“the company”) that they would finance and build on their land an electricity installation connecting their properties to the general electricity network operated by that company (high voltage transformer and cables). They had such an installation built and financed it from their own resources, paying PLZ 270,000,000 in pre-denomination currency – the equivalent of PLN 27,000 (approximately EUR 6,800 today).
In 1993, when the installation was ready, a disagreement arose between the applicants and the electricity supply company as to the reimbursement of the costs the applicants had incurred. The company refused to reimburse the costs. As a result, the installation became operational and the company took it over, connected it to the electricity network and started normal exploitation. In October 1993 the applicants refused to sign documents confirming that ownership of the high-voltage transformer, the essential part of the installation, had been taken over by the company ex lege. They only signed documents confirming the transfer of ownership of the cables to the company. In the same month they submitted a letter to the company informing it that they refused to acknowledge the transfer of ownership.
In the following years, from 1995 at the earliest, the company connected 24 new electricity users to the network built by the applicants (after the applicants had sold their land to these persons on unspecified dates), charged each of them for this service and for a part of the costs borne in connection with building the installation and operated the service normally, providing electricity to them at normal prices, using the installation built by the applicants.
The applicants apparently repeatedly tried to obtain reimbursement of the costs they had incurred in the amount of PLN 112,000, but received oral refusals. In August 2000 the applicants requested the company in writing to reimburse the costs of the construction they had borne in 1992-1993 as well as the amounts the company had charged the 24 users for connecting them to the network. They claimed PLN 112,000 (approximately EUR 27,300 today). The company refused, stating that ownership of the network had been transferred to it in October 1993.
In a letter of 6 September 2001 the Ombudsman, in reply to the applicants’ request to intervene in their case, informed them that their case was of a civil-law character and could, as such, be pursued before the civil courts. The Ombudsman also summarised a judgment of the Constitutional Court of 1991 (see Relevant domestic law below) and emphasised that after this judgment had been given, the Anti-Monopoly Court had repeatedly stated in its judgments that the practice of the State-run electricity supply company amounted to an abuse of a dominant market position. The applicants were also informed that there had been judgments of the Supreme Court to the effect that in cases in which contracts concluded as a result of an abuse of a dominant market position were declared null and void, wronged consumers could claim unjust enrichment under the provisions of the Civil Code on liability in tort.
In November 2001 the applicants lodged an action against the company with the Olsztyn District Court. They sought payment of PLN 1,000 (EUR 250), seeking a judgment on the principle of their claim, and argued that they had never given their agreement to the company taking over ownership and using the installation which they had built and financed themselves.
On 20 February 2003 the court dismissed the claim. It established that the applicants had built the installation and financed the building works from their own resources on the basis of technical documentation given to them by the electricity supply company. Upon completion of the installation they had refused to sign a document confirming the transfer of ownership of the main part of the installation to the company.
The court further noted that at the relevant time, the 1984 Energy Act had been in force. The principles governing the settlement of any accounts between the State-run electricity supply company and landowners who had financed the construction of installations necessary to connect their properties to the electricity network were provided for in a 1964 Ordinance. Article 18 of this Ordinance provided that all electricity installations were the property of the State. Consequently, this Ordinance allowed for all the costs arising from the construction of electricity installations to be borne by individual owners, without any corresponding obligation on the part of the electricity company to reimburse them. Hence, the applicants were to bear these costs. At the time of the construction they had been aware of this as the position of the company had been set out in technical documents which they had received from the company.
The applicants appealed, submitting that the defendant company had enriched itself at their expense since it had acquired ownership of the installation and had been exploiting it without having to compensate them in return.
The appellate court upheld the judgment by a decision of 25 September 2003. It observed that the first-instance court had correctly found that the applicants had been aware that under the 1964 Ordinance the connection of the installation to the electricity network had depended on the transfer of ownership of the installation to the company. However, the lower court had erred in law in that it had overlooked a judgment of the Constitutional Court given in 1991. In that judgment that court had observed that the 1964 Ordinance could no longer be applied after the 1984 Energy Act had entered into force, because it had been passed ultra vires on the basis of the 1962 Energy Act. Hence, the 1964 Ordinance could not constitute the legal basis for the automatic transfer of ownership of the electricity installation to the electricity company. The Constitutional Court had indicated that the provisions of the Civil Code should apply to such a situation.
In that connection, the Regional Court observed that under Article 49 of the Civil Code, electricity supply facilities did not constitute parts of land or a building if they were a part of an enterprise, including an electricity supply enterprise. Hence, such installations were not to be considered part of the applicants’ property and were to become the property of the defendant company.
On the other hand, the provisions of the Civil Code on the obligation of an owner of property to reimburse expenditure incurred by a person in possession in order to improve the condition of this property or increase its value were not applicable to the applicants’ situation. This was because at the time when the applicants had borne the expenditure for the construction of the electricity installation, they had been the owners of the properties concerned. Hence, they were not users within the meaning of the relevant provisions of the Civil Code: they had incurred expenditure on their own property, not somebody else’s and, consequently, had no claim to reimbursement.
The court finally observed that the applicants had known, when they incurred the expenditure for the construction of the electricity supply installation in 1993, that under the laws applicable at that time ownership of the installation would eventually be transferred to the electricity supply company. Hence, the company could not be said to have obtained unjust enrichment at the expense of the applicants. Further, it was the company which was obliged to operate and maintain these installations. Accordingly, it was fair that the company should take over their ownership.
B. Relevant domestic law and practice
1. Constitutional provisions
On 18 October 1997 the 1997 Constitution entered into force. Article 64 introduced the legal protection of private ownership. It reads:
“1. Everyone shall have the right to ownership, other property rights and the right of succession.
2. Everyone, on an equal basis, shall receive legal protection regarding ownership, other property rights and the right of succession.
3. The right of ownership may only be limited by means of a statute and only to the extent that it does not violate the substance of such right.”
Under Article 76 of the Constitution, public authorities shall protect consumers, customers, lessors or lessees against activities threatening their health, privacy and safety, as well as against dishonest market practices. The scope of such protection shall be specified by statute.
2. Evolution of the case-law during the relevant period
a. The 1991 resolution of the Constitutional Court
In 1991 the Ombudsman requested the Constitutional Court to issue a binding interpretation of section 45 of the 1962 Energy Act in so far as it empowered the Council of Ministers to issue ordinances concerning the technical conditions on which individually built and financed electricity supply installations could be connected to the general electricity supply network. At that time, the Constitution adopted in 1952 was in force.
In a resolution of 4 December 1991 (W 4/91) the Constitutional Court observed that the 1964 Ordinance, including Article 18 passed on the basis of the 1962 Energy Act, could no longer be applied after the 1984 Energy Act had entered into force. It further noted that in any event the ordinance had been passed ultra vires on the basis of the 1962 Energy Act.
The court observed further that relations between the electricity supply company and owners of property were to be considered in the light of the Civil Code. As to the ownership of electricity supply installations situated on individual properties, Article 49 of the Civil Code made it clear that they did not constitute a part of such properties if they were a part of an enterprise, including an electricity supply enterprise. Hence, such installations were to become the property of that enterprise.
Further, the provisions of the Civil Code on the obligation of an owner of property to reimburse expenditure incurred by a person in possession in order to improve the condition of this property or increase its value were not applicable to the situation of owners who had financed the construction of electricity supply installations. This was so because at the time of the financing and construction of such installations the owners were constructing them on their own properties. Hence, they could not have recourse to claims normally available to persons in possession against owners.
Lastly, the court considered that the civil-law provisions on unjust enrichment could not be applied to the settlement of accounts between the owners and the electricity supply company. Owners who built and financed electricity supply installations on their properties knew and accepted in advance that after these installations were connected to the general electricity network they were to become the property of the company.
The court was of the view that such an automatic transfer of ownership to the electricity supply company could not be said to run counter to “principles of community life” within the meaning of Article 5 of the Civil Code. This was because the connection of the installations to the electricity supply network was in the interest of owners. Moreover, after the electricity supply company had become the owner of the installations, it was obliged to operate them and to maintain them in proper technical condition; hence the fact that it had taken them over without being obliged to make any reimbursement was compatible with these principles.
b. The case-law of the Supreme Court
In a number of judgments given after 1991 the Supreme Court followed the reasoning based on the judgment of the Constitutional Court and dismissed claims for reimbursement of costs borne by owners to finance electricity supply installations, holding that upon their connection to the network the installation had become the property of the electricity supply company (I CRN 72/93, 23 June 1993, I CKN 608/99, 20 September 2000; resolution III CZP 169/94, 13 January 1995).
However, in a judgment of 7 November 1997 (II CKN 424/97) the Supreme Court held that if the recipient of the electricity had financed elements of the installation necessary for the property to be connected to the network, he or she was entitled, on the basis of the provisions of civil law on unjust enrichment, to seek from the electricity company a reimbursement of the costs incurred.
Subsequently, in judgments given in 2003 and 2004, the Supreme Court held that Article 49 of the Civil Code could not be interpreted to mean that the physical connection of such an installation, financed by a private party, to the electricity supply network automatically entailed a transfer of ownership of that installation to the electricity company (II CK 40/02, 26 February 2003; II CK 125/03, 10 October 2003; III SK 39/04, 13 May 2004; IV CZP 347/04, 3 December 2004).
On 8 March 2006 the Supreme Court gave a resolution (III CZP 105/05) purporting to clarify the discrepancies which had arisen in the case-law concerning the relationship between the electricity supply company and owners who had financed electricity supply installations situated on their land. It reiterated the history of the relevant case-law and observed that a transfer of ownership could only originate in legal events, not in factual ones. It observed that the only function of Article 49 of the Civil Code was to establish the limits of operation of the principle superficies solo cedit, not to determine the financial relationship between the owner of the installation and the owner of the electricity network. Hence, the mere fact that an installation was connected to the network operated by the electricity supply company was not, of itself, sufficient to conclude that a transfer of ownership to the company automatically followed. The issue of ownership and of any settlement of accounts between the company and individual owners should be determined by contract, specifically addressing related issues.
3. Energy Acts
In 1997 the 1984 Energy Act was repealed and replaced by a new Energy Act. No provisions producing the same effect as Article 18 of the 1964 Ordinance are currently in force. The question of ownership of electricity supply installations and of the settlement of accounts arising out of the building and financing by private parties of electricity supply installations is now left to the parties, to be freely negotiated between the owners and the State-run electricity supply company.
4. The provisions of the Civil Code
Article 49 of the Civil Code provides that water, electricity, power and similar installations do not constitute a part of land or buildings if they are a part of an enterprise.
5. Exemption from the court costs
Article 113 § 1 of the Code of Civil Procedure provides that a party to the proceedings may ask the court competent to deal with the case to grant him or her an exemption from court fees provided that he submits a declaration to the effect that the fees required would entail a substantial reduction in his and his family’s standard of living.
The applicants complained under Article 1 of Protocol No. 1 to the Convention that their right to the peaceful enjoyment of their possessions had been breached. They had incurred substantial expenditure for the construction of an electricity supply installation for the purpose of connecting their properties to the general electricity supply network. However, under the provisions of domestic law as applied by the courts at the material time, the installation became the property of the State-owned electricity supply company. Moreover, they could not obtain any reimbursement of their expenditure as the courts had dismissed their claim. The civil courts considered that neither the civil-law provisions on the settlement of accounts between owners and users of property nor the provisions on unjust enrichment entitled them to reimbursement.
As a result, the electricity supply company had gained further possessions at the applicants’ expense, since it used the installation they had built and financed and obtained income from its use without having to compensate them.
The applicants submitted that in the civil proceedings they had claimed reimbursement of only PLN 1,000 because they could not afford to pay the substantial court fees charged for civil proceedings at that time. Their intention had been to obtain a judgment on the principle of their entitlement to reimbursement of their costs.
They also invoked Article 6 and argued that the judgments of the civil courts had been unfair.
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
A. The parties’ submissions
1. The Government
The Government first argued that the application was incompatible ratione temporis with the provisions of the Convention. Poland had ratified Protocol No. 1 on 10 October 1994, while the interference complained of, namely the taking over of the electric installation by the electricity supply company, had occurred in October 1993 or at the latest in March 1994, when the company had connected the voltage to the installation. The Government referred to the Court’s judgment in the case of Blečić v. Croatia [GC], no. 59532/00, ECHR 2006 III.
The Government further argued that the applicants had not complied with the requirement of exhaustion of domestic remedies under Article 35 of the Convention. They had failed to lodge with the Constitutional Court a constitutional complaint against Article 49 of the Civil Code which had served as a legal basis for the final judicial decision in their case. The applicants could have challenged the compatibility of that provision with the 1997 Constitution in so far as it guaranteed a right to the peaceful enjoyment of one’s property.
The Government further submitted that the applicants had failed to exhaust a civil-law remedy. When lodging their compensation claim with the civil court, they had claimed PLN 1,000. This amount had been only a small fraction of the costs which they had borne for the construction of the installation and which they had previously claimed from the electricity company. Whatever the reasons which had prompted the applicants to do so, they had thereby deprived themselves of the opportunity of pursuing their case further by lodging a cassation appeal with the Supreme Court. At the material time, such an appeal had been available if the value of the litigation exceeded PLN 10,000. Given the evolution of the case-law of the Supreme Court, summarised above, in cases raising issues similar to those concerned in the present case in comparable factual contexts, their cassation appeal would have had a significant prospect of success.
The Government further submitted that the refusal of reimbursement amounted to an interference with the applicants’ rights which, in the light of the judgment of the Constitutional Court given in 1991, had to be regarded as legitimate and provided for by law. No contract between the applicants and the electricity supply company had ever provided for any reimbursement for the costs of installations. The applicants had known from the outset that the electricity installation would be operated by the company, no other option being technically possible. The value of the applicants’ plots had significantly increased after the plots had been connected to the electricity network and the applicants had been free to offset the expenditure they had borne in connection with the installation against the prices of the plots. Hence, the interference complained of had not imposed an excessive burden on them.
2. The applicants
With regard to the Court’s temporal jurisdiction, the applicants averred that the event referred to by the Government had been immaterial for the alleged breach of Article 1 of Protocol No. 1. It had only been when the electricity supply company had started to connect third parties to the installation which the applicants had financed that the ownership of the installation could, under the domestic law, be transferred ex lege to the electricity supply company. This had started to happen in 1995 and continued afterwards.
In so far as the Government relied on the constitutional complaint as a domestic remedy which should have been used in the applicants’ case, they submitted that under the applicable provisions of Polish law a constitutional complaint could not be based on the ground that the application of legal provisions had breached individual rights. Such a complaint was designed exclusively to eliminate from the system legal provisions which were incompatible with the Constitution. In their case it had not been Article 49 of the Civil Code in itself which had given rise to a breach of the Convention, but merely the way in which the courts had applied it. Moreover, the issues involved in the present case had already been examined by the Constitutional Court in 1991. The domestic courts, when dismissing the applicants’ compensation claim, had relied on this constitutional case-law. It would therefore have been futile to raise the issues before that court once again.
The applicants argued that at the material time the relevant case-law of the Supreme Court concerning relations between the electricity supply company and private parties had been divergent. The legal approach which would have been favourable to their compensation claim had not been established at that time. The first decision of the Supreme Court that had interpreted claims similar to theirs differently from the interpretation of the Constitutional Court in 1991 had been adopted only in 2003. Moreover, that decision of the Supreme Court had not been considered by other courts as a new binding interpretation of the relevant provisions. The applicants had therefore run the risk of losing the case. Hence, they had wished to reduce financial expenditure in connection with the court fees and had chosen to submit first an action for a judgment on the principle of their claim, not for the whole amount of damage which they had sustained. It had only been in 2006 that the Supreme Court had ultimately adopted a resolution favourable to persons in the applicants’ position.
The applicants further submitted that in October 1993 the electricity supply company had acted on the assumption that it would become the owner of the installation. The applicants had refused to sign documents accepting the transfer of ownership of the installation to the company because they had wanted to retain ownership. In the subsequent years, starting from March 1995 at the earliest, the company, without informing the applicants, had not only connected new electricity users to the network, but also obliged them to reimburse to it the installation costs which had been paid by the applicants. It was only in 2000 that the applicants had learned about it. As a result of the circumstances of the case viewed as a whole, the applicants had borne significant expenditure, which had never been repaid, for the benefit of third parties.
B. The Court’s assessment
The Court first notes the Government’s assertion that the application is incompatible ratione temporis with the provisions of the Convention and its Protocols. In the circumstances of the case the Court finds it appropriate to examine first whether the application meets the other admissibility criteria laid down in Article 35 of the Convention (see Borenstein v. Poland (dec.), no. 6303/04, and Weitz v. Poland (dec.), no. 7727/05). Even assuming that the facts constitutive of the interference are within its temporal jurisdiction, the Court finds that this part of the application is in any event inadmissible for the reasons set out below.
The Court reiterates that under Article 35 § 1 of the Convention it may only deal with the matter after all domestic remedies have been exhausted (see NA. v. the United Kingdom, no. 25904/07, § 88, 17 July 2008). The purpose of this rule is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to the Court (see, among other authorities, Selmouni v. France [GC], no. 25803/94, § 74, ECHR 1999-V).
Thus, the complaint submitted to the Court must first have been made to the appropriate national courts, at least in substance, in accordance with the formal requirements of domestic law and within the prescribed time-limits (see Zarb Adami v. Malta (dec.), no. 17209/02, 24 May 2005). Mere doubts as to the prospects of success of national remedies do not absolve an applicant from the obligation to exhaust those remedies (see Akdivar and Others v. Turkey, 16 September 1996, § 71, Reports of Judgments and Decisions 1996-IV).
Article 35 of the Convention requires the exhaustion of remedies which relate to the breaches of the Convention alleged and at the same time can provide effective and sufficient redress. The burden of proving the existence of available and sufficient domestic remedies lies upon the State invoking the rule (see Akdivar, cited above, §§ 65-69).
Turning to the circumstances of the present case, and in so far as the Government rely on the constitutional complaint as a remedy relevant to the applicant’s complaint, the Court reiterates that it has repeatedly held that a constitutional complaint available under Polish law was an effective remedy for the purposes of Article 35 § 1 of the Convention only in situations where the alleged violation of the Convention resulted from the direct application of a legal provision considered by the complainant to be unconstitutional (see Pachla v. Poland (dec.), no 8812/02, 8 November 2005; Wypych v. Poland (dec.), no. 2428/05, 25 October 2005; and Tereba v. Poland (dec.), no. 30263/04, 21 November 2006).
In the present case the alleged breach cannot be said to have originated from any single legal provision or even from a well-defined set of provisions. It rather resulted from the way in which the relevant laws were applied to the applicants’ case. However, it follows from the case-law of the Polish Constitutional Court that it lacks jurisdiction to examine the way in which the provisions of domestic law were applied in an individual case. Hence, it is not a remedy which the applicants should have tried. This part of the Government’s objection must therefore be rejected.
In so far as the Government argued that the applicants should have pursued their case before the civil courts, the Court notes the applicants’ submission that they decided to limit their claim to a symbolic amount of PLN 1,000 in order to test the courts’ response to the merits of their claim.
The Court observes in this respect that it was open to the applicants to request an exemption from the court fees. The Court cannot speculate whether in the applicants’ circumstances such a request offered reasonable prospects of success. In any event, it is not in dispute that in the present case a cassation appeal to the Supreme Court against a second-instance judgment was available if the value of the litigation exceeded PLN 10,000. Hence, had the applicants lodged a civil claim against the electricity company for the full amount of compensation to which, as they claimed before the Court, they were entitled, namely PLN 112,000, they could have subsequently lodged a cassation appeal with the Supreme Court.
As regards the prospects of success which an action for the full amount of compensation against the electricity company would have offered, the Court observes that at the relevant time the case-law of the Supreme Court concerning the legal relationship between persons in situations similar to that of the applicants and electricity supply companies was indeed inconsistent. Ultimately, the strand of the case-law based on the judgment of the Constitutional Court in 1991 which was unfavourable to the applicants’ position was abandoned in 2006, after the Supreme Court gave its resolution dated 8 March 2006. However, during the period material to the present case the Supreme Court gave judgments both in favour of and against litigants in the applicants’ position. Thus, while doubts as to the outcome of the applicants’ compensation claim were justified, the outcome itself was not, at that time, a foregone conclusion.
Having regard to the opinions expressed by the Supreme Court in its various judgments, the Court is of the view that the possibility cannot be ruled out that, had the applicants claimed the full amount and thus been able to pursue their case before the Supreme Court, they would have obtained a judgment in their favour. Despite this, they chose not to do so.
The Court further notes that this assessment of the fairness of the impugned proceedings and their outcome also disposes of the applicant’s complaint under Article 6 § 1 of the Convention.
It follows that the application must be rejected for non-exhaustion of domestic remedies pursuant to Article 35 §§ 1 and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Fatoş Aracı Nicolas Bratza
Deputy Registrar President