In today's article from the series "Tuesday Mornings for the Construction Industry," we decided to analyze the recent resolution of the Supreme Administrative Court (" NSA ") regarding decisions regarding the reprivatization of Warsaw land, which were issued in violation of the law. This resolution, passed by a seven-judge panel of the Supreme Administrative Court, was adopted on January 11, 2024, and the case was heard under reference number I OPS 3/22 (" Resolution ").
The thesis of the adopted Resolution clarifying the legal issue is as follows:
The circumstances specified in Article 30 paragraph 1 item 6 of the Act of 9 March 2017 on special rules for removing the legal effects of reprivatisation decisions concerning real estate in Warsaw issued in violation of the law (Journal of Laws of 2021, item 785) may constitute grounds for annulling a reprivatisation decision also if they occurred before the entry into force of this Act.
The provision interpreted by the Supreme Administrative Court states that the Commission shall issue a decision annulling the reprivatisation decision in whole or in part, or shall declare the reprivatisation decision or resolution invalid in whole or in part, or shall declare its issuance in violation of the law, if: the issuance of the reprivatisation decision has led to consequences that are grossly contrary to the public interest or to consequences contrary to the purpose for which perpetual usufruct was established, in particular to the persistent use of unlawful threats, violence against a person or violence of another kind against the person occupying the premises in a Warsaw real estate in a manner that significantly hinders the use of the premises .
The Provincial Administrative Court in Warsaw, adjudicating in this case at first instance (ref. I SA/Wa 963/18), examined the legality of the decision of the Commission for Eliminating the Legal Effects of Reprivatization Decisions (hereinafter " Commission ") concerning real estate in Warsaw. In examining the legality of the reprivatization decision, the Commission ruled on the basis of the aforementioned provision, assessing the effects of the reprivatization decision issued between 2009 and 2017. The Provincial Administrative Court in Warsaw questioned this position and pointed to the lack of a causal link. In filing a cassation appeal, the Commission indicated that it was possible to assess the factual circumstances under Article 30 paragraph 1 item 6, which did not exist at the time the administrative decision was issued.
Due to the importance of the case, the Supreme Administrative Court decided to refer the legal issue to a seven-judge panel of the Supreme Administrative Court, which resolved a serious doubt as to the interpretation of Article 30, section 1, item 6 of the Act of 9 March 2017 on specific rules for removing the legal effects of reprivatization decisions concerning Warsaw real estate issued in violation of the law (the "Act"). This provision, like all other premises indicated in Article 30 of the Act, concerns the grounds on which the Commission relies when reversing the issued decision regarding the reprivatization of Warsaw real estate.
In the Court's opinion, the essence of the doubt boils down to the question of whether the circumstances specified in Article 30, Section 1, Item 6 of the Act may constitute grounds for annulling a reprivatization decision if they occurred before the Act entered into force . Although the Act has been in force since May 5, 2017, the Court found that Article 30, Section 1, Item 6 of the Act may be applied to circumstances that occurred before its entry into force. Therefore, even though the circumstances specified in the provision did not constitute grounds for annulling a reprivatization decision before May 5, 2017, a situation in which they could constitute grounds for annulling it is permissible.
The Court also pointed out that the date of the Commission's decision is irrelevant, as the Commission, in each case, relies on statutory prerequisites when adjudicating in this regard. Therefore, it should consider all circumstances – even those that arose later and were not yet part of the legal system at the time of the decision. Considering the literal wording of the provision, which focuses on blatantly unlawful behavior such as harassment, threats against tenants, or even the use of violence, it was found to support the conclusion that this prerequisite – in the Court's opinion – should be considered on a case-by-case basis. The mere fact that it was not in force before May 5, 2017, is irrelevant. This means that its occurrence is irrelevant, and even if it occurred before the Act came into force, it could still constitute grounds, for example, for overturning a reprivatization decision in whole or in part. The Supreme Administrative Court's controversial position was explained by arguing that the consequences of decisions issued in violation of the law were so drastic that, given the totality of the circumstances, they should be invalidated to protect social order, regardless of the date of the Act's entry into force . The court therefore clearly presented the norm contained in Article 30, Section 1, Item 6 of the Act as both a substantive norm and one that simultaneously has an intertemporal character. Despite the fact that the norm emerged after the occurrence of the facts to which it pertains, its application is possible due to the scale of the violations.
Further explaining the justification for recognizing a derogation from the principle of lex retro non agit, the Supreme Administrative Court pointed out that it is not absolute in nature, as exceptions are permissible (referring to the judgment of the Constitutional Tribunal of 10 June 2020, file reference K 3/19, and similarly, with respect to EU law, the judgment of the Court of Justice of the European Union of 26 April 2005, C-376/02). The Court also noted that the very title of the Act provides a strong basis – due to the use of the word "special rules" – for treating the Act in such a way as to justify the possibility of retroactivity. The Court further elaborated on this position, presenting extensive argumentation from the doctrine, including the case law of the Constitutional Tribunal.
The Supreme Administrative Court also pointed out that the provisions of the Act also apply to circumstances that precede its entry into force, since it is an act on specific rules for removing the legal effects of reprivatization decisions already issued in violation of the law, and the Commission's task – in accordance with Article 3, Section 2 of the Act – is to "explain irregularities and deficiencies in the activities of bodies and persons conducting proceedings concerning the issuance of reprivatization decisions concerning real estate in Warsaw" and to take into account "circumstances conducive to the issuance of reprivatization decisions in violation of the law or committing crimes or hindering their disclosure", as well as to contact the competent authorities if such circumstances are identified.
The Court also explained that the legislator's intention included the possibility of recognizing that the Act may have retroactive effect, citing the wording of Article 3, Section 3 of the Act, which states that "The Commission is a public administration body safeguarding the public interest in the scope of proceedings concerning the issuance of reprivatization decisions concerning real estate in Warsaw." In the opinion of the Supreme Administrative Court, the legislative process that accompanied the creation of the Act "clearly indicates that the legislator's intention was to equip the Commission with the authority to declare invalid or repeal reprivatization decisions that were issued before the entry into force of the Act on the Commission, partly based on new premises that were not in force at the time of issuing the decision."
In its justification, the court also addressed numerous media allegations related to the public assessment of the Warsaw reprivatization period. It pointed out, among other things, that "the legality of many reprivatization decisions concerning Warsaw properties raised doubts" and explained that "the effects of these actions were not only legal in nature but also felt at the socio-economic level. The public assessment of the Warsaw reprivatization was extremely negative, and the reprivatization decisions were assessed as violating public and private interests and, therefore, a basic sense of social justice." This clearly negatively assessed the Commission's actions and justified the need to apply Article 30, Section 1, of the Act to eliminate from the legal order decisions made before 2017. The court explicitly stated that the Act was the legislature's response to the scale of numerous violations related to the issuance of decisions in the Warsaw reprivatization process.
In summary, the Supreme Administrative Court (NSA) indicated that the provision in question cumulatively meets the conditions that allow for a departure from the prohibition of retroactivity, i.e.: (i) it is a statutory provision, and (ii) it is not related to the domain of criminal or tax law. The NSA explicitly stated that "its introduction was necessary to protect legal order and security, and to maintain the principles of social justice. In the face of these values, the principle of legal certainty, understood formally, and the principle of freedom of economic activity, understood as the ability to pursue a business model that involves a blatant violation of the public interest, must yield."
This article is for informational purposes only and does not constitute legal advice.
Legal status as of February 12, 2024
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