Opinion on the Qualification of Purchase Actions Based on Civil Code as Inadmissible, in Light of Decision No. 33/2008 of the ICCJ


In the context of actions comparing titles, specifically comparing the title of the former owner whose property was nationalized with the title of the tenant-buyer under the provisions of Law no. 112/1995, although the explicit exception of inadmissibility invoked by tenant-buyers is not expressly accepted by the Cluj courts, the reasoning behind the rejection of these actions is based on this rationale.

Below, we present an opinion challenging this practice of the courts:

While the exception of inadmissibility invoked by the defendants is rejected in the majority of cases, in most instances, the courts base their decisions entirely on the considerations of Decision No. 33/2008. The conclusion, in fact, is that such an action would be inadmissible, and the plaintiffs could no longer avail themselves of it.

However, it is argued that in these situations, the conditions considered by the High Court of Cassation in the reasoning of Decision No. 33/2008 are not correctly analyzed. These conditions refer to the circumstances that led to the referral of the Court with such a legal issue, namely situations where such actions based on common law were recorded without the plaintiffs using the procedures provided by special laws.

It is observed that the courts handling such requests do not differentiate between the above situation and the one where the former owners of nationalized properties or their successors in rights have used all the special procedures and deadlines. However, even though they have a final court decision declaring the invalidity of the State’s takeover of the property and, consequently, the existence of an asset under the Convention, the realization of the right was denied by rejecting the request to annul the contracts.

Given the circumstances where the courts found, on the one hand, the illegal nature of the takeover and, on the other hand, the validity of the title of the defendant-tenant (which comes from a non-owner – the Romanian State), the court handling a title comparison request should proceed to a substantive analysis of the request, namely the comparison of the two titles. This is because Decision No. 33/2008 expressly allows the examination of the priority of community provisions in a common law action.

Decision No. 33/2008 of the ICCJ has established with binding force for national courts the fact that the existence of Law no. 10/2001 as a special law does not exclude the possibility of resorting to an action in reclamation if the claimant invokes an asset within the meaning of Article 1 of Protocol No. 1. In such cases, the court must verify, based on the concrete circumstances, to what extent domestic law conflicts with the Convention, and if affirmative, it must comply with the provisions of Article 20 of the Constitution, which obliges the national court to apply international provisions and not the domestic law in conflict with them.

In this regard, with respect to, for example, Decree No. 92/1950, it contradicted Article 8 and Article 10 of the 1948 Constitution regarding private property, the provisions of Article 481 of the Civil Code stating that no one can be forced to give up their property except for public utility and with a fair and prior compensation, as well as the provisions of Article 555 and following of the NCC.

Considering these legal texts, in a situation where the claimant has a previous decision declaring the invalidity of the takeover of their property, it follows that the asset has never legally left the patrimony of the true owner.

Moreover, this aspect is confirmed by the provisions of the ECHR and the Constitution of Romania (Article 46 of the Convention and Article 21 of the Constitution):

– Cases Ioana Petrescu and Others v. Romania (application no. 23635/04, decision of 03.06.2008), Gabriel v. Romania (application no. 35951/02, decision of 08.03.2007) – in which the Court stated that the applicants are the holders of an asset protected by Article 1 of Protocol No. 1, considering the finding of domestic courts regarding the illegal and abusive nature of the State’s confiscation of the property;

– Czaran and Grofcsik v. Romania (application no. 11388/06, decision of 02.06.2009), Filipescu v. Romania (application no. 34839/03, decision of 30.09.2008), and Gingis v. Romania (application no. 35955/02, decision of 04.11.2008) – in which the Court indicated that, since the domestic courts have established the illegal nature of the nationalization, even if this circumstance was noted in the considerations and not in the operative part, the applicants had an asset within the meaning of Article 1 of Protocol No. 1.

Given this practice of the ECHR, it follows that if the property was wrongfully taken, that asset has never legally left the patrimony of the true owner, having patrimonial value within the meaning of Article 1 of Protocol No. 1 added to the Convention.

Additionally, the European Court found in favor of former owners the violation of the right to property guaranteed by Article 1 of Protocol No. 1 in situations where former owners justified the existence of an asset within the meaning of the Convention – a final and irrevocable court decision confirming their property right (by establishing the invalidity of the takeover), followed by the annulment of this decision or the impossibility of enforcement, subsequently to the moment when the Romanian State became obliged to respect the Convention (Raicu v. Romania case).

Analyzing the reasoning of the European Court in the cases Păduraru, Străin, and Porțeanu, which have created a pattern in the Court’s practice, it is noted that in each specific case, the existence of an “asset” within the meaning of paragraph 1 of Protocol No. 1 was analyzed first. It was established that this condition is met when domestic courts have recognized the property right in the assets of the petitioners, either as an “actual asset” or as a “legitimate hope of recovery.” Thus, a “legitimate hope of recovery” exists to the extent that the sale to tenants under Law no. 112/1995 was made before the final resolution of the case in which a court decision was pronounced declaring the illegality of the takeover – Străin, Păduraru.

In this regard, the Decision of November 4, 2008, of the European Court of Human Rights in the case Gingis v. Romania, provides: “33. The Court notes that the Constanţa District Court established the illegal nature of the nationalization of the property by its judgment of June 21, 2004. Therefore, it considers that this finding of illegality, which, moreover, was not contradicted by a higher court, has the effect of indirectly and retroactively recognizing the applicants’ property right to the property in question. In addition, the Court notes that this right was not revocable and has not been challenged or contradicted to this day. 34. Therefore, the Court considers that the applicants had an asset within the meaning of Article 1 of Protocol No. 1.”

In the analysis of the two titles, following the principles governing the proof of the reclamation action, when comparing titles from different authors, the one who acquired from the author whose right is preferable gains the advantage. This is based on the principle that no one can transfer more rights to another than they themselves possess.

Therefore, through such an action, the claimant requests the determination that their property title is preferable to the title of the defendant-tenant, being the original owner or successor in rights of the original owner, who was deprived without any compensation for the possession and use of the property, both through abusive takeover and the sale of the apartment to the tenant (often before the final resolution of the restitution request). According to Article 1 of Law no. 112/1995, the Romanian State could only alienate dwellings acquired for value. However, in a situation where the State never had a legal title to validly alienate, the title of the former tenant is acquired from a non-owner, and the asset never legally left the patrimony of the initial owner.

As mentioned above, in determining the priority and efficiency of the property title, the courts should consider whether the former owner or their successors have taken all legal steps to regain the property wrongfully taken, without being in a state of passivity.

According to the provisions of Law no. 10/2001, the entitled person retains the status of owner at the time of the takeover if they prove that they filed a restitution request in accordance with the provisions and deadlines of Law no. 10/2001. In cases where such a notification has been made, the right to obtain restitution in kind is preserved, and there is a legitimate hope arising from the unequivocal provisions of the law that the status of owner from whom the property was wrongfully taken has never been lost. In these circumstances, the former owner has the right to receive restitution in kind, and there is a legitimate hope arising from the unequivocal provisions of the law that the status of the owner from whom the property was wrongfully taken has never been lost (Păduraru v. Romania case).

In these conditions, by rejecting the exception of inadmissibility and consequently analyzing the case on the merits, in the comparative analysis of property titles, the courts should also consider the absence of any compensation for the former owner.

This was also recognized by the Court in the case Faimblat v. Romania, stating that, since Law no. 10/2001 is not an effective way to realize the right, unable to lead to the payment of compensation within a reasonable period, such actions are admissible, even having the object of reclamation (for the same reasons). The reasoning behind such a conclusion is that denying access to the courts through common law could only be accepted if the special remedy offered is EFFECTIVE.

Considering this aspect, the analysis of the preference for one of the titles should also be made in terms of respecting the principle of proportionality.

Thus, in the case of admitting the former owner’s action, the necessary balance would be respected, as the defendant-buyer could obtain the repayment of the price paid and the market value of the apartment according to international assessment standards within a reasonable time. On the other hand, the former owner, having their request rejected, would suffer due to the long and uncertain term for payment and, moreover, with the legal changes, they would no longer have access even to the payment of a sum but only the receipt of other assets in compensation.

In this context, there is no remedy for the effective violation and abuse found, and the conclusions of the ECHR in the Faimblat v. Romania case regarding the theoretical and illusory nature of access to restitution through the administrative procedure are eloquent.

On the other hand, concerning the buyer, with the entry into force of Law no. 1/2009, the risk of violating their property right is eliminated, as they have the possibility of obtaining the market value of the property.

In conclusion, the former owner, having their request not analyzed on the merits and consequently rejected only in relation to the content of Decision No. 33/2008, is unable to recover their property through another means, even though its wrongful takeover has been established. Thus, the only solution for eliminating the continuous deprivation of property to which they have been subjected is the direct application of the provisions of the Convention, which prevails over domestic legislation. In this way, since the former owner cannot be repaired by monetary compensation, and on the other hand, it is possible to eliminate the risk that the defendant-buyer will bear the consequences of laws incompatible with the Convention (through the appearance of Law no. 1/2009), the courts should give preference to the former owner’s title by admitting the reclamation action.

The provided text appears to be a legal analysis or complaint related to alleged abusive clauses in credit contracts with Banca Comercială Română (BCR), a Romanian commercial bank. The analysis outlines several issues, including the calculation of interest rates, changes in the interest calculation method, the introduction of an administration fee, and the alleged violation of consumer rights.

Here is a summary of the key points in the text:

  1. **Abusive Clauses in Credit Contracts:** The text claims that BCR’s credit contracts contain abusive clauses, particularly related to the calculation of interest rates. It suggests that consumers were forced to accept these clauses due to the pre-formulated nature of the contracts.
  2. **Interest Rate Calculation:** The text discusses the method of interest rate calculation, indicating that the interest is initially fixed for the first year and then becomes variable based on BCR’s reference interest rate. There are allegations that the bank did not provide a clear formula for calculating the variable interest rate, leading to dissatisfaction among consumers.
  3. **Changes in Interest Calculation:** Following the issuance of Government Emergency Ordinance (O.U.G.) No. 50/2010, BCR notified consumers of changes in the interest rate calculation method. The text argues that the new method introduced by the bank does not comply with legal requirements.
  4. **Unilateral Modification of Interest Rates:** The text contends that BCR unilaterally modified the interest rates despite consumers expressing their refusal through written notifications. It emphasizes that any modification to the contract should require the agreement of both parties.
  5. **Administration Fee:** The text criticizes the introduction of an administration fee, claiming that it remains fixed throughout the entire repayment period, causing an artificial increase in the overall cost of credit. There are allegations that this fee was not proportionally reduced as the outstanding balance decreased.
  6. **Legal Violations:** The text argues that BCR’s practices violate various legal provisions, including those related to the negotiation of contracts, the Consumer Protection Law, and regulations on variable interest rates.
  7. **Request for Nullification:** The text calls for the nullification of certain clauses in the credit contracts, specifically those related to interest rate calculations and administration fees. It also suggests that consumers have the right to request the restitution of amounts paid based on these allegedly null and abusive clauses.

Please note that this is a summary, and the specific legal nuances and details of the arguments may require further examination by legal professionals.

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