Up-1581/18

Reference no.:
Up-1581/18
Objavljeno:
Official Gazette RS, No. 29/2019 and OdlUS XXIV, 27 | 04.04.2019
ECLI:
ECLI:SI:USRS:2019:Up.1581.18
Abstract:
[The text published below is a summary prepared for the annual report.]
 
A Pre-emption Right as an Element of a Property Right
 
By Decision No. Up-1581/18, dated 4 April 2019 (Official Gazette RS, No. 29/19), the Constitutional Court decided on a constitutional complaint against court decisions by which the courts dismissed a request to issue consent to the sale of real property by a debtor in bankruptcy (the seller) and the complainant (the buyer, a pre-emption right holder). In the case at issue, a complex of real property (49 plots) was being sold in bankruptcy proceedings, which also included two real properties regarding which the pre-emption right holder had a legal pre-emption right due to possessing a co-ownership share (0.4% of the entire real property complex). The pre-emption right holder invoked his pre-emption right under the conditions of bankruptcy proceedings in such a manner that by signing the contract he accepted, mutatis mutandis, the same conditions as applied to the chosen offeror with regard to the purchase of all of the real property together.
 
The complainant (the pre-emption right holder) reproached the courts for having inadmissibly interfered with his right to private property under Article 33 of the Constitution by denying his pre-emption right. This right protects a person’s freedom in the field of property. By guaranteeing private property, the Constitution not only protects a property right as defined in civil law, but also all legal positions that have a property value for an individual in a similar manner as the property right and which ensure him or her freedom to act in the field of property and thus to freely and responsibly create his or her own destiny.
 
The pre-emption right of a commonhold unit owner is based on Article 124 of the Law of Property Code. On the basis of the third paragraph of Article 513 of the Obligations Code, the rules on a contractual pre-emption right apply, mutatis mutandis, also to a statutory pre-emption right, unless the law stipulates otherwise for an individual case. Under the general rules, a pre-emption right thus entails the obligation of the owner of a thing (the seller) to notify the pre-emption right holder of the intended sale of the thing to a specific person and the conditions of such sale, and to offer the right holder the opportunity to buy the thing under the same conditions. The law regulating bankruptcy determines special cogent rules on invoking a statutory pre-emption right in the event bankruptcy proceedings are initiated against the person liable for pre-emption. In the case of a sale on the basis of a call for offers, it determines that the sales contract with the purchaser is to be concluded under the suspensive condition that the pre-emption right holder will not exercise the pre-emption right, and under a dissolving condition that is realised if the pre-emption right holder exercises the pre-emption right. The official receiver is obliged to provide the pre-emption right holder the wording of the contract with, mutatis mutandis, the same content as that of the contract that he or she provided to the chosen offeror and to call on the pre-emption right holder to return to him or her, within fifteen days following receipt, a signed copy of the contract and pay the whole purchase price pursuant to the contract. In the assessment of the Constitutional Court, the mentioned position of a pre-emption right holder arising from a statutory pre-emption right is protected within the framework of the right to private property determined by Article 33 of the Constitution.
 
In its reasoning, the Higher Court weighed the right of the pre-emption right holder, on one hand, against the right of the chosen offeror to buy the real property at the offered price, on the other. In view of the small surface area of the share of real property in co-ownership regarding which the complainant was able to invoke the pre-emption right, it concluded that the complainant’s pre-emption right cannot be extended to the whole complex of real property for sale. Such would namely entail an excessive interference with the right of the chosen offeror to buy the real property at the offered price, in particular since in the case at issue the chosen offeror can no longer raise the price due to the real property being sold in a procedure involving a binding call for offers. The Higher Court thus concluded that the pre-emption right holder does not have priority over the chosen offeror.
 
At the outset, the Constitutional Court explained that the right to private property determined by Article 33 of the Constitution protects the complainant’s position only in the scope of the recognised existence of the statutory pre-emption right, thus only in the scope in which it concerns the complainant’s position as a pre-emption right holder relating to the purchase of co-ownership shares of those two real properties regarding which his pre-emption right undisputedly exists on the basis of the law. In the case at issue, however, it had to be taken into account that a complex of forty-nine real properties as a whole was being sold. The joint sale of the whole complex of real property, which also included two real properties (co-ownership shares) over which the pre-emption right holder has a statutory pre-emption right, was thus a consequence of the sales method adopted in the bankruptcy proceedings and not a consequence of a decision of the pre-emption right holder. In the case at issue, the pre-emption right holder could invoke his pre-emption right in proceedings only in such a manner that by signing the contract he accepted, mutatis mutandis, the same conditions as applied to the chosen offeror with regard to the purchase of all real property together. In light of the mentioned circumstances, the Constitutional Court thus held that the position of the court according to which a pre-emption right holder does not have priority over the chosen offeror in the purchase of a complex of real property necessarily also entails that the complainant, who is explicitly granted a pre-emption right regarding specific real property (two co-ownership shares of the debtor in bankruptcy) by law in fact does not have this right. Such a position violates the right to private property determined by Article 33 of the Constitution. Due to the established violation of this human right, the Constitutional Court abrogated the challenged order and remanded the case to the Ljubljana Higher Court for new adjudication.
Document in PDF:
Type of procedure:
constitutional complaint
Type of act:
individual act
Applicant:
Igor Pezdirc, Ljubljana
Date of application:
14.12.2018
Date of decision:
04.04.2019
Type of decision adopted:
decision
Outcome of proceedings:
annulment or annulment ab initio
Document:
AN03991