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On the restoration of ownership rights to residential houses

Case No. 10/94

THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF LITHUANIA

R U L I N G

On the compliance of Item 1.1, Item 2.4 and Item 7 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994 with the Constitution of the Republic of Lithuania

19 October 1994, Vilnius

The Constitutional Court of the Republic of Lithuania, composed from the Justices of the Constitutional Court: Kęstutis Lapinskas, Zigmas Levickis, Vladas Pavilonis, Pranas Vytautas Rasimavičius, Stasys Stačiokas, Teodora Staugaitienė, Stasys Šedbaras, and Juozas Žilys

The court reporter—Rolanda Stimbirytė

Seimas member Pranciškus Vitkevičius and Algirdas Taminskas, Adviser of the Seimas State and Law Committee, acting as the representatives of the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1 of Article 102 of the Constitution of the Republic of Lithuania and Paragraph 1 of Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, in its public hearing, on 6 October 1994, considered case No. 10/94 subsequent to the petition submitted by the Širvintos District Local Court requesting an investigation into whether Item 2.4 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994, which has supplemented the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 with Item 4, is in compliance with Articles 23, 28 and the provisions of Paragraph 2 of Article 29 of the Constitution, also whether Items 1 and 7 of the same Law, by which the 18 June 1991 Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” has been amended and supplemented, are consistent with the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

1.

On 18 June 1991, the Supreme Council of the Republic of Lithuania adopted the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” (Official Gazette Valstybės žinios, 1991, No. 21-545) along with amendments and supplements (Official Gazette Valstybės žinios, 1992, No. 3-40; 1992, No. 7-155; 1992, No. 11-278; 1992, No. 15-405; 1993, No. 5-83; 1993, No. 32-725; hereinafter it shall be referred to as the 18 June 1991 Law), which on 11 January 1994 was amended and supplemented by the Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” (Official Gazette Valstybės žinios, 1994, No. 7-100; hereinafter it shall be referred to as the impugned Law).

Under Item 1.1 of the impugned Law, the first paragraph of Article 1 of the 18 June 1991 Law has been amended and formulated in the following way:

“This Law shall legislate the procedure and conditions of the restoration of the ownership rights to the citizens of the Republic of Lithuania to real property which was nationalised under the laws of the USSR (or those of the Lithuanian Soviet Socialist Republic; hereinafter referred to as the Lithuanian SSR), or which was otherwise unlawfully communised, and which, on the day of enactment of this Law, is considered the property of the state, of the public, of cooperative organisations (enterprises), or of collective farms, or which has been transferred by said organisations into the ownership of natural persons”.

Under Item 2.4 of the impugned Law, the second paragraph of Article 8 of the 18 June 1991 Law has been supplemented with Item 4. The new norm reads:

“The procedure and time limits for the restoration of residential houses (or portions thereof) shall be established by the Government of the Republic of Lithuania, pursuant to the provision that the residential houses shall be restituted in the case that:

4) natural persons, having acquired ownership rights of the houses (or portions thereof) subject to restitution, consent, of their own free will, to move into other residential premises allotted to them.”

Furthermore, under Item 7 of the impugned Law, the 18 June 1991 Law has been supplemented with the Article 191 entitled “Court investigation into petitions for the restoration of the ownership rights” the provision of the second paragraph of which “while considering such a case, the court shall conform to this Law” is impugned.

2.

On 2 March 1994, the Širvintos District Local Court, the petitioner, heard the case pursuant to the suit brought by O. Bagdonavičienė and J. Simonavičienė pertaining to the restitution of residential house from unlawful management. By its ruling, the said court suspended the consideration of a civil case and addressed the Constitutional Court with the petition requesting an investigation into the conformity of the below mentioned amendments and supplements to the impugned Law with the Constitution.

The petitioner’s request is based on the following legal reasoning.

  1. Item 1.1 of the impugned Law has supplemented the first paragraph of Article 1 of the 18 June 1991 Law with the provision “or has been transferred by said organisations into the ownership of natural persons”. The petitioner believes that such a supplement extends the scope of the application of said Law in the restitution of real property, i.e. at present it is applicable in the restoration to former owners not only of the property of the state, public, co-operative organisations (enterprises), or collective farms, but also of the property which has been transferred by said organisations into the ownership of natural persons, regardless of the way (with or without compensation) and the date of its transferral. In the petitioner’s opinion, this is a violation of the provision established in the first paragraph of Article 23 of the Constitution specifying that “property shall be inviolable” and the provision determined in the second paragraph of said Article that “the rights of ownership shall be protected by law”.
  2. Item 2.4 of the impugned Law has supplemented Article 8 of the 18 June 1991 Law with such a norm: “The procedure and time limits for the restoration of residential houses (or portions thereof) shall be established by the Government of the Republic of Lithuania, pursuant to the provision that the residential houses shall be restituted in the case that: <…> 4) natural persons, having acquired ownership rights of the houses (or portions thereof) subject to restitution, consent, of their own free will, to move into other residential premises allotted to them”. In the petitioner’s opinion, this norm is a violation of the constitutional principle of the inviolability of property and the provision of Article 28 of the Constitution that while exercising their rights and freedoms, persons must observe the Constitution and laws of the Republic of Lithuania, and must not restrict the rights and interests of other people. Besides, the principle that all the persons shall be equal before the law, the court, and other State institutions and officers, established in the first paragraph of Article 29 of the Constitution, has been violated too. The petitioner draws the conclusion that “while interpreting the said supplement to the Law, one can get an impression that subjective will of one person restricts the possibility of another person to exercise the right vested in him by law, the principle of people’s equality, inviolability and protection of private property is given different interpretations”.
  3. In the petitioner’s opinion, Item 7 of the impugned Law has supplemented the 18 June 1991 Law with Article 191, the second paragraph of which stating that “while considering such a case, the Court shall conform to this Law” contradicts the provisions of the first and second paragraphs of Article 5, the second paragraph of Article 109 and the first paragraph of Article 110 of the Constitution, because the court is commissioned to conform to the Law referred to by said norm while hearing specific cases of certain categories. This is a violation of the independence of court, as a state authority, from other state authorities as well as the independence of judges and courts while administering justice.

3.

The representatives of the party concerned explained in the court hearing that the supplement to the first paragraph of Article 1 of the impugned Law provided the possibility of the restitution of the ownership rights under the 18 June 1991 Law also to those citizens of the Republic of Lithuania whose real property which had been nationalised under the laws of the USSR (or those of the Lithuanian SSR), or which had been otherwise unlawfully communised, was the ownership of natural persons on the day of the enactment of this Law.

The representatives of the party concerned have specified that the Constitutional Court by its ruling of 15 June 1994 recognised that the provision of Item 2.4 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994 that the residential houses shall be restituted “in the case that natural persons, having acquired ownership rights of the houses (or portions thereof) subject to restitution, consent, of their own free will, to move into other residential premises allotted to them”, conforms to the Constitution. Thus, the petitioner’s request pertaining to Item 2.4 has already been decided.

The representatives of the party concerned have also explained that the provision of the second paragraph of Article 191, with which the 18 June 1991 Law was supplemented on 11 January 1994, implies that the Court should, along with the impugned Law, necessarily abide by the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, taking into account all the amendments and supplements.

Said norm does not create a collision of laws as it is a special norm, which must be applied only in the restoration of the ownership rights according to the 18 June 1991 Law which establishes a special procedure and conditions for the restoration of the ownership rights different from general legal norms determined in the Civil Code that regulate the protection of the ownership rights.

The representatives of the party concerned think that the petitioner groundlessly questions the compliance of the provision of the second paragraph of Article 191 with the principle of the independence of courts while administering justice, which is established in the second paragraph of Article 109 of the Constitution. The third paragraph of Article 109 of the Constitution prescribes that, when considering cases, judges shall obey only the laws, and the legislature by the provision of the second paragraph of Article 191 of the Law echoes the requirement of the third paragraph of Article 109 of the Constitution that, when considering cases, judges shall obey only the laws, and emphasises that the 18 June 1991 Law prescribes special procedure and conditions for the restoration of the rights of ownership, therefore, the special legal norms set forth in this Law and not the ones of general nature must be applied.

By adopting the impugned Law, including the provision that “while considering such a case, the court shall conform to this Law”, the Seimas only realised the right vested in it by Item 2 of Article 67 of the Constitution as well as its duty to enact laws, and did not violate Article 5 of the Constitution.

The Constitutional Court

holds that:

After the restoration of independent State of Lithuania, the right of private ownership was reinstated by constitutional provisions to the state legal system. By way of implementing these provisions, on 18 June 1991 the Supreme Council of the Republic of Lithuania adopted special Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”.

  1. On the compliance of Items 1.1 and 2.4 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Restoration of the Rights of Ownership to the Existing Real Property’” of 11 January 1994, by which the first paragraph of Article 1 and Article 8 of the 18 June 1991 Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” have been adequately amended and supplemented, with the Constitution of the Republic of Lithuania.

The Seimas by the 11 January 1994 Law has supplemented the norm of the first paragraph of Article 1 of the 18 June 1994 Law specifying that “this Law shall legislate the procedure and conditions of the restoration of the right of ownership to the citizens of the Republic of Lithuania to the property which was nationalised under the laws of the USSR (or those of the Lithuanian SSR), or which was otherwise unlawfully communised, and which, on the day of enactment of this law, is considered the property of the state, of the public, of cooperative organisations (enterprises), or of collective farms” by the provision “or has been transferred by said organisations into the ownership of natural persons”. This implies that under this Law the ownership rights are restored to the former owners not only to real property which is considered the property of the state, public, cooperative organisations (enterprises), or collective farms, but also which has been transferred by said organisations into the ownership of natural persons.

The procedure for the implementation of said provision concerning the restitution of residential houses (or portions thereof) is determined in Item 2.4 of Article 8 of the impugned Law: “The procedure and time limits for the restoration of residential houses (or portions thereof) shall be established by the Government of the Republic of Lithuania, pursuant to the provision that the residential houses shall be restituted in the case that: <...> 4) natural persons, having acquired ownership rights of the houses (or portions thereof) subject to restitution, consent, of their own free will, to move into other residential premises allotted to them”.

The Constitutional Court in its ruling of 15 June 1994 stated that natural persons, while acquiring residential houses (or portions thereof) on the contract, conformed to the rules of conclusion of contracts established by normative acts that were in force at that time, exercised the rights and performed ensuing from such contracts obligations of the party. Upon the denial of the ownership rights which appeared on the basis of such unlawful contracts, the contents of the existing legal relations would be changed.

Until the property is restituted or due compensation is paid, the subjective rights of the former owner to specific property are not restored yet, however the law entitles such a person to the right to bring an action in court so that the latter should resolve in civil procedure the petition to restore a residential house (or portion thereof) which has been transferred into the ownership of natural persons. Such provision of the Law provides the possibility of verifying in court procedure the legality of the contract on which a natural person has acquired real property because, upon restoration of the ownership rights to the former owner, the rights of the present owner may not be denied in non-judicial procedure.

The Constitutional Court has recognised that the provision “providing that there is no possibility of granting property in kind it must be adequately compensated for”, does not contradict the principles of inviolability of property and protection of property ownership rights, because fair compensation also ensures the restoration of property ownership rights (the Constitutional Court’s ruling of 27 May 1994).

While restoring ownership rights, not only the rights of former owners but also those of natural persons who have acquired residential houses (or portions thereof) on lawful contracts are protected.

This is in conformity with the provision of the first paragraph of Article 29 of the Constitution that “all persons shall be equal before the law, the court, and other state institutions and officers” and the provision of Article 28 of the Constitution that “while exercising their rights and freedoms, persons must observe the Constitution and laws of the Republic of Lithuania, and must not restrict the rights and interests of other people”.

Therefore, the impugned provision “or has been transferred by said organisations into the ownership of natural persons” is in compliance with the Constitution.

By its ruling of 15 June 1994, the Constitutional Court recognised that Item 2.4 of the 11 January 1994 Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’”, which had supplemented the second paragraph of Article 8 of the 18 June 1991 Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” with Item 4, did not contradict the Constitution of the Republic of Lithuania. Taking this into consideration, pursuant to Item 3 of Paragraph 1 of Article 69 of the Law on the Constitutional Court, the legal proceedings of this case concerning Item 2.4 should be dismissed.

  1. On the compliance of the second paragraph of Item 7 of the 11 January 1994 Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’”, which has supplemented the 18 June 1991 Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” with Article 191, with the Constitution of the Republic of Lithuania.

In the second paragraph of Article 5 of the Constitution it is established that the scope of powers shall be defined by the Constitution. The status of the Court, as one of the state authorities, is determined in Chapter IX of the Constitution. The first paragraph of Article 109 of the Constitution prescribes that the courts shall have the exclusive right to administer justice, the second paragraph of said Article runs that while administering justice judges and courts shall be independent, and the third paragraph thereof determines that while considering cases judges shall obey only the law. Anyone shall be prohibited from interfering with the activities of a judge or the court.

The provision of the impugned Law “while considering such a case, the court shall conform to this Law” may be evaluated as the possible way to settle the collision of laws or separate legal norms. This provision implies that, with regard to the relations of the restoration of the ownership rights, a special Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” should be applied, and not the norms of Civil Code which regulate the protection of the ownership rights. Also, it should be stated that the provision of the impugned Law that “while considering such a case, the court shall conform to this Law” is ambiguous as it can be interpreted as an interference with the independence of the judicial authority. However, such precondition may not serve as the basis for recognising that said provision contradicts the Constitution.

Conforming to Article 102 of the Constitution of the Republic of Lithuania as well as Articles 53, 54, 55, 56 and the third paragraph of Article 69 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

  1. To recognise that the provision of Item 1.1 of the 11 January 1994 Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” stating that “or has been transferred by said organisations into the ownership of natural persons”, which has supplemented the first paragraph of Article 1 of the 18 June 1991 Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, does not contradict the Constitution.
  2. To dismiss the legal proceedings of the case concerning the compliance of Item 2.4 of the 11 January 1994 Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” with the Constitution of the Republic of Lithuania.
  3. To recognise that the provision “while considering such a case the court shall conform to this Law” of the second paragraph of Item 7 of the 11 January 1994 Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’”, which has supplemented the 18 June 1991 Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” with Article 191, does not contradict the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:

Kęstutis Lapinskas                           Zigmas Levickis                               Vladas Pavilonis

Pranas Vytautas Rasimavičius         Stasys Stačiokas                              Teodora Staugaitienė

Juozas Žilys