Case law Developments in PIL

Foreign Judgments Relating to the Protection of Adults and their Recognition in Poland

In a resolution of 8 November 2019 (III CZP 24/19, available here, in Polish), the Supreme Court of Poland addressed the issue of jurisdiction to rule on the authorisation that a guardian of an adult may need to obtain prior to selling property belonging to the latter.

Background

DD is a German national, with habitual residence in Germany. He owned an immovable in Poland. Due to an impairment of his personal faculties, DD was put under guardianship by a German court. EH, a lawyer, was appointed his guardian and charged with taking care of DD’s property and represent him in court proceedings.

In 2018 the competent German court gave its approval for the disposal of DD’s immovable property in Poland. The property was sold to a married couple – SK and AK – and entered their community of property. Additionally, the sale contact instituted a mortgage on the property to secure a loan concluded by SK and AK with a Polish bank.

The buyers applied to the regional court in Poland to have the change of ownership and mortgage entered into the land register. This application was rejected as the court found that the sale contract was invalid, on the ground that EH had not been authorised to sell the property by a Polish family court. The higher instance court, to which SK and AK filed an appeal, decided to ask the Supreme Court for guidance.

Considered Sources of Law

The Supreme Court observed, to begin with, that the matters falls outside the material scope of the Brussels I bis Regulation in accordance withArticle 1(2)(a), on the legal capacity of natural persons. In Schneider (C-386/12) the CJEU confirmed that the above exclusion covers non-contentious proceedings by which a national of a Member State who has been declared to be lacking full legal capacity and placed under guardianship in accordance with the law of that State seeks in another Member State an authorisation to sell a property situated in that other Member State. The Court also reminded that Poland is not a party to the Hague Convention on the International Protection of Adults, and that the matter is not covered by the Brussels II bis Regulation.

It is thus for the domestic rules of private international law to determine whether, and subject to which conditions, a foreign judgement whereby a guardian is authorised to sell property belonging to a protected adult qualifies for recognition in Poland. The relevant rules are found in the Polish Code of Civil Procedure (“CCP”), specifically in the Code’s Part IV (available here, in Polish). The above conclusion is correct, given that no bilateral agreement is in force between Poland and Germany to cover the kind of judgments in question.

The Applicable Domestic Rules in Detail

The Supreme Court stated in its resolution that a judgement like the one at issue enjoys automatic recognition in Poland under Article 1145 CCP. Recognition may however be denied on any of the grounds listed in Article 1146 CCP. In particular, recognition ought to be denied if the matter is one for which Polish courts have, under Polish rules, ‘exclusive’ jurisdiction.

Pursuant to Article 1107CCP, proceedings over rights in rem in (and the possession of) immovable property located in Poland fall under the exclusive jurisdiction of Polish courts. Additionally, Article 1110CCP provides that exclusive jurisdiction extends to proceedings the decision of which ‘affects’ the rights in rem in (or the possession of) immovable property located in Poland.

While it was clear that the case under discussion did not fall within the scope of Article 1107CC, the question arose of whether it may be classified as affecting the rights in rem in immovable property within the meaning of Article 1110CCP.

A Case Affecting the Rights in rem in Immovable Property?

The Court explained that the characteristic feature of matters covered by Article 1110CCP is that they concern not only rights in rem. An example of such a case is a division of marital property. Before the Succession Regulation became applicable, the above provision would also apply to succession cases. However, the analogy between the above cases and the case at hand is far from obvious. For example, a division of an estate including property located in Poland entails a determination as to who should eventually own the property in question. By contrast, the authorisation required to sell the property of a person lacking capacity is just one of the conditions which need to be fulfilled in order for the change in the ownership to occur, but has no influence on whether the disposal will in fact take place.

The subsequent step of the reasoning is the most interesting. The Supreme Court, when analysing Article 1110CCP, relied on the case law of the CJEU, in particular in the Schneider and Schmidt (C-417/15) cases. In the said judgments, the CJEU distinguished the approval of a sale of property from the sale itself, stating that the main concern of the former proceedings is the protection of the interests of the seller.

Having in mind CJEU’s standpoint, the Supreme Court underlined that the proceedings at issue:

are aimed at analysing whether the premises for the approval for the sale … are met, having in view the interest of the person under guardianship. The nature of the asset concerned does not affect the scope and outcome of the analysis. No matter whether the contemplated transaction is the sale of immovable property or another juridical act requiring prior authorisation, the assessment revolves around the purpose of the transaction and the benefits that it may bring to the person lacking full legal capacity.

The above remarks indicate that the proceedings considered should not be characterised as a matter affecting the rights in rem in an immovable property.

The Court underlined also the practical aspect of this interpretation:

It is obvious that the family court of the place of residence of the person lacking full legal capacity, which appointed the guardian, placed the ward in the care home and supervises the protection, is the best informed about the adults concerned’s circumstances, conditions, views and needs, i.e. the factors that play a crucial role in deciding whether the transaction ought to be authorised.

Conclusion

Based on the above, the Court decided that the case should be classified as a matter relating to guardianship, an area for which Polish courts are not vested with exclusive jurisdiction. The recognition of foreign judgments cannot accordingly be refused in accordance with Article 1146 CCP.

2 comments on “Foreign Judgments Relating to the Protection of Adults and their Recognition in Poland

  1. Thanks for the post, Anna! Had the Hague Convention on the International Protection of Adults been in force in the relations between Germany (a party to that Convention) and Poland, the matter would have likely been dealt with in a straightforward, unproblematic way. The Convention addresses the whole set of issues that may arise in connection with the protection of adults in a cross-border scenario, including whether a measure of protection given in one contracting State (the measure whereby a guardian is appointed and entrusted with the power to represent the protected adult, the measure whereby the guardian is authorised to exercise such powers with respect to a given transaction etc.) may be relied upon in another. Is the ratification of the Convention by Poland a subject of discussion, at the political or at the academic level, in the country? And, apart from ratification: what if, in the case in question, the German court’s ruling had been denied recognition? Would the courts in Poland possess jurisdiction to authorise the guardian to proceed with the transaction in a situation like the one described in the post (with the adult being a foreign national, living abroad, and the only connection with Poland being – apparently – the location of the immoveable in Poland)? And, finally, assuming that the answer to the latter question is in the affirmative: based on which law would a Polish court assess the guardian’s application?

    • Anna Wysocka-Bar

      Pietro, Thank you for your comment!
      Poland signed the Hague Convention back in 2008 but have never ratified it. The ratification was planned few years ago (in 2014, 2015), within a much wider debate about the need for the fundamental change in the domestic legislation concerning protection of adults, in particular when it comes to the institution existing now in Poland which is a partial or a complete incapacitation. A general outline for a future legislation (amending civil code, but also private international law act, as well as code of civil procedure) was agreed in 2015 (the drafting process is documented here, at the website of the government – in Polish). Unfortunately, I am not aware of a draft legislation that would be the direct result of this debate. In the meantime, there were elections to the Parliament by the end of 2015 and a new government with its own priorities, which – as it seems to me – lost its interest in this subject…
      Also, at the academic level, ratification was encouraged (see for example, A. Juryk, The protection of adults in private international law, Silesian Journal of Legal Studies 2016, vol. 8, pp. 27-43).
      Answering your second question, in the case described above the lower instance court ruled that recognition is not possible, because of exclusive jurisdiction of Polish courts in this matter due to the location of the immovable property in Poland. So, yes – theoretically, Polish court would have jurisdiction to grant an authorization. Now, we know that this standpoint was erroneous. But, if we imagine that an application is brought to the Polish court, it would still assume jurisdiction based on Article 1107 CCP. In general, pursuant to Article 1107(1) CCP, jurisdiction in matters relating to guardianship is based on Polish nationality or domicile/habitual residence of the ward in Poland. However, in accordance with Article 1107(2) CCP, Polish courts have jurisdiction also with respect to decisions concerning estate located in Poland of a foreigner with neither domicile nor habitual residence in Poland, as long as it is necessary for the interests of this foreigner. What is more, pursuant to Article 1107(3) CCP, Polish courts have jurisdiction in other cases [other than these covered by section 1 and 2 of 1107 CCP], if there is a sufficient connection with Poland.
      In such cases, Polish court would apply Polish PIL Act 2011 to determine applicable law. Pursuant to Article 60(4) PIL Act 2011, in cases listed in Article 1107(2) and (3) CCP, Polish law applies. Polish (substantive) law also knows the institution of an authorization for the disposal of a property owned by the ward, so I do not foresee problems at this stage.
      In the resolution described the Supreme Court suggested that in general, the law of habitual residence governs such authorization, and that is why this particular case should be dealt with in Germany, a not in Poland. As you might notice, this statement is not necessarily consistent with the state of law in Poland (namely, Article 60 PIL Act 2011).

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