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.
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 11071 CCP, 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 11102 CCP 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 11071 CC, the question arose of whether it may be classified as affecting the rights in rem in immovable property within the meaning of Article 11102 CCP.
A Case Affecting the Rights in rem in Immovable Property?
The Court explained that the characteristic feature of matters covered by Article 11102 CCP 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 11102 CCP, 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.
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.