Decision

DECISION № 3 OF 8 JULY 2008
ON CONSTITUTIONAL CASE № 3/2008

The proceedings conform to Art. 149, para 1, subpara 2 of the Constitution.

The President of the Republic of Bulgaria claims that § 1 of the act amending the Code of Civil Procedure (promulgated, DV, № 50 / 30.05.2008) which amends Art. 84, item 1 of the CCP (promulgated, DV, № 59 / 20.07.2007 ) is anticonstitutional as it disagrees with Art. 4, para 1; Art. 8; Art. 17, para 2, Art. 19, para 2; Art. 117, para 3; and Art. 121 of the Constitution. The amendment reinstates the former privilege of the State and of the institutions of the State , i . e . the exemption from State-levied charges on initiated claims of private State receivables and title on assets that are private State property repealed by the original version of Art. 84, item 1 of the CCP.

The challenge based on Art. 149, para 1, subpara 2 of the Constitution is justified.

The original version of Art. 84, item 1 of the new CCP (DV, № 59 / 20.07.2007) provides that the State and the institutions of the State shall be exempt from State-levied charges in all events except in the event of claims of private State receivables and title on assets that are private State property. The provision challenged of § 1 of the act amending the CCP (DV, № 50 / 30.05.2008 ) deletes the words ,, except for claims of private State receivables and title on assets that are private State property” in Art. 84, para 1 of the CCP. In these circumstances the remaining part of the text of Art. 84, para 1 of the CCP that reads that the State and the institutions of the State shall be exempt from State-levied charges in the event of all claims regardless of the subject of the proceedings, remains in force, free of the implied limitation.

The State-levied charges payable by the claimants upon the presentation of a claim are determined by the fact that the administration of justice is a public service. The payment of a certain sum of money is related to the delivery of the service and to the encouragement of individuals and legal entities to exercise their right of taking legal action in good faith and to limit it to claims that are potentially justifiable and thus deter unjustified litigations.

The exemption from State-levied charges as the legislating authority sees it, is determined by the right to take legal action or the ways of defending it – Art. 83, para 1 of the CCP, and not by the type of legal subject that may proceed with a claim. According to the text cited these are proceedings initiated by workers, employees and members of cooperatives, deriving from contracts of employment, claims for alimony or indemnity for damages or claims by a prosecutor or by special agents of a person whose domicile is unknown. The great importance of the rights that are defended by these claims pertain to human reproduction, their holder or their exercise not by the holder of the right but by a procedural substitute or special agent necessitate that they be exempted by virtue of a codified exemption in order to ensure fair trial in the said categories of litigation. It is in this context that the provision of Art. 83, para 2 of the CCP is to be interpreted, viz. that the court judges with consideration for legal criteria that should the costs of the court are not affordable to individuals, the charges and expenses of the court shall be struck off not in line with a legal text for categories of litigations but in tune with the discretion of the court as to whether a claimant can afford the costs of the court.

Art. 84 of the CCP, though the heading is ,,Exemption in particular cases” where certain claimants are referred to – the State and the institutions of the State, the Bulgarian Red Cross and the municipalities, it is the nature of the right which must be protected that weighs on the exemption. Regarding the Bulgarian Red Cross as a humanitarian organization, the exemption as per Art. 84 item 2 of the CCP is justified as the organization works exclusively in the public interest. The exemption of the State, the institutions of the State – Art. 84, item 1 (the original version of the text in DV, № 59 / 20.07.2007) and of the municipalities – Art. 84, item 3 of the CCP, refers to claims of public state, respectively municipal receivables and title on assets that are public state, respectively municipal property with an argument of the opposite to the exception, for which there is no such exemption and the Constitution-defined subdivision of state and municipal property into public and private – Art. 17, para 2 of the Constitution.

Exemption of State-levied charges in the two cited hypotheses is determined by the nature of the units that are public property and the public receivables of the State and municipalities. The former meet public needs of nationwide or regional importance by communal utilization or else are given to the central government or municipal authorities so as to perform their functions; the latter are given to finance State and municipal activities.

The CCP text, which provides for an all-out exemption from State-levied charges has evolved and the evolution reflects that change in the Constitution texts dealing with state-owned property. Art. 63, para 4 of the CCP of 1952 ( revoked ) originally provided for the exemption of all institutions of the State when they are claimants in civil suits. That privilege survived even after the adoption of the Constitution, which is now in force; it is a case of the étatatisme of the revoked Constitution text that defines state property as all-nation property without any differentiation into state and municipal, whereas these are subdivided into public and municipal property. The amendment that Art. 63, para 4 of the CCP (repealed) constitutes enlarges the exemption to cover municipalities; however, it is only in Art. 84, items 1 and 3 of the new CCP's original version that the latest differentiation is complied with in the exemption of State-levied charges payable both for state and municipal property. However , the amendment of Art . 84, item 1 of the CCP with the challenged paragraph 1 of the act amending the CCP keeps it only in relation to municipal property.

That amendment creates a privilege to state property despite its changed nature in the existing Constitution – violation of its Art. 19, para 2. The State as the titleholder of private state property and private state receivables that serve more limited interests as compared to public ownership, and public receivables related to participation in businesses and in civil circulation is a subject of private law. In that capacity it is equal to the natural persons and legal entities that are holders of the right to private ownership, an actor on the market according to the cited Constitution text, which provides for equal legal conditions for business, even when it is a business run by the State or by municipalities.

That equality is relatable not only to the substantive matter of the State's private rights but also to the procedural assurance of their protection, which includes, inter alia, fair trial. It is the context of Art. 17, para 1 of the Constitution of law-guaranteed protection of property and its materialization by claims on assets and receivables that are private State property.

Whenever a privilege is created for the State and the institutions of the State by their exemption of State-levied charges for all categories of claims, whereon the public and private State titles are treated equally, the State is in a privileged procedural position vis-à-vis the other private subjects – individuals and legal entities, the municipalities included, and this is a breach of Art. 121 of the Constitution. That Constitution text provides that the parties to civil proceedings shall be subject to a procedure that is identical for both in order to ensure the equality of trial. The requirement is breached when and if the State grants facilitation of a defense proceedings in the hypothesis it is a party to a civil procedure as a private law subject. This ignores the Constitution-established subdivision of state property into public and private in Art. 17, para 2 of the Constitution as the privileged procedure of the protection of the title of the State on public assets extends also to its private assets.

The conceptions of budget relevance in the sense of the justification of the act amending the CCP, i.e. the complete exemption of the State and the institutions of the State of State-levied charges on the claims they may have, including claims of private State receivables and title on assets that are private State property are irrelevant to the constitutionality of § 1 of the Act. The cost of the initiation of proceedings cannot be a justification to exempt the State as this puts it in a privileged position in relation to individuals and legal entities as claimants in civil suits despite the fact that the State possesses a significantly larger financial resource than these to initiate such proceedings.

The circumstance that the State-levied charges on the claims of the State and institutions of the State are paid from the National Budget and go back into it, being transferred to the account of the court that has been approached, fails to support the opposite view. This is so as public finance is not an amorphous monetary resource but is structured into subsystems (the Government budget, the budget of the National Assembly and the budget of the Judiciary according to Art. 1 of the National Budget Structure Act) and on their turn these subsystems consist of separate target accounts intended to ensure the financing of the institutions of the State and the functions of the three branches of power.

The challenged text of § 1 of the act amending the CCP is at variance with the principle of the state committed to the rule of law – Art. 4, para 1 of the Constitution. The Code of Civil Procedure was promulgated in Durzhaven Vestnik, № 59 / 20.07.2007 , however it went into force on 01.03.2008 – § 61 of the Transitional and Concluding Provisions. The act amending the CCP was passed and promulgated immediately after ( DV , № 50 / 30.05.2008), and according to § 48 of the Concluding Provisions this makes it retroactive reckoned from the date on which the CCP went into force – 01.03.2008 whereby the State and the institutions of the State are relieved of the obligation to pay a charge on the claims to protect private receivables and assets. This affects legal security and stability as a feature of the state committed to the rule of law, which calls for long-term and conceptually consistent legal regulation of relations within the society.

In the case in question there is a double obligation which is struck off with a change in the Code of Civil Procedure – § 1 of the act amending the CCP. On the one hand, the State is the addressee of the prescription as per Art. 84, item 1 of the CCP's original version and bound to pay a charge on claims of private receivables and title on assets that are private state property; on the other hand, the payment must be binding on the State which is the author of this legal rule. The challenged § 1 of the act amending the CCP allows a privileged defense procedure for such rights in deviation from the procedure for the rest of private law subjects which are subject to a state fee on the claims they may have. By doing so the State excludes itself from the respect for procedures that it itself has codified.

Therefore, § 1 of the act that amends the CCP and that the President challenged should be pronounced anticonstitutional.

Председател: Румен Янков