The condition of possession applied only to legal successors of the prior owner of Warsaw property and became irrelevant after 1946
In judgments dated 22 May 2019, the Province Administrative Court in Warsaw issued its first extensive ruling on the condition of possession under the Warsaw Decree. The court held that this condition applied only to the legal successors of the prior owner of the real estate and was a condition for effective filing of a decree application, not granting of the application. And after 1946, this condition became irrelevant.
The judgments of 22 May 2019 were issued in upholding complaints against decisions of the Commission for Reprivatisation of Warsaw Properties, involving property covered by the Warsaw Decree at ul. Smolna 32. The commission had set aside a decision returning property to the heirs of the pre-decree owners.
In these cases, clients of our law firm obtained a decision in 2008 restoring to them land developed by a pre-war tenement building erected by their ancestors. However, the decision from 2008 was issued with the involvement of two pre-decree owners whose post-war fate was unknown and who were represented in the issuance of the restitution decision by a court-appointed curator. After years of effort, the curator managed to establish the date of death of those owners and to identify the owners’ heirs, which enabled an amendment of the restitution decision in 2014 to replace the deceased owners with their heirs.
The review commission found that the restitution decisions were issued in gross violation of the law, as the 2008 decision was made in favour of deceased persons. Moreover, the commission accused the Mayor of Warsaw of issuing restitution decisions without making findings on possession of the property by the pre-decree owners as of the time they filed a decree application in the 1940s.
In the hearings before the Province Administrative Court in Warsaw, apart from clients represented by our firm, the participants also included representatives of the commission and the City of Warsaw, as well as Jan Śpiewak on behalf of the Free City of Warsaw association (Wolne Miasto Warszawa). The court upheld our clients’ complaint and set aside the decision against them by the commission. In the justification for the judgments, the court presented an extensive interpretation of the condition of possession under the Warsaw Decree and addressed the defect in the restitution decision from 2008 connected with issuance of the decision in favour of persons who were no longer alive.
Condition of possession under the Warsaw Decree and the review commission’s interpretation
Under Art. 7(1) of the Warsaw Decree (the Decree on Ownership and Usufruct of Land in Warsaw of 26 October 1945), the prior owner of land, the owner’s legal successors in possession of the land, or persons representing the owner’s rights, or usufructuaries in the case of land delivered under administration and use under the applicable regulations, could file an application within 6 months of the date the land came into possession of the commune for award to the prior owner of the right of perpetual tenancy of the land at a token rent, or the right to develop the land for a token fee.
The topic of the condition of possession of the land under the Warsaw Decree was raised again during the media debate surrounding the recent “reprivatisation scandal.” It was argued that the authority issuing a decision under the decree was supposed to determine whether the person filing the decree application was in possession of the Warsaw property at the time of filing the application. Commentators suggested that the phrase setting forth the condition of possession (being “in possession”) supposedly applied to all categories of persons mentioned in Art. 7(1) of the decree, not only the group mentioned immediately before the phrase—legal successors of the prior owner.
Starting from this assumption, in its decisions the review commission presents an interpretation under which a mandatory element of decree decisions issued by the Mayor of Warsaw was a finding of possession of the Warsaw property by the person filing an application under the decree. In other words, in relation to every applicant—regardless of category—the Mayor of Warsaw should establish and describe in the decree decision the fact of possession of the Warsaw property at the time of filing the decree application. Thus a finding of possession at the time of filing the decree application would determine the formal admissibility of the application, and a failure to confirm possession would render the application ineffective. Significantly, in its decisions, the commission equates possession only to physical and factual holding of property, thus ignoring the wealth of case law and legal literature applying the notion of possession to a broadly understood ability to decide on the fate of the property, regardless of factual management of the property.
In the commission’s view, the absence of such a finding in the justification for a restitution decision constituted a gross violation of law, resulting in vacating the decree decision.
Correct interpretation of condition of possession
The Province Administrative Court in Warsaw rejected the interpretation of the condition of possession in Art. 7(1) of the Warsaw Decree presented by the review commission. In an extensive justification, the court unequivocally held that the condition of possession was solely a condition for the effectiveness of filing of a decree application and could not provide a basis for a negative ruling on the application. Moreover, the court found that the condition of possession referred only to the legal successors of the prior owner of the Warsaw property, and thus did not need to be examined if the decree application was filed by the owner or persons representing the owner’s rights.
The court based this interpretation on the provisions of the Napoleonic Code governing inheritance proceedings through the end of 1946. In this respect the court explained that because the land throughout Warsaw had been communalised, at the time of entry into force of the Warsaw Decree the legal successors of the prior owner—like the owners—could not prove their standing through a certificate from the land and mortgage register, as they could not enter their rights to the property in the register. In that situation, the drafters of the decree assumed that the appropriate document confirming the rights and claims of the legal successors to the property would be a ruling by the court on entry into possession of the property. Under the Napoleonic Code, such a ruling was required to demonstrate rights to an inheritance, and also to exclude a finding that the estate was heirless (spadek wakujący), which, upon fulfilment of other conditions, would enable the estate to be assumed by other entities, including the state. Under this approach, the phrase “in possession of the land” involved only a formal demonstration of the rights to the inheritance from the prior owner of the Warsaw property through submission of the relevant ruling on entering into possession of the real estate, in order to rebut the presumption of an heirless estate (wakujący spadek). At the same time, obtaining such a ruling would not entail taking actual control over the property, and, as the court pointed out, that was not a requirement under Art. 7(1) of the Warsaw Decree insofar as this phrase was used.
The court also pointed out that even if this phrase were understood as a direction for the legal successors of the prior owner to demonstrate possession of the property in the civil-law sense, such possession would have to be examined under entirely different criteria than those used by the review commission. The court indicated that possession of property is not limited—as the commission would have it—to physical holding of the property, but refers to a general influence over the fate of the property. Significantly, under the Napoleonic Code, possession was a concept understood much more broadly than under contemporary civil law. For this reason as well, all attempts by the review commission to deny possession of the real estate by pointing to a lack of evidence of a presence of the persons in question on the property could not be accepted in light of the rich Polish and French legal literature and case law on the subject of possession of property.
Finally, apart from its remarks on the condition of possession and is applicability only to legal successors of the prior owner of the property, the Province Administrative Court in Warsaw denied the review commission’s ability to undermine the decree decisions in the case of the property at ul. Smolna 32. This is because a ruling on entry into possession of the real estate by the prior owners was found in the file from the decree proceeding for that address from the 1940s. Moreover, our firm located documents demonstrating that from 1945 until the mid-1950s, the prior owners had made renovations and additions to the property and also administered the property on an ongoing basis. In light of this evidence, even if the commission’s view of the condition of possession of the property were upheld, the ruling by the commission would have succumbed to the court’s criticism in this particular case.
The court’s final argument against the commission’s erroneous interpretation of the condition of possession was that it entirely ceased to be relevant after 1946. First and foremost, inheritance law changed entirely on 1 January 1947, and in this respect the Napoleonic Code ceased to be in force. Simplification of inheritance procedure eliminated the possibility of drawing negative consequences from the presumption of an heirless estate, and thus there was no longer any need to conduct proceedings for the heirs’ entry into possession of the inherited estate. A consolidated procedure for confirming rights to an inherited estate was introduced at that time. Significantly, in all regulations adopted after 1946 referring to the Warsaw Decree or claims arising out of it, the condition of possession was no longer mentioned, which may be interpreted as a systemic abandonment of this requirement in the construction of decree-based rights and claims to Warsaw real estate. For this reason as well, the court held that the condition of possession (properly understood as a formal condition for demonstrating rights to Warsaw property inherited from the prior owner) could be relevant only in cases where the decree ruling was issued prior to 1947.
Issuance of a restitution decision in favour of a deceased person is not always a gross violation of law
In the decision in question, the Province Administrative Court in Warsaw partially upheld the review commission’s assessment that issuance of a restitution decision in 2008 in favour of deceased pre-decree co-owners of the real estate was a violation of law, as such persons could not be parties to the restitution decision even though a curator was appointed for them for purposes of the proceeding as persons whose whereabouts were unknown. But unlike the commission, the court found that such a violation of law is not an aggravated defect in the restitution decision from 2008 that would require it to be eliminated from legal circulation.
The court reached this position through an exhaustive evaluation of the legal, economic and social consequences exerted by the decision in question. In this case, thanks to the initiative of the curator, the post-war fate of the deceased co-owners was established, and their heirs were identified. This enabled amendment of the 2008 restitution decision in 2014 to reflect the complete set of heirs of all pre-decree co-owners of the real estate. Thanks in part to this, in the court’s view, the defect in the restitution decision from 2008 connected with issuance of the decision in favour of deceased persons did not merit a finding that the decision grossly violated the law. Such a defect is acceptable under the rule of law and did not require invalidation of the restitution decision from 2008.
The two judgments of the Province Administrative Court in Warsaw of 22 May 2019 (cases I SA/Wa 2145/18 and I SA/Wa 2146/18) are not yet legally final, and the review commission has already announced that it will file cassation appeals with the Supreme Administrative Court. Nonetheless, the court’s justification for these judgments makes an important contribution to the debate over the formal requirements for admissibility of a Warsaw Decree application, and also provides the first such extensive and thoroughly grounded statement in the case law on the condition of possession set forth in Art. 7(1) of the Warsaw Decree.
On the other hand, the reasoning by the court demonstrates that the review of the legality of restitution decisions through the extraordinary avenue provided for in the regulations governing the Commission for Reprivatisation of Warsaw Properties can lead to hasty and erroneous interpretations of the Warsaw Decree lacking a solid grounding in the wording and understanding of regulations in force at the time the decree was introduced.
Dr Radosław Wiśniewski, Reprivatisation practice and Private Client practice, Wardyński & Partners