On 19 March, the judges of the Department of Civil Cases of the Supreme Court discussed the views expressed in the public space regarding the non-observance of the judgment of the Constitutional Court of 8 March 2017 when examining the civil case No SKC-284/2017 (C04281907). In this case, the judgment was delivered on 28 December 2017. Judges of the Department of Civil Cases admitted that the critical opinion was expressed without taking into account the different factual and legal circumstances of cases examined by the Constitutional Court and the Department of Civil Cases of the Supreme Court. Consequently, accusations of non-observance of the judgment of the Constitutional Court shall be rejected as unfounded.

In this specific case, the Department of Civil Cases of the Supreme Court had to deal with the issue of protecting the bona fide acquirer of rights from a point of view of the civil law. By contrast, the Constitutional Court assessed the compatibility of the provisions of the Criminal Procedure Law with the Constitution of the Republic of Latvia. By making a number of general considerations regarding the balancing of the protection of the legitimate interests of the bona fide acquirer and the actual owner of real estate, the Constitutional Court has emphasized that there are objective differences between the criminal procedure and the civil procedure, including those relating to the legal relations concerned. The Constitutional Court indicated that the aims and principles of both procedures are different.

As it is apparent from the judgment of the Constitutional Court, in the case under its consideration, the disputed real estate was recognized as criminally acquired property with the decision of the initiator of the proceedings – investigator. The initiator of the proceedings had decided to return the criminally acquired property in question, based on the Section 360, Paragraph one of the Criminal Procedure Law, to the person who lost it as a result of a criminal offense. When assessing the different opinions of recognized experts on the extent to which and by what means the rights of the bona fide acquirer are protected and recognizing that there is no strict preventive law enforcement system regulated by law, the Constitutional Court concluded that the exception to the principle of the protection of the bona fide acquirer is permissible if the legal relationship is based on a criminal offense.

In contrast, the disputed real estate was not considered as criminally acquired property in the case examined by the Department of Civil Cases of the Supreme Court; criminal proceedings are still ongoing on the facts of falsification of documents and fraud. Consequently, regarding the civil case, the issue of the validity of concluded purchase agreements was resolved on the basis of the norms of the Civil Law concerning the lack of will to conclude a transaction, without assessing whether a criminal offense has taken place and whether the property in question was to be considered as criminally acquired. Such questions are to be examined only in the context of criminal proceedings and procedures. Taking into account the opinion of the Constitutional Court that the exception to the principle of the protection of the bona fide acquirer exists in cases where the legal relationship is based on a criminal offense and the principle recognized in legal doctrine that the exceptions are to be interpreted restrictively, the court examining the civil case had no basis for applying the exceptional provision to the situation when the property was not recognized as criminally acquired in criminal proceedings.

The judges of the Department of Civil Cases agreed to carry out an in-depth analysis of the situation in order to assess in detail the solutions to legal issues contained in the decision of the Department in relation to the considerations expressed in the judgment of the Constitutional Court and their possible impact on the examination of civil cases.

 

Information prepared by

Rasma Zvejniece, the Head of the Division of Communication of the Supreme Court

E-mail: rasma.zvejniece@at.gov.lv, telephone: +371 67020396, +371 28652211