Do the courts of the Member State where the unlawfully occupied housing is situated have exclusive jurisdiction over claims for compensation for the non-contractual use of a real property? Can such compensation be regarded as a matter relating to tort? Can an occupant residing in a different Member State than the other occupants be sued together with them as anchor defendants? To know the answers, read our article which analyses a fresh judgment of the CJEU.
Smartlegal Schmidt&Partners reports from Hungary:
- Facts
The Applicant’s parent concluded a tenancy agreement with a Polish municipal authority (“Landlord”) for a housing in Poland where the tenant and his children, including the Applicant lived together. The Landlord terminated the tenancy agreement however the occupants did not vacate the housing.
In 2013, the Landlord brought an action before the Koszalin District Court for compensation for the non-contractual use of the housing. The court issued an order for payment which was received by one of the defendants on behalf of all the other. In the lack of a challenge, the order for payment became valid and enforceable.
Ten years later, the Applicant lodged a statement of opposition to the order for payment, requesting that the action against her be dismissed as inadmissible. The Applicant claimed that the Polish District Court lacked jurisdiction given that since 2007 she had been residing solely in the Netherlands.
The Polish District Court had certain questions regarding the application of the Brussels Regulation[i], thus he stayed the proceeding and referred the case to the Court of Justice of the European Union.
- The temporal scope of the Brussels Regulation
Given that the original procedure was initiated in 2013 that is to say before the entry into force of the Brussels Ibis Regulation[ii] but the Applicant lodged her statement of opposition in 2023, after the entry into force of the said law, the CJEU had to decide whether the Brussels I[iii] or the Brussels Ibis Regulation shall be applicable in the present case.
According to the CJEU the statement of opposition which includes a request of the review of the case concerned must be regarded as part of continuation of the initial action. The request made by the Applicant is an application initiating proceedings which does not constitute proceedings separate from those opened by the initial action, but the extension of that action.
Thus, the (former) Brussels I Regulation shall be applicable to the case, however it must be added that the grounds for jurisdiction which shall be examined by the CJEU are the same in the former and the recast version of the Brussels Regulation.
- Can a compensation for the non-contractual use of a housing be considered as rights in rem in immovable property or tenancies of immovable property?
Given that based on the Brussels Regulation[iv] the courts of the Member State where the immovable property concerned is situated have exclusive jurisdiction in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the CJEU had to decide whether the action for compensation for the non-contractual use of a housing may be considered as such.
According to the CJEU the action seeking payment of compensation for the non-contractual use of a housing after the termination of the tenancy agreement, does not come within the scope of the rule of exclusive jurisdiction.
First, the assessment of such an action does not require on-site investigations, nor does it involve the assessment of facts or the application of rules and practices of the locus rei sitae in a way as to justify conferring exclusive jurisdiction on the court where the real property is situated.
Second, the action seeking payment of compensation for the non-contractual use of a housing is not covered by the term ‘rights in rem in immovable property’ because such an action is not based on a right in rem, having effect erga omnes but a right in personam which may only be relied upon against the alleged debtor from whom that compensation is sought. Furthermore, an action against the Applicant who was not a party of the terminated tenancy agreement, cannot be included in the concept of ‘tenancies of immovable property’ because such an action does not directly relate to the right and obligations arising from that tenancy.
Lastly, based on the Schlosser Report[v] actions for damages based on the infringement of rights in rem do not fall within the scope of the rule of exclusive jurisdiction because in that context the existence and content of such rights in rem, usually rights of ownership, are only of marginal significance.
- Can a compensation for the non-contractual use of a housing be considered as a matter relating to tort?
Another ground for the jurisdiction of the Polish Court could be if the claim for a compensation for the non-contractual use of a housing was considered as a matter relating to tort, delict or quasi-delict since in this case the courts of the Member State where the harmful event occurred may have jurisdiction.[vi]
According to the settled case-law of the CJEU the concept of a matter relating to tort, delict or quasi-delict includes all claims which
- do not concern matters relating to a contract (i.e. claims based on an obligation freely consented to by one person towards another) and
- seek to establish the liability of a defendant.
As to the first condition, the claim for compensation against the Applicant cannot be considered as a matter relating to a contract because such a claim is based on the fact that a person has occupied immovable property without the free consent of the landlord expressed in the form of a tenancy agreement.
When it comes to the second condition the claim against the Applicant is based on an obligation which originates in a harmful event, since that obligation does not arise irrespective of the defendant’s conduct, with the result that a causal link may be established between the damage and any unlawful act or omission committed by that defendant.
Based on the above, theoretically, the Polish Court could declare that it has jurisdiction, however certain other circumstances shall be taken into account. Namely, the referring court shall examine whether the Applicant personally occupied the housing, otherwise there is no connecting factor which would justify the jurisdiction of the Polish courts.
- Can the Applicant be sued together with other anchor-defendants residing in Poland?
Last, but not least the CJEU had to examine whether the Applicant as a co-defendant may be sued before the Polish court on the ground that the claims are so closely connected that they had to be determined together.[vii]
In relation to this jurisdiction ground the Luxembourg Court reminded that this ground for jurisdiction may only be applicable if there is a divergence in the outcome of the disputes, which arises in the context of the same situation of fact and law. Furthermore, the co-defendants cannot be used as anchor defendants for the sole purpose of removing one of them from the jurisdiction of the courts of the Member State in which that defendant is domiciled.
In the present case, the CJEU had doubts whether the Applicant may be sued as a co-defendant before the Polish courts. While it is true that subject matter and the purpose of the claims is identical, the claims are severable in so far as different judgments could be delivered in respect of the co-defendants, depending on whether each of them occupied the housing. In addition, there is no joint and several liability between the co-defendants which appears to imply an individual examination of the facts.
- Comment
In the present case, the CJEU examined various grounds of jurisdiction that the claimant could invoke in order to sue an unlawful occupant of a housing who is lately domiciled in a different Member State –together with other co-occupants – in the Member State where the property is located.
Relying on the exclusive jurisdiction ground which confers jurisdiction on the courts of the Member State where the housing is situated could be a natural choice, but the CJEU made it clear that the compensation for the non-contractual use of the housing can be considered neither a right in rem in immovable property nor tenancies of immovable property.
Invoking that the claims against different co-defendants shall be determined together might also appear reasonable; nevertheless, in the present case, the Court seems to be on the opinion that the claims are not so closely connected which would justify the need for joint adjudication.
Based on the CJEU’ s judgment, the appropriate solution may be for the claimant to argue that the claim for a compensation for the non-contractual use of a housing is considered as a matter relating to tort, in which case the court where the harmful event occurred, namely where the housing is situated, could have jurisdiction.
In this article we analysed the judgement C-99/24 of the CJEU.
Written by Anita Vereb
SMARTLEGAL is a team of agile business & litigation lawyers in Budapest, Hungary, helping international corporate clients and individual entrepreneurs doing business in Hungary. For more information please visit our website at Smartlegal.hu
[i] Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Regulation) and Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (Brussels Ibis Regulation)
[ii] Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (Brussels Ibis Regulation)
[iii] Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Regulation)
[iv] Article 22 (1) of the Brussels I Regulation; Article 24 (1) of the Brussels Ibis Regulation
[v] Report by Professor Dr Peter Schlosser on the Convention of 9 October 1978 on the Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice
[vi] Article 5 (3) of the of the Brussels I Regulation; Article 7 (2) of the Brussels Ibis Regulation
[vii] Article 6 (1) of the Brussels I Regulation; Article 8 (1) of the Brussels Ibis Regulation