Analysis of Verdict Rev1.No.247/18 of 17.04.2019 of the Supreme Court of the Republic of North Macedonia
15.09.2022
1. The facts of the case
Here, the defendant, acting as a plaintiff, led proceedings for compensation of non-material damage against the plaintiff, acting as a defendant, in which proceedings the following Verdicts have been adopted:
- Verdict P.no. 5553/09 dated 01.10.2010 of the Basic Court Skopje 2 Skopje with which the claim of the plaintiff was partially awarded and
- Verdict GŽ.no. 985/11 dated 12.05.2012 of the Appellation Court Skopje, which partially confirmed the first-instance Verdict.
However, after a revision was submitted, the Supreme Court of Republic of North Macedonia with Verdict Rev.no. 1012/11 dated 05.12.2013, accepted the revision, changed the contested Verdicts, and rejected the claim of the plaintiff for compensation of non-material damage as unfounded, and the plaintiff was charged with the costs of the procedure.
Due to the fact that the defendant paid the plaintiff compensation for non-material damage on the basis of the first-instance and second-instance Verdicts, which were abolished by the Verdict of the Supreme Court, the defendant now, acting as a plaintiff, initiated proceedings against the plaintiff, who is now sued, for unfounded acquisition. In this procedure, several Verdicts have been adopted in the first, second and third instance, and the Verdict in question for analysis by the Supreme Court Rev1.No. 247/18 dated 17.04.2019 is final.
The Verdict in question rejected the claim of the plaintiff against the defendant for unfounded acquisition for the amount paid as non-material damage, and the claim for unfounded acquisition for the amount paid as interest and expenses as secondary claims was accepted.
In the analyzed Verdict, the Supreme Court, referring to Article 205 of the Law on obligations, agreed with the conclusion of the second-instance court that the first-defendant had acquired the amount that was paid to her as non-material damage due to injury of the body and impairment of health, based on legally binding and executive court Verdicts, so that she is a conscientious acquirer, because she could not have known that the plaintiff would submit a revision, nor could have known the outcome of that revision. Whereas, according to this court, the first-defendant unfoundedly acquired only the secondary claims for interest and expenses, because the provision of Article 205 of the Law on obligations did not apply to these claims.
2. Meaning and application of material law
According to the general rule of unfounded acquisition regulated in Article 199 of the Law on obligations, when a part of the property of one person is transferred in any way to the property of another person, and this transfer has no basis in any legal matter or in the law, the transferee is obliged to return that part of the property, if that is possible, and otherwise he is obliged to compensate the value of the benefit achieved. The transfer of property also means the acquisition of a benefit by an action performed. The obligation to return, i.e. to compensate for the value, also arises when something is received considering the basis that was not fulfilled or which later fell off.
Presumptions for the creation of this type of obligation relationship are an increase in property (enrichment) on one side, which can consist in an increase in property, but also in a reduction of losses, expenses savings, etc., a decrease in property (impoverishment) on the other side, a correlation between the decrease and increase in the property of those persons and the absence (non-existence) of the legal basis that would legally justify the decrease and increase in the property of those persons.
From the judicial practice in relation to Article 199 of the Law on obligations, the following position has been noted: "When the plaintiff is awarded a certain amount by a final Verdict that he received through forced execution, he is obliged to return the amount to the defendant before the end of the dispute if with an extraordinary legal remedy the verdict was annulled" (Supreme Court of Macedonia Rev. 433/85 dated 03.10.1985).
According to Article 205 of the Law on obligations, one cannot request the return of unfoundedly paid amounts as compensation for damage due to bodily injury, health impairment or death, if the payment was made to a conscientious acquirer.
However, a condition for the acquirer to be considered conscientious is that he did not know nor could he have known, taking into account the circumstances of the case, that he received the amounts paid to him as compensation for non-material damage without legal grounds.
Therefore, for the correct application of the provision of Article 205 of the Law on obligations, it is necessary to determine the issue of "the conscientiousness of the acquirer of the funds".
In addition to the analyzed Verdict, the following decisions were made by the courts in Republic of North Macedonia in connection with the application of the provision of Article 205 of the Law on obligations:
Verdict 18 P1-1865/12 dated 02/06/2013 from the Primary Court Skopje 2 Skopje, final and enforceable (the Court considers that the claim for unfounded acquisition is founded because the basis on which the payment was made has fallen off, so the defendant is under obligation to return the received funds to the plaintiff in accordance with Article 199 of the Law on obligations)
Decision GŽ-1665/15 dated 18.11.2015 by the Appellation Court Skopje (the Court is of the opinion that since a revision was submitted, the defendant was obliged to wait for the outcome of the revision procedure, so in that sense the first instance court should determine correctly whether the acquirer is conscientious);
Verdict 18 P1-1865/12 dated 02/06/2013 from the Primary Court Skopje 2 Skopje, final and enforceable (the Court considers that the claim for unfounded acquisition is founded because the basis on which the payment was made has fallen off, so the defendant is under obligation to return the received funds to the plaintiff in accordance with Article 199 of the Law on obligations);
Verdict GŽ-2483/16 dated 30.11.2017 from the Appellation Court Skopje (the Court considers that by adopting the decision of the Supreme Court, the defendant unlawfully keeps the funds and is obliged to return the unlawfully charged amount because he is an unconscientious acquirer, which resulted in his unfounded enrichment, in addition to the fact that he himself submitted a revision regarding the awarded amount, so he knew or could have known that there would be a change in the amount);
Verdict 12 P4-494/16 dated 12.07.2017 from the Primary Court Skopje 2 Skopje (the Court found that the claim is founded, that in the specific case there is a reduction of the property of one party and an increase of the property of the other party, i.e. a correlation between the decrease and increase of the property of those persons and the absence of a legal basis that would legally justify the decrease and increase of the property of those persons. At the same time, the Supreme Court made the final decision according to the positive law and the said decision must be respected and implemented in its entirety. The legal basis fell off with the amendment of the first and secondinstance decision. When there is a revision procedure, it cannot be considered that the defendant is a conscientious acquirer, with an uncertain decision, and the ignorance of the legal norms does not exempt anyone from a possible obligation, responsibility);
At the same time, the Department of Civil Cases of the Supreme Court of Republic of Macedonia has adopted a legal opinion that the amount cannot be claimed back as compensation for damage due to bodily injury, health impairment or death, when the payment was made on basis of a final judgment because the payment was made to a conscientious acquirer, while the fact that in the revision procedure the claimant party was rejected in that part of the claim is not of any influence.
Also, according to the legislation in the Republic of Croatia, in Article 1117 of the Law on Obligation Relations of the Republic of Croatia, in addition to the exception "when the received can be retained", also provides a provision which regulates that "the acquirer is considered unconscientious from the moment of delivery of decision by which the extraordinary remedy is accepted and he is obliged to return what he received on the basis that fell off, with interest from the moment he became unconscientious".
In view of the different judicial practice and the restrictive legal opinion of the Department of Civil Cases of the Supreme Court of Republic of Macedonia, the Verdict in question from the Supreme Court was taken for analysis, in which the provision of Article 205 of the Law on obligations was applied, but the question for the conscientiousness of the acquirer was not correctly determined.
3. Conclusion
Based on the above, it follows that the analyzed Verdict violated the procedure under Article 345 of the Law on litigation procedure, considering that the court incorrectly applied the material law from Article 205 of the Law on obligations in correlation with the provisions of Article 199 of the Law on obligations.
As a matter of fact, with the Verdict in question, the court incorrectly applied the provision of Article 205 of the Law on obligations, for the reason that it did not consider the question of the acquirer's conscientiousness in terms of that, when the acquirer found out that he unfoundedly received the amounts paid to him as compensation for non-material damage and the fact that from that moment the acquirer is no longer a conscientious acquirer.
Namely, it cannot be considered that the acquirer is conscientious from the moment of receiving a Verdict from the Supreme Court, which annulled the Verdicts according to which he was paid compensation for non-material damage and rejected the legal claim of the acquirer for compensation for non-material damage. This is due to the fact that, from that moment, the acquirer already knows that the basis on which the compensation was paid to him has fallen off and, according to the rules for unfounded acquisition, he is obliged to return the amount that he unfoundedly received together with interest from the moment he became unconscientious.
At the same time, from the moment when the acquirer became unconscientious, the exception to the rules of unfounded acquisition cannot be applied because the assumptions for the creation of this relationship are met, so there is an increase in the property of one party and a decrease in the property of the other party, i.e. correlation between the decrease and increase in the property of those persons and the absence of a legal basis that would legally justify the decrease and increase in the property of those persons.
Moreover, since the final decision rejecting the claim for compensation for non-material damage, in accordance with positive law, was made by the court of the highest instance, i.e. the Supreme Court of Republic of North Macedonia, the same decision must be respected and implemented in its entirety.
Having in mind the above, I believe that the interpretation and application of the provision of Article 205 of the Law on obligations should be in the direction that "the conscientious acquirer becomes unconscientious at the moment of delivery of a decision accepting the extraordinary legal remedy and is obliged to return the received after the basis fell off, with interest from the moment he became unconscientious ".
In this sense, in relation to the application of the provision of Article 205 of the Law on obligations, another principled legal opinion should be adopted by the Supreme Court of the Republic of North Macedonia, with the aim of equal application of the laws by the courts, as an essential element of the principle of legal certainty, predictability of legal situations and the rule of law principle, which are one of the most important principles of democracy.
Here, the defendant, acting as a plaintiff, led proceedings for compensation of non-material damage against the plaintiff, acting as a defendant, in which proceedings the following Verdicts have been adopted:
- Verdict P.no. 5553/09 dated 01.10.2010 of the Basic Court Skopje 2 Skopje with which the claim of the plaintiff was partially awarded and
- Verdict GŽ.no. 985/11 dated 12.05.2012 of the Appellation Court Skopje, which partially confirmed the first-instance Verdict.
However, after a revision was submitted, the Supreme Court of Republic of North Macedonia with Verdict Rev.no. 1012/11 dated 05.12.2013, accepted the revision, changed the contested Verdicts, and rejected the claim of the plaintiff for compensation of non-material damage as unfounded, and the plaintiff was charged with the costs of the procedure.
Due to the fact that the defendant paid the plaintiff compensation for non-material damage on the basis of the first-instance and second-instance Verdicts, which were abolished by the Verdict of the Supreme Court, the defendant now, acting as a plaintiff, initiated proceedings against the plaintiff, who is now sued, for unfounded acquisition. In this procedure, several Verdicts have been adopted in the first, second and third instance, and the Verdict in question for analysis by the Supreme Court Rev1.No. 247/18 dated 17.04.2019 is final.
The Verdict in question rejected the claim of the plaintiff against the defendant for unfounded acquisition for the amount paid as non-material damage, and the claim for unfounded acquisition for the amount paid as interest and expenses as secondary claims was accepted.
In the analyzed Verdict, the Supreme Court, referring to Article 205 of the Law on obligations, agreed with the conclusion of the second-instance court that the first-defendant had acquired the amount that was paid to her as non-material damage due to injury of the body and impairment of health, based on legally binding and executive court Verdicts, so that she is a conscientious acquirer, because she could not have known that the plaintiff would submit a revision, nor could have known the outcome of that revision. Whereas, according to this court, the first-defendant unfoundedly acquired only the secondary claims for interest and expenses, because the provision of Article 205 of the Law on obligations did not apply to these claims.
2. Meaning and application of material law
According to the general rule of unfounded acquisition regulated in Article 199 of the Law on obligations, when a part of the property of one person is transferred in any way to the property of another person, and this transfer has no basis in any legal matter or in the law, the transferee is obliged to return that part of the property, if that is possible, and otherwise he is obliged to compensate the value of the benefit achieved. The transfer of property also means the acquisition of a benefit by an action performed. The obligation to return, i.e. to compensate for the value, also arises when something is received considering the basis that was not fulfilled or which later fell off.
Presumptions for the creation of this type of obligation relationship are an increase in property (enrichment) on one side, which can consist in an increase in property, but also in a reduction of losses, expenses savings, etc., a decrease in property (impoverishment) on the other side, a correlation between the decrease and increase in the property of those persons and the absence (non-existence) of the legal basis that would legally justify the decrease and increase in the property of those persons.
From the judicial practice in relation to Article 199 of the Law on obligations, the following position has been noted: "When the plaintiff is awarded a certain amount by a final Verdict that he received through forced execution, he is obliged to return the amount to the defendant before the end of the dispute if with an extraordinary legal remedy the verdict was annulled" (Supreme Court of Macedonia Rev. 433/85 dated 03.10.1985).
According to Article 205 of the Law on obligations, one cannot request the return of unfoundedly paid amounts as compensation for damage due to bodily injury, health impairment or death, if the payment was made to a conscientious acquirer.
However, a condition for the acquirer to be considered conscientious is that he did not know nor could he have known, taking into account the circumstances of the case, that he received the amounts paid to him as compensation for non-material damage without legal grounds.
Therefore, for the correct application of the provision of Article 205 of the Law on obligations, it is necessary to determine the issue of "the conscientiousness of the acquirer of the funds".
In addition to the analyzed Verdict, the following decisions were made by the courts in Republic of North Macedonia in connection with the application of the provision of Article 205 of the Law on obligations:
Verdict 18 P1-1865/12 dated 02/06/2013 from the Primary Court Skopje 2 Skopje, final and enforceable (the Court considers that the claim for unfounded acquisition is founded because the basis on which the payment was made has fallen off, so the defendant is under obligation to return the received funds to the plaintiff in accordance with Article 199 of the Law on obligations)
Decision GŽ-1665/15 dated 18.11.2015 by the Appellation Court Skopje (the Court is of the opinion that since a revision was submitted, the defendant was obliged to wait for the outcome of the revision procedure, so in that sense the first instance court should determine correctly whether the acquirer is conscientious);
Verdict 18 P1-1865/12 dated 02/06/2013 from the Primary Court Skopje 2 Skopje, final and enforceable (the Court considers that the claim for unfounded acquisition is founded because the basis on which the payment was made has fallen off, so the defendant is under obligation to return the received funds to the plaintiff in accordance with Article 199 of the Law on obligations);
Verdict GŽ-2483/16 dated 30.11.2017 from the Appellation Court Skopje (the Court considers that by adopting the decision of the Supreme Court, the defendant unlawfully keeps the funds and is obliged to return the unlawfully charged amount because he is an unconscientious acquirer, which resulted in his unfounded enrichment, in addition to the fact that he himself submitted a revision regarding the awarded amount, so he knew or could have known that there would be a change in the amount);
Verdict 12 P4-494/16 dated 12.07.2017 from the Primary Court Skopje 2 Skopje (the Court found that the claim is founded, that in the specific case there is a reduction of the property of one party and an increase of the property of the other party, i.e. a correlation between the decrease and increase of the property of those persons and the absence of a legal basis that would legally justify the decrease and increase of the property of those persons. At the same time, the Supreme Court made the final decision according to the positive law and the said decision must be respected and implemented in its entirety. The legal basis fell off with the amendment of the first and secondinstance decision. When there is a revision procedure, it cannot be considered that the defendant is a conscientious acquirer, with an uncertain decision, and the ignorance of the legal norms does not exempt anyone from a possible obligation, responsibility);
At the same time, the Department of Civil Cases of the Supreme Court of Republic of Macedonia has adopted a legal opinion that the amount cannot be claimed back as compensation for damage due to bodily injury, health impairment or death, when the payment was made on basis of a final judgment because the payment was made to a conscientious acquirer, while the fact that in the revision procedure the claimant party was rejected in that part of the claim is not of any influence.
Also, according to the legislation in the Republic of Croatia, in Article 1117 of the Law on Obligation Relations of the Republic of Croatia, in addition to the exception "when the received can be retained", also provides a provision which regulates that "the acquirer is considered unconscientious from the moment of delivery of decision by which the extraordinary remedy is accepted and he is obliged to return what he received on the basis that fell off, with interest from the moment he became unconscientious".
In view of the different judicial practice and the restrictive legal opinion of the Department of Civil Cases of the Supreme Court of Republic of Macedonia, the Verdict in question from the Supreme Court was taken for analysis, in which the provision of Article 205 of the Law on obligations was applied, but the question for the conscientiousness of the acquirer was not correctly determined.
3. Conclusion
Based on the above, it follows that the analyzed Verdict violated the procedure under Article 345 of the Law on litigation procedure, considering that the court incorrectly applied the material law from Article 205 of the Law on obligations in correlation with the provisions of Article 199 of the Law on obligations.
As a matter of fact, with the Verdict in question, the court incorrectly applied the provision of Article 205 of the Law on obligations, for the reason that it did not consider the question of the acquirer's conscientiousness in terms of that, when the acquirer found out that he unfoundedly received the amounts paid to him as compensation for non-material damage and the fact that from that moment the acquirer is no longer a conscientious acquirer.
Namely, it cannot be considered that the acquirer is conscientious from the moment of receiving a Verdict from the Supreme Court, which annulled the Verdicts according to which he was paid compensation for non-material damage and rejected the legal claim of the acquirer for compensation for non-material damage. This is due to the fact that, from that moment, the acquirer already knows that the basis on which the compensation was paid to him has fallen off and, according to the rules for unfounded acquisition, he is obliged to return the amount that he unfoundedly received together with interest from the moment he became unconscientious.
At the same time, from the moment when the acquirer became unconscientious, the exception to the rules of unfounded acquisition cannot be applied because the assumptions for the creation of this relationship are met, so there is an increase in the property of one party and a decrease in the property of the other party, i.e. correlation between the decrease and increase in the property of those persons and the absence of a legal basis that would legally justify the decrease and increase in the property of those persons.
Moreover, since the final decision rejecting the claim for compensation for non-material damage, in accordance with positive law, was made by the court of the highest instance, i.e. the Supreme Court of Republic of North Macedonia, the same decision must be respected and implemented in its entirety.
Having in mind the above, I believe that the interpretation and application of the provision of Article 205 of the Law on obligations should be in the direction that "the conscientious acquirer becomes unconscientious at the moment of delivery of a decision accepting the extraordinary legal remedy and is obliged to return the received after the basis fell off, with interest from the moment he became unconscientious ".
In this sense, in relation to the application of the provision of Article 205 of the Law on obligations, another principled legal opinion should be adopted by the Supreme Court of the Republic of North Macedonia, with the aim of equal application of the laws by the courts, as an essential element of the principle of legal certainty, predictability of legal situations and the rule of law principle, which are one of the most important principles of democracy.