Legal News [July 2023]: When does the statute of limitations start to run?
A ruling by the Grand Chamber of the Supreme Court has brought about a fundamental change in the issue of limitation periods. This is just one of the many topics in the latest Legal News. Read our selection of other notable Supreme Court decisions.
- In its judgment in Case No. 21 Cdo 1124/2022, the Supreme Court addressed the question of what specific circumstances justify the conclusion that the employer has paid (undertook to pay) a lump sum compensation to the survivors of a deceased employee in excess of the amount provided for by the legislation. The Labour Code defines the amount of the lump sum as the “minimum”. The Supreme Court held that, in accordance with established case law, it is necessary for the court to define a relatively vague hypothesis and to consider whether the particular circumstances of the case under consideration – taking into account the degree of detriment to the beneficiaries – justify the award of compensation in an amount higher than the minimum amount of compensation provided for by law.
- From the older case law, we draw your attention to the judgment in case no. 26 Cdo 1534/2022, in which the Supreme Court dealt with the issue of legal succession, which involves the transfer of the lessor’s rights and obligations under the lease to the acquirer of the leased property directly by operation of law. The Supreme Court summarised, in line with its previous case law, that the assignee takes over the original lease with all its essential features. The purpose of this legal succession is to ensure the continuity of the lease relationship on the part of the lessor in the event of a change of ownership of the leased property. The succession covers the entire content of the lease. It therefore applies not only to its essential components (e.g. the method of calculating or otherwise determining the amount of the rent), but also to its periodic (e.g. the time of performance of the lease) and incidental (accidental) components. Thus, the right to use the leased asset is transferred to the new lessor, which corresponds to the lessee’s obligation to make lease payments. The lessee’s obligation is to the new lessor (the transferee) and not to its predecessor. An agreement to set off mutual claims (where one of the claims is a claim for payment of the lease) cannot be regarded as a joint arrangement for a lease. The obligations under such an agreement to set off lease payments are therefore not transferred to the new lessor.
- In its judgment in Case No. 21 Cdo 2518/2022, the Supreme Court addressed the question of whether an employee commits a breach of the obligations arising from the legal provisions relating to his or her work by refusing to continue the work assigned to him or her by the employer after starting work during his or her temporary incapacity to work. The fact that the employee voluntarily starts work does not change the fact that the obligation to work is suspended during the employee’s temporary incapacity to work, i.e. the employee is still not obliged to perform the work and the employer is not obliged to assign it. Thus, the Supreme Court concluded that even after starting work during the temporary incapacity to work, the employee may decide not to continue performing the work, without the refusal to continue performing the work constituting a breach of a legal obligation related to the work performed, which could constitute grounds for termination of the employment relationship.
- How to determine the commencement of the limitation period for contractual performance rights whose maturity depends on the will of the creditor? This question was addressed by the Grand Chamber of the Supreme Court in its judgment in Case 31 Cdo 3125/2022. The case concerned a situation where the time within which the debtor is obliged to perform the debt is determined in the contract only in such a way that the basis for payment of the agreed price of the performance is an invoice issued by the creditor, the due date of which is agreed to be 14 days from its delivery to the debtor. The Grand Chamber held that the situation in which the creditor has a contractual right to demand payment of the agreed price of the performance is a situation, within the meaning of the second paragraph of Article 1958 of the Civil Code, in which the parties have not agreed when the debtor is to perform the debt and in which the determination of the time of performance is left to the creditor’s will. The creditor may determine the time for performance of the debt by demanding payment “immediately” after the right to demand payment of the agreed price of performance has arisen and the debtor is obliged to perform the debt “without undue delay” from the date of the demand. At the end of this period, the monetary debt becomes due (mature).
- In such a case, the decisive circumstances for the commencement of the limitation period, as defined in Section 619(2) of the Civil Code, are the circumstances in which the creditor became aware (or should have become aware and could have become aware) that he had the right to determine the time of performance of the debt. The three-year subjective limitation period under Section 629(1) of the Civil Code begins to run from the date on which the creditor became aware (or should have become aware and could have become aware) that the right to determine the time of performance of the debt (the right to demand payment of the debt “immediately”) had come into existence.
- In its judgment in Case No. 21 Cdo 1517/2022, the Supreme Court focused on determining the commencement of the limitation period for the employer’s right to compensation for damages against an employee consisting of a fine imposed in administrative proceedings. The Labour Code does not contain a specific provision on compensation for damages consisting of the employer’s obligation (in this case, the obligation to pay the fine). Therefore, the second sentence of Article 2952 of the Civil Code applies in the alternative, according to which if the actual damage depends on the incurrence of a debt, the injured party has the right to have the debt discharged or compensated by the wrongdoer. According to the current practice of the Supreme Court, the date on which the employer, as the aggrieved party, learns of the identity of the wrongdoer and of the incurrence of the debt (in this case, the entry into force of the decision imposing the fine) is decisive for the commencement of the subjective limitation of the right to compensation for the damage consisting in the employer’s debt. The date of payment of the debt or its due date is not relevant.