THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF CROATIA
No. U-III-1136/1997
Zagreb, 16 January 2003
The Constitutional Court of the Republic of Croatia, composed of Smiljko
Sokol, President of the Court, and Judges Marijan Hranjski, Petar Klaric, Mario Kos,
Ivan Matija, Ivan Mrkonjic, Jasna Omejec, Zeljko Potocnjak, Agata Racan, Emilija
Rajic, Nevenka Sernhorst, Vice Vukojevic and Milan Vukovic, deciding on the
constitutional complaint lodged by Z.T. from N., represented by M.D., attorney-at-law
from Z., at a meeting held on 16 January 2003, rendered the following
DECISION
I.
The constitutional complaint is hereby rejected.
II.
This decision shall be published in Narodne novine.
Statement of reasons
1.
Z.T. from N., as applicant, represented by M.D., attorney-at-law from Z.,
lodged a constitutional complaint alleging that the judgement of the Administrative
Court of the Republic of Croatia, No. Us-9646/1995-4 of 5 March 1997, is in breach
of the constitutional provisions on the rule of law (Article 3) and on the principle of
legality of individual decisions made by administrative agencies and other bodies
vested with public authority (Article 19 para. 1), and has violated her constitutionally
guaranteed right to equality before the law prescribed by the provision of Article 14
para. 2 of the Constitution of the Republic of Croatia.
2.
In the disputed judgement the above court rejected the applicant’s action
brought against the decision of the Croatian Health Insurance Bureau – Authority Z.,
class UP-II-502-10/94-01/211, reg. no. 338-01-11-15-95-1 of 9 November 1995.
In the above decision the Croatian Health Insurance Bureau – Authority Z. accepted
the applicant’s complaint, annulled the decision of the Croatian Health Insurance
Bureau, District Office P., Branch N., class UP/I-502-01/94-01/04, reg. no. 2149-3002-94-2, and recognised the applicant’s right to compensation of expenses for
medication.
The applicant brought an action against this decision before the Administrative Court
of the Republic of Croatia because the defendant had not also granted her default
interest from the day when she had lodged the claim for payment of compensation, in
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compliance with Article 277 para. 1 of the Law on Obligations (Narodne novine, Nos.
53/91, 73/91, 111/93, 3/94, 107/95, 7/96, 91/96, 112/99 and 88/01).
The Administrative Court rejected the action on the grounds that, in accordance with
the provisions of Articles 80 and 81 of the Health Insurance Law (Narodne novine,
Nos. 75/93 and 55/96), bodies of the Croatian Health Insurance Bureau have
subject-matter competence in administrative proceedings, pursuant to the provisions
of the Law on General Administrative Procedure (Narodne novine, Nos. 53/91 and
103/96 – decision of the Constitutional Court), only on the rights laid down in the
Health Insurance Law, while municipal and county courts are have subject-matter
jurisdiction over issues concerning payment of default interest (Article 16 of the
Judicial Law - Narodne novine, Nos. 3/94 and 100/96, 115/97, 131/97, 129/00 and
67/01), in accordance with the provisions of the Law on Obligations.
3.
In her admissible and timely constitutional complaint the applicant maintains
that the reasons given by the Administrative Court would be acceptable had the claim
for payment of default interest been the main issue in the administrative proceedings,
which was not the case, because the claim for payment of interest was only an
accessory claim inalienable from the main claim in the administrative proceedings.
She further claims that these reasons indicate that administrative bodies would only
be authorised to apply laws from their own narrow field, which would be absurd and
contrary to the basic principle of legality prescribed in Article 4 of the Law on General
Administrative Procedure, whereby their proceedings do not exclude the application
of any valid applicable legal norm, which includes the Law on Obligations. She also
points out as a generally known fact that in the Croatian legal system, to which
administrative bodies also belong, the main issue and accessory claims emerging
thereof are decided in one decision, so the reasons given for the judgement of the
Administrative Court contravene both the specific legal norms and the spirit of the
entire legal system that rests on them.
She proposes that the constitutional complaint should be adopted, the disputed
judgement quashed and the case returned to the Administrative Court for renewed
proceedings.
4.
The constitutional complaint contains the formal components prescribed in
Article 65 of the Constitutional Act on the Constitutional Court of the Republic of
Croatia (Narodne novine, No. 49/02-revised text, hereinafter: Constitutional Act), and
the preconditions laid down in Article 62 paras. 2 and 3, and Article 64 of the
Constitutional Act.
5.
In accordance with the constitutionally defined competence of the
Constitutional Court (Article 128 sub-para. 4 of the Constitution), and in accordance
with the provision of Article 62 para. 1 of the Constitutional Act, the constitutional
complaint is an institute established for the protection of human rights and
fundamental freedoms, and may be lodged if the applicant deems that an individual
decision (and the proceedings that preceded it) violated any of his constitutionally
guaranteed human rights and fundamental freedoms (constitutional right).
Pursuant to the above, the Constitutional Court, in deciding on a constitutional
complaint, first analyses whether the rights indicated in the constitutional complaint
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are indeed constitutional rights in accordance with Article 62 para. 1 of the
Constitutional Act. If it establishes that they are constitutional rights, the
Constitutional Court continues proceedings for establishing whether the disputed
individual act has violated the constitutional right indicated by the applicant.
6.
In her constitutional complaint the applicant proposes that the Constitutional
Court should pass a decision finding and establishing that the disputed judgement of
the Administrative Court is in breach of the constitutional provisions about the rule of
law (Article 3) and the principle of legality of individual decisions of administrative
agencies and other bodies vested with public authority (Article 19 para. 1), and of the
guarantee of equality before the law prescribed in Article 14 para. 2 of the
Constitution, designating this as her constitutional right.
The constitutional complaint is not grounded.
7.
From insight into the acquired case file the Constitutional Court found that the
applicant of the constitutional complaint did not claim payment of default interest in
the administrative proceedings. On the contrary, did she not bring an action with the
Administrative Court, claiming the right to default interest, until her right to
compensation for expenses for medication had been recognised.
The Constitutional Court holds that the applicant should have claimed payment of
default interest in her claim for compensation of expenses for medication, whereby
she instituted administrative proceedings (argument in Article 186 para. 1 of the Law
on Civil Procedure - Narodne novine, Nos. 53/91, 91/92 and 112/99).
The Health Insurance Law (Narodne novine, Nos. 75/93 and 55/96) does not specify
that in its application, when a claim is accepted, a decision shall as a matter of law
also be passed about default interest, without a particular claim by the party, as in the
case prescribed, for example, in the provision of Article 25 sub-para. 8 of the Law on
Expropriation (Narodne novine, Nos. 9/94, 35/94, 112/00 and 114/01). Therefore, the
applicant should have claimed payment of default interest together with her claim
concerning the main issue, not in an action before the Administrative Court. Because
of the above omission, the applicant cannot maintain that her constitutional right of
equality before the law has been violated in the disputed judgement of the
Administrative Court.
8.
In the reasons for the disputed judgement the Administrative Court holds that
administrative proceedings may only decide on the rights in the law that regulates
that particular administrative field, whereas issues such as payment of default
interest are in the jurisdiction of municipal and county courts. The Constitutional
Court points out that default interest is decided in administrative proceedings in
certain administrative fields on the grounds of explicit regulations, even without the
claim of the party. This is also regulated, for example, in the mentioned provision of
Article 25 sub-para. 8 of the Law on Expropriation.
Therefore the Constitutional Court holds wrong the view of the Administrative Court,
whereby bodies of the Croatian Health Insurance Bureau cannot, in administrative
proceedings, deal with or decide about the right to default interest, in the sense of the
provision of Article 277 para. 2 of the Law on Obligations, because these bodies, in
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accordance with the provisions of Articles 80 and 81 of the Health Insurance Law
(Narodne novine, Nos. 75/93 and 55/96), have subject-matter competence to decide
only on the rights established in the Health Insurance Law.
In the reasons for the disputed judgement, the Administrative Court rightly states that
municipal and county courts have subject-matter competence to decide on payment
of default interest, as a civil-law claim, in accordance with Article 16 para. 1 sub-para.
2/k of the Judicial Law. However, in addition to the fact that the above rule has an
exception, it primarily concerns the situation when the right to default interest is the
main claim. If the right to default interest is an accessory claim, then it must be
decided in the same proceedings and before the same body that deals with and
decides on the main claim.
In the specific case, the right to default interest emerges from the realised right to the
main claim and represents a claim accessory to the main claim, so it is not legally
logical, or economical, to decide on the main claim in one legal proceedings
(administrative) and on the accessory claim in another legal proceedings (civil).
The Constitutional Court also affirms that Article 13 of the Law on General
Administrative Procedure prescribes the principle of economy as a basic principle of
administrative procedure.
Therefore, calling on this principle alone it is not only possible, but should be the
practice, to decide on default interest as an accessory claim in administrative
proceedings and not to burden the party and another state body, or court, with the
institution of new proceedings for deciding on an accessory claim. There is no
regulation preventing an accessory claim, emerging from a realised claim that was
decided as the main issue in administrative proceedings, to be decided in the same
administrative proceedings.
9.
In her constitutional complaint the applicant also alleges violation of the
principle of the rule of law prescribed in Article 3 of the Constitution.
The provision of Article 3 of the Constitution, however, does not determine human
rights and fundamental freedoms (constitutional rights). Article 3 lays down the
highest values of the constitutional order, which are elaborated and defined in other
provisions of the Constitution, especially those that guarantee human rights and
fundamental freedoms. The provision of Article 3 of the Constitution serves as a
basis for interpreting the Constitution.
10.
Finally, in her constitutional complaint the applicant alleges violation of the
principle of legality prescribed in the provision of Article 19 para. 1 of the Constitution,
whereby individual decisions of administrative agencies and other bodies vested with
public authority must be grounded in law.
The provision of Article 19 para. 1 of the Constitution does not contain a
constitutional right in the sense of Article 62 para. 1 of the Constitutional Act, but
establishes the principle of legality in the work of public administration.
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11.
Pursuant to the provision of Article 75 of the Constitutional Act, the Court has
decided as in Item I of the dictum of this decision.
The publication of this decision is grounded in the provision of Article 29 para. 1 of
the Constitutional Act.
PRESIDENT
Smiljko Sokol, LLD, m. p.