In Case No III Ips 38/2021, the Supreme Court of the Republic of Slovenia has mitigated its jurisprudence on the publicity principle of the Land Registry in relation to the subjective limitation period for a claim for damages.
The publicity principle is one of the main principles of land registration law. It is regulated in Article 6 of the Land Register Act and it constitutes an irrebuttable presumption that the entry in the Land Register is known to everyone. Consequently, no one can plead ignorance of the information entered in the Land Register. The information is deemed to be known to everyone as from the beginning of the next working day following the day on which the land registry court records the receipt of an application for registration of a right or a legal fact.
In the present case, the plaintiff purchased a property from the debtor at a public auction in enforcement proceedings and registered as its owner in the Land Register. Prior to the sale of the property, the previous owner of the property had concluded a land consolidation agreement under which they were to receive a smaller plot of land in lieu of their own for a remuneration. As a result of the land consolidation procedure, after the plaintiff’s ownership of the property had been registered in the Land Register, the plot was deleted and another, smaller plot was registered in its place. This occurred despite the fact that the plaintiff was already registered in the Land Register as the owner of the property. The plaintiff, as the owner of the property, was not informed of the deletion procedure and the court order for deletion of the property was not served to the plaintiff because of an error on the part of the Land Registry Court. Since the plaintiff was not given the opportunity to participate in the procedure for the deletion of the plot and was deprived of their property arbitrarily and without compensation, they filed a claim for damages.
The Supreme Court of the Republic of Slovenia ruled in the case that the land registration procedure in relation to the contractual land consolidation was conducted in clear contravention of the explicit requirements of the Land Registry Act, which regulate the manner in which constitutional procedural guarantees are implemented and protect the property interests of the already registered owners of property. Article 22 of the Constitution of the Republic of Slovenia provides for a constitutional procedural guarantee of equal protection of rights, from which, inter alia, the right to a statement is derived, and Article 33 guarantees the right to private property. These two rights are protected in land registration proceedings by the guarantee of the right to be heard and by legal remedies before the publicity effect of the registration. The Court justified the mitigation of the publicity principle by emphasising that the publicity principle is not intended to regulate the communication of information outside the provisions of the Land Registration Act, which protect the aforementioned constitutional procedural guarantees and the right to private property.
The Court further emphasised the importance of the principle of equality under Article 14 of the Constitution of the Republic of Slovenia, which imposes on all branches of government the obligation to justify a reasonable ground, substantially related to the subject matter of the regulation, when substantially different situations are regulated in the same way. In the present case, the Court noted that a distinction must be drawn between the position of an individual acting in a legal transaction in respect of which information from the land register is relevant and that of an injured party alleging an impermissible interference with his right in land registration proceedings in which, as a result of a breach of that duty, he has not had the opportunity to participate. There was no reason to treat those two situations in the same way in the present case. While it is true that Article 6 of the Land Register Act establishes an irrebuttable presumption that the entry in the land register is known to everyone, the Court considers that it is unreasonable to expect the owner of immovable property, who is protected by the constitutional procedural guarantees and the constitutional right to private property, to check the land registration status of his immovable property on a daily basis. In cases where the person concerned is not a person acting in a legal capacity, the principle of publicity must therefore be mitigated in order to avoid infringements of the constitutional procedural guarantee of equal protection of rights and the constitutional right to private property.
According to Article 352(1) of the Civil Code, a claim for damages for is time-limited within three years of the injured party becoming aware of the damages and of the person who caused them, which is referred to as the subjective limitation period. In its decision, the Court justified its decision by pointing out that absolutizing the meaning of the publicity effect could mean that the subjective limitation period for the claim for damages would start to run even before the time limit for filing objections and appeals against the decision to allow registration under the Land Register Act had even started to run. According to such an interpretation, the subjective limitation period would run from the moment of registration in the Land Register (Article 6 of the Land Registration Act), and the period for objections and appeals against registration would only start to run from the moment of service of the decision authorising registration, which logically takes place after registration itself. According to such a view, the injured party would be deemed to have knowledge of the harmful registered rights of others and of the responsible party, in accordance with the principle of publicity laid down in Article 6 of the Land Register Act, irrespective of whether the injured party has actual knowledge of this fact or could have had such knowledge.
In light of all the foregoing, the Supreme Court of the Republic of Slovenia has concluded that, where the claim for damages is based on an allegation of a breach of the Land Registry Court’s duty to ensure the right to be heard to the injured party, as an adverse party in the land registration proceedings, it is inconsistent with the Constitution of the Republic of Slovenia to interpret the publicity effect of the registration as also starting the running of the subjective limitation period for the claim for damages. Such a strict interpretation of the principle of publicity would violate the constitutional right to compensation for damages, which is provided in Article 26 of the Constitution of the Republic of Slovenia.