June 26 2012
The Supreme Court has recently had to deal with questions regarding declaratory judgments. For example, may a court simply proceed from the assumption that the factual basis for a claim exists when deciding on the statute of limitations? Furthermore, may the court render a declaratory judgment on the existence of a right even if such right is dependent on the fulfilment of a condition?
Section 393a of the Civil Procedure Act provides that if a party pleads the statute of limitations, the court may - on its own motion or on request - decide on such objection by judgment unless the claim is to be dismissed for this reason. This provision came into force in May 2011.
On April 24 2012 the Supreme Court handed down a decision(1) in which it held that Section 393a enables the court to issue an interim judgment on the (negated) statute of limitations. Such decision evaluates only the possible, not the existing, statute of limitations, and can be appealed before potentially extensive evidentiary proceedings on the factual basis are initiated.
Such interim judgment does not exclude the claim being later rejected due to a lack of evidence. It is in the nature of an interim judgment on the statute of limitations that the separate examination of a possible expiry of the claim, the factual basis of which is not yet certain, requires the preliminary assumption that a valid basis for the claim exists.
Section 228 of the act provides that a claimant may request a judgment that declares that a certain right or legal relationship exists or does not exist, or which acknowledges a document's authenticity or lack thereof, provided that the claimant has a legal interest that such legal relationship or right or the document's authenticity be ascertained by court decision shortly.
In a second decision(2) the Supreme Court examined the requirements of legal interest in a declaratory judgment, in connection with conditional rights. The requirement of legal interest is fulfilled if there is objective uncertainty concerning the existence or scope of a claim that can be resolved by the binding effect of a declaratory judgment. Legal interest is assumed even when the existence of a disputed right is contested, resulting in actual uncertainty. This applies in particular when the uncertainty is caused by the defendant's conduct.
Furthermore, in order to establish a separate legal interest in a declaratory judgment, it is sufficient for the claimant to show confinement in his or her actions, whether legal or commercial. If the scope of a settlement agreement is unclear and leaves room for interpretation, such confinement is assumed.
Conditional rights can be ascertained by declaratory judgment only if all the right-generating facts of the case are certain and only the properly and precisely defined condition has not yet been fulfilled. In the case at hand, the court ruled that a required official permit (concerning the relocation of a door and integration of the area behind such door into the object) could not be qualified as an insufficiently proper and precise definition.
For further information on this topic please contact Klaus Oblin at Oblin & Melichar by telephone (+43 1 505 37 05), fax (+43 1 505 37 05 10) or email (firstname.lastname@example.org). The Oblin & Melichar website can be accessed at www.oblin.at.
ILO provides online commentaries as specialist Legal Newsletters. Written in collaboration with over 500 of the world's leading experts and covering more than 100 jurisdictions, it delivers individually requested information via email to an influential global audience of law firm partners and international corporate counsel. Please click here to register for the service.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com.