2019/03/27 – 30 Cdo 2672/2018 (summary)

Judgment of the Supreme Court of 27 March 2019, Ref. No. 30 Cdo 2672/2018
(Right to permanent residence, state liability for the damage caused by a decision issued after the statutory limit)

The appellant in this case claimed for the payment of 68 400 Czech crowns in damages. She claimed that she filed an application for a permanent residence permit on 12 July 2012 and that even though the law stipulates the statutory limit of maximum 60 days to issue a decision, the authorities issued such decision on 11 October 2013. In her opinion, she was thus deprived of permanent residence status and corresponding rights, such as the participation in the system of public health insurance. For the same reason, she was obliged, as of April 2014, to purchase a commercial health insurance in the amount of 54 000 Czech crowns for the period of one year. The appellant equally “purchased health insurance” for her new-born daughter in June 2013. The claim of the appellant was thus based on the demand for actual damages; if the permanent residence permit had been issued within the statutory period, the appellant and her daughter would be part of the public health insurance and would not have to spend her financial resources on the “commercial insurance”. The court of first instance in its consideration of the claim stated that there was an improper administrative procedure and as a consequence the appellant incurred a damage in the amount as claimed by her. The appeal court reversed this judgment and stated that the appellant was not legally entitled to a residence since the Constitutional Court of the Czech Republic stated that there is no subjectively guaranteed right of foreigners stipulated in the Czech Constitution to reside in the Czech Republic and thus the appellant could not presuppose that she would be granted such a residence. Since she was residing in the Czech Republic on the basis of a long-term residence permit for the business purposes, she was obliged to have health insurance and pay for it herself. The appeal court thus held that there is no causal link between the procedure consisting in not-issuing the decision granting the permanent residence permit within the statutory limit and the damage claimed by the appellant.

The Supreme Court, however, reversed the judgment of the appeal court. It addressed firstly the question whether a foreigner has a right to permanent residence and, secondly, the question of causal link between the delayed granting of permanent residence and the expenses on the commercial insurance. The Supreme Court referred to the § 68 of the Law No. 326/1999 in Coll., on the residence of foreigners which transposed the Directive No. 2003/109/ES regarding the term long-term residence status. It then referred to the case-law of the Supreme Administrative Court and agreed with its conclusion stipulating that if all the substantive and procedural conditions are fulfilled, the applicant is legally entitled to be granted a long-term residence status. The same conclusions flow equally from the case-law of the Court of Justice of the European Union (see case C-508/10, para. 66-68). The terms of “long-term residence” and “permanent residence” in this regard are according to the Supreme Court intertwined and thus the requirements for granting the “long-term residence” and the “permanent residence” should be considered similarly. With regards to the case-law of the Constitutional Court stipulating that there is no legal entitlement to the residence in the Czech Republic, the Supreme Court stressed that it is necessary to differ between the “permanent residence” and “temporary residence”. The Constitutional Court issued its judgments only with the reference to the “temporary residence” which is conceptually and systematically different term than the “permanent residence” and, thus, should not be assessed jointly. The Supreme Court therefore concluded that even though there is no right to certain forms of residence, there is a right to issue a permanent residence permit to a foreigner if all the conditions are fulfilled. It further stressed that the decision of an administrative authority to issue a permanent residence permit in accordance with § 68 (1) of the Law on the residence of foreigners shall not be subject of its further consideration.

Regarding the second question, the Supreme Court recalled its case-law concerning the causal link and the improper administrative procedure. In the present circumstances, the administrative authorities committed the improper administrative procedure by not issuing a decision without delay. The appellant consequently claimed for the actual damages caused by the fact that in the period of delay she had to spend higher expenses on the travel health insurance. On the basis of the relevant statutory provisions, the Supreme Court stated that the appellant was obliged to have, on her own expense, travel health insurance irrespective of her health condition or pregnancy. If the administrative authority had issued the decision without the delay, the appellant would participate ex lege in the public health insurance. The Supreme Court noted that the appellant was entitled to rely that the authorities will issue the decision within the time-limit. It can be assumed that the appellant would act economically and therefore that she would pay for more expensive travel health insurance only until the time when, as a consequence of the decision issuing to her a permanent residence permit within the time-limit, she would participate in the public health insurance with lower insurance sum or with the insurance that would be covered by the state.