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Decision no. 2011-212 QPC of 20 JANUARY 2012

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Ms Khadija A., wife of M. [Insolvency proceedings: inclusion in assets of spouse's property]

On 2 November 2011 the Constitutional Council, pursuant to Article 61-1 of the Constitution, received an application for a priority preliminary ruling on the issue of constitutionality from the Cour de Cassation (commercial chamber, decree no. 1123 of 2 November 2011) raised by Ms Khadija A., wife of A. regarding the compatibility of Article L. 6246 of the Commercial Code with the rights and freedoms guaranteed by the Constitution.

THE CONSTITUTIONAL COUNCIL,

Having regard to the Constitution;

Having regard to Ordinance no. 581067 of 7 November 1958 as amended, concerning organic law on the Constitutional Council;

Having regard to the Commercial Code;

Having regard to the Civil Code;

Having regard to the Regulation of 4 February 2010 on the procedure applicable before the Constitutional Council with respect to applications for priority preliminary rulings on the issue of constitutionality;

Having regard to the observations filed by SCP Isabelle Goïc in the capacity as court-appointed liquidator for Mr. Malick M. by SCP Yves Richard, Attorney to the Conseil d'État and the Cour de Cassation, registered on 24 November 2011;

Having regard to the observations of the Prime Minister, registered on 25 November 2011;

Having regard to the observations filed on behalf of the applicant by SCP Boré and Salve de Bruneton, Attorney to the Conseil d'État and the Cour de Cassation, registered on 12 December 2011;

Having regard to the documents produced and appended to the case files;

Having heard Esq. Jean de Salve de Bruneton for the applicant, Esq. Yves Richard for SCP Goïc, and Mr Xavier Pottier, appointed by the Prime Minister, at the public hearing of 10 January 2012;

Having heard the Rapporteur;

1. Considering that pursuant to Article L. 613-6 of the Commercial Code: "The court nominee or the administrator may, if he proves by all means that the assets acquired by the debtor's spouse have been paid by money provided by the debtor, request the inclusion of these acquisitions in the debtor's assets";

2. Considering that, according to the applicant, in making it possible to include in the assets of insolvency proceedings property belonging to the debtor's spouse even though the latter is not a party to such proceedings, the contested provisions violate the constitutional requirement that property rights be protected; that in applying this rule solely to the debtor's spouse, and not to any other party, they also create a difference of treatment which is contrary to the principle of equality before the law;

3. Considering on the one hand that property is included under the human rights enshrined by Articles 2 and 17 of the 1789 Declaration of the Rights of Man and the Citizen; that pursuant to Article 17: "Since property is an inviolable and sacred right, no one shall be deprived thereof except where public necessity, legally determined, shall clearly demand it, and then only on condition that the owner shall have been previously and equitably indemnified"; that even if there is no violation of the right to property pursuant to that Article, it nonetheless follows from Article 2 of the 1789 Declaration that the limits placed on this right must be justified by a reason of general interest and be proportionate with the objective pursued;

4. Considering on the other hand that it is for Parliament, which has jurisdiction pursuant to Article 34 of the Constitution to determine the fundamental principles of property law, real rights and civil and commercial obligations, and to define the rules governing the acquisition or maintenance of ownership;

5. Considering that the contested provisions apply when a debtor is under administration due to insolvency ("procédure de sauvegarde") or in receivership or if a court has appointed a liquidator under the conditions provided for under the Commercial Code; that they make it possible to supplement the debtor's assets with assets acquired by his or her spouse to which the debtor has made a financial contribution; that accordingly, in these particular circumstances, they have the effect of establishing as the effective owner of an asset not the person designated as such according to the rules of civil law, but the person who contributed funds permitting it to be purchased; that accordingly they do not result in a deprivation of ownership for the purposes of Article 17 of the 1789 Declaration;

6. Considering that when a debtor is subject to insolvency proceedings, the possibility of including assets owned by his or her spouse but which were purchased with funds which he or she provided is intended to facilitate the repayment of the debts in order to permit, depending upon the circumstances, the business to be continued or the creditors to be repaid; that accordingly it pursues a goal in the general interest;

7. Considering however that the contested provisions make it possible to contribute in kind to the assets all property acquired over the duration of the marriage with funds provided by the spouse, irrespective of the cause of this contribution, the period of time which has subsequently passed, the origin of the funds or the activity which the spouse carried out at the time of the contribution; that these provisions do not give any further consideration to the proportion of this contribution towards the financing of an asset joined to the bankruptcy estate; that absent any provision enacted by Parliament in order to ensure that the conditions under which assets may be contributed are specified in greater detail, the provisions of Article L. 6246 of the Commercial Code permit the property rights of the debtor's spouse to be infringed in a manner which is disproportionate having regard to the goal pursued; that accordingly they must be declared unconstitutional, without any need to examine the other challenge;

8. Considering that the second paragraph of Article 62 of the Constitution provides: “A provision declared unconstitutional on the basis of Article 611 is repealed as from the publication of the decision of the Constitutional Council or at a later date stipulated in the decision. The Constitutional Council determines the conditions and the limits according to which the effects produced by the provision are subject to revision"; whilst, as a matter of principle, the declaration of unconstitutionality must benefit the party submitting the priority question on constitutionality and the provision ruled unconstitutional cannot be applied to proceedings in progress at the time the decision of the Constitutional Council is published, the provisions of Article 62 of the Constitution grant the Council the power both to set the date of repeal and to defer its effects as well as to provide for the review of the effects that the provision generates before this declaration takes effect;

9. Considering that the repeal of Article L. 6246 of the Commercial Code will take effect from the date of publication of this decision; that it shall take effect in all proceedings which have not been definitively resolved at that time,

HELD:

Article 1. Article L. 6246 of the Commercial Code is unconstitutional.

Article 2 The declaration of unconstitutionality of Article 1 shall take effect on the date of publication of this decision in the conditions set down by recital 9.

Article 3. – This decision shall be published in the Journal Officiel of the French Republic and notified in the conditions provided for under Article 23 11 of the Ordinance of 7 November 1958 referred to hereinabove.

Deliberated by the Constitutional Council in its session of 19 January 2012, sat on by: Mr Jean-Louis DEBRÉ, President, Mr Jacques BARROT, Mrs Claire BAZY MALAURIE, Mr Guy CANIVET, Mr Michel CHARASSE, Mr Renaud DENOIX de SAINT MARC, Mrs Jacqueline de GUILLENCHMIDT, Mr Hubert HAENEL and Mr Pierre STEINMETZ.

Announced on 20 January 2012.