A proxy can be set up for many reasons – lack of time, desire not to worry about conduct or simply for professional service. However, what happens when the authority sends a letter not to the attorney and delivers it directly to the party? Is such service effective and the letter has procedural consequences?
This was the case in the case recently dealt with by the Supreme Administrative Court (hereinafter referred to as NSA).
Provincial Administrative Court in Bydgoszcz by judgment dated 20 April 2021 (reference no.: I SA/Bd 851/20) took into account the action against the decision of the Social Insurance Institution (hereinafter referred to as ZUS) to refuse the right to be exempted from payment of charges for March 2020 and annulled the contested decision.
Therefore, ZUS did not agree with the judgment of the court and filed a cassation complaint. Contrary to appearances, the clue of the case did not concern the mere dismissal and the proper delivery of the decision. It was supplied directly to the party, while the party had a proxy established in the case.
According to the Social Security Office, as presented in the cassation complaint, defective service of the decision cannot lead to its repeal because the defective service of the decision, e.g. by omitting the party’s attorney, enters into the market and produces legal effects.
Fortunately, the NSA didn't allow such a far-reaching free will. In the judgment dated 16 March 2022 (reference no.: I GSK 1329/21) did not take into account the cassation complaint. He referred to Article 40 section 2 Code of Administrative Procedure[1], according to which: ‘If a party has appointed a representative, letters shall be served on the representative. If several representatives have been appointed, only letters shall be served one The attorney. A Party may designate such a representative.’
The following statement of reasons refers to the order of the Supreme Court dated 9 September 1993 (reference no.: III ARN 45/9345), that this provision does not allow any exceptions.
Further: “(...) in accordance with the principle of formality of service adopted in the Code of Administrative Procedure, the administrative authorities carrying out the procedure must serve all procedural documents, including decisions (decisions and provisions) to the proxy established in the case.
As from the date of notification to the authority of the appointment of the representative, he should be provided with an active participation in the proceedings as the party concerned and the omission of the party's representative in the proceedings shall be tantamount to the omission of the party and shall have the same legal effect.’[2].
Therefore, the service of the letter directly to the party, while it operates a properly appointed representative, has no legal effect.
The earlier resolution of the Supreme Administrative Court (dated 7 March 2022, reference no.: And FPS 4/21). It states that the order to grant immediate enforceability was served to the party who had the appointed representative, in violation of Article 145 section 2 Tax Ordinance[3], which, according to the NSA, is equivalent Article 40 section 2 Code of Administrative Procedure[4], be considered non-binding.
The NSA considered that “there was no correct plea in law in the cassation of the wrong interpretation Article 40(2) k.p.a. by accepting that a breach of this provision would result in a lack of legal marketing and would therefore have a significant impact on the outcome of the case.
Court first it correctly accepted that the infringement by the authority resulting from Article 40(2) k.p.a. the order to deliver the decision to the proxy of the party shall result in the absence of that decision being placed on the legal market.’[5]. NSA dismissed the cassation complaint.
In view of the arguments put forward in the explanatory memorandum to the above judgment, it can only be accepted that the Supreme Administrative Court has done the right thing. The opposing jurisprudence of the administrative courts could lead to a disorder in administrative proceedings, which would lead to a breach of its fundamental principles, such as the active participation of the parties in proceedings or the principle of the functioning of the bodies in a way that inspires citizens' confidence.
[1] Act dated 14 June 1960, Code of Administrative Procedure (i.e. Journal of Laws of 2021, item 735, as amended).
[2] Reasons for the Supreme Administrative Court dated 16 March 2022, reference no.: I GSK 1329/21
[3] Act dated 29 August 1997, Tax Ordinance (i.e. Journal of Laws of 2021, item 1540 as amended).
[4] Where a proxy is established, letters shall be served on the proxy at the address indicated in the mandate.
[5] Reasons for the Supreme Administrative Court dated 16 March 2022, reference no.: I GSK 1329/21
Author: Michał Zdanowski
Tax consultant At Russell Bedford Poland. Graduate of the Faculty of Law and Administration of the University of Warsaw, Graduate of the Postgraduate Tax and Tax Law Studies of the University of Warsaw, Graduate of the Postgraduate Accounting and Finance Studies of the Warsaw School of Economics. During his studies, he gained experience in law and tax law firms. Since September 2013 is associated with the law firm Russell Bedford Poland. It specialises in documenting transactions between related parties.