Decision of the Regional Court in Kraków, 1st Civil Division, dated 28th October 2014
I C 862/12

The Regional Court in Kraków, 1^st Civil Division, composed of:

Presiding Judge:            Izabella Dyka, Regional Court Judge

Judges:                            Elżbieta Bednarczuk, Regional Court Judge;

Kamil Grzesik, Regional Court Judge

having examined on 28^th October 2014, in Kraków, at a session in camera, the case brought by D. N. – representative of a group consisting of: [data of 49 persons], against (…) with its registered office in N. for payment

decides to:

order the publication in the daily newspaper “Rzeczpospolita” (publisher: (…) LLC with its registered office in W.) about the initiation of group proceedings with the following content:

“A group proceeding was initiated before the Regional Court in Krakow, 1^st Civil Division, under case number I C 862/12, pursuant to the Act of 17^th December 2009 on Pursuing Claims in Group Proceedings (Journal of Laws 2010, No. 7, item 44) on the basis of a claim brought by D. N. – representative of a group consisting of: [data of 49 persons] against (…) in N. for payment.

7. N. – (as representative of the group) requested payment as a result of damage suffered by the members of the group as a result of a series of actions taken by the defendant and the company (…) which constituted a tort in the form of: a/ the conclusion by F. (…) and the defendant on 2^nd November 2006, of a cooperation agreement regarding the issuance (by F. (…)) of bonds with a total value of PLN 150 million to be used for investment (purchase of land for multi-family housing construction) exceeding the level of generally accepted business risk (due to the amount of financing and interest on the bonds – 25% per annum and F.’s freedom (…) in deciding how to spend the funds from the bond issuance and the inability to obtain similar financing from other sources), in a situation where F. (…) was unable to meet its obligations from the outset and the defendant was aware of the existence of other unsecured creditors of F. (…); b/ multiplication of mortgage collateral granted to the defendant in connection with the issue of bonds on real estate located in W. and K. at st. (…) and on real estate located at al. (…) in K., which were encumbered with three mortgages in the amounts of PLN 20 million, PLN 5 million, and PLN 7.5 million; c/ deliberate transfer by F. (…) and the defendant to the developer’s customers of the burden and economic risk associated with the investment at al. (…), in a situation where the investment had already been completed and its implementation had been financed for the most part by the purchasers of the premises (members of the group – consumers), who were unable to properly secure their own interests due to the prohibition of disclosing claims in the land and mortgage register contained in the preliminary agreements and were unaware of the involvement of their funds in risky transactions of the above-mentioned entities, while at the same time the level of security of these transactions, in the event of their failure, allowed the defendant to return the invested capital and make a profit; d/ further increasing the economic risk in connection with the financing (through the issue of bonds in the amount of PLN 5 million with an interest rate of 30% per annum) of the residential investment F. (…) under the name “os. (…)”; e/ the defendant and F. (…) taking advantage of the coercive situation (which the defendant should have at least anticipated) of the buyers of premises at al. (…), who were offered additional payments for the premises in the amount of at least PLN 2,000 per 1 m², otherwise F. (…) would have to declare bankruptcy, which would result in the satisfaction of the defendant’s mortgage-secured claims.

All persons who may be covered by the group action, i.e. who jointly meet the following conditions, may join the group: they have concluded with F. (…) an agreements establishing separate ownership, a sales agreements, and a loan agreements – concerning residential premises at al. (…) in K., have suffered damage as a result of an unlawful act by the defendant (…) with its registered office in N., as described in detail in this announcement, and their damage is in the form of property damage.

Such a person may join the group by submitting a written statement of joining the group within a strict deadline of three months from the date of publication of this announcement and sending it to the group representative – D. N. (to the address of the attorney – legal counsel A. K. (2), Law Office (…), (…) and Legal Counsels LP, st. (…), (…)-(…) K.).

Joining the group after the above deadline is not permitted.

Submission of a declaration of joining the group is tantamount to consenting to D. N. acting as a group representative and to the terms of the attorney’s remuneration.

Pursuant to the agreement on the statement of legal services in group proceedings with the group representative, the group representative shall not bear any costs related to the proceedings other than the costs that will be charged to the representative as a member of the group and which result from a separate agreement between the law office, in which the attorney is practicing, and each member of the group. The costs of the litigation, including costs of representation, costs of experts, deposits, possibly awarded court costs, as well as costs related to attorneys’ remuneration, attorneys’ travel expenses and any costs related to the proceedings will be paid in full by the group members. The Law Office’s remuneration for the first instance covering activities related to organizational support of the group and activities indicated in the contract for legal services in group proceedings with a member of the group amounts to PLN 2,000 net (PLN 2,460 gross) payable by each member of the group in two installments – the first in the amount of PLN 1,000 net (PLN 1,230 gross) within 7 days from the date of conclusion of the contract for legal services in group proceedings, the second in the amount of PLN 1,000 net (PLN 1,230 gross), payable within 3 months from the conclusion of the contract for legal services in group proceedings. The Law Office’s remuneration for the second instance covering the activities indicated in the contract for legal services in group proceedings with a group member is PLN 1,200 net (PLN 1,476 gross) payable by each group member within 7 days from the date of filing the appeal regardless of the party filing it. The Law Office’s remuneration in the event of an appeal in cassation or in the event of representation of a group before the Supreme Court is PLN 1,000 net (PLN 1,230 gross), payable by each member of the group within 7 days from the date of filing an appeal in  cassation regardless of the party filing it. The Law Office’s success fee is a percentage of the value of the amounts actually obtained (enforced) as a result of the proceedings, calculated with respect to each member of the group separately. VAT at the rate in effect on the date of the invoice will be added to the amount so added. The percentage of success fee depends on the number of persons appearing in the group proceedings and is as follows: 10 persons – 7%, 20 persons – 6.80%, 30 persons – 6.00%, 40 persons – 5.80%, 50 persons – 5.00%, 60 persons – 4.80%, 70 persons – 4.00%, 80 and more persons – 3.80%.

The judgment, that will be rendered in the case in the group proceedings, will also be binding on the person who will be covered by the court’s decision on the composition of the group.”