Argument Structures in Legal Interpretation: Balancing and Thresholds

In this section, a model of statutory interpretation, which is outlined in Araszkiewicz (2013b), is presented. The model itself has mainly descriptive purposes. The purpose of the model is to represent actual judicial interpretive argumentation in the context of statutory legal systems. The model’s objective is not to criticize the actual judicial reasoning, but to faithfully represent its actual structure and argumentation patterns for the possible implementation in a legal knowledge system in the future. The presentation of the model here is informal.⁷

The model outlined here is designed to represent the extensional aspect of legal interpretation which is determination of extension of statutory terms. This operation takes place in the context of an operative, judicial interpretation of law as well as the abstract, doctrinal interpretation of law. For example, if we deliberate if John should be classified as an object subsumed under the statutory expression “thief” we cannot state, by simply assertion, that John is a thief to justify this conclusion; in fact we have to use another general linguistic expression such as ‘a person who deliberately takes the property of other’ and only after classifying John as an object of such intermediate legal concept (for instance, in the process of evidence inquiry) we are able to classify John as a thief. Once the evidentiary reasoning is concluded, the determination of the extension of statutory expressions consists in arguing about extensions of different general terms and expressions. We refer to the propositions concerning extensions of statutory expressions as extensional statements. Here are three examples of extensional statements:

The first extensional statement is taken from the text of a statute, the second from a doctrinal textbook, and the third from case law. They are formulated in different contexts of legal argumentation, but they all have one thing in common: they establish set-theoretical relations between sets of objects belonging to the ranges of predicates used in linguistic expression. This relation may be a relation of inclusion, equality, or another type of extensional relation such as strict superiority, etc. Extensional statements that encompass at least one occurrence of a term that is not extracted from the wording of a normative act is referred to as an Interpretive Statement (IS). The extensional statement (1) presented above is not an IS, but the remaining two statements are.⁸

The formation of IS represents the first layer of the model of legal interpretation; however, an IS should be justified (supported by reasons). Therefore, the second layer of the model consists of the use of argumentation schemes to produce arguments (argument tokens) supporting or attacking a particular IS. Argumentation schemes are abstractions of patterns actually used in argumentation (Walton 2006; Walton 1996). Because the concept of argumentation schemes is well-known in the literature and in legal reasoning, a very brief description of this concept will suffice here. Argumentation schemes are based mainly on content and not on premises and conclusions. Consequently, the arguments are non-deductive and defeasible. By default, an argument based on an argument scheme provides for the justification of a given conclusion. Each argument scheme is accompanied with a set of critical questions that are used to scrutinize the actual strength of the argument based on the argument scheme.

Classical canons of legal interpretation can be reconstructed as argumentation schemes. Although this topic has not been fully developed yet, there are already interesting studies to show how the directives of legal interpretation can be understood as argumentation schemes (Macagno et al. 2012).

In order to explain how an argumentation scheme can be developed on the basis of a classical canon of legal interpretation, let us present a scheme for a teleological interpretation of statutory expression. This is an informal (and simplified) description of a formalized, logic-based framework that was presented in Żurek and Araszkiewicz (2013)⁹:

According to the argument scheme presented above, accepted Interpretive Statements should satisfy the goal of a rule at least to some minimally acceptable extent (threshold). As Żurek and Araszkiewicz (2013, 164) argued, this type of threshold formation is actually used in the teleological interpretation of the Polish courts.

Consequently, the second layer of the model of legal interpretation involves reasons that support or demote the acceptance of certain Interpretive Statements. These reasons are included in arguments, or in instantiations of argumentation schemes.

As a result, the present model provides precise answers to the questions formulated in the preceding section in which the process of legal interpretation was discussed from the perspective of a general theory of multi-criteria decision-making. The set of decisions (alternatives) is given by competing Interpretive Statements; their structure is well-defined in the present model, and it does not seriously alter the syntactic and semantic structure of the actual interpretive statements as expressed in legal decisions. The set of criteria of assessment is formed by arguments that are instantiations of argumentation schemes built on the canons of legal interpretation. The third layer of the model, which concerns the optimization function (if any) used in legal interpretation needs further development. Because the model should perform mainly descriptive functions, a preliminary version of an account of legal balancing will be extracted from the actual legal cases discussed in the next section.

The purpose of the case study presented is to show the usefulness of the model of interpretation discussed in the preceding section and to develop its third layer concerning the comparison and balancing of interpretive arguments.

The illustrative material is provided by a series of cases decided by Polish administrative courts (with particular emphasis on the case law of the Polish Supreme Administrative Court, hereafter referred to as the PSAC) concerning the application of a rule extracted from the Inheritance and Donation Tax Act of July 28, 1983, as amended¹⁰ (hereafter referred to as the Act). Generally, according to the Act, the acquisition of material goods and monetary rights by means of inter alia, inheritance, or donation¹¹ is subject to taxation. As in most tax statutes, there are many exceptions to this general rule as well as tax reliefs and exemptions. One of these exemptions is the housing exemption. For the sake of simplicity and because it is sufficient for the purposes of this paper, let us state that the acquisition of a property (a flat or a residential building) is generally exempted from inheritance tax provided that the exempted taxpayer fulfils a set of conditions. It is not necessary to present an exhaustive set of these conditions, but an important condition is that the (exempted) taxpayer does not dispose of (sell or donate, etc.) the inherited property for a prescribed amount of time. The time period relevant to this study is 5 years from the date of acquisition of the property.

The rationale behind the “housing exemption” is quite obvious: the legislator is aware that property is often included in an inheritance to provide younger generations with housing. The acquired property must actually be used as a residence for at least 5 years. This period is prescribed to ensure that the acquired property is not sold or donated to third parties in a short time following the date of acquisition. As a result, if the acquired real property is transferred in a shorter period of time, the exemption is no longer valid, and the taxpayer is obligated to pay the tax.

The Act also provides certain exceptions to the conditions that are generally necessary to obtain the exemption. One of the exceptions to this condition that was enforced from the 22nd of June in 2004 to the 31st of December in 2006 caused a series of complicated cases and diverging opinions. This exception may be explained as follows:

Although one might have supposed that the first vague condition (necessity) caused more interpretive problems, it was in fact the second one that led to serious disagreement. More precisely, the expression “no later than” was assessed as ambiguous, which led to the formulation of two incompatible Interpretive Statements:

These two Interpretive Statements are contradictory regarding the acquisition of new property before the inherited property is transferred, which also includes the time before the inherited property is acquired. It is obvious that the (exempted) taxpayer is entitled to dispose of the inherited property and to acquire new property without losing his or her tax exemption in a period of 6 months. The interpretive question was whether he or she is entitled to acquire new property earlier and then to transfer the inherited property without causing the termination of the exemption.

As is common in such cases, the courts adopted different interpretive views. Some courts argued that “no later than x months from the point in time y” means “x months from the point in time y, but not earlier” (as in IS 1), and some courts argued that “x months from the point in time y or earlier” (as in IS 2) is the right interpretation. Even the different panels of the PSAC took opposing sides. Below, we reconstruct arguments favouring IS 1 and IS 2, respectively, on the basis of real cases decided by the PSAC.¹²

We begin with the reconstruction of the argument supporting IS 1 as it was argued in the judgment of the PSAC o13th of October in 2006, II FSK 1311/05 (hereafter: Judgment 1). The PSAC formulated only one argument in support of its thesis, which, in fact, had the form of argument from wrong consequences of adoption of IS 2. Because IS 1 and IS 2 are contradictory regarding the possibility of retaining the tax exemption in the case of the acquisition of new property before the inherited property is transferred, the rejection of IS 2 requires the acceptance of IS 1.

Due to the fact that IS 1 and IS 2 are contradictory, the rejection of IS 2 leads to the immediate acceptance of IS 1.