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FIFTH
SECTION
CASE OF MIHAYLOVI v. BULGARIA
(Application
no. 6189/03)
JUDGMENT
STRASBOURG
12 February 2009
This judgment will become
final in the circumstances set out in Article 44 § 2 of the
Convention. It may be subject to editorial revision.
In the case of Mihaylovi v.
Bulgaria,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Peer Lorenzen, President,
Rait
Maruste,
Karel Jungwiert,
Renate Jaeger,
Mark
Villiger,
Isabelle Berro-Lefèvre,
Mirjana
Lazarova Trajkovska, judges,
and Claudia
Westerdiek, Section
Registrar,
Having
deliberated in private on 20 January 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 6189/03) against the Republic
of Bulgaria lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by two Bulgarian nationals, Mr Anton Mihaylov and
his wife, Mrs Nadezhda Mihaylova (“the applicants”), on
14 February 2003.
- The
Bulgarian Government (“the Government”) were represented
by their Agent, Mrs M. Dimova.
- The
applicants alleged that they have been deprived
of their property in violation of Article 1 of Protocol No. 1.
- On
26 November 2007 the President of the Fifth Section decided to give
notice of the application to the Government. It was also decided to
examine the merits of the application at the same time as its
admissibility (Article 29 § 3).
- Judge
Kalaydjieva, the judge elected in respect of Bulgaria, withdrew from
sitting in the case (Rule 28 of the Rules of Court). On 1 October
2008, the Government, pursuant to Rule 29 § 1 (a), informed the
Court that they had appointed in her stead another elected judge,
namely Judge Lazarova Trajkovska.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
first applicant, Mr Mihaylov, was born in 1926. He passed away in
2003. His heirs, the second applicant, Mrs Mihaylova, and her two
children, Ms Valentina Mihaylova and Mr Stefan Mihaylov, stated that
they wished to pursue the application. The applicants were born
respectively in 1931, 1956 and 1962, and live in Sofia.
- In 1985 the first two applicants
purchased from the Sofia municipality a three-room apartment of 88
square metres. The apartment was located in a three-storey building
in the centre of Sofia. It had become State property by virtue of the
nationalisations carried out by the communist regime in Bulgaria in
1947 and for several years afterwards.
- Several months after the adoption
of the Restitution Law in 1992, the former pre-nationalisation owners
brought proceedings under section 7 of that law against the first and
second applicants, seeking the
nullification of the applicants' title and the restoration of their
property..
- The proceedings ended by final
judgment of the Supreme Court of Cassation of 13 December 2002. The
courts found that the applicants' title was null and ordered them to
vacate the apartment. This finding was based on two grounds: 1) the
area where the apartment was located had been earmarked for
construction of buildings of more than three storeys, according to
the building plan of Sofia, and the relevant legislation prohibited
the sale of apartments in three-storey buildings located in such
areas; and 2) the 1985 sale contract had not been signed by the mayor
but by his deputy.
- The applicants vacated the
apartment on 30 December 2002.
- After
the final judgment in their case, the applicants had the opportunity
to obtain compensation from the State in the form of compensation
bonds which could be used in privatisation tenders or sold to
brokers. The applicants did not avail themselves of this opportunity.
- In May 2006 the second applicant was granted the
tenancy of a one-room municipal apartment.
II. RELEVANT DOMESTIC LAW AND PRACTICE
- The
relevant background facts and domestic law and practice have been
summarised in the Court's judgment in the case of
Velikovi and Others v. Bulgaria, nos.
43278/98, 45437/99, 48014/99, 48380/99, 51362/99, 53367/99, 60036/00,
73465/01, and 194/02, 15 March 2007.
- Shortly
after the adoption of that judgment, on 8 May 2007 the Government
published regulations implementing section 7(3) of the Restitution
law (State Gazette no. 37 of May 2007). The regulations enable
persons currently in possession of housing compensation bonds to
obtain payment at face value from the Ministry of Finance.
THE LAW
PRELIMINARY OBSERVATION
- The
Court notes at the outset that the first applicant died in 2003 and
that his heirs, the second applicant and their two children,
expressed the wish to pursue the application on his behalf. In
similar cases in which an applicant has died in the course of the
proceedings the Court has taken into account the statements of the
applicant's heirs who have expressed a wish to pursue the proceedings
before it, and the Court sees no reason to hold otherwise in the
present case (see, among others, Kirilova and Others v. Bulgaria,
nos. 42908/98, 44038/98, 44816/98 and 7319/02, § 85, 9 June
2005).
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
- The
applicants complained that they have been deprived of their property
in violation of Article 1 of Protocol No. 1, which reads as follows:
“Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions or penalties.”
- The
Government contested that argument.
A. Admissibility
- The Court notes that the application is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. It further notes that it is not inadmissible on any other
grounds. It must therefore be declared admissible.
B. Merits
- The
applicants stated that they were deprived of their property and that
the requisite fair balance under Article 1 of protocol No. 1 has not
been respected. They maintained that no adequate compensation had
been made available to them for the deprivation of their property.
They stressed that the amendments providing for payment at face value
of the compensation bonds had been adopted only in 2007, when the
opportunity to obtain such bonds was no longer available to them.
- The
Government stated that the restitution laws
adopted after the fall of communism were aimed at restoring justice.
In the applicants' case, the courts had applied the relevant law
correctly. The requisite fair balance had not been upset because the
applicants had been entitled to compensation by bonds which following
the 2007 amendments to the law could have been paid at face value.
The applicants had failed to introduce a timely request to obtain
such compensation. Moreover, the second applicant was granted the
tenancy of a municipal apartment when she applied in 2006.
- The
Court notes that the present case concerns the same legislation and
issues as in Velikovi and Others,
cited above.
- The
facts complained of undoubtedly constituted an interference
with the applicants' property rights and fall
to be examined under the second sentence of the first paragraph of
Article 1 of Protocol No. 1 as a deprivation of property.
- The
Court must examine therefore whether the deprivation of property at
issue was lawful, was in the public interest and struck a fair
balance between the demands of the general interest of the community
and the requirements of the protection of the individual's
fundamental rights.
- The Court notes that the
interference was based on the relevant law and pursued an important
aim in the public interest – to restore justice and respect for
the rule of law. As in Velikovi
and Others (cited above, §§ 162 176), it
considers that in the particular circumstances the question whether
the relevant law was sufficiently clear and foreseeable cannot be
separated from the issue of proportionality.
25. Applying
the criteria set out in Velikovi and
Others (cited above, §§ 183-192),
the Court notes that the applicants' title was declared null and
void and they were deprived of their property because
of shortcomings imputable to the municipal authorities. In
particular, the fact that the municipality sold an apartment in a
three-storey building in an area where higher buildings had been
planned was entirely a matter for the municipality to decide.
Moreover, it was never claimed that the sale had impeded the
realisation of the building plan, which was apparently abandoned. The
second ground for nullity, the fact that the contract had been signed
in 1985 by the deputy to the official in whom the relevant power had
been vested was a procedural defect
imputable to the municipal administration and not to the applicants.
- The
Court considers that the present case is therefore similar to those
of Bogdanovi
and Tzilevi,
examined in its Velikovi and Others
judgment (see § 220 and § 224 of that judgment, cited
above), where it held that in such cases the fair balance required by
Article 1 of Protocol No. 1 could not be achieved without adequate
compensation.
- The
Court notes that the applicants have not received compensation.
However, as in one of the applications examined in Velikovi
and Others (see §§
226-228) – the application of Tzilevi
– the applicants did not apply for compensation bonds,
as they could have in 2003. The Court considers that, as a result,
they forewent the opportunity to obtain at least between 15% and 25%
of the value of the apartment, as that was the rate at which bonds
were traded until the end of 2004. The fact that bond prices rose at
the end of 2004 or that the applicable law was amended in 2006 and
provided for payment of the bonds at face value cannot lead to the
conclusion that the authorities would have secured adequate
compensation for the applicants. Indeed, the applicants could not
have foreseen bond prices or legislative amendments and the Court
cannot speculate whether they would have waited four or more years
before cashing their bonds. Furthermore, the legislation on
compensation changed frequently and was not foreseeable (see Velikovi
and Others, cited above, § 191
and § 226).
- In
these circumstances, the Court finds that no clear and foreseeable
opportunity to obtain compensation was secured to the applicants.
Their failure to use the bond compensation scheme will have to be
taken in consideration under Article 41, but cannot decisively affect
the outcome of their Article 1 Protocol 1 complaint.
- There
has therefore been a violation of Article 1 of Protocol No. 1.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- The
applicants claimed 70,000 euros (EUR) in respect of the market value
of the apartment. However, they did not submit an expert report or
any other document on which basis this estimate was made. They also
claimed 1,307 Bulgarian levs (BGN), approximately EUR 670, in respect
of the amount of rent paid after their eviction and submitted the
relevant receipts. The applicants claimed EUR 4,000 for non-pecuniary
damage.
- The
Government invited the Court to determine an award in conformity of
its case-law in similar cases and pointed that the applicants did not
submit evidence in support of their claim.
- Applying
the approach set out in similar cases, in view of the nature of the
violation found the Court finds it appropriate to fix a lump sum in
respect of pecuniary and non-pecuniary damage with reference to the
value of the apartment and all other relevant circumstances (see
Todorova and Others v. Bulgaria (just
satisfaction), nos.
48380/99, 51362/99, 60036/00 and 73465/01, §§ 10 and
47, 24 April 2008).
- To
determine the amount to be awarded, the Court observes that it stated
above that the applicants' failure to use the bond compensation
scheme would have to be taken into consideration under Article 41 of
the Convention. It notes that had the applicants made use of that
scheme they could have obtained between 15% and 25% of the value of
the apartment. The Court considers therefore that it must apply an
appropriate reduction of the just satisfaction award on account of
the applicants' failure to make use of the opportunity to obtain
partial compensation. It accepts that the reduction must be modest,
having regard to the fact that the relevant national legislation on
compensation was subject to frequent amendments in contradictory
directions and was thus unpredictable and generated legal uncertainty
(see paragraph 27 above and Todorova and others, cited above,
§ 46).
- Having
regard to the above considerations, all the circumstances of the case
and information at its disposal about the real-estate market in
Sofia, the Court awards the applicants EUR 57,000 in respect of
pecuniary and non-pecuniary damage.
B. Costs and expenses
- The
applicants also claimed BGN 1,800 (EUR 920) for legal fees. They
submitted a receipt for paid legal fees of BGN 540 (EUR 276) for the
procedure before the Court and of BGN 110 (EUR 56) for the domestic
procedure.
- The
Government did not comment.
- According
to the Court's case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and are
reasonable as to quantum. In the present case, the Court notes that
the applicants provided justification for part of the legal fees
claimed and awards EUR 332 in respect of costs and expenses.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the application admissible;
- Holds that there has been a violation of Article
1 of Protocol No. 1;
- Holds
(a) that
the respondent State is to pay the applicants, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following amounts, to be
converted into Bulgarian levs at the rate applicable at the date of
settlement
i. EUR
57,000 (fifty seven thousand euros), plus any tax that may be
chargeable, in respect of pecuniary and non-pecuniary damage;
ii. EUR
332 (three hundred thirty two euros), plus any tax that may be
chargeable to the applicants, in respect of costs and expenses;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicants' claim
for just satisfaction.
Done in English, and notified in writing on 12 February 2009,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Peer Lorenzen
Registrar President
