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FOURTH
SECTION
CASE OF HAPESHIS AND OTHERS v. TURKEY
(Application
no. 38179/97)
JUDGMENT
(Just
satisfaction)
STRASBOURG
26
October 2010
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 Hapeshis and Others v. Turkey,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Ljiljana Mijović,
David Thór
Björgvinsson,
Ján Šikuta,
Päivi
Hirvelä,
Işıl Karakaş, judges,
and
Fatoş Aracı, Deputy
Section Registrar,
Having
deliberated in private on 5 October 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 38179/97) against the Republic
of Turkey lodged with the European Commission of Human Rights (“the
Commission”) under former Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by two Cypriot and two British nationals, Mr
Michael P. Hapeshis, Mrs Maria Hapeshi-Michaelidou, Mrs
Praxoulla Hapeshi-Campbell and Mrs Prodromoulla Hapeshi-Evagora (“the
applicants”), on 10 January 1997.
- In
a judgment delivered on 22 September 2009 (“the principal
judgment”), the Court dismissed various preliminary objections
raised by the Turkish Government and found a continuing violation of
Article 1 of Protocol No. 1 to the Convention by virtue of the fact
that the applicants were denied access to and control, use and
enjoyment of their properties as well as any compensation for the
interference with their property rights. Furthermore, it found that
it was not necessary to examine the applicants' complaint under
Article 14 of the Convention (Hapeshis and Others v. Turkey,
no. 38179/97, §§ 22, 23, 29 and 32 and points 1-3
of the operative provisions, 22 September 2009).
- Under
Article 41 of the Convention the applicants sought just satisfaction
of approximately 17,139,546 euros (EUR) for the deprivation of their
properties concerning the period between January 1987, when the
respondent Government accepted the right of individual petition, and
31 December 2007. Two valuation reports, setting out the basis
of the applicants' loss, were appended to their observations.
Furthermore, the applicants claimed approximately EUR 170,860
each in respect of non-pecuniary damage and EUR 23,203 for the
costs and expenses incurred before the Court.
- Since
the question of the application of Article 41 of the Convention was
not ready for decision, the Court reserved it in whole and invited
the Government and the applicants to submit, within three months,
their written observations on that issue and, in particular, to
notify the Court of any agreement they might reach (ibid., §§
46 and 49, and point 4 of the operative provisions).
- On
4 March 2010 the Court invited the applicants and the Government to
submit any materials which they considered relevant to assessing the
1974 market value of the properties concerned by the principal
judgment. The applicants were moreover invited to submit written
evidence that the properties at stake were still registered in their
name or to indicate and substantiate any transfer of ownership which
might have taken place.
- The
applicants and the Government each filed observations on these
matters. On 28 May 2008 the applicants produced certificates of
ownership of Turkish-occupied immovable properties issued by the
Department of Lands and Surveys of the Republic of Cyprus. It
transpires from these documents that on 14 May 2010 the properties
described in paragraph 13 (a), (b) and (c) below were registered in
the name of the applicants, while the property described in paragraph
13 (h) below was owned by the first applicant (Michael P. Hapeshis);
on the same date, the properties described in paragraph 13 (d), (e),
(f) and (g) below were registered in the name of the first (Michael
P. Hapeshis), second (Maria Hapeshi-Michaelidou) and fourth
(Prodromoulla Hapeshi-Evagora) applicants and in the name of a
certain “Kyriacou Pericle Kyriacos”. The latter is the
son of the third applicant, Praxoulla Hapeshi-Campbell, who
transferred to him the properties at issue on 19 August 2003. Mr
Kyriacou Pericle Kyriacos declared that he wished to continue the
procedure and authorised his mother to represent him in the
proceedings before the Court.
THE LAW
I. PRELIMINARY ISSUE
- In
a letter of 22 April 2010 the Government requested the Court to
decide that it was not necessary to continue the examination of the
applicants' just satisfaction claims. They invoked the principles
affirmed by the Grand Chamber in Demopoulos and Others v. Turkey
([GC] (Dec.), nos. 46113/99, 3843/02, 13751/02, 13466/03,
10200/04, 14163/04, 19993/04, 21819/04, 1 March 2010) and argued
that the applicants should address their claims to the Immovable
Property Commission (the “IPC”) instituted by the “TRNC”
Law 67/2005. They reiterated their position on the issue of
exhaustion of domestic remedies in the present case and in other
similar cases on 8 and 22 June 2010.
- The
Court first observes that the Government's submissions were
unsolicited; they were received by the Registry long after the
expiration of the time-limit for filing comments on just satisfaction
and almost two months after the delivery of the Grand Chamber's
decision in Demopoulos. It could therefore be held that the
Government are estopped from raising the matter at this stage of the
proceedings.
- In
any event, the Court cannot but reiterate its case-law according to
which objections based on non-exhaustion of domestic remedies raised
after an application has been declared admissible cannot be taken
into account at the merits stage (see Demades v. Turkey (merits),
no. 16219/90, § 20, 31 July 2003, and Alexandrou
v. Turkey (merits), no. 16162/90, § 21, 20 January
2009) or at a later stage. This approach has not been modified by the
Grand Chamber, as the cases of Demopoulos and Others had not
been declared admissible when Law 67/2005 entered into force and when
Turkey objected that domestic remedies had not been exhausted.
- Furthermore,
the Court considers that its previous finding in the present case
that the applicants were not required to exhaust the remedy
introduced by Law 67/2005 constitutes res judicata. It recalls
that after the compensation mechanism before the IPC was introduced,
the Government raised an objection based on non-exhaustion of
domestic remedies. This objection was rejected in the principal
judgment (see paragraph 23 of the principal judgment and point 1 of
its operative provisions). The Government also unsuccessfully
requested the referral of the case to the Grand Chamber.
- It
follows that the Government's request to stay the examination of the
applicants' claims for just satisfaction should be rejected. The
Court will therefore continue to examine the case under Article 41 of
the Convention.
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. Pecuniary and non-pecuniary damage
1. The parties' submissions
(a) The applicants
- In
their just satisfaction claims of 29 September 1999, the applicants
requested 4,489,931 Cypriot pounds (CYP –
approximately EUR 7,671,496) for pecuniary damage. They relied on an
expert's report assessing the value of their losses which included
the loss of annual rent collected or expected to be collected from
renting out their plots of land, plus interest from the date on which
such rents were due until the day of payment. The rents claimed were
for the period dating back to January 1987, when the respondent
Government accepted the right of individual petition, until September
1999. The applicants did not claim compensation for any purported
expropriation since they were still the legal owners of the
properties. The evaluation report contained a description of Ayios
Amvrosios, of its development perspectives and of the applicants'
properties. The latter were registered as follows (see paragraph 8 of
the principal judgment):
(a) plot
of land with trees in Kapsala (plot no. 12/7/5/1, sheet/plan
13/15, registration no. 14426, area: 39,818 square metres (m²));
(b)
plot of land with trees in Glifhonera (plot no. 12/7/3,
sheet/plan 13/15, registration no. 13911, area: 56,105 m²);
(c)
plot of land with trees in Glifhonera (plot no. 12/7/4,
sheet/plan 13/15, registration no. 13912, area: 55,027 m²);
(d)
plot of land with trees in Apati (plot nos. 13/4 and 15/3,
sheet/plan 13/31, registration no. 10106, area: 2,342 m²);
(e)
plot of land with trees in Spati (plot no. 250/3, sheet/plan
13/23, registration no. 7182, area: 3,345 m²);
(f)
plot of land with trees in Apati (plot no. 11/6, sheet/plan
13/31, registration no. 10097, area: m² 437);
(g)
plot of land with trees in Apati (plot no. 11, sheet/plan 13/31,
registration no. 10087, area: 4,014 m²);
(h) plot
of land in Trachonas (plot no. 579, sheet/plan 13/22,
registration no. 5927; area: 1,673 m²).
- In
1974, the properties described above were owned by the applicants'
father, who died on 19 May 1991. According to his will, dated 18 May
1988, the plot described under paragraph 13 (h) above was to be
inherited by the first applicant and the other plots were to be
inherited by the four applicants in equal shares. The applicants
registered their titles with the Department of Lands and Surveys of
the Republic of Cyprus on 10 July 1995 (see paragraph 11 of the
principal judgment).
- The
expert first observed that two of the applicants' properties were
building sites situated in highly touristic locations. The annual
rent obtainable from these plots of lands was calculated as a
percentage (6%) of their market value in August 1974. A 12% annual
increase was applied both to the rents and to the market value of the
properties. According to the expert, these two building sites had a
1974 market value of CYP 450,000 (approximately EUR 768,870),
while the annual rent obtainable from them in 1987 was CYP 109,200
(approximately EUR 186,579). The other applicants' properties
were agricultural lands. In 1974 their total annual rental value was
CYP 30.41 (approximately EUR 52), to which a 7% annual increase
was applied. Moreover, compound interest for delayed payment was
applied at a rate of 8% per annum.
- On
25 January 2008, following a request from the Court for an update on
the developments of the case, the applicants submitted updated claims
for just satisfaction, which were meant to cover the period of loss
of the use of the properties from 1 January 1987 to 31 December 2007.
They produced a revised valuation report, which, on the basis of the
criteria adopted in the previous report, concluded that the whole sum
due for the loss of use for the agricultural lands was CYP 3,140.56
plus CYP 2,890.91 for interest. The total sum claimed under this head
was thus CYP 6,301 (approximately EUR 10,765). As concerned the
building sites, the total rent from 1 January 1987 to
31 December 2007 was CYP 5,596,692, while the interest amounted
to CYP 4,428,347. The total sum claimed for these two properties was
thus CYP 10,025,039 (approximately EUR 17,128,781), while the whole
pecuniary damage suffered by the applicants was approximately EUR
17,139,546.
- On
28 May 2010 the applicants produced a revised valuation report, which
was meant to cover the loss of use for the period between 1 January
1987 and 30 June 2010. The expert appointed by the applicants
considered that the whole sums due to his clients for pecuniary
damage was EUR 20,897,559.
- Having
regard, inter alia, to a list of sales of comparable
properties in the Kyrenia District, showing that in the period
1968-1971 the price of land was comprised between CYP 0.56
(approximately EUR 3.80) and CYP 2.242 (approximately EUR 0.95)
per square metre, the expert appointed by the applicants confirmed
the 1974 market value of the two building sites as indicated in
paragraph 15 above.
- In
their just satisfaction claims of 29 September 1999, the applicants
further claimed non-pecuniary damages. They left up to the Court to
determine their amount, noting, however, that they considered that
the sum of CYP 100,000 (approximately EUR 170,860) for each
of them would not be sufficient.
(b) The Government
- The
Government filed comments on the applicants' updated claims for just
satisfaction on 30 June 2008, 15 October 2008 and 22 June 2010. They
pointed out that the present application was part of a cluster of
similar cases raising a number of problematic issues and submitted
that as an annual increase of the value of the properties had been
applied, it would be unfair to add compound interest for delayed
payment. Moreover, Turkey had recognised the jurisdiction of the
Court on 21 January 1990, and not in January 1987. In any event, the
alleged 1974 market value of the properties was exorbitant, highly
excessive and speculative; it was not based on any real data with
which to make a comparison and made insufficient allowance for the
volatility of the property market and its susceptibility to
influences both domestic and international. The report submitted by
the applicants had instead proceeded on the assumption that the
property market would have continued to flourish with sustained
growth during the whole period under consideration.
- The
Government produced a valuation report prepared by the
Turkish-Cypriot authorities, which they considered to be based on a
“realistic assessment of the 1974 market values, having regard
to the relevant land records and comparative sales in the areas where
the properties [were] situated”. This report contained two
proposals, assessing, respectively, the sum due for the loss of use
of the properties and their present value. The second proposal was
made in order to give the applicants the option to sell the
properties to the State, thereby relinquishing title to and claims in
respect of them.
- The
report prepared by the Turkish-Cypriot authorities specified that it
would be possible to envisage, either immediately or after the
resolution of the Cyprus problem, restitution of the properties
described in paragraph 13 (d), (e), (f) and (g) above. The other
immovable properties referred to in the application were possessed by
refugees; they could not form the object of restitution but could
give entitlement to financial compensation, to be calculated on the
basis of the loss of income (by applying a 5% rent on the 1974 market
values) and increase in value of the properties between 1974 and the
date of payment. Had the applicants applied to the IPC, the latter
would have offered CYP 401,239.52 (approximately EUR 685,557) to
compensate the loss of use from July 1995 onwards and CYP 597,356.91
(approximately EUR 1,020,644) for the value of the properties.
According to an expert appointed by the “TRNC”
authorities, the 1974 open-market value of the applicants' properties
was the following:
-
plots of land described under paragraph 13 (a), (b) and (c) above
(building sites): CYP 95,593.22 (approximately EUR 163,300);
-
plot of land described under paragraph 13 (d) above: CYP 76.27
(approximately EUR 130);
-
plot of land described under paragraph 13 (e) above: CYP 105.93
(approximately EUR 180);
-
plot of land described under paragraph 13 (f) above: CYP 12.71
(approximately EUR 21);
-
plot of land described under paragraph 13 (g) above:
CYP 17.12 (approximately EUR 29);
-
plot of land described under paragraph 13 (h) above: CYP 1,694.92
(approximately EUR 2,895).
- Upon
fulfilment of certain conditions, the IPC could also have offered the
applicants exchange of their properties with Turkish-Cypriot
properties located in the south of the island.
- In
their comments of 22 June 2010, the Government recalled that in the
case of Demopoulos and Others (cited above) the Grand Chamber
had found that the IPC was an adequate domestic remedy for those
claiming a violation of Article 1 of Protocol No. 1. Notwithstanding
the adoption of a judgment on the merits, it would still be open to
the applicants to apply to the IPC, which would calculate the current
value and the 1974 value of the properties “in a credential way
based on actual data”. On 27 May 2010 the IPC had sent a letter
to the applicants' representative, inviting his clients to introduce
an application before it.
- The
Government recalled that under Law No. 67/2005, the following means
of redress were available: a) restitution; b) compensation;
c) exchange. The relevant provisions of the law at issue are
described in Demopoulos and Others (cited above, §§
35-37).
- The
Government further noted that in making its assessment as regarded
compensation for the loss of use, the IPC had collected data from the
Department of Lands and Surveys on the 1973-1974 purchase prices for
comparable properties. It had also examined the development of
interest rates of the Cyprus Central Bank. The loss of income was
then calculated by assuming that the obtainable rent would have been
5% of the value of the properties; this last value had been modified
every year on the basis of the land market value index. Cyprus
Central Bank interest rates had been applied on the sums due since
1974.
- Being
in possession of the land registers, the Turkish-Cypriot authorities
were in a better position than the applicants and the Greek-Cypriot
authorities to assess the market values of the properties in a
realistic and reliable manner. The applicants had put forward
exaggerated claims and had tended to inflate the 1974 values of their
possessions. The Government therefore requested the Court to
rule on compensation on the basis of the calculations made by the
Turkish-Cypriot authorities, which were “credential and
objective in every aspect”.
- The
report prepared by the Turkish-Cypriot authorities confirmed that it
would be possible to envisage restitution of some of the applicants'
properties. Had the applicants applied to the IPC, the latter would
have increased its offer up to CYP 477,430.31 (approximately EUR
815,737) to compensate the loss of use and up to CYP 653,890.20
(approximately EUR 1,117,236) for the value of the properties.
The expert appointed by the authorities of the “TRNC”
also confirmed the 1974 open-market values of the applicants'
properties as indicated in paragraph 22 above.
- Finally,
the Government considered that the amount claimed in respect of
non-pecuniary damage was excessive and unrealistic; given the
existence of an effective domestic remedy, the Court should keep the
award for such damage to a minimum.
2. The Court's assessment
- The
Court recalls that it has concluded that there had been a continuing
violation of the applicants' rights guaranteed by Article 1 of
Protocol No. 1 by reason of the complete denial of the rights of the
applicants with respect to peaceful enjoyment of their properties in
northern Cyprus (see paragraph 29 of the principal judgment).
Furthermore, its finding of a violation of Article 1 of Protocol No.
1 was based on the fact that, as a consequence of being continuously
denied access to their plots of land, the applicants had effectively
lost all access and control as well as all possibilities to use and
enjoy their properties (see paragraph 27 of the principal judgment).
They are therefore entitled to a measure of compensation in respect
of losses directly related to this violation of their rights as from
the date on which they formally acquired ownership of the properties,
namely 10 July 1995 (see paragraphs 11 and 29 of the principal
judgment and paragraph 14 above), until the present time (see,
mutatis mutandis, Cankoçak v. Turkey, nos.
25182/94 and 26956/95, § 26, 20 February 2001, and Demades
v. Turkey (just satisfaction), no. 16219/90, § 21, 22
April 2008).
- In
connection with this, the Court observes that the affirmations of
ownership of Turkish-occupied immovable properties produced by the
applicants (see paragraph 6 above) show that on 14 May 2010 the first
applicant was still the owner of the property described in paragraph
13 (h) above and that all the applicants were, in equal shares, still
the owners of the properties described in paragraph 13 (a), (b) and
(c) above. On the same date, the properties described in paragraph 13
(d), (e), (f) and (g) above were owned by the first, second and
fourth applicants and by the son of the third applicant (see
paragraphs 6 and 14 above). The Court also observes that Mr
Kyriacou Pericle Kyriacos was not one of the original applicants and
does not, therefore, have standing to continue the present
application on his mother's behalf or to be represented by her before
the Court. The Court will take due account of the fact that the third
applicant owned ¼ of the properties described in paragraph 13
(d), (e), (f) and (g) above only until 19 August 2003.
- In
the opinion of the Court, the valuations furnished by the applicants
involve a significant degree of speculation and make insufficient
allowance for the volatility of the property market and its
susceptibility to influences both domestic and international (see
Loizidou v. Turkey (just satisfaction), 28 July 1998, §
31, Reports of Judgments and Decisions 1998-IV).
Accordingly, in assessing the pecuniary damage sustained by the
applicants, the Court has, as far as appropriate, considered the
estimates provided by them (see Xenides-Arestis v. Turkey (just
satisfaction), no. 46347/99, § 41, 7 December
2006). In general it considers as reasonable the approach to
assessing the loss suffered by the applicants with reference to the
annual ground rent, calculated as a percentage of the market value of
the properties, that could have been earned during the relevant
period (Loizidou (just satisfaction), cited above, § 33,
and Demades (just satisfaction), cited above, § 23).
Furthermore, the Court has taken into account the uncertainties,
inherent in any attempt to quantify the real losses incurred by the
applicants (see Loizidou v. Turkey (preliminary objections),
23 March 1995, § 102, Series A no. 310, and (merits)
18 December 1996, § 32, Reports 1996-VI).
- The
Court notes that notwithstanding its request to submit material
relevant to assessing the 1974 market value of the applicants'
properties, the parties have produced few elements in this respect.
The Government have relied on the accuracy of the IPC's calculations
(see paragraphs 21 and 26-27 above), while the applicants have
produced a list of sales of comparable properties in the Kyrenia
District, showing that in the period 1968-1971 the price of land was
comprised between CYP 0.56 (approximately EUR 3.80) and CYP 2.242
(approximately EUR 0.95) per square metre (see paragraph 18
above).
- The
Court further observes that the applicants submitted an additional
claim in the form of annual compound interest in respect of the
losses on account of the delay in the payment of the sums due. While
the Court considers that a certain amount of compensation in the form
of statutory interest should be awarded to the applicants, it finds
that the rates applied by them are on the high side (see, mutatis
mutandis, Demades (just satisfaction), cited above, §
24). Moreover, the applicants' expert has calculated the loss of
rents as from January 1987, when Turkey had recognised the right of
individual petition, and not from 10 July 1995, when the applicants
became the legal owners of the properties (see paragraphs 11 and 29
of the principal judgment and paragraphs 14 and 30 above).
- Finally,
the Court is of the opinion that an award should be made in respect
of the anguish and feelings of helplessness and frustration which the
applicants must have experienced over the years in not being able to
use their properties as they saw fit (see Demades (just
satisfaction), cited above, § 29, and Xenides-Arestis
(just satisfaction), cited above, § 47).
- Having
regard to the above considerations, the Court is of the opinion that
the sums claimed by the applicants in respect of pecuniary and
non-pecuniary damage (respectively, EUR 20,897,559 and EUR 683,440 –
see paragraphs 17 and 19 above) are manifestly excessive. It
considers that the amount which, according to the Government, the IPC
could have offered the applicants in respect of loss of use (the
global sum of EUR 815,737 – see paragraph 28 above) constitutes
a fair basis for compensating the damage sustained by them. In
connection with this, it is to be recalled that the properties
concerned by the principal judgment are eight plots of land, some of
which were building sites, of a total area of 162,761
square metres (see paragraph 13 above). Making its assessment
on an equitable basis, the Court decides to award the applicants EUR
900,000 in respect of pecuniary and non-pecuniary damage.
B. Costs and expenses
- In
their just satisfaction claims of 29 September 1999, relying on bills
from their representatives, the applicants sought CYP 11,265.62
(approximately EUR 19,248) for the costs and expenses incurred
before the Court. This sum included CYP 5,400 (approximately EUR
9,226) for the costs of the expert report assessing the value of
their properties. In their updated claims for just satisfaction of
25 January 2008, they submitted additional bills of costs for
the new valuation report and for legal fees amounting to EUR 1,955
and EUR 2,000 respectively. The total sum sought for cost
and expenses was thus approximately EUR 23,203. Finally, on
28 May 2010 the applicants submitted that their further legal
fees and expert report's costs amounted to EUR 1,400 and EUR 23,000
respectively.
- The
Government did not comment on this point.
- According
to the Court's case-law, an applicant is entitled to reimbursement of
his costs and expenses only in so far as it has been shown that these
have been actually and necessarily incurred and were reasonable as to
quantum (see, for
example, Iatridis v. Greece (just
satisfaction) [GC], no. 31107/96, § 54, ECHR 2000-XI).
- The
Court notes that the case involved perusing a certain amount
of factual and documentary evidence and required a fair degree of
research and preparation. In particular, the
costs associated with producing updated valuation reports in view of
the continuing nature of the violation at stake were essential for
enabling the Court to reach its decision regarding the issue of just
satisfaction (see Demades v. Turkey (just
satisfaction), cited above, § 34).
- Although
the Court does not doubt that the fees claimed were actually
incurred, it considers the amount claimed for the costs and expenses
relating to the proceedings before it excessive and decides to award
the total sum of EUR 8,000.
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
- Dismisses the Government's request to
stay the examination of the applicants' claims for just satisfaction;
- 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:
(i) EUR
900,000 (nine hundred thousand euros), plus any tax that may be
chargeable, in respect of pecuniary and non-pecuniary damage;
(ii) EUR
8,000 (eight thousand 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 26 October 2010, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Nicolas Bratza
Deputy Registrar President
