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FIRST
SECTION
CASE OF VAJAGIĆ v. CROATIA
(Application
no. 30431/03)
JUDGMENT
(Just
satisfaction)
STRASBOURG
16 October
2008
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 Vajagić v. Croatia,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Christos
Rozakis,
President,
Nina
Vajić,
Anatoly
Kovler,
Elisabeth
Steiner,
Khanlar
Hajiyev,
Dean
Spielmann,
Sverre
Erik Jebens,
judges,
and
André Wampach,
Deputy
Section Registrar,
Having
deliberated in private on 25 September 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 30431/03) against the Republic
of Croatia lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by Croatian nationals, Mr Mirko Vajagić and
Mrs RuZica Vajagić (“the applicants”), on 4
September 2003.
- In
a judgment delivered on 29 June 2006 (“the principal
judgment”), the Court held that there had been a violation of
Article 1 of Protocol No. 1 to the Convention and Article 13 thereof
and that it was unnecessary to examine the length complaint under
Article 6 of the Convention (see Vajagić v. Croatia,
no. 30431/03, 20 July 2006).
- Under
Article 41 of the Convention the applicants sought just satisfaction
in respect of pecuniary and non-pecuniary damage and in respect of
costs and expenses.
- Since
the question of the application of Article 41 of the Convention was
not ready for decision, the Court reserved it and invited the
Government and the applicants to submit, within six months, their
written observations on that issue and, in particular, to notify the
Court of any agreement they might reach (ibid., § 59, and point
5 of the operative provisions).
- The
applicants and the Government each filed observations.
THE FACTS
- On
20 February 2006 the Office for Property Affairs of the Town of
Virovitica (Ured drZavne uprave u Virovitičko-podravskoj
Zupaniji, SluZba za opću upravu i imovinsko-pravne
poslove – “the Virovitica Office”) adopted a
new decision in the case and awarded the applicants 214,982.70
Croatian kunas (HRK) in compensation for their expropriated property.
- Following
an appeal by the applicants, on 19 May 2006 the Ministry of Justice
(Ministarstvo pravosuđa),
acting as the second-instance administrative authority, quashed the
first-instance decision and remitted the case. It instructed the
Virovitica Office to establish what had been the use of the property
(residential, business or agricultural) at the time of expropriation,
and then determine the contemporary market value as if the property
was today being used for the same purpose, whereupon a new expert
opinion should be obtained. As regards the contemporary market value
of the property, the first-instance authority was directed to obtain
the relevant data from the tax authorities. However, in its decision
the Ministry also decided to award the applicants the above amount of
HRK 214,982.70 as advance payment of compensation together with the
statutory default interest accruable from 20 February 2006.
- Both
the applicants and the Town of Virovitica then brought an action in
the Virovitica County Court (Zupanijski sud u Virovitici)
against that decision, but on 21 May 2007 that court gave judgment
whereby it dismissed both actions and upheld the Ministry’s
decision. The applicants submitted that they had received the above
amount of HRK 214,982.70 only after the judgment became final.
- A
subsequent appeal by the applicants on points of law (revizija)
against that judgment was dismissed by the Supreme Court (Vrhovni
sud Republike Hrvatske) on 23 October 2007.
THE LAW
- 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 damage
1. The parties’ submissions
(a) The applicants
- The
applicants claimed EUR 60,550 for their expropriated land, submitting
that the current market value of land suitable for construction in
the town of Virovitica was EUR 97.22 per square metre. They submitted
that the land was situated in the street that represented a part of
the national road that connects Hungary with the Adriatic coast. It
was located on the border between construction zones I and II of the
town of Virovitica, only 250 metres from the town centre. According
to the applicants, the land was suitable for construction of a large
commercial and/or residential building and commencement of a very
profitable business activity. In support of their claim regarding the
correct market value of the construction land in Virovitica, the
applicants submitted a sale contract concluded in September 2000
whereby the town of Virovitica sold land to Croatian Telecom
(Hrvatski Telekom) at a price some EUR 61 per square metre.
They also submitted that in 2004 a certain Z.D. sold his land to the
town of Virovitica for some EUR 79 per square metre. They referred to
two other sale contracts according to which the price was some EUR 63
and EUR 72 per square metre respectively.
- The
applicants further sought EUR 20,250 for the house, arguing that the
current market value of a house or flat in Virovitica was EUR 900 per
square metre. Lastly, they asked for EUR 7,432 for other construction
on the property (toilet, well, shed, fence and garage).
- In
sum, the applicants claimed a total amount of EUR 88,232, together
with the statutory default interest from the date of expropriation,
namely 19 August 1976.
- In
reply to the Government’s arguments (see paragraph 18 below)
the applicants first submitted that the compensation they had
received represented a small and symbolic amount compared to the just
compensation due for their property expropriated thirty-two years
ago.
15 As
regards the Government’s argument that the exact market value
of their property had to be assessed by the competent domestic
authorities (see paragraph 19 below), the applicants considered it
rather hypocritical as those authorities had not managed to do so for
more than thirty years. They therefore viewed the Court’s
judgment on just satisfaction as the only option for receiving the
appropriate compensation for their expropriated property.
- Finally,
the applicants disputed the data relied on by the Government (see
paragraph 20 below). They first labelled the fiscal authorities which
had furnished the information as biased and their information as
“pure bureaucratic data”. They also emphasised that in
the sale contracts they had submitted to the Court the prices per
square metre were considerably higher than those provided by the
fiscal authorities. The applicants also challenged the expert opinion
relied on by the Government, pointing out that it was only one out of
six expert opinions obtained during the proceedings. In their view
that expert opinion was “the worst” and the expert who
prepared it “the most incompetent” as he used unreliable
data and was not familiar with the real estate market in Virovitica.
(b) The Government
- The
Government considered the applicants’ claim excessive. They
argued that there was no causal link between the applicants’
financial expectations and the violation found.
- Relying
on the Court’s case-law and in particular the judgment in the
case of Holy Monasteries (The) v. Greece (9 December 1994,
§ 71, Series A no. 301 A), the Government
pointed out that Article 1 of Protocol No. 1 did not guarantee a
right to full compensation in all circumstances, since legitimate
objectives of “public interest” may call for
reimbursement of less than the full market value. That being so, and
having regard to the fact that the applicants had received
compensation which in the Government’s view in large proportion
corresponded to the market value of their property, the Government
argued that the applicants were not entitled to any pecuniary damage
under Article 41 of the Convention.
-
Apart from awarding the applicants a large portion of compensation
for their property, the Ministry had given clear instructions to the
first-instance administrative authority as to how the remaining part
of the compensation should be determined. Thus, the Government deemed
that under the domestic law the applicants might obtain full
compensation for the market value of their property. However, it was
for the competent domestic authorities to assess that value, the
determination of which involved expert examination of all relevant
parameters. It was also for these reasons that the Government
considered that the applicants’ claim for pecuniary damages
should be rejected.
- Lastly,
the Government argued that the market value of the applicants’
property could not be established by simply referring to the highest
prices received for land suitable for construction and applying them
to the applicants’ property. They thus rejected the applicants’
claim that the market value of the property corresponded to the sum
of EUR 60,550, that is, EUR 97 per square metre (see paragraph 11
above). Instead, they submitted information collected by the fiscal
authorities (letter of the Ministry of Finance of 17 March 2008)
according to which the current market value of the land suitable for
construction in the town of Virovitica amounted to EUR 23 per square
metre. Taking into account that information as well as the opinion of
the expert J.H. of 10 November 2005 and its supplement of 26 January
2006, obtained in the context of the relevant administrative
proceedings by the Virovitica Office, the Government asserted that
the actual market value of the applicants’ property did not
exceed the amount they had already received as advance payment.
2. The Court’s assessment
21. The Court reiterates that a
judgment in which it finds a breach imposes on the respondent State a
legal obligation to put an end to the breach and make reparation for
its consequences in such a way as to restore as far as possible the
situation existing before the breach. If national law does not allow
– or allows only partial – reparation to be made, Article
41 empowers the Court to afford the injured party such satisfaction
as appears to it to be appropriate (see Iatridis
v. Greece (just satisfaction)
[GC], no. 31107/96, §§ 32-33, ECHR 2000-XI).
22. In the principal judgment the Court
found a violation of Article 1 of Protocol No. 1 for the following
reasons:
42. In the present case, 29 years have passed
without the applicants having been paid any compensation, of which
more than eight and a half years fall within the Court’s
competence ratione temporis.
43. [The Court finds] ... that it was the
authorities’ inactivity that caused for such a long passage of
time between the expropriation measure and the evaluation of the
property.
44. The Court observes that the delays in the
proceedings were caused mainly by the successive remittals. Given
that a remittal of a case for re-examination is usually ordered as a
result of errors committed by lower instances, the Court considers
that the repetition of such orders within one set of proceedings
discloses a deficiency in the procedural system as applied in the
present case (see, mutatis mutandis, Wierciszewska v.
Poland, no. 41431/98, § 46, 25 November 2003).
45. In conclusion, the Government have not
produced any convincing evidence to justify the failure of the
domestic authorities for so many years to determine the final amount
of the compensation due. This fact has resulted in an interference
with the applicants’ property rights, which in the Court’s
view was such as to have placed an excessive burden on them.
- The Court has first to determine whether, as the
Government argued, national law allows for reparation to be made for
the consequences of the violation found by the principal judgment
(see Almeida Garrett, Mascarenhas Falcão and Others v.
Portugal (just satisfaction), nos. 29813/96 and 30229/96,
§ 19, 10 April 2001). It notes in this connection that on
20 February 2006 the Virovitica Office had given a new decision in
the case and awarded the applicants HRK 214,982.70 in compensation
for their expropriated property but that on 19 May 2006 the
Ministry of Justice - following an appeal by the applicants - quashed
that decision and remitted the case. The Court also takes note of the
fact that in its decision the Ministry decided to award the
applicants HRK 214,982.70 as advance payment of compensation together
with the statutory default interest accruable from 20 February
2006 and that the applicants received that amount. However, the
Ministry’s decision was further challenged by the applicants
before the VaraZdin County Court and, later on, the Supreme Court.
While the case was pending before these courts, the Virovitica Office
- despite the fact that the Ministry’s decision was definitive
(konačna) and enforceable in terms of administrative law
- took no action upon it, that is it failed to use that time to
collect the information the Ministry had instructed it to obtain.
- That
being so, the Court cannot but conclude that - despite the partial
compensation paid to the applicants - the situation on account of
which it found a violation of Article 1 of Protocol No. 1 to the
Convention and Article 13 thereof in the principal judgment has not
substantially improved. It is sufficient to note that yet another
quashing and remittal occurred, resulting in the case being again
pending before the first-instance administrative authority and that
the applicants still have not received full compensation for their
expropriated property. In these circumstances, to ask the applicants
to await the final outcome of the relevant administrative
proceedings, which have so far lasted more than ten years and eight
months after the ratification, would scarcely be in keeping with the
idea of the effective protection of human rights and would lead to a
situation incompatible with the aim and object of the Convention (see
De Wilde, Ooms and Versyp v. Belgium
(Article 50), 10 March 1972, § 16, Series A no. 14;
Almeida Garrett, Mascarenhas Falcão and Others v. Portugal
(just satisfaction), cited above, § 20; and Jalloh v. Germany
[GC], no. 54810/00, § 129, 11 July 2006).
25. The Court thus finds that the
national law allows, at most, only for partial reparation to be made
for the consequences of the violation found and, consequently,
considers that it has to afford the applicants just satisfaction (see
Almeida Garrett, Mascarenhas Falcão and Others v. Portugal
(just satisfaction), cited above, § 21)
corresponding to the difference between the value of their property
and the compensation they obtained at national level.
- The
Court further reiterates that in many cases of lawful expropriation,
such as an expropriation of land with a view to building a road or
for other purposes “in the public interest”, only full
compensation can be regarded as reasonably related to the value of
the property (see Former King of Greece and Others v. Greece [GC]
(just satisfaction), no. 25701/94, § 36, 28 November
2002). However, as correctly pointed out by the Government,
legitimate objectives of “public interest”, such as those
pursued by measures of economic reform or measures designed to
achieve greater social justice, may call for less than reimbursement
of the full market value (ibid.). Nonetheless, the present
case concerns the expropriation which was neither carried out as part
of a process of economic, social or political reform nor linked to
any other specific circumstances. Moreover, it would appear that even
the relevant domestic law requires that the compensation due to the
applicants has to reflect the contemporary market value of the
property, having regard to its use at the time of the expropriation
(see paragraph 7 above). Accordingly, in this case, the
Court does not discern any legitimate objective “in the public
interest” capable of justifying less than reimbursement of the
market value (see, mutatis mutandis, Scordino v. Italy
(no. 1) [GC], no. 36813/97, § 102, to be published
in ECHR 2006).
- In
this connection the Court observes that the applicants’
property consisted of 622 square metres of land suitable for
construction with a house of 25.73 square metres, shed, garage,
toilet, well and fence (see paragraph 5 of the principal judgment).
- Having
regard to the fact that the applicants’ property had been
expropriated in 1976 and taking into account the information
submitted by the parties, in particular several expert opinions
obtained during the domestic proceedings, and the amount of
compensation already received at the domestic level, the Court
considers it reasonable to award the applicants jointly EUR 11,000
in respect of pecuniary damage, plus any tax that may be chargeable
on that amount.
B. Non-pecuniary damage
- The
applicants claimed EUR 100,000 in respect of non-pecuniary damage.
- The
Government contested the claim as excessive and unsubstantiated.
- The
Court finds that the applicants must have sustained non-pecuniary
damage. Ruling on an equitable basis, it awards each applicant
EUR 4,000 under that head, plus any tax that may be chargeable
on that amount.
C. Costs and expenses
1. The parties’ submissions
- The
applicants claimed, in particular, 3,810 Croatian kunas (HRK) for the
costs and expenses incurred before the domestic authorities and HRK
75,880 for those incurred before the Court, of which HRK 67,920 for
their legal representation and HRK 7,960 for translation expenses.
- The
Government contested these claims. They noted, in particular, that
the applicants had not shown any evidence that they had actually
incurred any costs for their representation before the Court.
2. The Court’s assessment
- 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 are
reasonable as to quantum.
- In
the present case, regard being had to the information in its
possession and the above criteria, the Court considers it reasonable
to award the sum of EUR 530 for costs and expenses in the domestic
proceedings, plus any tax that may be chargeable on that amount.
- As regards the applicants’ claim for costs and
expenses incurred before it, the Court notes that they failed to
submit any relevant supporting documents for the costs of their legal
representation, although they were invited to do so. It follows that
in respect of that part of their claim the applicants failed to
comply with the requirements set out in Rule 60 § 2 of the Rules
of Court. The Court therefore rejects it (Rule 60 § 3).
On the other hand, it awards the applicants EUR 1,100 for translation
expenses, plus any tax that may be chargeable on that amount.
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
- Holds
(a) that
the respondent State is to pay, 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
Croatian kunas at the rate applicable at the date of settlement:
(i) to
the applicants jointly EUR 11,000 (eleven thousand euros), plus any
tax that may be chargeable, in respect of pecuniary damage;
(ii) to
each applicant EUR 4,000 (four thousand euros), plus any tax that may
be chargeable, in respect of non-pecuniary damage;
(iii)
to the applicants jointly EUR 1,630 (one thousand six hundred and
thirty euros), plus any tax that may be chargeable, 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 16 October 2008, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
André Wampach Christos Rozakis
Deputy Registrar President
