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FIRST
SECTION
CASE OF HOUSING ASSOCIATION OF WAR DISABLED AND VICTIMS OF WAR OF
ATTICA AND OTHERS v. GREECE
(Application
no. 35859/02)
JUDGMENT
(Just
satisfaction)
STRASBOURG
27
September 2007
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 Housing Association of War Disabled and Victims of
War of Attica and Others v. Greece,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Mr L. Loucaides, President,
Mr C.L.
Rozakis,
Mrs F. Tulkens,
Mrs E. Steiner,
Mr K.
Hajiyev,
Mr D. Spielmann,
Mr S.E. Jebens, judges,
and
Mr S. Nielsen, Section Registrar,
Having
deliberated in private on 6 September 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 35859/02) against the Hellenic
Republic lodged with the Court under Article 34 of the Convention for
the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by an association with legal personality under
Greek law, the Housing Association of War Disabled and Victims of War
of Attica (“the first applicant”), on 25 September 2002.
The first applicant lodged the present application acting both in its
own capacity and on behalf of 157 of its members, whose names have
been submitted to the Court, on the basis of a decision taken by its
general assembly on 8 September 2002.
- In
a judgment delivered on 13 July 2006 (“the principal
judgment”), the Court held unanimously that there had been a
violation of Article 1 of Protocol No. 1. More specifically, it held
that no reasonable balance had been struck between the public
interest and the requirements of the protection of the applicants'
rights (see Housing Association of War Disabled and Victims of War
of Attica and Others v. Greece, no. 35859/02, §§ 40-41,
13 July 2006).
- Under
Article 41 of the Convention the applicants invited the State either
to restore their right to build their homes on the land in question,
or to pay them compensation of between 60 and 65 million euros (EUR).
They further claimed EUR 14,700,000 for non-pecuniary damage and
EUR 100,000 for 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 three months from the
date on which the principal judgment became final, their written
observations on that issue and, in particular, to notify the Court of
any agreement they might reach (ibid., § 45, and point 3
of the operative provisions).
- The
applicants and the Government each filed observations and
subsequently replied to each other's submissions.
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 applicants' submissions
- The
applicants recalled at the outset that the Court had already accepted
that not only the applicant association itself, but also each of its
members, were victims of a violation of their property rights.
Moreover, in 1999, when the applicant association (together with
three of its board members) had sought either the exchange or the
expropriation of the land in question, it had been acting in the name
of and on behalf of all its members. All the applicants therefore had
a right to just satisfaction.
- The
applicants stressed that their case was exceptional in many respects.
The victim of the violation was not an ordinary owner or possessor:
the founding of the Housing Association had been approved by the
State in the early 1950s for the exclusive purpose of providing each
of its members with a house. As made clear by the evidence submitted
to the Court, the original land had been purchased for a substantial
amount of money (GRD 400,000) paid by the applicants in 1957; it had
been subsequently expropriated by the State for use by the Greek
Army. In exchange, the State had transferred the land now in issue to
the applicants and, since it was larger in area than the original
land, the applicants had had to pay an additional amount (see
paragraphs 9-10 of the principal judgment).
- The
applicants further argued that the issue of whether the land in
question had been a forest before it came into their possession was
irrelevant. On the contrary, what was crucial for the case was that
even if that land at the time had been considered as forest –
which was false – this could not hinder its use and, more
specifically, its development as building land. In this respect, the
applicants recalled that the drastic change in the protection of the
environment and forests in Greece had occurred gradually, after the
adoption of the 1975 Constitution. Prior to that change, the
protection of forests was guaranteed under ordinary legislation and
could be restricted for various reasons, including the extension of
town plans or for housing or agricultural use.
- In
any event, the applicants stressed that at the time it was acquired
by them (1964), the land in question had not been a forest. This is
all the more so in view of the fact that the land had been given to
the association to replace the land the latter had bought in 1957
with its own means for exactly the same purpose, namely to provide
housing to war disabled and victims of war. In other words, unlike
ordinary landowners who had the legitimate expectation of building on
their land and developing it subsequently, the association had owed
its existence to serving the above purpose exclusively.
- In
view of the above, the applicants submitted that the violation of
their rights not only fell within the ambit of the “third rule”
contained in Article 1 of Protocol No. 1, but could also be
considered as a deprivation of property, given that it amounted to
the cessation of the purpose for which the applicant association had
been founded. For this specific reason, the applicants considered
that only restitutio in integrum could put an end to the
breach that had occurred. If that was not possible, full compensation
was the only acceptable reparation.
- In
this respect, the applicants submitted an expert report by King
Hellas International Property Consultants S.A., according to
which the market value of the land in question at the date on which
the violation had commenced (according to the applicants on 15 April
1988, when a Presidential decree had excluded their land from the
urban development plan – see paragraph 16 of the principal
judgment), had been the equivalent of EUR 14,400,000. This amount had
been calculated primarily with reference to the “objective
value” of their land, which represented under Greek law the
minimum value on the basis of which the tax authorities had to
estimate the transfer or inheritance tax owed on transactions. For
information, the applicants submitted that in December 2006 the
market value of their land amounted to EUR 108,000,000.
- As
no compensation whatsoever had been paid to them, the applicants
submitted that the above sum should be readjusted to take account of
interest rates for the period from 15 April 1988 to date. For this
purpose, the experts had used two distinct alternative methods:
first, they had applied the rate of interest on government bonds, the
safest, albeit very conservative, type of investment in Greece,
during the period in question; this method had produced an aggregate
amount of EUR 132,830,000 at 31 December 2006. Second, they had
applied the 6% annual interest rate corresponding to the interest
rate paid by the Greek State during that period on its borrowings;
this alternative method had resulted in an amount of EUR 43,570,000.
At this point the applicants stressed that, using both methods for
calculation of the above sums, the experts had applied the compound
interest method on a yearly basis and not on a month-to-month basis
as practised by the Greek State itself in dealing with its debtors
during the same period.
- The
applicants further claimed that even if the violation of their rights
was considered not as a deprivation but merely as a control of the
use of their property, compensation was still owed. For the
calculation of that compensation, the applicants referred again to
the expert report. For the period from 15 April 1988 to date, the
latter had used two different methods: on the one hand, they had
applied the interest rate on government bonds, producing an amount of
EUR 118,430,000. On the other, the 6% annual interest rate had
been applied to the same period, giving an amount of EUR 29,170,000.
- Having
said that, the applicants argued that for the calculation of the loss
of use of their land, the starting point could also have been set on
the date that their land had been included in the town plan of
Cholargos (6 May 1966 – see paragraph 11 of the principal
judgment). On that date, on the basis of the royal decree issued for
the purpose, the applicants could have begun construction work on
their houses after obtaining the relevant building permits. Applying
the same alternative methods used above and taking into consideration
the market value of their land on 6 May 1966 (EUR 1,600,000),
the respective amounts would have totalled EUR 118,310,000
(investment in government bonds) and EUR 15,840,000 (6% interest
rate).
2. The Government's submissions
- The
Government argued that in its principal judgment the Court had found
that the interference complained of amounted to a control of the use
of the applicants' property (ibid., § 36) and not to a
deprivation of property as the applicants now alleged. The fact that
the objective pursued by the applicant association had not been
achieved did not alter the situation.
- The
Government further noted that the Court had not contested the
lawfulness of the impugned acts, the fact that the land was a forest
or the public interest pursued by the acts in question. It had found
a violation of Article 1 of Protocol No. 1 only because no reasonable
balance had been struck between the interests of private individuals
and the public interest. The Government affirmed that the present
case was therefore clearly different from the Papamichalopoulos
case, where the Court had found that the State's illegal occupation
of the applicants' possessions amounted to a de facto
expropriation (Papamichalopoulos and Others v. Greece,
judgment of 24 June 1993, Series A no. 260-B, p. 69,
§§ 41-42).
- It
was obvious, therefore, that both the applicants' request to be
allowed to build on their land and their claim to compensation equal
to the alleged market value of that land were totally ill-founded,
since the damage they claimed to have sustained was not causally
connected with the violation found. Consequently, the applicants'
claim for restitutio in integrum or full compensation should
be dismissed.
- Furthermore,
the criterion used by the applicants in order to determine their
pecuniary damage, namely the market value of the land, was wrong and
inappropriate, since there was no market or “objective”
value for forests and woodlands which could not be developed
commercially. In this connection, the Government argued that the
disputed land had always been a forest and had been earmarked for
reafforestation decades previously. Consequently, the findings of the
valuation report produced by the applicants, which had been prepared
by a private company and was based on a totally arbitrary method of
calculation, should not be taken into account by the Court.
- According
to the Government, the Court should also take into account the fact
that the applicants had acquired the land by concession from the
State, paying a purely symbolic price for it. Furthermore, when the
State conceded the disputed land, it had not undertaken to include it
in the urban development plan and had not guaranteed that the land
met the requirements for being included therein.
- Moreover,
in determining the applicants' compensation for the limitation on the
use of their property, the Court should take into account the
pressing public-interest needs served by the applicable limitations
and also the fact that not every member of the applicant association
had sought, in 1999, the exchange or expropriation of the land in
question by the State.
- In
view of the above, the Government concluded that any award for
pecuniary damage should not exceed a total of EUR 150,000.
3. The Court's assessment
- In its principal judgment the Court concluded that the
interference with the applicants' property rights “clearly
amounted to a control of the use of their property, within the
meaning of the second paragraph of Article 1 of Protocol No. 1”
(ibid, § 36). The Court cannot therefore depart from this
finding and consider that the interference complained of was
tantamount to deprivation of property, as the applicants now suggest.
Further, the Court recalls that its present task is to determine the
award of just satisfaction which, if necessary, shall be afforded to
the injured party and not to go back to questions relating to the
substance of the case, namely to decide whether the land in question
was a forest in 1964 or whether it was donated to or purchased by the
applicants.
- The Court reiterates that, where it has found a breach
of the Convention in a judgment, the respondent State is under a
legal obligation to put an end to that breach and make reparation for
its consequences in such a way as to restore as far as possible the
situation existing before the breach (see Iatridis v. Greece
(just satisfaction) [GC], no. 31107/96, § 32, ECHR
2000-XI).
- The respondent Government are, in principle, free to
choose the means whereby they will comply with the judgment. This
discretion as to the manner of execution of a judgment reflects the
freedom of choice attaching to the primary obligation of the
Contracting States under the Convention to secure the rights and
freedoms guaranteed (Article 1). If the nature of the breach allows
for restitutio in integrum, it is for the respondent
Government to effect it, the Court having neither the power nor the
practical possibility of doing so itself. However, 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
Papamichalopoulos and Others v. Greece (Article 50),
judgment of 31 October 1995, Series A no. 330-B, pp.
58-59, § 34, and Brumărescu v. Romania (just
satisfaction) [GC], no. 28342/95, § 20, ECHR 2001-I).
- In
its principal judgment the Court held, inter alia, that “in
such a complex situation in which any decision could weigh heavily on
the property rights of a large number of people, the legitimate
concern to protect the forests, understandable as it is in the modern
day, should not absolve the State of its responsibility to provide
adequate protection to people such as the applicants who bona fide
possess or own property... The Court is particularly struck by the
fact that, although the very substance of the applicants' ownership
has been affected..., the applicants were not successful in obtaining
compensation under Greek law. This, combined with the State's
ultimate refusal to expropriate the applicants' property or to
exchange it for new land of equal value, aggravated considerably the
adverse effects on the applicants' situation and placed a
disproportionate burden on them. The above circumstances lead the
Court to conclude that there was no reasonable balance struck between
the public interest and the requirements of the protection of the
applicants' rights” (ibid., §§ 38-40). It
follows that the act of the Greek Government which the Court held to
be contrary to the Convention was a prohibition on building houses on
the land belonging to the applicants which would have been legitimate
but for the failure to pay any kind of compensation.
- The
Court first considers that, in the circumstances of the case, the
nature of the breach found in the principal judgment does not allow
the Court to proceed on the basis of the principle of restitutio
in integrum (see Former King of Greece and Others
v. Greece [GC] (just satisfaction), no. 25701/94,
§ 73). An award of just satisfaction must therefore
be made.
- In
the present case, the Court cannot overlook the fact that the
applicants suffered a drastic limitation of the use of their
property. Nevertheless, it is aware of the difficulties in
calculating the value of the property and the pecuniary damage
sustained as a result of the limitation of its use. Furthermore, it
notes the considerable disparity between the parties' estimates (see
Papastavrou and Others v. Greece (just satisfaction),
no. 46372/99, §§ 15-16, 18 November 2004).
- In
view of all the above considerations, the Court, ruling on an
equitable basis as required by Article 41 of the Convention, awards
the applicants EUR 5,000,000 jointly under the head of pecuniary
damage, plus any tax that may be chargeable on that amount.
B. Non-Pecuniary damage
- The
applicants claimed EUR 100,000 for each individual share of the
applicant association, giving a total amount of EUR 15,700,000 in
respect of the non-pecuniary damage they had sustained.
- According to the Government, the amount claimed was
excessive. They considered that the finding of a violation of Article
1 of Protocol No. 1 constituted in itself sufficient just
satisfaction for any non-pecuniary damage sustained by the
applicants.
- The
Court considers that while the applicants may have sustained
non-pecuniary damage, the present judgment provides sufficient
compensation for it.
C. Costs and expenses
- The
applicants sought reimbursement of EUR 100,000 for the costs and
expenses incurred before the domestic courts and the Court. In this
connection, they produced a bill of costs for their lawyers' fees
before the Court in the amount of EUR 15,000 and a disbursement bill
in the amount of EUR 24,990 charged by the experts who had prepared
the valuation report.
- The
Government submitted that the amounts claimed were exorbitant,
unnecessary and insufficiently substantiated. In particular, they
stressed that the preparation of the expert's report had been
unnecessary because it was based on the erroneous assumption that the
disputed land was fit for building on and therefore had a market
value. They also challenged the amount claimed for lawyer's fees,
arguing that no oral hearing had been held before the Court and that
the case had been examined on written submissions. Any award under
this head should therefore not exceed a total amount of EUR 3,000.
- According
to the Court's established case-law, costs and expenses will not be
awarded under Article 41 unless it is established that they were
actually and necessarily incurred and were also reasonable as to
quantum (see Iatridis v. Greece (just satisfaction), cited
above, § 54).
- The Court notes that the applicants submitted no
supporting documents as regards costs and expenses before the
domestic courts. Accordingly, it does not award anything under this
head. As regards the applicants' claims relating to the proceedings
before it, the Court considers that the lawyers' fees and the
expenses for the valuation report have been necessarily incurred, are
reasonable in quantum and have been fully substantiated. Therefore,
having regard to the circumstances of the case and the complexity of
the question of the application of Article 41, the Court
considers it reasonable to award the applicants jointly EUR 40,000,
plus any tax that may be chargeable on that amount.
D. 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 the applicants jointly, 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
5,000,000 (five million euros) in respect of pecuniary damage;
(ii) EUR
40,000 (forty thousand euros) in respect of costs and expenses;
(iii) any
tax that may be chargeable on the above amounts;
(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 27 September 2007,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Loukis Loucaides
Registrar President
