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FOURTH
SECTION
CASE OF HAPESHIS AND HAPESHI-MICHAELIDOU v. TURKEY
(Application
no. 35214/97)
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 Hapeshi-Michaelidou 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
FatoşAracı, 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. 35214/97) 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 nationals, Mr Michael P. Hapeshis
and Mrs Maria Hapeshi-Michaelidou (“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 continuing violations of
Article 8 of the Convention by reason of the complete denial of the
right of the applicants to respect for their home and 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 Hapeshi-Michaelidou v. Turkey,
no. 35214/97, §§ 20, 21, 27, 37 and 40, and points 1-4
of the operative provisions, 22 September 2009).
- Under
Article 41 of the Convention the applicants sought just satisfaction
of 206,585 Cypriot pounds (CYP –
approximately 352,971 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 approximately EUR 8,924 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., §§
53 and 56, and point 5 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 2010 the applicants produced certificates of
ownership of Turkish-occupied immovable property 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 below were registered in the names of
“Hapeshis Panteli Michael” and “Michaelidou-Hapeshi
Maria”, each one of them owning ½ share.
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 21 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 7 April 2000, the applicants
requested CYP 91,456 (approximately EUR 156,261) 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 properties in Ayios
Amvrosios, plus interest from the date on which such rents were due
until the day of payment. The rent claimed was for the period dating
back to January 1987, when the respondent Government accepted the
right of individual petition, until April 2000. 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 the applicants' land and real estate,
which were located in Ayios Amvrosios, in the District of Kyrenia
(northern part of Cyprus). They consisted of two semi-detached
residences built on plot no. 233/9 of sheet/plan 13/23, which covered
an area of 517 square metres (m²); each residence was of 290 m².
They both had a garage and two floors (see paragraph 8 of the
principal judgment). The applicants had inherited these properties in
equal shares from their father, who died on 19 May 1991. On 10 July
1995 they registered their titles of ownership with the Department of
Lands and Surveys of the Republic of Cyprus (see paragraph 10 of the
principal judgment).
- The
valuation report calculated the annual rent obtainable from the
applicants' properties as a percentage (4%) of the market value of
the two semi-detached houses in August 1974. A 5% annual increase was
applied both to the rents and to the market value. According to the
applicants' expert, their houses had a 1974 market value of
CYP 38,000 (approximately EUR 64,926), while the rent
obtainable from them at that time was CYP 1,520 (approximately
EUR 2,597) per annum. 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 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 was CYP 102,379 plus CYP 104,206 for
interest. The total sum claimed under this head was thus CYP 206,585
(approximately EUR 352,971).
- 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 370,067. He referred to a synoptic table on the
increase of the prices of apartments between 1973 and 2008 in the
unoccupied areas of Greater Nicosia, showing that the average annual
increase in capital value had been of 8%. However, an average
increase of 5% only had been adopted for the applicants' properties.
According to the above-mentioned table, in 1973 flats had been sold
in Nicosia for a price comprised between CYP 106 (approximately EUR
181) and CYP 130 (approximately EUR 222) per square metre.
- The
expert considered that the 1974 market value of the land on which the
applicants' houses were constructed was CYP 6 (approximately EUR 10)
per square metre; the total price of the applicants' land was
therefore CYP 3,102 (approximately EUR 5,300). The expert
referred to a judgment of the Kyrenia District Court, given on 6 July
1973, concerning compensation in respect of land acquisitions which
had taken place in February 1970. It transpired from this judgment
that the values of land located in Ayios Amvrosios at the relevant
time were between CYP 560 (approximately EUR 956) and CYP 1,120
(approximately EUR 1,913) per decare and that the land values had had
a 20% annual increase. The expert also considered that the cost of
construction was CYP 60 (approximately EUR 102) per square metre,
thus a total construction cost of CYP 34,800 (approximately
EUR 59,459). He therefore confirmed the 1974 market value of the
houses and of the land as indicated in paragraph 14 above.
- In
their just satisfaction claims of 7 April 2000, 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 the
properties described in paragraph 13 above were possessed by
refugees; they could not therefore 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 17,416.75 (approximately EUR
29,758) to compensate the loss of use from July 1995 onwards and CYP
25,929.69 (approximately EUR 44,303) for the value of the properties.
According to an expert appointed by the authorities of the “TRNC”,
the 1974 open-market value of the applicants' properties was
CYP 4,237 (approximately EUR 7,239). 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 not be possible to envisage, either immediately or after the
resolution of the Cyprus problem, restitution of the properties
described in paragraph 13 above. Had the applicants applied to
the IPC, the latter would have increased its offer up to
CYP 20,723.99 (approximately EUR 35,409) to compensate the loss
of use and up to CYP 28,383.65 (approximately EUR 48,496)
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 21 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 8 of
the Convention and Article 1 of Protocol No. 1 by reason of the
complete denial of the rights of the applicants with respect to their
home and the peaceful enjoyment of their properties in northern
Cyprus (see paragraphs 37 and 27 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 land and real estate, the
applicants had effectively lost all access and control as well as all
possibilities to use and enjoy their properties (see paragraph 25 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 paragraph
10 of the principal judgment and paragraph 13 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 they were
still the owners of the properties described in paragraph 13 above.
- 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 20 and 24-25 above), while the applicants have
referred to the sale, in 1970, of comparable land. According to their
expert's assessment, this sale showed that at the relevant time the
market price of land located in Ayios Amvrosios was comprised between
EUR 956 and EUR 1,913 per decare, which is between EUR 0.956 and EUR
1.913 per square metre (see paragraph 17 above). The applicants also
produced a synoptic table showing that in 1973 flats had been sold in
Nicosia for a price comprised between CYP 106 (approximately EUR 181)
and CYP 130 (approximately EUR 222) per square metre (see
paragraph 16 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 10 and 27
of the principal judgment and paragraphs 13 and 28 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 and to enjoy their homes (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 370,067 and EUR 341,720 –
see paragraphs 16 and 18 above) are excessive. At the same time, the
amount which the “TRNC” authorities could have offered
the applicants in respect of loss of use (EUR 35,409 – see
paragraph 26 above) does not seem to take into due account the
nature of the properties owned by the applicants. They consisted of
two semi-detached residences of 290 square metres built on a plot of
land which covered an area of 517 square metres (see paragraph 13
above). Making its assessment on an equitable basis, the Court
decides to award the applicants EUR 130,000 in respect of pecuniary
and non-pecuniary damage.
B. Costs and expenses
- In
their just satisfaction claims of 7 April 2000, relying on bills from
their representatives, the applicants sought CYP 3,750 (approximately
EUR 6,407) for the costs and expenses incurred before the Court.
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 517.5 and EUR 2,000
respectively. The total sum sought for cost and expenses was
thus approximately EUR 8,924. 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 1,725 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 violations at stake were essential for
enabling the Court to reach its decision regarding the issue of just
satisfaction (see Demades (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
130,000 (one hundred and thirty 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
