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FOURTH
SECTION
CASE OF ECONOMOU v. TURKEY
(Application
no. 18405/91)
JUDGMENT
(just
satisfaction)
STRASBOURG
22
June 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 Economou v. Turkey,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza,
President,
Giovanni Bonello,
Ljiljana
Mijović,
David Thór Björgvinsson,
Ján
Šikuta,
Päivi Hirvelä,
Işıl
Karakaş, judges,
and
Fatoş Aracı,
Deputy
Section Registrar,
Having
deliberated in private on 1 June 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 18405/91) 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 a Cypriot national, Mr Antonios Economou (“the
applicant”), on 31 May 1991.
- In
a judgment delivered on 27 January 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 applicant was denied access to and control, use and
enjoyment of his properties as well as any compensation for the
interference with his property rights. Furthermore, it found that it
was not necessary to examine the applicant's complaints under
Articles 8, 13 and 14 of the Convention (Economou v. Turkey,
no. 18405/91, §§ 14, 26, 31, 34 and 37, and points 1-3
of the operative provisions, 27 January 2009).
- Under
Article 41 of the Convention the applicant sought just satisfaction
of 210,000 Cypriot pounds (CYP –
approximately 358,806 euros (EUR)) for the deprivation of his
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
applicant's loss, were appended to his observations. Furthermore, the
applicant claimed CYP 81,000 (approximately EUR 138,396) in
respect of non-pecuniary damage and approximately EUR 4,826 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 applicant 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., §§
52 and 55, and point 4 of the operative provisions).
- On
13 July 2009 the Court invited the applicant 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
applicant and the Government each filed comments on this matter.
- On
4 September 2009 the applicant was invited to submit written
evidence that the properties at stake were still registered in his
name or to indicate and substantiate any transfer of ownership which
might have taken place.
- In
a letter of 24 September 2009, the applicant's representative stated
that “no further changes of ownership of the ... properties
have taken place up to now”. In October 2009 he produced
affirmations of ownership of Turkish-occupied immovable properties
issued by the Department of Lands and Surveys of the Republic of
Cyprus. According to these documents, on 22 October 2009 the
properties described in paragraph 15 below were registered in the
name of Michael Antonios Economou.
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
applicant's 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 applicant should address his claims to the Immovable
Property Commission (the “IPC”) instituted by the “TRNC”
Law 67/2005.
- 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 had objected that domestic remedies had not been exhausted.
- Furthermore,
the Court considers that its previous finding in the present case
that the applicant was 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 14 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
applicant's 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 applicant
- In
his just satisfaction claims of 27 October 1999, the applicant
requested CYP 84,000 (approximately EUR 143,522) for pecuniary
damage. He relied on an expert's report assessing the value of his
losses which included the loss of annual rent collected or expected
to be collected from renting out his properties, 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 October 1999. The applicant did not claim compensation for any
purported expropriation since he was still the legal owner of the
properties. The valuation report contained a description of Ayios
Amvrosios village, where the applicant's plots of land were located.
The latter were registered as follows (see paragraph 8 of the
principal judgment):
(a) Ayios
Amvrosios, registration no. 13094, plot no. 33/2, sheet/plan
XIII/31.E.1, field with various trees; area: 15,339 square metres
(m²); share: whole;
(b) Ayios
Amvrosios, registration no. 8648, plot no. 512, sheet/plan
XIII/27.E.1&E.2 and XIII/28.W.1&W.2, inaccessible hilly
field; area: 19,733 m²; share: whole;
(c) Ayios
Amvrosios, registration no. 4923, plot no. 135, sheet/plan
XIII/22.W.1; inaccessible field with olive trees; area: 3,345 m²;
share: whole;
(d) Ayios
Amvrosios, registration no. 8277, plot no. 343, sheet/plan
XII/27.E.1, field with small former farmhouse and stables; area: 372
m²; share: whole;
(e) Ayios
Amvrosios, registration no. 13131, plot nos. 400 and 401/1,
sheet/plan XIII/27.E.1, inaccessible field with nine olive trees;
area: 1,255 m²; share: whole.
- The
starting point of the valuation report was the rental value of each
property in 1974, calculated as a percentage (between 1.75% and 6%)
of the market value of each plot of land. The expert took into
account the use and the building potentialities of each property.
According to the expert, the 1974 market value of the properties
described in paragraph 10 above was CYP 23,000 (approximately EUR
39,297), CYP 6,000 (approximately EUR 10,251), CYP 3,000
(approximately EUR 5,125), CYP 3,000 and CYP 300 (approximately
EUR 512) respectively. The rent which could have been obtained in the
same year was CYP 1,035, CYP 180, CYP 90, CYP 180 and CYP 5
respectively, thus an overall sum of CYP 1,490 (approximately
EUR 2,545). This sum was subsequently adjusted upwards according
to an annual rental increase of 5%, in order to arrive at the annual
rent receivable in 1987 (CYP 2,810) and in 1999 (CYP 5,046).
Compound interest for delayed payment was applied at a rate of 8% per
annum.
- On
26 January 2008, following a request from the Court for an update on
developments in the case, the applicant submitted updated claims for
just satisfaction, which were meant to cover the period of loss of
use of the properties from 2000 to 31 December 2007. He produced a
revised valuation report which, on the basis of the criteria adopted
in the previous report, concluded that the sum due for the loss of
use for this last period was CYP 126,000 (approximately EUR
215,283) including statutory interest. The total sum claimed by the
applicant for pecuniary damage thus amounted to CYP 210,000
(approximately EUR 358,806).
- On
21 April 2009 the applicant produced two judgments of the Kyrenia
District Court, given on 6 July and 30 November 1973, concerning
compensation in respect of land acquisitions which had taken place in
February 1970. It transpired from these judgments 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.
Therefore, in the middle of 1974 the market price of a decare of land
in Ayios Amvrosios could be estimated between CYP 1,070
(approximately EUR 1,828) and CYP 2,130 (approximately EUR
3,639).
- On
24 September 2009 the applicant produced a revised valuation report,
which was meant to cover the loss of use for the period between 1987
and October 2009. Referring to the judgments quoted in paragraph 18
above, the expert appointed by the applicant considered that the 1974
annual rent of his client's properties was EUR 2,546 and that the
whole sum due for loss of use was EUR 433,000.
- In
his just satisfaction claims of 27 October 1999, the applicant
further claimed CYP 50,000 (approximately EUR 85,430) in respect
of non-pecuniary damage. He stated that this sum had been calculated
on the basis of the sum awarded by the Court in the Loizidou v.
Turkey case ((just satisfaction), 28 July 1998, Reports of
Judgments and Decisions 1998-IV), taking into account, however,
that the period of time for which the damage was claimed in the
instant case was longer and that there had also been a violation of
Article 14 of the Convention.
- In
his updated claims for just satisfaction of 26 January 2008, the
applicant requested an additional CYP 31,000 (approximately
EUR 52,966) in respect of non-pecuniary damage.
(b) The Government
- The
Government filed comments on the applicant's updated claims for just
satisfaction on 30 June 2008, 15 October 2008 and 6 October 2009.
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, and that 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 applicant 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 applicant 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 15 (a), (b), (d) and (e) above. The other
immovable property referred to in the application was possessed by
refugees; it 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 applicant applied to the IPC, the latter
would have offered CYP 24,838.15 (approximately EUR 42,438) to
compensate the loss of use and CYP 26,455.99 (approximately EUR
45,201) for the value of the properties. According to an expert
appointed by the authorities of the “TRNC”, the 1974
open-market value of all the properties described in paragraph 15
above was CYP 4,323 (approximately EUR 7,386). Upon fulfilment
of certain conditions, the IPC could also have offered the applicant
an exchange of his properties with Turkish-Cypriot properties located
in the south of the island.
- In
their comments of 6 October 2009 the Government noted that the
amounts suggested by the IPC were realistic and credible. They
further observed 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.
- It
could therefore be said that the IPC had used the same criteria as
the Greek-Cypriots applicants. However, being in possession of the
land registers in which comparable sales had been recorded, it was
better placed to assess the 1974 market values of the properties.
Applicants had, in general, tended to exaggerate and inflate these
values. Their calculations were highly presumptive; for instance, the
percentage used for assessing the loss of income had frequently been
the same for buildings, fields, orchards and plots of land,
irrespective of their location, of the existence of electricity or
water supplies and of an access to a minor or major road. On the
contrary, the Turkish-Cypriot authorities had taken all these factors
into consideration; they had applied a higher percentage for
buildings in built-up areas than for vacant fields.
- The
Government also insisted that, as it could not be excluded that the
properties at issue had been transferred within the legal system of
southern Cyprus, applicants should be required to provide search
certificates issued by the Greek-Cypriot Department of Lands and
Surveys. Failure to substantiate title to the properties at the
material time and at the time of the Court's judgment should be
considered as a failure to cooperate with the Court. No just
satisfaction should be awarded in respect to unsubstantiated or
dubious claims.
- After
the delivery of the Court's principal judgment, the Turkish-Cypriot
authorities had invited the applicant to apply to the IPC in order to
reach an agreement on the matter of compensation. The applicant had
not replied to this invitation. This attitude was due mainly to
political reasons and to the pressures exerted by the Greek-Cypriot
authorities in order to discourage their citizens from applying to
the IPC. Misleading information had been given about its powers and
the Greek-Cypriots who had applied to it had been questioned by the
Office of the Attorney General. In 2006 the Greek-Cypriot media had
even revealed a “shame list” and published the names of
applicants to the IPC.
- Finally,
the Government noted that the amount claimed by the applicant for
non-pecuniary damage was excessive and incompatible with the case-law
and practice of the Court.
2. The Court's assessment
- The
Court recalls that in its principal judgment it has concluded that
there was a continuing violation of the applicant's rights guaranteed
by Article 1 of Protocol No. 1 to the Convention by virtue of the
complete denial of his right to the peaceful enjoyment of his
properties in northern Cyprus (see paragraph 26 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 his land since 1974, the applicant had
effectively lost all access and control as well as all possibilities
to use and enjoy his properties (see paragraph 24 of the principal
judgment). The applicant is therefore entitled to a measure of
compensation in respect of losses directly related to this violation
of his rights as from the date of the deposit of Turkey's declaration
recognising the right of individual petition under former Article 25
of the Convention, namely 22 January 1987, until the present time
(see 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
applicant (see paragraph 8 above) show that on 22 October 2009 he was
still the owner of the properties described in paragraph 15 above.
- In
the opinion of the Court, the valuations furnished by the applicant
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 (just satisfaction), cited above, § 31).
Accordingly, in assessing the pecuniary damage sustained by the
applicant, the Court has, as far as appropriate, considered the
estimates provided by him (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 applicant 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
applicant (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 applicant's
properties, the parties have produced few elements in this respect.
The Government have relied on the accuracy of the IPC's calculations
(see paragraphs 25-26 above), while the applicant has referred to the
sale, in 1970, of comparable land. According to his expert's
assessment, this sale showed that at the relevant time the market
price of land located in Ayios Amvrosios was between EUR 956 and EUR
1,913 per decare, which is between EUR 0.956 and EUR 1.913 per square
metre (see paragraph 18 above).
- The
Court further observes that the applicant 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 applicant, it finds
that the rates applied by him are on the high side (see, mutatis
mutandis, Demades (just satisfaction), cited above, §
24).
- 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
applicant must have experienced over the years in not being able to
use his properties as he 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 applicant in respect of pecuniary and
non-pecuniary damage (respectively EUR 433,000 and EUR 138,396 –
see paragraphs 19-21 above) are excessive. At the same time, the
amount which the “TRNC” authorities could have offered
the applicant in respect of loss of use (approximately EUR 42,438
– see paragraph 24 above) does not seem to take due account of
the number and nature of the properties owned by the applicant and
listed in paragraph 15 above. Making its assessment on an equitable
basis, the Court decides to award the applicant EUR 90,000.
B. Costs and expenses
- In
his just satisfaction claims of 27 October 1999, relying on bills
from his representative, the applicant sought CYP 1,825
(approximately EUR 3,118) for the costs and expenses incurred before
the Court. This sum included CYP 500 (approximately 854 EUR) for the
cost of the expert report assessing the value of his properties. In
his updated claims for just satisfaction of 26 January 2008, the
applicant submitted additional bills of costs for the new valuation
report and for legal fees amounting to CYP 1,000 (approximately
EUR 1,708). The total sum claimed for costs and expenses was
thus approximately EUR 4,826.
- On
21 October 2009 the applicant's representative stated that his fees
had increased up to EUR 6,640.
- 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 valuation reports in view of the
continuing nature of the violation at stake were essential to enable
the Court to reach its decision regarding the issue of just
satisfaction (see Demades (just satisfaction), cited
above, § 34).
- In
the light of the above, the Court considers the amount claimed for
costs and expenses for the proceedings before it (EUR 6,640)
reasonable and decides to award it to the applicant.
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 applicant's claims for just satisfaction;
- Holds
(a) that
the respondent State is to pay the applicant, 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
90,000 (ninety thousand euros), plus any tax that may be chargeable,
in respect of pecuniary and non-pecuniary damage;
(ii) EUR
6,640 (six thousand six hundred and forty euros), plus any tax that
may be chargeable to the applicant, 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 applicant's claim
for just satisfaction.
Done in English, and notified in writing on 22 June 2010, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Nicolas
Bratza
Deputy Registrar President
