FIFTH SECTION
CASE OF
MAKSYMENKO AND GERASYMENKO v. UKRAINE
(Application no.
49317/07)
JUDGMENT
STRASBOURG
16 May 2013
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 Maksymenko and Gerasymenko v. Ukraine,
The European Court of Human Rights (Fifth Section), sitting as
a Chamber composed of:
Mark Villiger, President,
Angelika Nußberger,
Boštjan M. Zupančič,
Ann Power-Forde,
Helena Jäderblom,
Aleš Pejchal, judges,
Myroslava Antonovych, ad hoc judge,
and Claudia Westerdiek, Section Registrar,
Having deliberated in private on 9 April 2013,
Delivers the following judgment, which was adopted on that
date:
PROCEDURE
The case originated in an application (no.
49317/07) against Ukraine lodged with the Court under Article 34 of the
Convention for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by two Ukrainian nationals, Mr Mykola Vasylyovych Maksymenko and Mr Volodymyr
Borysovych Gerasymenko (“the applicants”), on 6 November 2007. Following the
second applicant’s death on 27 November 2009, his widow, Mrs Lyudmyla Petrivna
Gerasymenko, expressed the wish to pursue the application on his behalf.
The applicants were represented by Mr A.
Gryshchenko and Mr O. Matyushenko, lawyers practising in the towns of
Malyn and Radomyshl respectively. The Ukrainian Government (“the Government”)
were most recently represented by their Agent, Mr N. Kulchytskyy,
of the Ministry of Justice of Ukraine.
The applicants alleged, in particular, that by
invalidating in 2006 a decision taken in 1995 to privatise a hostel which they
had bought in 2004 as bona fide purchasers, and all subsequent transfers
of ownership, the State had breached their right to peaceful enjoyment of their
possessions under Article 1 of Protocol No. 1 to the Convention.
On 28 March 2011 the application was communicated
to the Government. Mrs G. Yudkivska, the judge
elected in respect of Ukraine, was unable to sit in the case (Rule 28 of the
Rules of Court). The President of the Chamber decided to appoint Ms Myroslava
Antonovych to sit as an ad hoc judge (Rule 29 § 1(b)).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The first applicant was born in 1958 and lives in
Malyn. The second applicant was born in 1963 and died in 2009.
By decision no. 492 of 16 November 1995, the
Zhytomyr Regional Department of the State Property Fund (регіональне
відділення
Фонду державного
майна
України в
Житомирській
області) transformed a State
enterprise, M., into a joint-stock company, which resulted in its
privatisation. An audit of M.’s assets carried out on 1 October 1995 revealed
that the company’s immovable property included several hostels.
On 31 January 2000 M. was reorganised into four
companies including S., to which ownership of the hostels was transferred.
On 19 June 2003 the Zhytomyrskyy Regional
Commercial Court declared S. insolvent.
By letter of 9 July 2003, the liquidator in the
S. insolvency proceedings informed the mayor of Malyn and the Head of the Malyn
District Administration that S. had been declared insolvent. As the sale of the
hostels owned by S. would, according to the liquidator, create social tensions
in the town, it was proposed that the town would take over their ownership.
By letter of 30 January 2004 the mayor informed
the liquidator that the hostels were not owned by the State and it was for the
board of creditors to decide what to do with them.
On 20 July 2004 the board of creditors agreed to
sell one of the hostels to the applicants.
On 21 August 2004 a contract of sale was signed.
The applicants paid 41,160 Ukrainian hryvnias (UAH) (at the material time
around 6,127 euros (EUR)) for the hostel and became owners of a half share
each.
On 11 January 2005 the applicants informed a
local electricity supply company that they were the new owners of the hostel.
They requested the company to cut off the electricity supply until a new contract
had been signed with them. The applicants discovered that the power cables and
electricity meters serving the property needed to be replaced, and that the
hostel occupants had not been paying rent.
On 19 January 2005 the electricity supply
company informed the hostel occupants that the electricity would be cut off on 25
January 2005.
On 21 January 2005 a prosecutor ordered the
electricity in the hostel not to be cut off since he had been preparing to institute
legal proceedings on behalf of the hostel occupants.
By letter of 21 January 2005, the applicants
informed the Malyn District Prosecutor’s Office, the mayor, the company S., at
that time allegedly in liquidation, and the hostel occupants, that they had
bought the hostel in order to live there themselves. The applicants stated that
when the hostel was being sold, the occupants had refused to participate in the
sale process. Despite the hostel’s change of ownership and need for
refurbishment, its occupants had not been paying rent or communal charges for
six months. The applicants requested S. to provide new housing to those occupants,
who were requested to vacate the hostel by 30 March 2005.
On 26 January 2005, G., a nineteen-year-old
hostel occupant, sought the assistance of the Malyn District Prosecutor’s
Office as she had a young child and had been requested to leave the hostel.
On 18 February 2005 a prosecutor instituted
proceedings at the Malynsky District Court on behalf of G., requesting that the
decision of 16 November 1995 and all subsequent transfers of ownership be
declared invalid. The prosecutor noted that in January 2005 the hostel occupants
had lodged previous complaints with his office. After examining the case the
prosecutor concluded that the hostel’s privatisation in 1995 had been unlawful.
He argued that section 2(2) of the State
Housing Stock Privatisation Act (Закон
«Про
приватизацію
державного
житлового
фонду») prohibited the privatisation of rooms
in hostels. The transfer of ownership of the hostel and its subsequent sale
breached the Act, other legal provisions and the “moral principles of society”,
since the occupants’ constitutional rights to housing had been violated. It
also adversely affected the economic interests of the State and the housing
rights of G., who was a single mother with a young child and was therefore unable
to lodge a claim herself. Lastly, the prosecutor requested that ownership of the
hostel be transferred to Malyn Town Council (“the Council”).
On 1 April 2005 the applicants lodged a counterclaim.
They reiterated that the hostel occupants had refused to participate in the
hostel sale process and had not been paying rent and communal charges which had
resulted in S.’s insolvency. The applicants submitted that they had informed
the prosecutor’s office of the matter and requested S. to provide housing to the
hostel occupants. The prosecutor’s office had failed to protect the rights of
the new owners despite the fact that the hostel was in an alarming state, the drainage
and water supply systems were not functioning and the rooms were being heated
by stoves. Moreover, the premises could no longer be classed as a hostel as it had
become a normal multi-family apartment building. Its occupants were no longer
employed by the company which had provided them with housing. Lastly, the
applicants requested the court, in the event of finding against them, to award
them UAH 52,748 in compensation, to be paid by the Council, representing the
hostel’s value and the administrative costs relating to the contract of sale.
On 11 April 2005 the Malyn District Court
returned the counterclaim to the applicants and provided them with a deadline
of 1 May 2005 to correct errors in their application. In particular, the court
noted that the counterclaim “lacked logical consistency”, in that there was no clear
evidence of causation and loss. The decision was posted to the applicants on 23
April 2005. It is unclear when they received it. It appears that the applicants
did not re-lodge their claim.
On 20 December 2005 the second applicant sent
the Malyn District Court a copy of a decision of 26 May 2005 taken by the
Zhytomyr Regional Court of Appeal in which it had rejected a prosecutor’s application
to declare as invalid decisions taken in 1994 and 1999 by the Zhytomyr Regional
State Property Fund to privatise a certain hostel. The court found that there were
no legal provisions prohibiting the privatisation of hostels, as section 2(2)
of the State Housing Stock Privatisation Act prohibited the privatisation of
rooms within hostels but not hostels per se. The court did not refer to section
3 of the State Property Privatisation Act, which prohibited the privatisation
of State housing stock.
On 23 January 2006, in the applicants’ case, the
court rejected the prosecutor’s request as unsubstantiated. Again, the court
did not refer to section 3 of the State Property Privatisation Act. In reply to
the applicants’ objection that the prosecutor had missed the three-year time-limit
for lodging his claim, the court noted that the prosecutor had only learned
about the situation in question following G.’s complaint.
On 8 June 2006 the Zhytomyr Regional Court of
Appeal quashed that decision and declared the decision of 16 November 1995 and
all subsequent transfers of ownership invalid. The court held that section 3 of
the State Property Privatisation Act provided that State housing stock,
including hostels, was not amenable to privatisation. Since, at the material
time, the hostel in question was owned by the State, it had been privatised
unlawfully. Referring to Article 216 of the Civil Code of Ukraine, the court awarded
the applicants UAH 41,160, to be paid by S. It further held that ownership of the
hostel should be transferred to the Council.
The applicants appealed on the grounds that the court’s
decision of 8 June 2006 contradicted another decision taken in an
analogous case by the Zhytomyr Court of Appeal, that the court had disregarded the
time-limits for lodging claims and that S. had been declared insolvent.
On 21 May 2007 the Vinnytsya Regional Court of
Appeal, acting as a court of cassation, rejected the applicants’ appeal on
points of law by finding, without any further explanation, that there had been
no breaches of law.
On 19 July 2007 the Council agreed to take over
ownership of the hostel.
On 25 September 2007, in the case of T. and
G. v. State Property Fund of Ukraine, S., and Malyn Town Council, the
Zhytomyr Regional Court of Appeal found, referring to decision no. 891 of 6
November 1995 of the Cabinet of Ministers of Ukraine, that a transfer of
ownership of another hostel in 1995 had been lawful, since hostels did not form
part of State housing stock.
The applicants submitted that S. had failed to
comply with the court decision of 8 June 2006 requiring it to pay them compensation.
Between November and December 2008, twelve out
of the fourteen apartments at the hostel were privatised by their occupants pursuant
to the amended State Housing Stock Privatisation Act (see paragraph 34 below).
II. RELEVANT DOMESTIC LAW
A. Civil Code of Ukraine 2004
Article 216 of the Code provided, in so far as
relevant, as following:
“... In the event of a transaction being declared null and void,
each party shall return to the other party the proceeds received for the
transaction in question. In the event of such restitution being impossible, ...
it shall return to the other party its current value.
If a party or a third party has suffered pecuniary or
non-pecuniary damage as a result of a transaction being declared null and void,
the liable party shall pay compensation.”
Articles 257 and 261 of the Code provide that the
time-limit for lodging a civil claim is three years. The calculation of the
relevant time-limit starts from the day a person learns, or could have learned,
of a breach of his or her rights.
B. State Property Privatisation Act 1992
Section 3 of the State Property Privatisation
Act provides that State housing stock cannot be privatised.
C. Housing Code of Ukraine 1983
Article 4 of the Code provides that the State
housing stock includes dwelling houses and residences in other buildings
belonging to the State.
D. State Housing Stock Privatisation Act 1992
Sections 2 and 3 of the Act provide that, as
regards privatisation of apartments (or houses), at least 21 square metres of
living space per person and an additional 10 square metres per household should
be transferred to tenants free of charge. The remaining living space should be
available for purchase.
In September 2008 the Act was amended so as to allow the privatisation
of rooms within hostels.
E. Decision no. 851 of 6 November 1995 of the Cabinet
of Ministers of Ukraine
The decision, which entered into force on 7
December 1995, provided that, in the event of insolvency, liquidation or the transfer
of ownership of a company, any properties belonging to State housing stock but being
managed by the said company were to be given to a municipality. Before being
amended in 2004, the provision did not apply to hostels.
F. Prosecutor’s Act 1991
Section 35 provides that the prosecutor can
join proceedings at any given time if it is in the interests of the State or for
the protection of citizens’ constitutional rights.
THE LAW
I. LOCUS STANDI
OF THE SECOND APPLICANT’S WIDOW
The second applicant died on 27 November 2009.
On 14 October 2010 his widow informed the Court that she wished to pursue the
application.
The respondent Government submitted that by 22
July 2011, besides his widow, the second applicant’s mother, son and daughter had
all claimed to be his heirs. The Government noted that the second applicant had
died intestate and that there had been a dispute between his heirs about the
division of the inherited property. The Government agreed that the second
applicant’s widow should be able to maintain the application before this Court
on her late husband’s behalf; however, they requested the Court to take into
account the above-mentioned information.
The Court notes that the present application
concerns a property right which is, in principle, transferable to the heirs of
the deceased, and that the second applicant’s widow was his next of kin. In
these circumstances the Court considers that she has standing to continue the
present proceedings in his stead (see Sharenok v. Ukraine, no. 35087/02,
§ 12, 22 February 2005). However, reference will still be made to the
second applicant throughout the remainder of the judgment.
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO.
1
The applicants complained that their right to peaceful
enjoyment of their possessions had been breached, and that they had been
deprived of their property. The applicants relied on Article 1 of Protocol No.
1, which reads as follows:
“Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his possessions
except in the public interest and subject to the conditions provided for by law
and by the general principles of international law.
The preceding provisions shall not, however, in any way impair
the right of a State to enforce such laws as it deems necessary to control the
use of property in accordance with the general interest or to secure the
payment of taxes or other contributions or penalties.”
A. Admissibility
The Government submitted that the applicants
should have claimed damages under Article 216 § 2 of the Civil Code of Ukraine on
account of the invalidation of the contract of sale. Under Article 22 of that Code,
damages included losses a person had sustained owing to the destruction of an
item of property, costs incurred as a result of a breach of duty (actual damages),
and loss of income. The Government submitted copies of court decisions in two
commercial law cases concerning what appeared to be private companies, one of which
was awarded damages by the courts pursuant to Article 216 of the Civil Code of
Ukraine. Therefore, the national law provided the applicants with an avenue to receive
not only reimbursement of their costs, but also compensation for losses
incurred as a result of being deprived of their property, including loss of income.
The applicants did not submit any evidence that they had claimed such damages through
the national courts. In the Government’s view, that proved that the applicants had
regarded as sufficient the amount of compensation awarded to them on 8 June
2006. Lastly, the Government noted that the existence of mere doubts as to the
prospects of success of a particular remedy which was not obviously futile was
not a valid reason for failing to exhaust domestic remedies (see Dzizin v.
Ukraine (dec.), no. 1086/02, 24 June 2003). The Government thus contended that
the applicants had not exhausted the effective remedies available to them at national
level.
The applicants submitted that on 1 April 2005
they had lodged a counterclaim for damages. On 11 April 2005 the Malyn District
Court dismissed their claim without considering it. That decision was only sent
to the applicants on 23 April 2005; therefore, they had been unable to comply
with the time-limit given by the court. The applicants further noted that the
court decisions arising from the cases cited by the Government had been adopted
in different circumstances, and that they mainly concerned transactions
involving the Commercial Procedure Code of Ukraine.
The Court notes that the Government did not
specify against whom the applicants were supposed to have lodged their claim
for damages. The court decisions submitted by the Government concerned disputes
between two private companies; however, it does not appear that the applicants
could have lodged such a claim against S. since the company had been already declared
insolvent. Moreover, it is doubtful whether S. could have been treated as a defendant
for the purposes of Article 216 of the Civil Code. Assuming that the Government
had submitted examples of successful litigation between two companies to
demonstrate that the applicants should have claimed damages from the State, the
Court considers that the Government’s objection is closely linked to the merits
of the applicants’ complaint under Article 1 of Protocol No. 1 and joins it thereto.
The Court notes that this complaint is not
manifestly ill-founded within the meaning of Article 35 § 3 (a) of the
Convention. It further notes that it is not inadmissible on any other grounds.
It must therefore be declared admissible.
B. Merits
1. The parties’ submissions
The Government indicated that fourteen families
had lived in the hostel. They had all belonged to socially unprotected groups
of the population, for example, G., a single mother. The Government noted that
Article 8 of the Convention imposed positive obligations on the State, that is
to say to take measures to protect an individual’s rights to respect for
private life and in particular housing (the Government cited mutatis
mutandis, Marckx v. Belgium, 13 June 1979, Series A no. 31, and Menteş
and Others v. Turkey, 28 November 1997, Reports of Judgments and
Decisions 1997-VIII). The applicants had tried to create unsuitable
living conditions in the hostel (for example, by cutting off the electricity)
in order to evict the occupants. The prosecutor’s office had concluded that the
applicants had breached the occupants’ right to respect for their homes, as
indicated in its complaint to the court and its appeal against the decision of
23 January 2006. By having awarded the applicants adequate
compensation, the courts had balanced their rights against the public interest.
The Government further noted that the applicants had been deprived of their
property in accordance with the law.
The Government further contended that the
applicants had owned the hostel in question between 21 August 2004 (the date on
which the contract of sale was registered at the State property registry (Державний реєстр
правочинів)) and 8 June 2006. They had not claimed compensation for the costs
of maintaining and improving the property during that period. The applicants had
been awarded compensation equal to the value of the hostel, to be paid by S., but
they had not instituted enforcement proceedings against the company. Therefore,
the Government contended that depriving the applicants of their property had not
imposed an excessive individual burden on them.
In reply, the applicants submitted that they had
been deprived of their property by the State without any compensation.
Moreover, the hostel in question had later been privatised by its occupants.
There was no evidence that the hostel occupants had belonged to socially
unprotected groups of the population. For example, one of the occupants who had
privatised his apartment was a school headteacher. The applicants rejected the
allegation that they had evicted people from the hostel and had cut off the
electricity. Therefore, the State had failed to demonstrate in what “public
interest” the applicants had been deprived of their property.
The applicants further submitted that S. had
been insolvent and at the material time had been in liquidation. The insolvency
proceedings had been run by a board of creditors headed by a representative of
the Malyn Regional State Tax Inspectorate. Therefore the bailiffs’ service had not
been empowered to enforce the judgment in question (see Mykhaylenky and
Others v. Ukraine, nos. 35091/02, 35196/02, 35201/02, 35204/02, 35945/02,
35949/02, 35953/02, 36800/02, 38296/02 and 42814/02, ECHR 2004-XII). The
applicants had tried to intervene in the insolvency proceedings against S. but
to no avail.
2. The Court’s analysis
The Court reiterates that Article 1 of Protocol
No. 1 contains three distinct rules: the first rule, set out in the first
sentence of the first paragraph, is of a general nature and enunciates the
principle of the peaceful enjoyment of property; the second rule, contained in
the second sentence of the first paragraph, covers deprivation of possessions
and subjects it to certain conditions; the third rule, stated in the second
paragraph, recognises that the States are entitled, amongst other things, to control
the use of property in accordance with the general interest. These rules are
not, however, unconnected: the second and third rules are concerned with
particular instances of interference with the right to the peaceful enjoyment
of possessions and are therefore to be construed in the light of the principle
laid down in the first rule (see, for example, Scordino v. Italy (no. 1)
[GC], no. 36813/97, § 78, ECHR 2006-V).
In the present case, the Court considers that
there has been a “deprivation of property” within the meaning of the second
sentence of Article 1 of Protocol No. 1 which amounted to an interference with
the applicants’ right to the peaceful enjoyment of such. It must therefore be
ascertained whether the interference is justified under that provision.
To be compatible with Article 1 of Protocol No.
1, a measure of interference must fulfil three basic conditions: it must be
carried out “subject to the conditions provided for by law”, which excludes any
arbitrary action on the part of the national authorities, it must be “in the
public interest”, and it must strike a fair balance between the owner’s rights
and the interests of the community (see Vistiņš and Perepjolkins
v. Latvia [GC], no. 71243/01, § 94, 25 October 2012).
(a) Compliance with the principle of lawfulness
The Court reiterates that an essential condition
for an interference to be deemed compatible with Article 1 of Protocol No. 1 is
that it should be lawful. However, the existence of a legal basis in domestic
law does not suffice, in itself, to satisfy the principle of lawfulness; it is
rather the quality of the applicable provisions that matters.
Firstly, the legal norms upon which the
deprivation of property is based should be in accordance with the domestic law
of the Contracting State, including the relevant provisions of the Constitution
(see Former King of Greece and Others v. Greece [GC], no. 25701/94,
§§ 79 and 82, ECHR 2000-XII; and Jahn and Others v. Germany [GC],
nos. 46720/99, 72203/01 and 72552/01, § 81, ECHR 2005-VI). Secondly,
the provisions of domestic law must be sufficiently accessible, precise and
foreseeable in their application (see Shchokin v. Ukraine, nos. 23759/03
and 37943/06, § 51, 14
October 2010).
The Court, however, has limited power to review
compliance with domestic law, especially when there is nothing from which it
can conclude that the authorities applied the legal provisions in question
manifestly, erroneously or so as to reach arbitrary conclusions (see Beyeler
v. Italy [GC], no. 33202/96, § 108, ECHR 2000-I).
In the present case, the national court based its decision of 8 June 2006 to
invalidate the decision to privatise taken in 1995 on a provision of national
law which prohibited the privatisation of State housing stock. It seems to
be unclear in how far "hostels" were included in the "housing
stock" in the sense of the State Property Privatisation Act.
The Court notes that from the court decisions cited
by the applicants, it does not follow that there existed one unique approach at
national level as regards the lawfulness of privatising hostels in the 1990s
(see paragraphs 21 and 27 above). From that standpoint, the element of
uncertainty in the courts’ practice, despite the clear character of the legal
provision in question, is to be taken into account in determining whether the
measure complained of struck a fair balance (ibid., mutatis mutandis, § 108).
(b) “In the public interest”
In the present case, the prosecutor instituted
court proceedings challenging the privatisation and all subsequent transfers of
ownership of the hostel in the name of the “economic interests of the State and
the housing rights of G.” (see paragraph 18 above). No explanation was given as
to what particular economic interests of the State were at stake or how they
served the “public interest”.
As for G.’s and other hostel occupants’ housing
rights, the Court notes that the applicants had intended to evict them from the
hostel as they had been planning to renovate it and to live there themselves
(see paragraph 16 above).
Therefore, the Court accepts that the
deprivation of the applicants’ possessions was carried out in the public
interest, that is to say, to ensure the protection of the housing rights of
others.
(c) Proportionality
Even if it is lawful and carried out in the
public interest, a measure of interference with the right to the peaceful
enjoyment of possessions must always strike a “fair balance” between the
demands of the general interest of the community and the requirements of the
protection of the individual’s fundamental rights. In particular, there must be
a reasonable relationship of proportionality between the means employed and the
aim sought to be realised by any measure depriving a person of his possessions
(see Scordino, cited above, § 93).
In determining whether this requirement is met,
the Court recognises that the State enjoys a wide margin of appreciation with
regard both to choosing the means of enforcement and to ascertaining whether
the consequences of enforcement are justified in the general interest for the
purpose of achieving the object of the law in question (see Vistiņš and Perepjolkins
v. Latvia [GC], no. 71243/01, § 109 25 October 2012). Nevertheless, the
Court cannot abdicate its power of review and must determine whether the
requisite balance was maintained in a manner consonant with the applicants’
right to the peaceful enjoyment of their possessions, within the meaning of the
first sentence of Article 1 of ProtocolNo. 1 (see Jahn and Others v. Germany
[GC], cited above, § 93).
In the present case the State authorities, with
a view to protecting the housing rights of others, corrected, what they
considered to be, an erroneous interpretation of the law in force which
occurred more than ten years earlier.
In this connection the Court reiterates the particular
importance of the principle of “good governance”. It requires that where an
issue in the general interest is at stake, in particular when the matter
affects fundamental human rights such as those involving property, the public
authorities must act in good time and in an appropriate and above all
consistent manner (see Rysovskyy v. Ukraine, no. 29979/04, §§ 70-71, 20
October 2011).
The good governance principle should not, as a
general rule, prevent the authorities from correcting occasional mistakes, even
those resulting from their own negligence (see Moskal v. Poland, no. 10373/05, § 73, 15 September 2009). However, the need to correct an old “wrong”
should not disproportionately interfere with a new right which has been
acquired by an individual relying on the legitimacy of the public authority’s
action in good faith (see, mutatis mutandis, Pincová and Pinc v. the Czech Republic, no. 36548/97, § 58, ECHR 2002-VIII). In other words, State
authorities which fail to put in place or adhere to their own procedures should
not be allowed to profit from their wrongdoing or to escape their obligations
(see Lelas v. Croatia, no. 55555/08,
§ 74, 20 May 2010). The risk of any mistake made by the State authority
must be borne by the State itself and the errors must not be remedied at the
expense of the individuals concerned (see, among other authorities, mutatis
mutandis, Pincová and Pinc, cited above, § 58; Gashi v. Croatia, no. 32457/05, § 40, 13 December 2007; and Trgo v. Croatia, no.
35298/04, § 67, 11 June 2009). In the context of revoking ownership of a
property transferred erroneously, the good governance principle may not only
impose on the authorities an obligation to act promptly in correcting their
mistake (see, for example, Moskal v. Poland, cited above, § 69), but may
also necessitate the payment of adequate compensation or another type of
appropriate reparation to its former bona fide holder (see Pincová
and Pinc, cited above, § 53, and Toşcuţă and Others v. Romania, no. 36900/03, § 38, 25 November 2008).
The Court notes that before taking the decision
to sell the hostel to the applicants, S.’s board of creditors had informed the State
authorities about possible complications but in January 2004 the town mayor had
explicitly refused to take over ownership of the hostels, including the one
later sold to the applicants.
A year later the prosecutor instituted court proceedings
seeking to invalidate the contract of sale as the hostel should not have been
privatised in the first place. However, a year after the decision satisfying
the prosecutor’s claim was upheld by a higher court, 85% of the hostel
apartments became privately owned by their occupants.
The Court further notes that there is no
evidence that all the hostel occupants belonged to socially unprotected groups
of the population, whose housing rights required reinforced protection. In
particular, it is unclear whether the hostel occupants had bought the
apartments or whether ownership had been transferred to them free of charge in
accordance with the State Housing Stock Privatisation Act. In any event, the
subsequent privatisation of the hostel rooms confirmed that the State did not
intend to keep the building in question to use as social housing.
Lastly, the Court cannot disregard the fact that
the applicants did not receive any compensation for being deprived of their
property. Although the court had indeed awarded them compensation, to be paid
by S., it could not have ignored the fact that by that time the company was
already insolvent, which was in itself the reason for the sale of the hostel.
In such circumstances, the Court is not convinced that the applicants should
have instituted further proceedings to claim damages from the State. The Court therefore dismisses the Government’s objection in
this regard.
In the Court’s view, even assuming that the
interference in question was based on clear and foreseeable provisions of the
national law and was aimed at protecting the housing rights of others, the fact
that the applicants, who were bona fide purchasers, were unable to be
compensated for their losses, which had been inflicted on them by the
inconsistent and erroneous decisions of the State authorities, constitutes a
disproportionate burden on the applicants.
There has accordingly been a violation of Article 1 of Protocol
No. 1 to the Convention.
III. ALLEGED VIOLATION OF ARTICLE 6 OF THE
CONVENTION
The applicants complained that the court had disregarded
the three-year time-limit for lodging a claim, since the decision to privatise
the hostel had been taken in 1995. They relied on Article 6 of the Convention,
which reads as follows:
“In the determination of his civil rights and obligations ...
everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
The Government submitted that the relevant
time-limit began from the moment when G. had submitted her complaint to the
prosecutor’s office.
The applicants stated that Article 261 of the
Civil Code of Ukraine did not apply to the prosecutor, since the public prosecutor’s
office was a State body which carried out permanent “supervision of the
observance of human and civil rights and freedoms and of the observance of laws
regulating these issues by executive power bodies, by local self-government
bodies, their officials, and officers”, as stipulated in Article 121 of the
Constitution of Ukraine. The applicants submitted that the prosecutor
represented the interests of third parties and could not be regarded as a
claimant.
The Court notes that, in the present case, the
prosecutor’s application to invalidate the decision of 16 November 1995 was
lodged more than nine years later, on 18 February 2005, and was triggered by
the complaint lodged by G. on 26 January 2005. There is no evidence that the
prosecutor was aware of the transactions in question before this complaint was
submitted.
Although no evidence of G.’s complaint was
presented by the parties, it appears from the case materials available that G.
complained about being required to move out of the hostel in question. The
prosecutor, having concluded that the potential eviction originated from the transfer
of ownership of the hostel, lodged a claim not only in the interests of G., but
also in the interests of the State (see paragraph 18 above).
The Court notes that the first-instance court
addressed the applicants’ argument against their failure to comply with three-year
time-limit for lodging a claim and rejected it as unsubstantiated. Although
neither the second-instance, nor third-instance courts answered the applicants’
objection in this regard, the Court notes that Article 6 § 1 obliges the courts
to give reasons for their judgments, but cannot be understood as requiring a
detailed answer to every argument (see Van de Hurk v. the Netherlands,
19 April 1994, § 61, Series A no. 288). In the present case it may be concluded
that by not answering the applicants’ plea of limitation the higher courts
adhered to the interpretation given by the first-instance court. In particular,
the Vinnytsya Regional Court of Appeal, acting as a court of cassation, noted
that there were no breaches of law.
The Court further reiterates that it is not its
task to examine whether the plea of limitation was well-founded, as it is
primarily for the national authorities, notably the courts, to resolve problems
of interpretation of national law (see Ruiz Torija v. Spain, 9 December
1994, § 30, Series A no. 303-A).
The Court concludes that, in the present case, the
interpretation of the relevant provision of domestic law by the national court
does not appear to be in breach of Article 6 § 1 of the Convention. The
Court thus considers that this part of the application must be declared
inadmissible as manifestly ill-founded, pursuant to Article 35 §§ 3 (a) and 4
of the Convention.
IV. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
Lastly, the applicants complained under Article
6 § 1 of the Convention that the national courts had disregarded the previous
decision of the commercial court to sell the hostel to them and that the court
of cassation had held a hearing in their absence.
The applicants also relied on Articles 13, 14,
17 and 34 of the Convention. In particular, they stated that the unlawful
deprivation of their property and the inability to recognise that the prosecutor
had acted unlawfully had been aimed at preventing them from lodging an
application with the Court.
The applicants lastly submitted that, by
disclosing information about the second applicant’s heirs, the Government had
breached Article 8 of the Convention.
Having considered the applicants’ submissions in
the light of all the material in its possession, the Court finds that, in so
far as the matters complained of are within its competence, they do not
disclose any appearance of a violation of the rights and freedoms set out in
the Convention.
It follows that this part of the application
must be declared inadmissible as manifestly ill-founded, pursuant to Article 35
§§ 3 (a) and 4 of the Convention.
V. 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. Damage
The applicants claimed EUR 12,583 in respect of
pecuniary damage and EUR 12,000 in respect of non-pecuniary damage.
The Government stated that the applicants had
been already awarded compensation, to be paid by S., and had failed to claim
further damages. The Government further submitted that the applicants’ claim
for compensation in respect of non-pecuniary damage was unsubstantiated.
The Court awards the applicants EUR 6,127 (representing
the value of their interest in the seized hostel) in respect of pecuniary
damage.
The Court, deciding on an equitable basis,
further awards the applicants EUR 3,000 each in respect of non-pecuniary
damage.
B. Costs and expenses
The applicants also claimed EUR 1,300 for the
costs and expenses incurred before the domestic courts and before the Court.
The Government submitted that the applicants had
failed to specify the amount of time spent by their lawyers on the case and to submit
evidence in support of their other expenses.
According to the Court’s case-law, an applicant
is entitled to the reimbursement of 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 that no
documents in substantiation of the above expenses had been submitted by the
applicants, the Court rejects the claim for costs and expenses.
C. Default interest
The Court considers it appropriate that the
default interest rate 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
1. Decides to join to the merits the Government’s
objection as to inadmissibility of the applicants’ complaint under Article 1 of
Protocol No. 1 for non-exhaustion of effective domestic remedies and dismisses
it;
2. Declares the complaint under Article 1 of
Protocol No. 1 admissible and the remainder of the application inadmissible;
3. Holds that there has been a violation of
Article 1 of Protocol No. 1 to the Convention;
4. 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, to be
converted into the currency of the respondent State at
the rate applicable at the date of settlement:
(i) EUR 6,127 (six thousand one hundred and twenty-seven
euros), plus any tax that may be chargeable, in respect of pecuniary damage;
(ii) EUR 3,000 (three thousand euros) each, plus
any tax that may be chargeable, in respect of non-pecuniary damage;
(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;
5. Dismisses the remainder of the applicants’
claim for just satisfaction.
Done in English, and notified in writing on 16 May 2013,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Mark
Villiger
Registrar President
