CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 6 mai 2004

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Rozakis , President ,   Mr   G. Bonello,   Mr   E. Levits ,   Mrs   S. Botoucharova ,   Mr   A. Kovler ,   Mr   V. Zagrebelsky ,   Mrs   E. Steiner, judges , and Mr S. Nielsen , Section Registrar , Having regard to the above application lodged with the European Commission of Human Rights on 6 January 1998, Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court, Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant, Having deliberated, decides as follows: THE FACTS The applicant, Mr Konstantin Argirov Yanakiev, is a Bulgarian national who was born in 1944 and lives in Varna. He is represented before the Court by Mr N. Rounevski, a lawyer practising in Sofia. The respondent Government are represented by Ms M. Dimova, co ‑ agent, of the Ministry of Justice. A.     The circumstances of the case The facts of the case, as submitted by the parties, may be summarised as follows. In 1983 the applicant became a tenant, together with his family, in an apartment “used and managed” by the State enterprise by which he was employed. In January 1992 the enterprise was transformed into a State ‑ owned limited liability company. In November 1992 it was transformed into a State ‑ owned joint ‑ stock company. In late 1992, after the adoption of amendments to the Resolving of Housing Problems Act of 1991, the applicant applied to purchase the apartment, which had, after the transformation, become property of his employer. The applicant considered that paragraph 4 of the additional provisions of the Act gave rise to a right to buy the apartment. It seems that many of his colleagues did acquire apartments under this provision. On 28   December 1992 the board of directors of the company assented to the purchase. On 4 January 1993, in accordance with the relevant procedure, the applicant requested the mayor of Varna to approve the purchase, enclosing documents purporting to establish that he met all the conditions set out in the Act. In addition, he submitted a letter from the board of directors of the company which notified the mayor that it had assented to the purchase and asked him to validate the deal. The letter expressly mentioned that the purchase was to be effected under paragraph 4 of the additional provisions of the Resolving of Housing Problems Act of 1991. It also indicated the company's bank account to which the municipality was to transfer the sale price once the applicant had paid it. The mayor did not respond and the applicant filed an application for judicial review of his tacit refusal with the Varna Regional Court. In a judgment dated 30 November 1994 and entered in the court's register on 5 December 1994 the Varna Regional Court quashed the refusal and returned the file to the mayor, instructing him to issue an order validating the purchase. It held that the mayor's tacit refusal to issue such an order had been an “administrative act” within the meaning of the Administrative Procedure Act (“APA”) and was subject to judicial review. The court further held that the applicant, who had been a tenant in the apartment since 1983, had the right to purchase it, in accordance with the procedure set out in the State Property Regulations 1975. Once the applicant's employer had assented to the sale of the apartment, the mayor had no discretion and was obliged to issue the order, thus formalising the agreement between the parties to the purchase contract: the employee and the company ‑ owner of the apartment. The mayor's role was not that of a party to the contract but that of an administrative authority which merely approved the already executed contract. The mayor refused to comply and on 3 February 1995 submitted a petition for review to the Supreme Court, arguing that his order – or the refusal to issue one – was not an “administrative act” and was thus not subject to judicial review. The applicant filed a counter ‑ pleading, arguing, inter alia , that the dispute did not concern an ordinary sale but a sale of a apartment owned by a State entity covered by the special provisions of the Resolving of Housing Problems Act of 1991. Thus, the mayor's role was not that of a contracting party, as it would be in the general case, but that of a supervising administrative authority. Once the prerequisites for effecting the sale had been met, the mayor had no discretion and was bound to approve it. He or she could refuse to do so only if the applicant did not meet the conditions laid down by the Act. The Supreme Court held a hearing on 7 October 1996. The applicant's counsel argued that the mayor's petition for review had been submitted out of time. The participating prosecutor also maintained that the petition was untimely and stated that the mayor should be allowed to present evidence to prove when the Varna Regional Court's judgment had been entered in the register. The merits of the case were not pleaded during the hearing. On 9 October 1996 the Supreme Court sent a letter to the Varna Regional Court, enquiring about the date when the latter's judgment had been entered in the court's register. The Varna Regional Court replied that its judgment had been entered on 5 December 1994. In December 1996 the Supreme Court was divided into a Supreme Court of Cassation and a Supreme Administrative Court. The newly formed Supreme Administrative Court was given jurisdiction to, inter alia , examine appeals on points of law against judgments of the regional courts in administrative cases. It also took over cases, such as the applicant's, in which petitions for review had been pending before the former Supreme Court. A three ‑ member panel of the Supreme Administrative Court gave judgment on 14 January 1997. It held that the petition for review had been submitted within the two-months' statutory time-limit and was thus admissible and continued: “... The petition for review is well-founded. ... The decisions or refusals to enter into a contract for the sale of State-owned apartments under the State Property Regulations 1975, including where the apartments have been given, for use and management, to [State enterprises], are not administrative acts within the meaning of Article 2 of the [APA]. These decisions precede the execution of the contract ... and express the assent of the mayor to the conclusion of the deal. [The mayor] does not, however, act as an administrative authority; he is placed on equal footing with the contracting private party. ... By examining the application [for judicial review] on its merits the Regional Court acted outside its jurisdiction. Therefore its judgment is to be vacated, the application is to be left without examination, and the proceedings are to be discontinued. ...” The reasons of the three-member panel did not make any reference to the Resolving of Housing Problems Act of 1991. On 24 February 1997 the applicant filed an appeal on procedural grounds, expounding all his arguments, including those relating to the merits of the case. Later he filed additional observations. A hearing was held on 19 June 1997, at which the applicant's counsel argued the case and made reference to his earlier written pleadings. On 10 July 1997 a five ‑ member panel of the Supreme Administrative Court upheld the impugned judgment. It held: “[The three ‑ member panel] correctly established that the decisions or the refusals to effect a sale of a State-owned apartment under the State Property Regulations [1975] ... are not individual administrative acts within the meaning of Article 2 of the [APA]. [These decisions] precede the execution of a contract between the State and the [private person] transferring title to the [apartment], and express the assent of the mayor to the future execution of this contract. [In these circumstances t]he mayor does not act as an administrative authority; he is placed on an equal footing vis-à-vis the private person. That is why his acts fall outside of the compass of the [APA]. Acts that relate to civil ‑ law relations, in which the administrative body and the [private person] are on an equal footing, are not individual administrative acts within the meaning of the APA. ... [T]he State Property Regulations [1975 do not mandate] the sale of apartments [managed by State entities] ... They lay down only the manner of selling of such apartments[, but contain no] obligation for the mayor to assent to the sale of an apartment [owned or managed by a State entity]. Likewise, the five-member panel did not mention the Resolving of Housing Problems Act of 1991 in its reasons. B.     Relevant domestic law and practice 1.     The Resolving of Housing Problems Act of 1991 („Закон за уреждане на жилищните въпроси на граждани с многогодишни жилищно-спестовни влогове“) This Act concerns mainly persons who have deposited money in special housing bank accounts prior to 1991 (the applicant does not fall into this category). Separately, paragraph 4 of the additional provisions of the Act, dealing with the housing needs of employees of State entities, provided, as enacted in 1991: “[State] entities ... may sell available apartments to their employees ... provided the persons who apply to purchase the apartments meet the requirements of section 2(1).” In 1992 that text was amended to read: “1.     [State] entities ... shall sell available apartments to their employees under the following terms: (1)     employees ... who were tenants in [apartments owned by the respective entities] before [4 March 1991] and who meet the requirements of section 2(1)(1), (3) and (4) of the Act may purchase the apartments at prices set in accordance with [previous, more favourable pricing rules for selling immovable State property]. (2)     employees who were settled as tenants in [apartments owned by the respective entities] after 4 March 1991 ... and, as of the [beginning of the tenancy], met the requirements of section 2(1)(1), (3) and (4) of the Act, may purchase the apartments at prices set in accordance with [the then current pricing rules for selling immovable State property]. 2.     The difference between the price at which the apartments are acquired under subparagraph 1 and their real value shall be borne by the [State] entity.” Points 1, 3, and 4 of section 2(1) of the Act, as in force at the relevant time, laid down certain conditions for a person to come within its purview: (i) that he or she did not own dwellings or country houses whose value, when added to the person's other wealth, was above 150,000 old Bulgarian levs (“BGL”); (ii) that he or she had not disposed of dwellings he or she had owned after 1 January 1981; and that (iii) the total amount of his or her wealth, other than his or her dwellings and country houses, calculated in accordance with the Regulations for the implementation of the Act, was below BGL 150,000. 2.     Regulations for the implementation of the Resolving of Housing Problems Act of 1991 („Правилник за прилагане на Закона за уреждане на жилищните въпроси на граждани с многогодишни жилищно-спестовни влогове“) Section 2 of the Regulations reads: “The persons eligible within the meaning of the Act are: ... (3)     tenants in apartments owned by [State entities] whose tenancies commenced before 3 August 1992; ...” Paragraph 18 of the additional provisions of the Regulations (adopted in 1995) provides that if the apartments sold under paragraph 4 of the additional provisions of the Act have been listed as long-term assets of State enterprises transformed into State-owned joint-stock companies, the difference between the price at which they were sold and their book value has to be reflected as a reduction of the companies' capital. 3.     The State Property Regulations 1975 („Наредба за държавните имоти“) The State Property Regulations 1975 (repealed in 1996) were adopted by the Council of Ministers under section 21 of the Property Act (which empowered it to make regulations for the “management, use, and disposition” of State property) and governed, inter alia , the procedure for selling apartments owned or “used and managed” by State entities. Section   111(2) of the Regulations provided that where such apartments were put up for sale they were to be turned over to the municipality on the territory of which they were situated for the effecting of the transaction. 4.     Legal regime of the assets of State enterprises Before 1989 State enterprises did not have an independent right of property over their assets; the assets were the property of the State and were only allocated to the enterprises for “use and management”. Under the Commerce Act and other legislation adopted in 1991 and 1992 State enterprises had to be transformed into State ‑ owned limited liability companies or State-owned joint ‑ stock companies. The question whether the transformed enterprises became full owners of their assets or were beneficiaries of a right to “use and manage” State property was still discussed in the legal theory after 1991. While the new provisions of commercial law were based on the concept that every commercial company owned its assets, section 8 of the Property Act, as in force until 1996, provided that State-owned legal persons only “exercised, on their own account, the right to State property in respect of the assets provided to them”. On the other hand, section 17a (adopted in 1994) of the Transformation and Privatisation of State Enterprises Act provided that after the transformation of a State enterprise into a commercial company title to the assets that it had “used and managed” vested in the transformed company, unless otherwise specified in the act of transformation. 5.     Judicial review of administrative acts (a)     Relevant constitutional and statutory provisions Article 120 of the Constitution provides: “1.     The courts shall review the lawfulness of the administration's acts and decisions. 2.     Physical and legal persons shall have the right to seek judicial review of any administrative act or decision that affects them, save in the cases expressly specified by act of Parliament.” The APA governs the procedure for issuing “administrative acts” and for judicial review of such acts. Section 2(1) of the Act defines “individual administrative acts” as “acts issued [by public authorities], which create rights or obligations for, or affect rights or legitimate interests of, individuals or legal entities, as well as the refusals to issue such acts”. By sections 33 and 34 of the Act, all “administrative acts”, save those relating to the national security or specifically enumerated by statute, are subject to judicial review. (b)     Judgment no. 21 of 1995 of the Constitutional Court In this interpretative judgment no. 21 of 26 October 1995 in constitutional case no. 18/1995 (реш. № 21 от 26 октомври 1995 г. по к.д. № 18 от 1995 г., обн., ДВ, бр. 99 от 10 ноември 1995 г.) the Constitutional Court gave a binding interpretation of Article 120 § 2 of the Constitution. It held, inter alia , that that Article's provision encompassed all administrative acts regardless of their character or theoretical qualification. The exclusion of a given administrative act from judicial review could only be done by statute. “All administrative acts” meant “without exception”. Only internal acts which did not affect in any way physical or legal persons outside the respective administration were not covered by the constitutional provision. 6.     Review proceedings before the Supreme Court Until December 1997 section 44 of the APA provided that the regional court's judgments on applications for judicial review of administrative acts were final and could be set aside only in accordance with Article 225 et seq. of the Code of Civil Procedure (“CCP”). Articles   225 ‑ 30 of the CCP, repealed with effect from 1 April 1998, governed review proceedings before the former Supreme Court. Review proceedings were initiated upon the petition of a party to the case (Article   225 § 1), lodged within two months after the judgment's entry into force (Article 226 § 1), or the proposal of the Prosecutor ‑ General (Article   225 § 2), lodged within one year after the judgment's entry into force (Article 226 § 1). The petition for review did not have suspensive effect, but the Supreme Court could, on the application of the petitioning party, order a stay of the enforcement of the regional court's judgment in case the enforcement would cause irreparable harm to the petitioning party (Article   225 § 4). In review proceedings the Supreme Court had the power to set the judgment aside wholly or in part, whenever (1) it was “contrary to the law”, (2) “substantial breaches of procedural law [had] occurred during the proceedings or in connection with the delivery of the judgment”, or (3)   “the judgment [was] ill ‑ founded” (Article 225 § 3 in conjunction with Article   207). If the Supreme Court set the regional court's judgment aside, it could either decide the case itself, or, exceptionally, remit it to the regional court for a fresh examination (Article 229 §   2). COMPLAINTS 1.     The applicant complained under Article 6 of the Convention that he had been denied access to a court in respect of his application for judicial review of the refusal of the mayor. In particular, he submitted that the judgments of the Supreme Administrative Court had been arbitrary and had ignored his arguments; the court had failed to mention the Resolving of Housing Problems Act of 1991 in its analysis of the relevant law. As a result, it had not ruled on the merits of the dispute relating to the tacit refusal of the mayor. The applicant also relied on Article   13. 2.     The applicant complained under Article 6 of the Convention that the Supreme Administrative Court had not been impartial and that the proceedings before it had not been fair. In particular, he alleged that that court had not given judgment within the time-limit set by the CCP; that no argument had been heard during the oral hearing before the three-member panel in respect of the merits of the case, which had prevented his counsel from bringing new pertinent arguments to the attention of the court; and also that, instead of leaving it to the mayor to prove that his petition for review had been timely, that panel had of its own motion, and contrary to its prior practice, requested information from the Varna Regional Court about the date of the entering of the latter's judgment in the register. 3.     The applicant complained that the mayor had refused to approve the purchase and had thus deprived him of his right under paragraph 4 of the additional provisions of the Resolving of Housing Problems Act of 1991 to acquire the apartment in which he was living at a preferential price. He submitted that in many cases identical to his own the mayor had given an approval and invoked Article 14 of the Convention. THE LAW 1.     The Court considers that the applicant's complaints that he had been denied access to a court in respect of his application for judicial review of the refusal of the mayor and that the proceedings before the Supreme Administrative Court had not been fair fall to be examined under Article   6 §   1 of the Convention, which provides, as relevant: “In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal ...” The Government submitted that the applicant's complaint was manifestly ill ‑ founded. They stated that the State Property Regulations 1975 had set out in detail the manner and conditions for selling State ‑ owned apartments, including apartments owned by State entities. The sale of State property to private persons was a complex transaction, including both administrative and civil ‑ law elements. Under Bulgarian administrative law the parties to a legal relationship were not equal; the administrative authority was in a dominant position vis-à-vis the private person. Therefore, the administrative authority could act unilaterally, without obtaining the consent of the other parties concerned. By contrast, civil ‑ law relations were characterised by the equality of the parties. The Government explained that the reasons on which the domestic courts had relied to hold that the mayor's refusal had not been an “administrative act” within the meaning of section 2(1) of the APA were that when it came to the selling of State ‑ owned property, the mayor's assent preceded the execution of the contract. The mayor did not act as an administrative authority issuing binding orders, but was at an equal footing vis-à-vis the contracting private party. He or she could not be bound by another authority or by the private party to give such assent. The private party's right of property did not arise immediately after the mayor's act, but only after all elements of the transaction had been completed. Thus, as they were not “individual administrative acts”, the mayor's decisions relating to the sale of State property fell outside the ambit of the APA and were not subject to judicial review. The domestic courts' case ‑ law on this was constant. The Government further argued that the Supreme Administrative Court's judgments had been lawful and well-founded. In view of that court's finding that the applicant's application for judicial review was inadmissible, it would have been superfluous to discuss the relevance of the Resolving of Housing Problems Act of 1991 or, indeed, any issues going to the merits of the case. Finally, the Government maintained that the proceedings had been fair and that the Supreme Administrative Court had been impartial. The applicant's allegation that that court had showed bias by inquiring of its own motion about the date when the Varna Regional Court's judgment had been entered in the court's register was ill ‑ founded. The transcript of the hearing indicated that the prosecutor who had participated in the proceedings had made a request to the court to establish the starting point of the time ‑ limit for the lodging of the petition for review. The applicant submitted that he had been denied effective access to a court in respect of the tacit refusal of the mayor to approve the purchase of the apartment. He referred to his arguments in respect of the complaint under Article 1 of Protocol No. 1 and argued that he had had an arguable claim. The proceedings which he had instituted had been intended to vindicate his civil right to purchase the apartment. As regards the question whether the mayor's approval had been needed and whether the proceedings which the applicant had instituted had been determinative of a right, the applicant argued that the sales of apartments owned by State entities had always been effected in the manner provided by the State Property Regulations 1975. This had also been the opinion of the Varna Regional Court, the only court which had reviewed the issue. The board of directors of the applicant's employer did not have any other course of action than to request the permission of the mayor, as required by the Regulations. Moreover, the Government did not dispute this. The applicant stated that the question whether the mayor's refusal had been an “individual administrative act” within the meaning of domestic law was immaterial for the purposes of Article 6 of the Convention. What mattered was that he had had a right, which had been infringed, to buy the apartment. However, the Supreme Administrative Court, relying on the obsolete theory of the “individual administrative act”, had denied the courts jurisdiction to examine his application for judicial review on the merits, in breach of Article 6. In any event, the Supreme Administrative Court had erred in its analysis of domestic law. It was true that in the general case the mayor's acts relating to the sale of State property were not “administrative acts”; however, in the case at hand the mayor had not been a contracting party and had had no discretion, because the sale had been made mandatory by the Resolving of Housing Problems Act of 1991. All the mayor had to do was to verify whether the conditions of the Act had been met by the applicant. The applicant further argued that the Supreme Administrative Court had not given any reasons in respect of his arguments stemming from the Resolving of Housing Problems Act of 1991, although this issue was of crucial importance for the outcome of the case. Furthermore, the court had not mentioned Article 120 of the Constitution, which was also highly relevant. Finally, the applicant submitted that the proceedings in the Supreme Administrative Court had been unfair because that court had verified of its own motion whether the mayor's petition for review had been timely. It had thus shown its bias in favour of the mayor and had infringed the equality ‑ of ‑ arms principle. In addition, the proceedings had been unfair in that during the hearing on 7 October 1996 the parties had only had time to plead the issue of whether the mayor's petition for review had been timely, while the merits of the case had remained untouched. The Court considers, in the light of the parties' submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill ‑ founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established. 2.     The Court considers that the applicant's complaint that he was deprived of his right to acquire the apartment in which he was living at a preferential price falls to be examined under Article 1 of Protocol No. 1, which provides: “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.” The Government submitted that the right to buy an apartment under paragraph 4 of the additional provisions of the Resolving of Housing Problems Act of 1991 was subject to a number of requirements: that the applicant had a proven housing need, that the total amount of his household wealth, calculated using special methods, was below a certain threshold, that he had not disposed of apartments owned by him after a certain date, etc. While the applicant averred that he had met these requirements, it was only the competent authorities who could conclusively rule on the issue. According to the applicant, paragraph 4 of the additional provisions of the Resolving of Housing Problems Act of 1991, as amended in 1992, gave him an entitlement to purchase the apartment at a preferential price in his capacity of a tenant and obliged the authorities to approve this sale. While the initial wording of paragraph 4 had been that the “[State] entities ... [could] sell [the] apartments”, it had been amended in 1992 to provide that “[State] entities ... shall sell [the] apartments”. Therefore, after 1992 the State entities, such as his employer, were under an obligation to sell the available apartments, provided of course that the persons willing to buy them conformed to requirements of the Act. The Act had been adopted many years after the State Property Regulations 1975 and, moreover, constituted lex specialis in relation to their more general provisions. The applicant submitted that technically the Government were right in arguing that it was only the competent authorities who could conclusively rule on the existence of the prerequisites for the right to buy the apartment. However, these authorities had refused to do exactly that. The applicant had provided to the municipality all necessary documents purporting to establish that he had met the requirements of the Act, but it had failed to examine the matter. The owner of the apartment – the applicant's employer – had agreed to the sale. In these circumstances, the mayor could not revisit the issue, but could only verify whether the applicant conformed to the requirements of the Act. The applicant further maintained that the Government apparently admitted that he had the right to buy the apartment. The existence of the prerequisites for buying it, even though not part of the subject ‑ matter of the proceedings before the Court, could be considered established by the assent to the purchase given by the board of directors of the applicant's employer. The only reason for the non ‑ completion of the transaction had been the refusal of the mayor to issue the requisite order. The need for this order existed because of the archaic provisions of the State Property Regulations 1975. In these circumstances, the applicant was placed in the absurd situation of having the right to buy an apartment at a preferential price, of having obtained the assent of the apartment's owner – his employer –, but not being able to acquire the apartment because of the unwillingness of the municipal authorities to examine his case. The Court considers, in the light of the parties' submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill ‑ founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established. For these reasons, the Court unanimously Declares the application admissible, without prejudging the merits of the case.   Søren Nielsen   Christos Rozakis   Registrar   President