CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 18 mai 2006

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Rozakis , President ,   Mrs   N. Vajić ,   Mr   A. Kovler ,   Mrs   E. Steiner ,   Mr   K. Hajiyev ,   Mr   D. Spielmann ,   Mr   S.E. Jebens, judges , and Mr S. Nielsen , Section Registrar , Having regard to the above application lodged on 20 September 2002, 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, the Rijeka Serbian Orthodox Church ( Srpska Pravoslavna Crkvena Opština na Rijeci ), is a religious community with its seat in Rijeka. It is represented before the Court by Mr M. Markiš, a lawyer practising in Rijeka. The respondent Government are represented by their Agents, first Ms   L.   Lukina-Karajković and subsequently Ms   Š. Stažnik. A.     The circumstances of the case The facts of the case, as submitted by the parties, may be summarised as follows. The applicant owns in Rijeka a flat of a surface of 104.57 square metres. A certain Ž.J. had a specially protected tenancy of the flat. On 22   October 1996 Parliament enacted the Lease Act, which regulates the conditions of leasing privately-owned flats, including those previously let under a specially protected tenancy. Under the Lease Act, on 8 November 1997 the applicant let the flat to Ž.J. On 1 April 1999 the applicant terminated the lease because it intended to lodge a priest in the flat. Since Ž.J refused to vacate the flat, the applicant instituted proceedings in the Rijeka Municipal Court ( Općinski sud u Rijeci ) seeking eviction of Ž.J. The applicant based its claim on the Lease Act claiming that it needed the flat for its own use, namely to house its priest. It also claimed that it could provide for Ž.J. another flat also situated in Rijeka, but a smaller one, of a surface of 48 square metres. On 5 June 2000 the Rijeka Municipal Court dismissed the applicant’s action, finding that it did not need the flat in question for itself but only to install its priest. The court found that the priest could have lived in any other flat including the one that the applicant was offering to Ž.J. The applicant appealed against the first-instance judgment arguing that installing its priest in the flat at issue amounted to the use of the flat by the applicant itself. On 4 April 2001 the Rijeka County Court ( Županijski sud u Rijeci ) dismissed the applicant’s appeal. It found that the applicant did not satisfy the conditions of section 40 of the Lease Act because it was a legal entity rather than a natural person. The court stated that the question whether there existed a need for the flat at issue on behalf of the applicant, the reasons for eviction of Ž.J., and the fact that the applicant had offered Ž.J. another flat, were irrelevant in the present case. The applicant subsequently filed a constitutional complaint claiming, inter alia , that its property rights were violated because it had no possibility to terminate the lease on the flat that it owned. On 3 June 2002 the Constitutional Court ( Ustavni sud Republike Hrvatske ) dismissed the applicant’s complaint. It found that the lower courts’ decisions were based on law, and that the relevant provisions of the Lease Act providing for termination of a lease for personal reasons referred only to natural persons but not to legal entities. It stated that the applicant’s inability to terminate the lease did not violate its property rights. Meanwhile, Ž.J. died, but his wife, A.J., continues to live in the flat. B.     Relevant domestic law The Flat Lease Act ( Zakon o najmu stanova , Official Gazette no. 91/1996 of 28 October 1996) (“the Lease Act”) regulates the legal relationship between the landlord and the tenant with respect to the lease of flats. It recognises a special category of tenants, namely those who were previously holders of specially protected tenancies on privately-owned flats. Such a category is, according to the Act, subject to a number of protections, for instance, an obligation for the owners to contract a lease for an unlimited period of time; payment of a so-called protected rent, the amount of which is to be prescribed by the Government, as well as limited reasons for the termination of the lease. The Lease Act abolished the specially protected tenancy as such. Pursuant to the Lease Act a landlord may terminate the lease of a protected tenant in the following cases: -           if the tenant does not pay the rent or charges; -           if the tenant sublets the flat or part of it, without permission from the landlord; -           if the tenant or other tenants in the flat disturb other tenants in the building; -           if another person, not figuring in the lease contract, lives in the flat longer than thirty days, without permission from the landlord, except where that person is a spouse, child or parent of the tenant or of the other legal tenants in the flat, or a dependant of the tenant or a person on whom the tenant is dependent; -           if the tenant or other legal tenants do not use the flat for living, but for other purposes; -           if the landlord does not have another flat and is entitled to social assistance benefits or is older than sixty years. Under section 40   (1) of the Lease Act, the landlord may also terminate a lease of a protected tenant if the landlord intends to move into the flat himself or install his children, parents or dependants therein. COMPLAINT The applicant complains under Article 1 of Protocol No. 1 that its right to peaceful enjoyment of possessions was violated because the domestic courts did not recognise its right to terminate a lease on a flat that it owns. THE LAW The applicant complains that its inability to terminate the lease as a legal entity violated its property rights guaranteed under Article 1 of Protocol No.   1 to the Convention, 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.” 1.     The parties’ submissions The Government submit that there was no interference with the applicant’s property rights. Their property was burdened due to the fact that Ž.J. had had specially protected tenancy of a private flat, which had been established in the former regime and long before the Convention entered into force in respect of Croatia in November 1997. Subsequently, by the enactment of the Lease Act, the State only strengthened the applicant’s position as the owner in transforming the position of former specially protected tenants so as to resemble almost entirely the one of regular tenants. The Government further argue that an interference, if any, was justified for the control of use of property. In order to minimise the negative consequences of abandoning the socialist regime, it was necessary to provide the former holders of specially protected tenancies on privately-owned flats with a possibility to continue living in those flats. The applicant was thus obliged to conclude a lease contract with Ž.J., which could, however, be terminated for the same reasons as any other lease concluded for an indefinite period of time, such as non-payment of rent, disturbing other tenants or the use of flat for business activities etc. In this connection, the Government deem that a fair balance was struck between the interests of the owner and that of the protected tenants. As to the applicant’s inability to terminate the lease in order to move its priest in the flat, the Government agree with the conclusion and the reasoning of the domestic courts. The State and the courts acknowledge the interest of owners to use a flat they own themselves, limiting this right only to natural persons. In cases like the present one, the interests of the protected tenant prevail over the interest of the applicant as a legal entity. In the Government’s view, it is clear that a legal entity has a larger choice of accommodation for its staff and that a limitation in this respect does not impose an excessive individual burden on it. The applicant maintains that the refusal of the domestic courts to terminate the lease violated its property rights. In interpreting the possibility of termination of a lease for reasons of personal use as applying solely to natural persons, the domestic courts artificially created a difference between owners who are natural persons and those who are legal entities. Consequently, being a legal person, the applicant is discriminated against, as opposed to owners who are natural persons. Moreover, taking into account that in the domestic proceedings the applicant offered alternative accommodation to Ž.J., it holds that the interference with its property rights was disproportionate and imposed an excessive burden on it. 2.     The Court’s assessment The Court recalls that Article 1 of Protocol No. 1 comprises 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 peaceful enjoyment of property. The second rule, contained in the second sentence of the same paragraph, covers deprivation of possessions and makes it subject to certain conditions. The third rule, stated in the second paragraph, recognises that Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are not “distinct” in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principles enunciated in the first rule (see The Former King of Greece and Others v Greece [GC], no. 25701/94, § 50, ECHR - 2000-XII). For the Court, the restriction on the applicant’s right to terminate its tenants’ lease in the present case constitutes an act of control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1. In this respect the Court further recalls that the second paragraph of Article 1 of Protocol No. 1 allows Contracting States to control the use of property in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose, which means that there must exist a reasonable relationship of proportionality between the means employed and the aim sought to be realised (see Sporrong and Lönnroth judgment of 23   September 1982, Series   A no. 52, p. 24, §   64; Allan Jacobsson v. Sweden judgment of 25 October 1989, Series A no. 163, p. 16, §   54). As regards the choice of the detailed legal rules implementing a measure for the control of the use of property, the domestic legislature must have a wide margin of appreciation. As regards the purpose of the measures, the Court must respect the domestic legislature’s judgment as to what is in the general interest, unless that judgment was manifestly without reasonable foundation (see Mellacher and Others v. Austria , judgment of 19   December 1989, Series A no. 169, p. 26, §   45). In the present case the Court notes that the decision of the domestic courts were in line with the domestic law. Although the Lease Act does not expressly exclude legal persons from terminating the lease for its own use, such conclusion is implicit and was confirmed by the domestic courts. The Court accepts that the legislation applied in this case pursues a legitimate aim, namely the social protection of tenants, and that it thus tends to promote the economic well-being of the country and the protection of the rights of others. As to the proportionality of the measure, the Court observes that the Lease Act allows landlords to terminate a lease in cases when tenants are in some way not fulfilling their obligations stemming from the lease, but also provides an exception for landlords who are natural persons in that they may terminate the lease if they need the flat for their personal use. Legal persons are not included in this exception and are accordingly not entitled to terminate the lease of their tenants so as to use the flat itself or to lodge one of its employees. Regard being had to the wide margin of appreciation enjoyed by the States, the Court considers that the domestic courts’ decisions in the circumstances of the present case did not interfere with the applicant’s property rights in a manner contrary to Article 1 of Protocol No. 1 to the Convention. For these reasons, the Court unanimously Declares the application inadmissible.   Søren Nielsen   Christos Rozakis   Registrar   President