CEDH · CASELAW;CLIN;ENG — 25 octobre 2012

.s3ABFC313 { font-size:10pt } .sD4B5322E { margin-top:12pt; margin-bottom:12pt; text-align:justify } .sBB9EE52A { font-family:Arial } .sA241FE93 { margin-top:0pt; margin-bottom:18pt; text-align:justify; page-break-after:avoid; border-bottom:0.75pt solid #000000; padding-bottom:1pt } .s2EF62ED2 { margin-top:0pt; margin-bottom:0pt; font-size:12pt } .s4DDA3AA3 { font-family:Arial; font-weight:bold; font-style:italic } .s29100277 { font-family:Arial; font-weight:bold } .s32563E28 { margin-top:0pt; margin-bottom:0pt } .s8F2B0B1B { margin-top:12pt; margin-bottom:12pt; page-break-after:avoid; font-size:12pt } .s9FF10068 { margin-top:0pt; margin-bottom:12pt } .sEB86A30B { margin-top:0pt; margin-bottom:14pt; page-break-after:avoid } .sA36B60A1 { font-family:Arial; font-style:italic } .s5F48796F { margin-top:12pt; margin-bottom:0pt; text-align:justify } .s7ED160F0 { text-decoration:none } .s3DC36BA9 { font-family:Arial; text-decoration:underline; color:#0069d6 } .s8B6C6D43 { margin-top:0pt; margin-bottom:0pt; border-bottom:1pt solid #000000; padding-bottom:1pt } .sDF790F1E { margin-top:12pt; margin-bottom:0pt; text-align:center } Information Note on the Court’s case-law No. 156 October 2012 Vistiņš and Perepjolkins v. Latvia [GC] - 71243/01 Judgment 25.10.2012 [GC] Article 1 of Protocol No. 1 Article 1 para. 1 of Protocol No. 1 Deprivation of property Compensation significantly lower than current cadastral value of land expropriated following restoration of Latvian independence: violation Facts – The applicants acquired five plots of land under contracts of donation signed in 1994 on an island that is mainly occupied by port facilities and is part of the city of Riga. The plots had previously been expropriated illegally by the Soviet Union, but the donors had recovered their title in the context of denationalisation in the early 1990s. The cadastral value of the land as indicated at the time of the donation was insignificant, but in 1996, following its incorporation into the Port of Riga, it was estimated at about EUR 900,000 for the land belonging to the first applicant and for that of the second totalled about EUR 5,000,000. In 1997 the Latvian Parliament enacted a law for the expropriation of land for the needs of the State within the Free Port of Riga. The compensation awarded to the applicants was fixed at EUR 850 and EUR   13,500, respectively, in accordance with the new statutory provision setting as the ceiling for such compensation the cadastral value as at 22   July 1940, multiplied by a conversion ratio. In 1999 the applicants brought proceedings to obtain rent arrears for the use of their land since 1994 and were awarded, respectively, the equivalent of about EUR 85,000 and EUR 593,150. They further requested the courts to annul the cadastral registration of the State’s title, arguing in particular that the procedure provided for by the 1923 General Expropriation Act had not been complied with; but their claims were dismissed on the ground that the expropriation was not based on the 1923 General Act but on a special law of 1997. On 8 March 2011 a Chamber of the Court found that there had been no violation of Article   1 of Protocol No.   1 or of Article   14 of the Convention (see Information Note no.   139 ). Law – Article 1 of Protocol No. 1: In the present case there had been a “deprivation of possessions”, within the meaning of the second sentence of that Article. (a)     Lawfulness of the interference – In Latvian law the formal and final decision on expropriation was taken not by the executive but by Parliament in the form of a special law. This was a feature of the Latvian legal system, dating back to 1923, and enshrined in the Constitution in 1998. The general principles and objectives of the expropriation system set up by Latvian law did not, as such, raise any issue of lawfulness within the meaning of Article   1 of Protocol No.   1. Prior to the adoption, in 1997, of the regulation and the enactment of the special Law confirming it, the applicants could have expected that any expropriation of their property would be carried out in accordance with the 1923 General Expropriation Act. The Court had doubts as to whether the expropriation at issue had been carried out “subject to the conditions provided for by law”, having regard in particular to the derogation applied to the applicants and to the procedural safeguards that were – or were not – attached to it. (b)     Legitimate aim of the interference – The Government had argued that the State needed the expropriated land, situated near the Free Port of Riga, to extend, renovate and rebuild the port’s infrastructure. The Court had no reason to believe that those grounds were manifestly devoid of a reasonable basis. (c)     Proportionality of the interference – The value of the properties at issue had been assessed on three separate occasions. The applicants themselves had initially decided to indicate an exceptionally low value for their land and the parties agreed that this evaluation had been solely for the purpose of calculating registration duty. Leaving aside the question of the parties’ good faith in terms of their tax obligations, it was noteworthy that this calculation had never been referred to in the subsequent expropriation and compensation procedure. The Latvian authorities had been justified in deciding not to compensate the applicants for the full market value of the expropriated property and much lower amounts could suffice to fulfil the requirements of Article   1 of Protocol No.   1, for three reasons. Firstly, because the actual market value of the land could not objectively be determined, in particular because of the exclusive right of purchase introduced for the benefit of the State and local authorities by the Ports Act. Secondly, because the land at issue was subject to a statutory servitude for the benefit of the port. Lastly, because the applicants had not invested in the development of their land and had not paid any land tax, the tax-reassessment procedure subsequently initiated against them by Riga City Council having been unsuccessful. However, there was an extreme disproportion between the official cadastral value of the land and the compensation received by the applicants: the sum paid to the first applicant was less than one thousandth of the cadastral value of his land, and the second had received a sum some 350   times lower than the total cadastral value of all his properties. In the Court’s view, such disproportionate awards were virtually tantamount to a complete lack of compensation. Only very exceptional circumstances could justify such a situation. It was accordingly for the Court to ascertain whether such circumstances existed in the present case, by examining, in turn, the applicants’ personal situations and conduct, and the general historical and political background to the impugned measure. (i)     Applicants’ personal circumstances : The applicants’ good faith as to the acquisition of the property in question had never been disputed at national level. The Latvian authorities had never taken legal action to challenge the validity of the 1994 contracts of donation. On the contrary, they had formally recognised the applicants’ right of ownership by registering the land in their names and by paying them rent. In those circumstances the Court did not find any reason to question the conformity of the donations with the requirements of Latvian law or the validity of the applicants’ right of ownership. The donations had been made in return for certain services rendered by the applicants to the donors. It would therefore be incorrect, strictly speaking, to assert that the property in question had been acquired “free of charge”. In any event, the manner in which the applicants had acquired their property could not be held against them. Similarly, whilst it was true that the applicants had possessed their land for only about three years, that fact did not affect the value of the property and did not by itself justify a significant reduction in compensation. Consequently, the applicants’ personal circumstances and conduct did not in themselves justify the award of such minimal sums. (ii)     Historical and political background : By the time of their expropriation, all the disputed plots of land had already, with final effect, been denationalised and allotted to individuals. In this connection, the Court could not equate individuals who had not yet recovered their property with those who were already in possession of a valid title deed. The context of the present case was different from that of Jahn and Others v. Germany , in the following three aspects in particular. Firstly, the laws in the present case had been enacted by a democratically elected parliament and there was no reason why the applicants could not maintain their rights, except in the event of fraudulent enrichment to the detriment of the former owners, but neither the validity of the contracts of donation nor the good faith of the applicants had been called into question by the Latvian authorities. Similarly, the applicants’ status as property owners was unquestionably sound and the claims deriving from the enjoyment of their possessions had been further strengthened by the Free Commercial Port of Riga Act, which had subjected their land to profitable servitudes. Secondly, all the events at issue had taken place more than three years after the final re-entry into force of the democratic Constitution of 1922 and more than five years after the restoration of independence of Latvia, that is to say, well after the end of the period of historic upheaval. It followed that, whilst it had still been open to the Latvian legislature, in 1997, to correct any errors that might have been committed during the land reform, it could nevertheless have been expected to uphold the principle of legal certainty and to refrain from imposing excessive burdens on individuals. Thirdly, the expropriation at issue had been of benefit solely to the State, which had not redistributed any of the property to individuals. The present case was therefore not one where a manifestly unjust situation resulting from a process of denationalisation had to be remedied by the legislature ex post facto within a relatively short time in order to restore social justice. Furthermore, shortly after being deprived of their properties, the applicants had received significant amounts from the Free Commercial Port of Riga for the rent arrears due to them and in respect of the servitudes. Those amounts – calculated this time on the basis of the current value, and not that of 1940 – were respectively 95   times higher than the compensation granted to the first applicant and 40   times higher than that granted to the second. Noting that the rent arrears due to the applicants derived from a separate legal basis from that of the compensation awarded to them, the Court was unable to agree with the Government’s argument that the former sufficed to make up for the insignificance of the latter. In any event, the disproportion between the rent arrears and the compensation awarded confirmed that the compensation had been unreasonably low. Lastly, the Government had failed to show that the legitimate aim relied on, namely that of optimising the management of the Riga Port infrastructure in the general context of the State’s economic policy, could not be fulfilled by less drastic measures than expropriation compensated for by purely symbolic sums. The State’s budgetary difficulties did not constitute an imperative capable of justifying the adoption of such exceptional measures. In principle, it was not for the Court to indicate to the Contracting Parties what concrete legislative or regulatory measures should be taken in order to comply with their obligations. That being said, an exchange of land or a reduction in the rent due to the applicants – for as long as the State did not have the requisite budgetary resources to expropriate their land in return for fair compensation – were conceivable examples of such measures. Lastly, the authorities could have calculated the compensation on the basis of the cadastral value of the land at the date on which the applicants had actually lost their title instead of using the cadastral value from 1940. However, there was no evidence in the file that such measures had been discussed or even envisaged at national level. In those circumstances, even though Article   1 of Protocol No.   1 did not, in the present case, require the reimbursement of the full cadastral or market value of the expropriated properties, the disproportion between their current cadastral value and the compensation awarded was too significant for it to find that a “fair balance” had been struck between the interests of the community and the applicants’ fundamental rights. The State had overstepped the margin of appreciation afforded to it and the expropriation complained of by the applicants had imposed on them a disproportionate and excessive burden, upsetting the “fair balance” to be struck between the protection of property and the requirements of the general interest. Conclusion : violation (twelve votes to five). Article 41: question reserved. (See Jahn and Others v. Germany [GC], 46720/99, 72203/01 and 72552/01, 30   June 2005, Information Note   76)   © Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court. Click here for the Case-Law Information Notes