FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 57239/00 
by Ivan KANALA 
against Slovakia

The European Court of Human Rights (Fourth Section), sitting on 7 February 2006 as a Chamber composed of:

Sir Nicolas Bratza, President
 Mr G. Bonello
 Mr K. Traja
 Mr S. Pavlovschi
 Mr L. Garlicki
 Ms L. Mijović, 
 Mr J. Šikuta, judges
and Mr M. O’Boyle, Section Registrar,

Having regard to the above application lodged on 6 March 2000,

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Ivan Kanala, is a Slovakian national, who was born in 1964 and lives in Rožňava. He was represented before the Court by Mr I. Gažík, a lawyer practising in Prievidza.

The respondent Government were represented by their Agent, Mrs A. Poláčková.

A.  The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicant is a businessman. In 1991 he acquired, at an auction held in the context of denationalisation of State property, real property located in the centre of the Rožňava town. The opening price in the auction was fixed at 245,000 Czechoslovak korunas (Kčs) in accordance with the relevant price regulation. The applicant purchased the property for Kčs 560,000.

The applicant contracted loans and used the money for re-constructing the property.

According to the applicant, he should have been the sole owner of the property in question. However, in 1993 the District Court in Spišská Nová Ves determined that the applicant and a Mr T., considered as the applicant’s partner, owned one half of the above real property each. As a result, Mr T. started running his business in the re-constructed part of the premises. Since he was not able to benefit from the use of a part of the premises, the applicant was unable to pay the instalments to the bank.

On 20 September 1994 Mr T. filed an action for termination of joint ownership of the property. The applicant filed a claim seeking a re-determination of the ownership of the real property in issue.

As the applicant did not pay the instalments, the Rožňava District Court, on 17 February 1997, ordered him and another person to pay a sum to the creditor. The judgment became final on 20 August 1997. On 11 August 1997 the Rožňava District Court issued a payment order against the applicant and another person ordering them to pay different parts of the debt. The payment order became final on 4 November 1997.

On 12 March 1998 the Rožňava District Court, at the creditor’s request, authorised an executions officer to execute the above decisions. The creditor agreed to the recovery of the debt by selling the applicant’s share in the above real property. Both executions were carried out simultaneously as they concerned the same persons.

The applicant submitted that the executions officer and the applicant’s brother had reached an agreement under which the latter would start paying off the debt and that no sale of the property would be ordered.

On 8 June 1998 the applicant filed an objection to the execution on the ground that he had requested re-opening of the proceedings concerning the ownership of the property. On 16 June 1998 the District Court dismissed the objection.

On 24 July 1998 the executions officer ordered the sale of the applicant’s property. On 18 August 1998 the applicant requested that the execution be adjourned. On 17 September 1998 the District Court dismissed the request.

On 14 October 1998 the executions officer informed the applicant that an expert had valued the property at 390,590 Slovakian korunas (SKK) on 30 September 1998.

Both the applicant and the creditor objected to the valuation as they found that the sum indicated by the expert was too low. A second expert opinion was ordered. In it a different expert assessed the value of the property at SKK 439,280.

On 21 December 1998 the executions officer announced that the property would be sold at an auction on 22 January 1999. The opening price was to be SKK 219,640 which corresponded to a half of the value of the whole property as determined by the second expert.

On 28 December 1998 the other co-owner of the property availed himself of his pre-emption right and deposited SKK 219,640 with the executions officer.

On 15 January 1999 the executions officer informed the District Court and the applicant that the real property would not be sold at an auction as the co-owner of the property had deposited the sum corresponding to its value. Reference was made to Section 166(2) of the Executions Order.

On 25 January 1999 the applicant filed objections to the execution. He complained that an auction had been scheduled in disregard of the fact that his brother had undertaken to pay off the debt and that three payments had been made between September and December 1998. He concluded that the executions officer was biased. The applicant further objected that the value of the property as determined by experts was disproportionately low. In particular, the applicant argued that a different expert had established a report, in 1992, according to which the value of the property had been Kčs 656,679 at that time and that more than SKK 400,000 had been invested in the building subsequently. The applicant submitted that the actual value of the property was approximately double the sum established by the experts. He requested that another expert should assess the value of the property. Finally, the applicant requested that the case be transferred to a different court with a view to “preventing undue influences on the proceedings in his case”. In his submission the applicant also mentioned that his above request for re-opening of the proceedings concerning the property in issue had been transferred to a different court. He stated that he would submit more detailed reasons upon request of the court of second instance.

On 1 February 1999 the District Court submitted the applicant’s request for exclusion of its judges to the Regional Court in Košice. In the accompanying document the judge in charge of the execution stated that he knew Mr T., the co-owner of the property in issue, as his late father had been employed at the District Court as a driver. The judge declared, however, that he did not consider himself biased. A different judge stated that he knew the applicant and proposed that he should be excluded from dealing with the case. All other judges declared that they did not know the parties and that they were impartial.

On 19 February 1999 the Regional Court in Košice excluded the judge who had stated that he knew the applicant. The Regional Court found no reason for excluding the other judges.

On 25 March 1999 the District Court found that the executions officer was not biased. The decision stated that the applicant had failed to submit any relevant reasons for excluding the executions officer.

On 26 March 1999 the Rožňava District Court judge informed the executions officer that he had proceeded erroneously. The letter stated, in particular, that the market value of the property should have been established for the purpose of the execution. Reference was made to Section 144(4) of the Executions Order. The judge invited the executions officer to have the assessment modified by an expert accordingly.

On 6 May 1999 the applicant again challenged the judges of the Rožňava District Court. The objection was based on the fact that the late father of the co-owner of the property had been an employee of the District Court.

On 15 July 1999 the executions officer informed the District Court that the expert was bound by Regulation No. 465/1991 and that he could not, therefore, take into account the market value of the property in issue.

In a decision of 13 September 1999 the Rožňava District Court confirmed that the co-owner had acquired the applicant’s share in the property in that he had deposited the above sum with the executions officer. The District Court further dismissed the applicant’s objections concerning the valuation of the property. It held that the experts had been bound by Regulation No. 465/1991. The fact that the executions officer had disregarded the above agreement that the applicant’s brother would start paying off the debt was irrelevant as such agreement was subject to approval by the creditor. No such approval had however been given. The decision stated that the above execution concerned the sum of SKK 281,800 SKK and, apart from the applicant, it mentioned another person as debtor. No appeal lay against the District Court’s decision.

On 22 October 1999 the applicant filed an appeal on points of law. The Supreme Court rejected it, on 29 June 2000, as such a remedy was not available in the case.

On 3 October 2000 the District Court granted the applicant’s objection to the execution officer’s proposal as to how the sum obtained should be distributed. On 11 December 2000 the executions officer submitted a new proposal on this point. The District Court approved of it on 13 March 2001. Both the applicant and the other debtor appealed. The court of appeal granted the appeals on 29 May 2001.

In a decision given on 15 March 2002 the District Court approved of an amended proposal on distribution of the sum obtained from the sale of the applicant’s property. That decision became final on 5 April 2002.

In the course of the execution the relevant documents were served directly on the applicant despite the fact that he was represented by a lawyer.

Subsequently the applicant’s brother claimed the sum of money which he had paid to the executions officer in order to pay off the applicant’s debt. On 11 February 2002 the District Court in Rožňava dismissed the action holding that the money paid had been transferred to the applicant’s creditors with a view to paying off the latter’s debts.

B.  Relevant domestic law and practice

1.  The Executions Order of 1995 (Act No. 233/1995, as amended)

a)  Provisions in force at the relevant time

Section 139(1), as in force until 8 November 1999, provided for the value of property to be established in an expert opinion.

Pursuant to Section 142(2), as in force until 8 November 1999, the lowest bid at a sale by auction of real property equalled the price as established in an expert opinion.

Section 144(4) provides, inter alia, that the purchase price of property obtained as a result of its sale at an auction is not limited by price regulations.

Pursuant to Section 157(4), where the proceeds of the sale exceed all claims to be satisfied in the context of the execution, the executions officer shall, after having satisfied all justified claims, transmit to the debtor the remainder of the proceeds of the sale.

Under Section 166(2), a co-owner of an object which is to be sold in the context of an execution can prevent its sale if he or she deposits with the executions officer, prior to the start of the auction, a sum corresponding to the share which is to be sold. The executions officer shall use the sum thus obtained as income from the sale.

b)  Amendments enacted with effect from 9 November 1999

As from 9 November 1999, Section 139(1) was amended in that an expert opinion on the value of real property should comprise both the price established pursuant to the relevant price regulation and the market price of the real property in question.

Pursuant to amended Section 142(2), the lowest bid at a sale by auction of real property equals the market value of the property as determined by expert under Section 139(1).

2.  Regulation No. 465/1991 (as amended)

Regulation No. 465/1991 of 25 October 1991 governed, inter alia, the valuation of buildings and of plots of land. It was repealed with effect from 1 January 2004.

Section 1(a) provided that the Regulation extended, inter alia, to the determination of the opening price for the purpose of sale of property at public auctions unless the law otherwise provided.

3.  Regulation No. 86/2002 (as amended)

Regulation No. 86/2002 governs the determination of the general value of property and became operative on 31 December 2003.

Section 1(2) provides that it applies to determining the general value of property in the context of proceedings under, inter alia, the Execution Order.

Pursuant to Section 3(2)(a) and (b), the general value of property is its final value determined in an objective manner by an expert and corresponding to a price for which the property could be realised in normal circumstances at a given place and time. It should include, as a rule, the value-added tax. The State of the property, influence of the market, economic situation and other specific factors should thereby be taken into account.

4.  Domestic courts’ practice

In opinion Cpj 30/97 of 20 October 1997 the Civil-law Section of the Supreme Court held that courts should take into account the general value of property (that is the price for which it could actually be sold) when deciding on the dissolution of joint ownership and on adequate compensation for a part of such property. Such general value of property could not be determined on the basis of the price regulations in force. The opinion states that the general value should also be applied where a co-owner avails himself or herself of the pre-emptory right to buy the property. The constitutional principle of equality of rights was thereby respected.

COMPLAINTS

1.  Under Article 6 § 1 of the Convention the applicant complained that (i) the executions officer had disregarded the agreement with the applicant’s brother on paying off the debt, (ii) apart from the final decisions, the relevant documents in the context of the execution had been delivered to the applicant and not to the lawyer whom he had appointed to represent him; (iii) the District Court had changed its view as to how the value of the property should be determined without paying due attention to the applicant’s arguments and had failed to give adequate reasons for its decision, and (iv) the District Court judge involved had been biased.

2.  The applicant complained under Article 1 of Protocol No. 1 that his property had been sold at a price substantially lower than its market value without any relevant justification.

THE LAW

1.  Alleged violation of Article 1 of Protocol No. 1

The applicant complained that his property had been sold at a price substantially lower than its market value without any relevant justification. He relied on Article 1 of Protocol No. 1 which provides 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.”

The Government objected that the applicant had not exhausted domestic remedies as required by Articles 35 § 1 of the Convention. They pointed out that the execution proceedings in issue had ended on 5 April 2002. At that time, the new remedy under Article 127 of the Constitution had been operative. The applicant, therefore, could have obtained redress at domestic level.

The applicant argued that at the relevant time he had had no possibility of having the alleged violation of Article 1 of Protocol No. 1 redressed by the Constitutional Court or any other domestic authority.

The Court notes that the substance of the applicant’s complaint under Article 1 of Protocol No. 1 relates to the fact that he suffered a loss as his property that was the subject of the execution proceedings had been valued under Regulation No. 465/1991 and in disregard of its genuine market value. That issue was determined in the decision given by the District Court in Rožňava on 13 September 1999. Since the domestic legal order excluded any ordinary remedy against that decision, and since the constitutional remedy invoked by the Government became available only as from 1 January 2002, the Government’s objection relating to non-exhaustion of domestic remedies cannot be upheld. The fact that, subsequently, the execution proceedings were pursued with a view to determining how the proceeds from the sale of the applicant’s property should be distributed cannot affect the position.

The Government further argued that the execution of the judicial orders had pursued the legitimate aim of ensuring compliance with the applicant’s contractual obligations. Thus it had been in the public interest. The execution had been carried out in accordance with the law then in force. In the circumstances of the case, the interference had not been disproportionate to the legitimate aim pursued. As regards the fact that the property had not been sold at a price corresponding to its market value, the Government argued that the applicant could have foreseen that, in accordance with the relevant law, such would be the consequence of his failure to comply with his obligations. The opinion of the Supreme Court under file number Cpj 30/97 of 20 October 1997 related to a case of termination and subsequent settlement of joint ownership under Section 141(1) of the Code of Civil Procedure. As such, it was irrelevant for determination of the point in issue.

The Government concluded that this part of the application was manifestly ill-founded.

The applicant argued that his property had been sold far below its real value. The interference with his rights under Article 1 of Protocol No. 1 had been, therefore, clearly disproportionate and unjustified. The above judicial practice should have been applied to his case by analogy.

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.  Alleged violation of Article 6 § 1 of the Convention

The applicant complained that his right to a fair hearing by an impartial tribunal had been violated in the context of the above execution proceedings. He relied on Article 6 § 1 of the Convention which in its relevant part provides:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal ...”

The Government first objected that, as the execution proceedings in issue had ended on 5 April 2002, the applicant should have sought redress by means of a complaint under Article 127 of the Constitution, as operative since 1 January 2002.

The applicant disagreed.

The Court does not consider it necessary to determine whether or to what extent should the applicant have sought redress by means of the remedy invoked by the Government as it finds that this part of the application is in any event inadmissible for the reasons set out below.

a)  As regards the applicant’s complaint that the District Court judge involved in the execution proceedings lacked impartiality, the Government argued that none of the arguments put forward by the applicant justified such a conclusion.

The applicant pointed out that in different cases concerning the same parties the judges of the District Court in Rožňava had been excluded.

The Court notes that the applicant first requested that the case should be transferred to a different court as he feared that the judges of the District Court in Rožňava could proceed with it in an inappropriate manner. He also mentioned that his request for re-opening of the proceedings concerning the ownership of the property in question had been transferred to a different court. After one of the judges had stated, in his comments on the applicant’s request, that he knew the co-owner of the property in issue as the son of a driver formerly employed at the District Court, the applicant again challenged the judges.

The Regional Court in Košice had before it the above facts but found no reason for excluding the District Court judges with the exception of the one who had considered himself biased as he knew the applicant. In view of the documents before it the Court finds no reason for concluding that the District Court judge involved in the execution proceedings against the applicant lacked impartiality contrary to Article 6 § 1 of the Convention. It notes, in particular, that the person who co-owned the property and who acquired the applicant’s part thereof was not a party to the execution proceedings under consideration.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

b)  The applicant also complained that (i) the executions officer had disregarded the agreement with the applicant’s brother on paying off the debt, (ii) most of the relevant documents in the context of the execution had been delivered to the applicant and not to the lawyer whom he had appointed to represent him and (iii) the District Court had changed its view as to how the value of the property should be determined without paying due attention to the applicant’s arguments and had failed to give sufficient reasons for its decision.

The Court has examined such complaints but finds, to the extent that they have been substantiated and fall within its competence, that they do not disclose any appearance of a violation of the Convention.

It follows that this part of the application is also manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares admissible, without prejudging the merits, the applicant’s complaint under Article 1 of Protocol No. 1 concerning the alleged violation of his property rights;

Declares inadmissible the remainder of the application.

Michael O’Boyle Nicolas Bratza 
 Registrar President

KANALA v. SLOVAKIA DECISION


KANALA v. SLOVAKIA DECISION