AS TO THE ADMISSIBILITY OF
Application no. 65850/01
by Rumen Ivanov TODOROV
The European Court of Human Rights (Fifth Section), sitting on 13 May 2008 as a Chamber composed of:
Zdravka Kalaydjieva, judges,
and Claudia Westerdiek, Section Registrar,
Having regard to the above application lodged on 25 October 2000,
Having regard to the Court’s partial decision of 29 September 2005,
Having deliberated, decides as follows:
The applicant, Mr Rumen Ivanov Todorov, is a Bulgarian national who was born in 1960 and lives in Ahtopol. He was represented by Mr M. Ekimdjiev, a lawyer practising in Plovdiv. The respondent Government were represented by their Agent, Ms M. Karadjova, of the Ministry of Justice.
The facts of the case, as submitted by the parties, may be summarised as follows.
On 11 May 1990 the applicant obtained construction rights over a plot of municipal land in Rezovo, the municipality of Tsarevo (formerly Michurin). In accordance with the relevant law as in force at the time, the municipal authorities issued an order granting construction rights and also entered into a contract with the applicant. The surface of the plot was 700 square metres. The price was set at 700 “old” Bulgarian levs (BGL), which the applicant paid on 14 May 1990. At that time BGL 700 was the equivalent of approximately three average monthly salaries in the country.
The contract stipulated, inter alia, that the applicant’s right to construct a building would expire in the event of his failing to complete the building within five years.
The applicant hired an architect and on 19 July 1991 he obtained a building permit for a two-storey house of 111 square metres to be constructed on the plot. The applicant also purchased construction material, transported it to Rezovo and stored it there.
On an unspecified date in the summer of 1991 the municipal building authorities refused to authorise the commencement of the construction works as the technician who had visited the site had noted that a high-voltage electricity conduit passed over the plot.
It appears that during the same period persons claiming rights over neighbouring plots obstructed the applicant’s preparations for the construction of his house. In 1992 the applicant brought an action against them, seeking damages. The municipality of Tsarevo was summoned as a third party. By judgment of 2 March 1993 the Bourgas District Court dismissed the applicant’s claim against the neighbours, noting that the impossibility for the applicant to realise his project was only imputable to the municipality which had sold him construction rights over the plot in disregard of the fact that constructing a building there was not allowed owing to the passage of a high-voltage electricity conduit.
On an unspecified date in 1993 the applicant wrote to the municipality asking them to provide him with another plot. He allegedly received assurances that that would be done later.
By decision of 1 September 1995 the local land commission ordered the restitution of the land on which the applicant had obtained construction rights to the heirs of the person who had owned it prior to the collectivisation of agricultural land in Bulgaria in the 1950s.
In October 1995 the applicant travelled to Germany and started working there.
On 29 January 1996 the mayor of Tsarevo issued an order cancelling the applicant’s construction rights.
On an unspecified date in 1997 the applicant brought an action against the municipality of Tsarevo seeking restitution of the price paid by him under the 1990 contract and damages for breach of contract. Initially he claimed BGL 100,000. On 31 March 1998 he increased the claim to BGL 1,000,000.
By a judgment of 27 July 1998 the Tsarevo District Court partially granted the claim. On an appeal by the applicant, on 24 March 1999 the Bourgas Regional Court increased the award. The final judgment was that of the Supreme Court of Cassation of 15 May 2000, which upheld the Regional Court’s judgment.
The courts found, inter alia, that the Tsarevo municipality had breached the 1990 contract with the applicant in that it had granted him construction rights over a plot which could not be built over and had failed to remedy that situation despite his complaints. It followed that the municipality was liable to pay all ensuing damages. The applicant had proven the alleged losses in respect of the price paid by him in May 1990 to the municipality (BGL 700), the architect’s fees paid by him in 1991 (BGL 1,200) and the expenses incurred by him in 1991 for the transport of construction material (BGL 8,000).
The remainder of his claims, which concerned alleged loss of profits, were dismissed as unproven. The applicant had stated that in normal circumstances he would have completed the house within a year and would have rented it each year during the summer holidays. The courts found that the applicant had not substantiated the alleged loss of profits. He had relied solely on information about average property and rental prices at the relevant time.
The amount awarded to the applicant was thus BGL 9,900 plus interest. Owing to the depreciation of the Bulgarian currency, by March 1999, when the award became enforceable, it represented, together with all interest accrued, the equivalent of not more than 15 euros (EUR).
In his appeals before the Regional Court and the Supreme Court of Cassation the applicant protested that the courts had awarded him sums which had become worthless. He insisted that the award should be commensurate to the value of the actual damage he had sustained.
In reply to those arguments the courts stated that in accordance with the relevant law and established practice the applicant was entitled to compensation for the actual damage suffered at the time when it was occasioned.
In 2003 the applicant submitted a claim in which, in confused terms, he sought a declaration that the mayor’s order of 29 January 1996 was null and void and also requested compensation. The courts interpreted the claim as an action for a declaration of nullity and rejected it as unfounded by final decision of 18 June 2004.
The applicant complained, relying on Article 6 and Article 1 of Protocol No. 1 of the Convention, that he had suffered damage imputable to the State but was only given token compensation, as the courts did not take into consideration the monetary depreciation in the country.
The Court considers that the complaint falls to be examined 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.”
The Government pointed out that the case concerned contractual relations between the applicant and the Tsarevo municipality and the applicant’s allegation that a sum of money awarded for breach of contract had been insufficient. There was no delay in payment for which the State was responsible as in Akkuş v. Turkey (judgment of 9 July 1997, Reports of Judgments and Decisions 1997-IV), and Mancheva v. Bulgaria (no. 39609/98, 30 September 2004). Since the applicant did not have a legitimate expectation of a higher award and the amount had been determined by the courts, no issue under Article 1 of Protocol No. 1 arose. The Government submitted that Article 1 of Protocol No. 1 did not guarantee an inflation-compatible default interest rate. The courts had applied the law, which was the same no matter who the debtor was.
The applicant stated that his right to construct on municipal land was a “possession” within the meaning of Article 1 of Protocol No. 1 and that he had been deprived of this right unlawfully and without justification. He submitted, in addition, that despite the contractual nature of the municipality’s obligations, the case also involved acts by the mayor in the exercise of his administrative powers. The mayor’s acts had been unlawful and therefore the applicant was entitled to adequate compensation and the State was liable in tort. The State had the duty to secure such compensation despite its wide margin of appreciation in issues concerning inflation and its consequences.
In so far as the applicant refers to the mayor’s decision cancelling his construction rights, the Court observes that in its own partial decision of 29 September 2005 it rejected the applicant’s claim as being inadmissible in this respect.
The complaint before the Court concerns in essence the fact that the Bulgarian courts did not take into consideration inflation and the depreciation of the Bulgarian currency when they awarded the applicant a sum of money. While it is true that the award in question was made against an administrative body, the municipality of Tsarevo, the Court observes that the facts concern contractual relations between the applicant and the municipality and damages for breach of contract. Moreover, a significant part of the relevant events occurred before 7 September 1992, the date of the Convention’s entry into force for Bulgaria.
The Court further notes that, in accordance with the established practice of the Bulgarian courts, it was not possible to revalorise claims. The applicant had no right under Bulgarian law to obtain an award in damages reflecting inflation and, therefore, his claim for such an award did not constitute “legitimate expectation” or “existing possessions”, within the meaning of Article 1 of Protocol No. 1 and the Court’s case-law (see Kopecký v. Slovakia [GC], no. 44912/98, ECHR 2004-IX-).
Furthermore, the Court has held that Article 1 of Protocol No. 1 cannot be interpreted as imposing an obligation on States to maintain the value of claims or apply an inflation-compatible default interest rate to private claims (see O.N. v. Bulgaria (dec.), no. 35221/97, 6 April 2000 and Grozeva v. Bulgaria (dec.), no. 52788/99, 3 November 2005). The Court does not find any indication that the authorities contributed to the loss of value of the applicant’s claim. In particular, three levels of jurisdiction examined the applicant’s claims within approximately three years.
In these circumstances the Court finds that the remainder of the application is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.
For these reasons, the Court unanimously
Declares the remainder of the application inadmissible.
Claudia Westerdiek Peer
TODOROV v. BULGARIA DECISION
TODOROV v. BULGARIA DECISION