AS TO THE ADMISSIBILITY OF
Application no. 67723/01
by Oskar PÕDER and Others
The European Court of Human Rights (Fourth Section), sitting on 4 January and 26 April 2005 as a Chamber composed of:
Sir Nicolas Bratza, President,
Mr J. Casadevall,
Mr M. Pellonpää,
Mr R. Maruste,
Mr S. Pavlovschi,
Mr J. Borrego Borrego,
Mr J. Šikuta, judges,
and Mr M. O'Boyle, Section Registrar,
Having regard to the above application lodged on 26 February 2001,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,
Having deliberated, decides as follows:
The applicants, Mr Oskar Põder, Ms Ene Mölder and Ms Maie Raag, are Estonian nationals who were born in 1910, 1943 and 1947 respectively. On 12 August 2002 Mr Põder died and his daughter, Ms Tiiu Kasvand, pursued the application on his behalf. Ms Kasvand and Ms Raag live in Tallinn. Ms Mölder lives in Tartu. The applicants were represented before the Court by Mr H. Vallikivi, a lawyer practising in Tallinn. The respondent Government were represented by Mrs M. Hion, Director of the Human Rights Division of the Legal Department of the Ministry of Foreign Affairs.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
On 8 October 1991 Mr Põder lodged an application with the Valga County Government (Valga Maavalitsus) for restitution of his family's property, which had been nationalised in 1947 and allocated by the authorities to a third person free of charge since 1970. The property consisted of farmland, a house and farm buildings.
By a decision of the Valga County Commission for the Return and Compensation of Unlawfully Expropriated Property (Õigusvastaselt võõrandatud vara tagastamise ja kompenseerimise Valga maakonna komisjon) of 5 May 1994, all three applicants were recognised as the persons entitled to the nationalised property under the property reform legislation.
On 9 April 1996 the Õru District Administration (Õru Vallavalitus), relying on section 12(8)(2) of the Property Reform (Principles) Act (Omandireformi aluste seadus), decided not to return the property to the applicants on the ground that it had lost its former distinct character (that is, the form or size of the property, as assessed according to the criteria established by law, had changed significantly). On 28 February 1997 the District Administration decided to award the applicants compensation in respect of the property.
The applicants appealed against both of these decisions to the Valga County Court (Valga Maakohus).
By a judgment of 23 February 1998, the County Court declared the decision of the Õru District Administration of 9 April 1996 unlawful, finding that the condition of the property had been incorrectly assessed. The judgment was upheld by the Tartu Court of Appeal (Tartu Ringkonnakohus) on 22 June 1998. The courts left unexamined the applicants' complaint concerning the decision on compensation of 28 February 1997 as the complaint did not meet the formal requirements.
On 25 August 1998 the Õru District Administration gave a new decision refusing to return the property to the applicants. That decision was also declared unlawful, mainly for lack of reasoning, by the Valga County Court and the Tartu Court of Appeal on 11 June 1999 and 24 September 1999 respectively. The courts also declared unlawful the compensation decision of 28 February 1997, as it had been made on the basis of the unlawful decision of 9 April 1996 to refuse restitution.
By a decision of 25 January 2000, the Õru District Administration refused to return the nationalised property to the applicants on the ground that the property was in the possession of a third person who had acquired it in good faith. In particular, that person had not persecuted the applicants or expropriated their property. The District A dministration based its decision on an amended version of section 12(3)(3) of the Property Reform (Principles) Act, which had come into force on 2 March 1997.
The applicants lodged a complaint against the decision submitting, inter alia, that, under section 12(3)(3) of the Property Reform (Principles) Act in the version in force until 2 March 1997, a person who had obtained expropriated property free of charge could not be regarded as the bona fide owner of the property. They had lodged an application for restitution at the time when that Act was in force and therefore had a legitimate expectation that their application would be decided according to that Act.
By a judgment of 24 April 2000, the Võru County Court (Võru Maakohus) dismissed the applicants' complaint. The judgment was upheld by the Tartu Court of Appeal on 6 September 2000. The Supreme Court (Riigikohus), which initially refused the applicants leave to lodge an appeal with it, subsequently granted them leave and, on 11 June 2001, rendered a judgment upholding the Court of Appeal's judgment.
In its judgment the Supreme Court reiterated that one of the purposes of the property reform was to undo the injustices caused by violations of property rights in the past. At the same time, the restitution of property or the payment of compensation to former owners should not prejudice the lawful interests of other persons or cause new injustices. The deprivation of property of new owners who had received it free of charge would create such an injustice. Expropriated property had often been preserved thanks to the efforts of new owners. The provisions of section 12(3)(3) of the Property Reform (Principles) Act, as they had existed until 2 March 1997, were unjust and offered no protection to new owners of unlawfully expropriated property. The applicants could not reasonably expect that the law would not change. Their expectation that their restitution claim would be decided in accordance with the former law did not outweigh the right of the current owner to the protection of his property and his legitimate expectation that he would not be deprived of his lawfully obtained possessions. The applicants were, however, entitled to claim compensation for property which could not be returned to them.
In the meantime, on 28 November 2000 the Õru District Administration decided to award compensation to the applicants in respect of the nationalised property in the form of “privatisation vouchers” to the nominal value of 63,150 Estonian kroons (EEK) for Mr Põder and to the nominal value of EEK 31,575 each for Ms Raag and Ms Mölder. The Government informed the Court that the applicants had received the compensation. There is no indication that the applicants appealed against the size of the award.
B. Relevant domestic law
The Property Reform (Principles) Act came into force in 1991. It subsequently underwent various substantial amendments. Section 12(3)(3) of the Act in its original wording provided that unlawfully expropriated property was not subject to return if
“the property [was] in the possession of a natural person who [had] acquired it in good faith”.
Section 12(3)(3) of the Act as in force from 21 June 1993 to 2 March 1997 provided that unlawfully expropriated property was not subject to return if
“the property [was] in the possession of a natural person who [had] acquired it in good faith; a person who [had] obtained the property free of charge by a decision of a State authority or who [had] participated in the persecution of the owner of the property or in its unlawful expropriation [could] not be regarded as a bona fide owner”.
On 2 March 1997 a further relevant amendment to the Act came into force. Under the new text of section 12(3)(3), unlawfully expropriated property was not subject to return if
“the property [was] in the possession of a natural person who [had] acquired it in good faith; above all, a person who [had] participated in the persecution of the owner of the property or in its unlawful expropriation [could] not be regarded as a bona fide owner”.
Section 13(1) of the Property Reform (Principles) Act stipulated that if unlawfully expropriated property could not be returned on the basis of section 12 of the Act, the State would pay compensation in respect of the property according to the procedure provided for by law.
In accordance with the Regulation on the procedure for the restoration of unlawfully expropriated property enacted by the government on 5 February 1993, as amended, the restitution of property rights was carried out in three stages: (1) the establishment of the unlawfulness of the expropriation and the determination of the persons entitled to restitution of their property rights; (2) the decision as to whether the property was to be returned; (3) the transfer of the property to the eligible persons. The Regulation on the procedure for determining compensation in respect of unlawfully expropriated property enacted by the government on 13 July 1993, as amended, provided that the compensation procedure was initiated where the eligible person had requested compensation, the property in question had been destroyed, or the law did not provide for the return of the property concerned.
C. The Estonian reservation in respect of Article 1 of Protocol No. 1
The instrument of ratification of the Convention deposited by the Estonian government on 16 April 1996 contains the following reservation:
“In accordance with Article 64 of the Convention, the Republic of Estonia declares that the provisions of Article 1 of the First Protocol shall not apply to the laws on property reform which regulate the restoration or compensation of property nationalised, confiscated, requisitioned, collectivised or otherwise unlawfully expropriated during the period of Soviet annexation; the restructuring of collectivised agriculture and privatisation of state owned property. The reservation concerns the Property Reform (Principles) Act (published in Riigi Teataja [Official Gazette] 1991, 21, 257; RT I 1994, 38, 617; 40, 653; 51, 859; 94, 1609), the Land Reform Act (RT 1991, 34, 426; RT I 1995, 10, 113), the Agricultural Reform Act (RT 1992, 10, 143; 36, 474; RT I 1994, 52, 880), the Privatisation Act (RT I 1993, 45, 639; 1994, 50, 846; 79, 1329; 83, 1448; 1995, 22, 327; 54, 881; 57, 979), the Dwelling Rooms Privatisation Act (RT I 1993, 23, 411; 1995, 44, 671; 57, 979; 1996, 2, 28), the Act on Evaluation and Compensation of Unlawfully Expropriated Property (RT I 1993, 30, 509; 1994, 8, 106; 51, 859; 54, 905; 1995, 29, 357), the Act on Evaluation of Collectivised Property (RT I 1993, 7, 104) and their wording being in force at the moment the Ratification Act entered into force.”
1. The applicants complained that the courts had incorrectly applied domestic law. According to the applicants, the law in force at an earlier point in time should have been applied, leading to a result favourable to them. They also complained that, as the Supreme Court had refused them leave to appeal to it, they had not been afforded a fair and public hearing, in violation of Article 6 § 1 of the Convention.
2. The applicants also complained that, due to the incorrect application of domestic law by the courts, they had been denied restitution of their possessions.
A. Article 6 § 1 of the Convention
The applicants complained, under Article 6 § 1 of the Convention, that the courts had failed to apply the domestic law correctly. They complained further that they had not been afforded a fair and public hearing before the Supreme Court, since the latter had refused them leave to appeal.
The relevant part of Article 6 § 1 of the Convention reads as follows:
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law. ...”
The Government submitted that, although the Supreme Court had initially refused the applicants leave to appeal to it, leave had later been granted on exceptional grounds. The applicants had therefore been able to participate in the public hearing before the Supreme Court and submit their arguments. The Government maintained that it was not the European Court's role to deal with errors of fact or law allegedly committed by national courts, unless and in so far as they might have infringed rights and freedoms protected by the Convention.
The applicants maintained that the courts had misapplied both statutory and general principles of law. In order to comply with their legitimate expectations, the courts should have applied the earlier version of the law. They noted that, although the Supreme Court had granted them leave to appeal after they had lodged an application with the European Court, it had still violated the applicable procedural requirements. The applicants were of the opinion that, since the Supreme Court's jurisprudence had not been consistent, their case should have been decided by the full panel of the Administrative Chamber of the Supreme Court or by a special panel formed in order to reconcile differing interpretations of law by different chambers of the court.
The Court notes that the parties did not dispute the applicability of Article 6 § 1 to the proceedings in issue. The Court is satisfied that the applicants' “civil rights”, within the meaning of Article 6 § 1, were at stake, as the substance of the questions concerning restitution of the applicants' possessions was determined. The Court considers that the dispute was of a genuine and serious nature and that the result of the proceedings was decisive for the rights in question. Therefore, the Court finds Article 6 § 1 applicable to the dispute concerning the applicants' rights.
As regards the further issue of compliance with Article 6 § 1, the Court reiterates that it is not its function to deal with errors of fact or law allegedly committed by a national court, unless and in so far as they might have infringed rights and freedoms protected by the Convention (see García Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I). It is primarily for the national courts to interpret and apply national law. The national courts examined the applicants' complaint at three levels and delivered reasoned judgments addressing the complaints and arguments submitted by the applicants. The Court does not find any indication of a violation of Article 6 § 1. 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. Article 1 of Protocol No. 1
The applicants complained that they had been denied restitution of their possessions. Article 1 of Protocol No. 1 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
(a) The Government
The Government submitted that, since the applicants had not specifically relied on Article 1 of Protocol No. 1 from the introduction of their application to the Court, it lacked jurisdiction to review the matter under this provision. In any event, the Estonian reservation in respect of this provision was applicable to the applicants' complaint. When the reservation was made, it had been understood that it should be applicable to practically all substantive issues of property reform and should therefore exclude these questions from the Convention review mechanism. The Government admitted that, in accordance with the text of the reservation, it concerned the laws in question as worded at the time the Ratification Act came into force. However, this did not mean that no amendments could be made to the legislation in question after the entry into force of the Ratification Act. In the present instance, the wording of the law had been changed in view of the overall aim of the property reform – redressing injustices and avoiding new injustices – without changing the principles of the property reform.
The Government argued that, even if the Court were to find that the reservation made by Estonia was inapplicable in the present case, the matter still fell outside the scope of Article 1 of Protocol No. 1. They pointed out that the unlawful expropriation of the property in question had taken place in 1947 during the communist regime, even before the adoption of the Convention. In any case, the Republic of Estonia could not be held responsible for the unlawful acts committed on its territory that had not been under the control of its lawful government.
According to the Government, the Convention did not guarantee, as such, the right to restitution of property. The applicants, in the Government's view, did not have a possession within the meaning of Article 1 of Protocol No. 1. Additionally, the Government noted that the Property Reform (Principles) Act did not provide that unlawfully expropriated property was definitely to be returned in kind. The law stipulated that unlawfully expropriated property which could not be returned would be compensated for to the extent and pursuant to the procedure provided by law. Moreover, the applicants had received compensation in respect of the expropriated property.
(b) The applicants
The applicants were of the opinion that the amendments made to the property reform legislation after Estonian accession to the Convention were not covered by the Estonian reservation in respect of Article 1 of Protocol No. 1. They also maintained that the compensation for the property had been awarded against their wishes, which were to have their property rights restored. Moreover, the amount of the compensation had been less than one-fifth of the value of the buildings. In the applicants' view, the persons to whom the property in question had been given free of charge by the Soviet authorities could not be deemed to have obtained it in good faith. According to the applicants, since these persons had not acquired the property or any proprietary rights, the restoration of the applicants' property rights could not have violated the legal rights of the persons who were in possession of the property. Thus, such restoration could not create injustice, only the refusal to do so. Against this background, the applicants considered that the authorities had failed to strike a proper balance between their interests and those of the persons in possession of the property. The refusal to return the property to them had failed to pursue a legitimate public interest and imposed on them an excessive and disproportionate burden. They maintained that, under the Property Reform (Principles) Act, they had a legitimate expectation that their property rights would be restored.
2. The Court's assessment
(a) The jurisdiction of the Court
The Court reiterates that, since it is master of the characterisation to be given in law to the facts of the case, it does not consider itself bound by the legal characterisation given by an applicant or a respondent Government. The Court has considered of its own motion complaints under Articles not relied on by the parties, because a complaint is characterised by the facts alleged in it and not merely by the legal grounds or arguments relied on by the parties (see Guerra and Others v. Italy, judgment of 19 February 1998, Reports of Judgments and Decisions 1998-I, p. 223, § 44). Therefore, the Court does not consider itself barred from examining the instant case under Article 1 of Protocol No. 1 merely because this provision was not initially relied on by the applicants.
(b) The Estonian reservation
As regards the issue of applicability of the Estonian reservation in this case, the Court observes that it has previously examined the validity of the said reservation in Shestjorkin v. Estonia ((dec.), no. 49450/99, 15 June 2000). It reiterates that, in order to be valid, a reservation must satisfy the following conditions: (1) it must be made at the time the Convention is signed or ratified; (2) it must relate to specific laws in force at the time of ratification; (3) it must not be a reservation of a general character; (4) it must contain a brief statement of the law concerned. In the above-cited case, the Court was satisfied that the reservation made by Estonia met the requirements of Article 57 of the Convention. It observed, however:
“The reservation only covers laws in force at the material time and does not extend to later amendments to the restitution laws which might subsequently be subjected to Convention scrutiny. Moreover it only concerns substantive as opposed to procedural questions in the field of the property issues encompassed by its terms.”
The Court notes that the Property Reform (Principles) Act was amended subsequent to the reservation. However, it considers it unnecessary to determine in the present case whether the provisions of the Act, after its amendment, on which the national authorities based their decisions still fall within the scope of application of the reservation, as alleged by the Government and contested by the applicants. The Court finds that the complaint has to be declared inadmissible, in any event, for the reasons set out below.
(c) Whether the applicants had “existing possessions” or “ assets”
The Court reiterates its case-law, according to which, “possessions” within the meaning of Article 1 of Protocol No. 1 can be either “existing possessions” (see Van der Mussele v. Belgium, judgment of 23 November 1983, Series A no. 70, p. 23, § 48) or assets, including claims, in respect of which an applicant can argue that he has at least a “legitimate expectation” that they will be realised (see Pressos Compania Naviera S.A. and Others v. Belgium, judgment of 20 November 1995, Series A no. 332, p. 21, § 31).
The Court first notes that the original expropriation of the applicants' property occurred during the Soviet occupation almost fifty years ago, long before the entry into force of the Convention in respect of Estonia. Moreover, according to the Convention case-law, a deprivation of ownership or other rights in rem is in principle an instantaneous act and does not produce a continuing situation of “ deprivation of a right” (see Malhous v. the Czech Republic (dec.) [GC], no. 33071/96, ECHR 2000-XII, with further references). Therefore, the Court is of the opinion that the applicants had no “existing possessions” within the meaning of Article 1 of Protocol No. 1 at the time of the entry into force of the Convention in respect of Estonia or at the time they lodged their application with the Court.
The Court further reiterates that Article 1 of Protocol No. 1 does not guarantee the right to acquire property (see Van der Mussele, cited above, p. 23, § 48). Nor can it be interpreted as creating any general obligation for the Contracting States to restore property which had been unlawfully expropriated before they ratified the Convention or as imposing any restrictions on their freedom to determine the scope of property restitution and to choose the conditions under which they agree to restore property rights of former owners (see, mutatis mutandis, Kopecký v. Slovakia [GC], no. 44912/98, § 35, ECHR 2004-IX).
On the other hand, once a Contracting State has enacted legislation for the restitution or compensation of property expropriated under the previous regime, and it has remained in force after the State ratified the Convention, including Protocol No. 1, such legislation may be regarded as having generated a new property right protected under Article 1 of Protocol No. 1 for persons satisfying the requirements for entitlement (see Kopecký, cited above, § 35 , and Broniowski v. Poland [GC], no. 31443/96, § 125, ECHR 2004-V).
The Court agrees that the enactment of the Property Reform (Principles) Act gave rise to the applicants' claim that they should have their property rights restored or that they should be paid compensation in respect of the property. In order to hold that the claim constituted an “asset”, it must be determined that it was sufficiently established to be enforceable (see Kopecký, cited above, § 42, and Jasiÿnienÿ v. Lithuania, no. 41510/98, § 44, 6 March 2003).
In this regard the Court notes that, under the Estonian legislation, the procedure concerning the restoration of property rights within the framework of the property reform consisted of three phases: (1) the establishment of the unlawfulness of the expropriation and the determination of those who were “eligible” under the terms of the property reform legislation; (2) the decision as to whether the property was to be returned; (3) the transfer of the property to those entitled under the legislation . The compensation procedure was initiated where the eligible person had requested compensation, the property in question had been destroyed, or the law did not provide for the return of the property concerned.
The Court notes that only the first of the above-mentioned three phases had been completed on 5 May 1994 when the authorities recognised the applicants as “eligible subjects” of the property reform in respect of the property concerned. Therefore, the Court has doubts as to whether the decision of 5 May 1994 could in itself give rise to a claim specific enough to be enforceable.
The Court finds it even more questionable that a claim to the restitution of the property (as opposed to the payment of compensation) arose from the decision in question. The Court notes that the authorities had never made a decision to return the property to the applicants. On the contrary, the Õru District Administration gave three decisions (on 9 April 1996, 25 August 1998 and 25 January 2000) according to which the restitution of the property was refused. All these decisions were challenged by the applicants and the two former ones were declared unlawful by the courts. The courts did not, however, order the District Administration to return the property to the applicants.
That being so, the Court does not find it necessary to determine in this case whether the applicants' claim to the restitution of the property was sufficiently established to attract the guarantees of Article 1 of Protocol No. 1. However, even assuming that this was the case, the Court is satisfied that the requirements of this provision were met for the reasons set out below.
(d) Justification for the alleged interference
Following its case-law, the Court observes that the national authorities had to strike a fair balance between the rights of the applicants and those of the persons who had been in possession of the property for more than twenty years (see, mutatis mutandis, Pincová and Pinc v. the Czech Republic, no. 36548/97, §§ 58-64, ECHR 2002-VIII). It notes in this regard that the Supreme Court of Estonia considered in its judgment of 11 June 2001 that section 12(3)(3) of the Property Reform (Principles) Act, as in force before 2 March 1997, had been unjust. The Supreme Court was of the opinion that, with the amendment, the law had been brought into conformity with the Constitution to the effect that the rights of the new owners were afforded due protection. At the same time the subjects of the property reform, whose property could not be returned, were afforded compensation.
The Court points out that, according to the 28 November 2000 decision of the Õru District Administration, the applicants received compensation in respect of the nationalised property. It notes that, although the applicants alleged that the compensation was less than the market value of the property, they had failed to complain of the amount of the compensation to the national authorities. Moreover, Article 1 of Protocol No. 1 does not guarantee a right to full compensation in all circumstances, especially in cases where the compensatory entitlement does not arise from any previous taking of individual property by the respondent State, but is designed to mitigate the effects of a taking or loss of property not attributable to that State (see Broniowski, cited above, §§ 182 and 186).
The Court accepts that the national authorities enjoyed a wide margin of appreciation in regulating ownership relations in the present case, which dealt with large-scale economic and legal reforms. It is true that, had the earlier law been applied to the applicants' claim, they would have had a chance of more favourable results.
Against this background the Court considers, however, that the national authorities succeeded in striking a fair balance between the proprietary interests of the persons concerned. The Court does not find that the authorities imposed an excessive individual burden on the applicants and it is satisfied that the requirements of Article 1 of Protocol No. 1 were not violated.
It follows that this complaint is 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 the application inadmissible.
Michael O'Boyle Nicolas Bratza
PÕDER and Others v. ESTONIA – COMMUNICATED CASE
PÕDER and Others v. ESTONIA – COMMUNICATED CASE