Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 26347/95

by V.S. and T.H.

against the Czech Republic

The European Commission of Human Rights (Second Chamber) sitting

in private on 10 September 1996, the following members being present:

Mrs. G.H. THUNE, President

MM. J.-C. GEUS

G. JÖRUNDSSON

A. GÖZÜBÜYÜK

J.-C. SOYER

H. DANELIUS

F. MARTINEZ

L. LOUCAIDES

M.A. NOWICKI

I. CABRAL BARRETO

J. MUCHA

D. SVÁBY

P. LORENZEN

E. BIELIUNAS

E.A. ALKEMA

M. VILA AMIGÓ

Ms. M.-T. SCHOEPFER, Secretary to the Chamber

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 16 September 1994

by V.S. and T.H. against the Czech Republic and registered on

27 January 1996 under file No. 26347/95;

Having regard to :

- the reports provided for in Rule 47 of the Rules of Procedure of

the Commission;

- the Commission's decision of 11 April 1996 to declare the

application inadmissible;

- the observations submitted by the applicants on 11 July 1996;

Having deliberated;

Decides as follows:

THE FACTS

The applicants are two Czech citizens born in 1933 and 1931

respectively. They reside in Prague. Before the Commission, they are

represented by Mrs. E. Schramm, a lawyer practising in Bielefeld and

Prague.

The facts of the case, as submitted by the applicants, may be

summarised as follows.

A. The particular circumstances of the case

The applicants jointly own a house in Prague 10 comprising three

apartments. The applicants occupy two apartments, the third one

(consisting of five rooms and a kitchen with a total surface area of

126m²) was leased to Mr. B. on 1 September 1988 by the Prague 10

District Office which, under the former legislation, had the right to

dispose of apartments in private houses. The rent was set at 294.00

crowns, with maintenance contributions 400.00 crowns, pursuant to the

Decree No. 60/1964.

On 4 April 1991 the applicants informed Mr. B. of an increase in

the rent and maintenance contributions. They claimed a monthly rent

of 12,600.00 crowns (i.e. 100.00 crowns per square metre) and

maintenance contributions of 1,300.00 crowns as from 1 May 1991. They

considered that the existing rent plus maintenance contributions did

not cover their actual costs. At the same time, they gave notice to

Mr. B. asking him to leave the apartment.

The tenant refused, following which the applicants brought

proceedings against him before the Prague 10 District Court (Obvodní

soud pro Prahu 10) asking that the lease be terminated and that Mr. B.

be ordered to leave the apartment. They also sought orders modifying

the rent and the maintenance contributions to the effect that Mr. B.

would have to pay the above sums as from 1 May 1991.

The Prague 10 District Court found against the applicants on

5 November 1991. The Court stated that:

[Translation]

"[Mr. B.] uses the apartment on the basis of an exchange of

apartments [made with a former tenant], which was approved

by the Prague 10 District Office ...

The rent and maintenance contributions are governed by

Regulation No. 60/1964 ... The applicants' proposal to

increase the rent to 12,600.00 crowns is unjustified

because according to this Regulation, the rent is fixed at

294.00 crowns ... The court also rejects the applicants'

proposal to increase the maintenance contributions as they

have not proved the actual costs."

The applicants' appeal against this decision was dismissed by the

Prague Municipal Court (Mestsky soud v Praze) on 22 April 1992. The

Court found:

[Translation]

"... on the basis of an approved exchange of apartments of

17 August 1988, ... Mr. B. became entitled to make an

agreement about taking over an apartment [with the owners

of the house]. The right to use the apartment was

established only after the agreement had been made. The

former legislation did not require a written form for such

an agreement, but it was also possible to conclude an oral

or even an implied contract.

... the agreement between the applicants and [Mr. B.] was

made tacitly. ... although the applicants and [Mr. B.] did

not express their will to conclude an agreement about

surrendering and taking over the apartment, it was obvious

that they intended to do so ... the applicants expressed

their consent to [Mr. B]'s moving into the apartment ...

This conclusion is not affected by the fact that the

applicants, under the former legislation, did not have the

right to consent to the exchange of apartments.

... it follows that from 1 September 1988 [Mr. B.] had the

right to use the apartment in question. As from

1 January 1992 this legal relationship was transformed to

a lease contract (Article 871 para. 1 of the Civil Code).

If the applicants prove that they need the apartment for

themselves, ..., they may terminate the lease with the

court's consent.

... Until 31 December 1991 the rent and maintenance

contributions were governed by Regulation No. 60/1964 ...

which excluded unilateral rent increases. The maintenance

contributions were determined by Article 13 of the above

Decree. This regulation was amended and the new Regulation

No. 15/1992 entered into force on 1 January 1992. In the

present case, the rent and maintenance contributions should

be agreed between the owner and tenant under Article 16.

A unilateral rent increase is possible only if the actual

amount of a rent does not reach the level set out in

Article 5; ... this [is not the problem in the present

case.]"

On 26 August 1993 the applicants lodged a constitutional appeal.

They referred to the Charter of Fundamental Rights and Freedoms and

alleged that the relevant legislation, in particular

Article 871 para. 1 of the Civil Code, constitutes an illegal

interference with their right to property, respect for their dignity,

equality in treatment, and that they are thereby obliged to provide

free services to their tenant which amounts to forced labour. They

also complained about the unfairness of the proceedings at first and

second instance as the courts had rejected their request for increased

maintenance contributions. The applicants further requested that

Article 871 para. 1 of the Civil Code be quashed as unconstitutional.

On 22 March 1994 the Assembly of the Constitutional Court

rejected the applicants' constitutional appeal as to the alleged

unconstitutionality of Article 871 para. 1 of the Civil Code and

declared that this provision was compatible with the Charter of

Fundamental Rights and Freedoms. The Court considered that:

[Translation]

"... the right to use an apartment was based on an

administrative decision about the surrender and taking over

of the apartment, often without the owner's consent.

However, the Court must take into account the conflict

between the owners' interests in disposing of their

apartments and the tenants' interests in protecting their

rights. Article 871 para. 1 of the Civil Code is a

regulation about transformation of rights. Its purpose is

to ensure protection of tenants and to create legal

certainty with regard to relationships between owners and

tenants. This legal provision is in conformity with ...

the Constitution ... and, in this respect, it cannot be

considered as unconstitutional."

On 7 July 1994 the Chamber of the Constitutional Court dismissed

the remainder of the applicants' constitutional appeal as

unsubstantiated. The Court stated that:

[Translation]

"The applicants allege a violation of their right to be

protected by a court under Article 38 para. 1 of the

Charter of Fundamental Rights and Freedoms because the

courts found against them. ... they criticised the

appreciation of evidence by the courts as they considered

that the agreement about the surrendering and taking over

of the apartment was concluded tacitly. ... [T]he

Constitutional Court is not a further level of jurisdiction

and it thus generally has no power to reexamine the

activities of those courts; it has such a right only in

those cases where the constitutional principles have been

breached. However, the fact that the applicants' claim was

unsuccessful does not in itself constitute a violation of

the right to be protected by a court ...

[The] ordinary courts found that ... the tenant's right to

the use of the apartment was established per facta

concludentia ... Following the judicial practice, [an

implied contract] also exists where one party begins to

execute obligations resulting from a contract even without

expressly accepting its text. According to the courts'

findings, the applicants have done this. ... In view of the

above the user of the apartment gained the right to its use

[which was] transformed into a lease pursuant to

Article 871 para. 1 of the Civil Code. The ordinary court

applied this legal provision and the Constitutional Court

does not find its application to be in contradiction with

Article 11 of the Charter.

[Finally], the courts' decision to dismiss the claim

concerning the maintenance contribution is not a decision

which would violate the applicants' fundamental rights or

freedoms. ... It is an ordinary civil matter which cannot

be considered by the Constitutional Court."

B. Relevant domestic law

According to Chapter III of the (former) Civil Code, the District

Office had the right to dispose of apartments in private houses. It

also assigned apartments and approved exchanges between tenants. On

the basis of such approval, tenants became entitled to conclude (in

writing, orally or tacitly) agreements with owners about the

surrendering and taking over of an apartment which created a right to

use an apartment. Owners did not have the right to consent to the

exchange of their apartments; if they refused, the courts could give

their approval.

By an amendment to the Civil Code (Article 871 para. 1) which

entered into force on 1 January 1992, the right to use an apartment

(created between the administrative authority and the tenant) was

transformed into a lease contract between the tenant and the owner.

Until 31 December 1991 rent and maintenance contributions were

governed by Regulation No. 60/1964 on Compensation for the Use of an

Apartment and for the Maintenance Contributions Related to that Use

(Vyhláska o úhrade za uzívání bytu a za sluzby spojené s uzíváním

bytu). This Regulation was amended by Regulation No. 15/1992 which

entered into force on 1 January 1992. Pursuant to Article 5 para. 2

of this Regulation, the rent of apartments was increased by about 100%

with effect from 1 July 1992.

Pursuant to Article 72 para. 1a) of Law No. 182/1993 on the

Constitutional Court (Zákon o Ústavním soudu), as amended, a

constitutional appeal can be lodged by a physical or legal person

alleging a violation, by a final decision in proceedings to which that

person was a party or by any other interference by an organ of the

public authorities, of that person's fundamental rights or freedoms as

guaranteed by a constitutional statute or an international treaty to

which the Czech Republic is a party.

COMPLAINTS

The applicants originally complained that, by the application of

Article 871 para. 1 of the Civil Code, which converted the right to use

the apartment created between the State administrative authority and

the tenant into a lease contract between the owners and the tenant,

they were subjected to an unjustified interference with their right to

the peaceful enjoyment of their possessions, in violation of Article

1 of Protocol No. 1. They also complained that they were required to

provide free services to their tenant, in violation of Article 4 para.

2 of the Convention.

PROCEDURE BEFORE THE COMMISSION

On 11 April 1996 the Commission (Second Chamber) declared the

application inadmissible in part (the complaint under Article 1 of

Protocol No. 1 to the Convention) for non-exhaustion of domestic

remedies and in part (the complaint under Article 4 of the Convention)

as manifestly ill-founded.

On 11 July 1996 the applicants' representative wrote to the

Secretary to the Commission, claiming that the non-exhaustion reasoning

followed by the Commission was inappropriate, as the complaint under

Article 1 of Protocol No. 1 related not to the levels of rent which the

applicants could receive, but to the transformation as a result of

Article 871 para. 1 of the Civil Code of the right to use the apartment

created between the State administrative authority and the tenant into

a lease contract between the owners and the tenant.

THE LAW

1. The applicants repeat their complaint that, by the application

of Article 871 para. 1 of the Civil Code, they were subjected to an

unjustified interference with their right to the peaceful enjoyment of

their possessions, contrary to Article 1 of Protocol No. 1 (P1-1).

Whilst it is true, as the Commission indicated in its decision

of 11 April 1996, that the applicants did not submit to the courts and,

ultimately, to the Constitutional Court, a complaint concerning the new

rent regulations, it is also true, as the applicants point out, that

the applicants did make before the Constitutional Court an allegation

that the transformation by Article 871 para. 1 of the Civil Code of the

right to use the apartment created between the State administrative

authority and the tenant into a lease contract between the owners and

the tenant breached Article 1 of Protocol No. 1 (P1-1) to the

Convention.

The Commission finds it appropriate to re-open this application

to the extent necessary to consider the applicants' claim concerning

the application of Article 871 para. 1 of the Civil Code.

Article 1 of Protocol No. 1 (P1-1) reads as follows:

"1. 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.

2. 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 Commission first notes that the applicants were never

deprived of their possessions: their right to use the property was

restricted in the past by the former legislation and is now subject to

similar restriction by virtue of Article 871 para. 1 of the Civil Code.

The Commission next notes that the former legislation was in

force until 31 December 1991, which is before the Convention entered

into force in respect of the Czech Republic. The Commission is

therefore not competent ratione temporis to examine the former

legislation in the present case.

As regards the new legislation - Article 871 para. 1 of the Civil

Code - the Commission finds that the transformation as a result of

Article 871 para. 1 of the Civil Code of the right to use the apartment

created between the State administrative authority and the tenant into

a lease contract between the owners and the tenant may be regarded as

a control of the use of property within the meaning of the second

paragraph of Article 1 of Protocol No. 1 P1-1). The Commission must

therefore examine whether the control in the present case was lawful,

in accordance with the general interest, and whether it pursued a

legitimate aim in a proportionate manner (cf. Eur. Court HR, the Tre

Traktörer AB v. Sweden judgment of 7 July 1989, Series A no. 159, pp.

22-24, paras. 56-63).

The Commission recalls the case-law of the Convention organs

where it is recognised that State intervention in socio-economic

matters such as housing is often necessary in securing social justice

and public benefit. In this area, the margin of appreciation available

to a legislature in implementing social and economic policies is

necessarily a wide one both with regard to the existence of a problem

of public concern warranting measures of control and as to the choice

of the rules for the implementation of such measures. The Convention

organs will respect the legislature's judgment as to what is in the

general interest unless that judgment is manifestly without reasonable

foundation (cf. Eur. Court HR, the Mellacher and Others v. Austria

judgment of 19 December 1989, Series A no. 169, p. 25, para. 45, and

the James and Others v. the United Kingdom judgment of 21 February

1986, Series A no. 98, p. 32, para. 46).

The change in law brought about by Article 871 para. 1 of the

Civil Code had the effect of transferring the rights and obligations

from the State to an owner of property. To the extent that the

applicants were affected by the provision at all, the changes were

beneficial, since the applicants thereby attained a slightly higher

degree of control over their apartment than they had previously

enjoyed. Moreover, the aim of Article 871 para. 1 of the Civil Code,

which was to ensure that the legal relationship for tenants was a

relationship between a tenant and an owner, rather than between a

tenant and the State, cannot be considered to be unreasonable.

It is true that the applicants claim that the courts did not

examine the real effect of the application of Article 871 para. 1 of

the Civil Code on their case and that they did not verify the

proportionality between their rights as owners and the rights of the

tenant, i.e. the proportionality between the rent and maintenance

contribution allowed to the applicants' tenant and the actual costs of

the apartment borne by the owners. However, no such complaint has been

submitted to the ordinary courts, nor, at final instance, to the

Constitutional Court although it was open to the applicants to do so.

In particular, they could have challenged the rent regulations which

were then in force, submitting evidence on the difference between the

rent and actual costs.

In any event, the Commission finds that, bearing in mind the wide

margin of appreciation afforded to States in regulating housing

problems, the control of the use of the applicants' property was

justified within the meaning of the second paragraph of Article 1 of

Protocol No. 1 (P1-1).

It follows that this part of the application is manifestly ill-

founded within the meaning Article 27 para. 2 (Art. 27-2) of the

Convention.

For these reasons, the Commission, unanimously,

DECIDES TO RE-OPEN the claim relating to the application of

Article 871 para. 1 of the Civil Code to the applicants' case,

and

DECLARES IT INADMISSIBLE.

M.-T. SCHOEPFER G.H. THUNE

Secretary President

to the Second Chamber of the Second Chamber

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V.S. AND T.H. v. THE CZECH REPUBLIC

V.S. AND T.H. v. THE CZECH REPUBLIC

LEXI