SECOND SECTION

CASE OF PERDIGÃO v . PORTUGAL

( Application no. 24768/06 )

JUDGMENT

STRASBOURG

4 August 2009

THIS CASE WAS REFERRED TO THE GRAND CHAMBER WHICH DELIVERED JUDGMENT IN THE CASE ON 16/11/2010

This judgment may be subject to editorial revision.

I n the case of Perdigã o v . Portugal ,

The European Court of Human Rights ( Second S ection ) , sitting as a C hamb er compos ed of :

Françoise Tulkens , P r e sident, Ireneu Cabral Barreto , Vladimiro Zagrebelsky , Danutė Jočienė , Dragoljub Popović , András Sajó , Işıl Karakaş , ju d ges, and Françoise Elens-Passos , Deputy S ection Registrar ,

Having deliberated in private on 7 July 2009 ,

Delivers the following judgment , which was adopt ed on that date :

PROC E DURE

1 . The case originated in an application ( no. 24768/06) against the Portuguese R e publi c lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention ”) by two Portuguese nationals , M r João Jos é Perdigão and M rs Maria Jos é Queiroga Perdigão (“the applicants” ), on 19 June 2006 .

2 . The applicant s were repr e sent e d by Mr A.C. Miranda and Mr J. Perdigão , lawyers practising in Lisbo n . The Portuguese Government ( “ the Government” ) were repr e sent e d by their A gent, M r J. Miguel , Deputy Attorney-General .

3 . The applicant s complained in particul a r of a violation of their property rights because the compensation for expropriation awarded to them had ultimately been fully absorbed by the amount they had to pay to the State in court fees .

4 . On 24 Ap ril 2008 the P r e sident of the Second S ection d e cid e d to give notice of the application to the Government . It was also d e cid e d to examine the merits of the application at the same time as its admissibility (Article 29 § 3) .

THE FA C T S

I. THE CIRC UM STANCES OF THE CASE

5 . The applicant s were born i n 1932 and 1933 respective ly and live in Lisbon .

A. The expropriation

6 . The applicant s owned a piece of land measuring 128 , 619 m² . By order of the Ministry of P ublic Work s, publi shed in the Official Gazette on 11 S eptemb er 1995 , the land was expropri ated to build a motorway.

7 . During the expropriation proc e edings before the first-instance court, then before the Court of Appeal of E vora , the parties discu ssed whether the potential profit from exploit ing a quarry located on the land concerned should be taken into account when calculating the amount to be paid in compensation for the expropriation. The applicant s argued that they should be paid 20 , 864 , 292 euros (EUR) in compensation . Having examined several expert reports, one of which was ordered by the first-instance court of its own motion , the E vora Court of Appeal finally decided , in a judgment of 10 July 2003, that the potential profit from the quarry should not be taken into account, and awarded the applicants EUR 197 , 236 . 25 in compensation for the expropriation .

8 . On 7 Ap ril 2005 the applicant s lodged application no. 12849/05 with the Cour t, complaining about the lack of compen sation regarding the quarry . The application was reje c t e d by a com m it te e on 30 August 2005 as being out of time .

B. The c ourt fees

9 . On 4 February 2005 the applicant s received notice of the court fees payable for the expropriation proce edings . The sum they were expected t o pay amounted to EUR 489 , 188 .42 .

10 . On 22 February 2005 the applicant s filed a complaint about the fee s , all e g ing in particular that they violated the princip l e of fair compensation and the right of acc ess to a court . They also pointed out various inaccuracies and miscalculations .

11 . On 1 Ap ril 2005 , acting on information provided by the registry , the E vora court judge acknowledged the mistakes and ordered their rectification. The amount owed was reduced to EUR 309,052.71 , leaving the applicant s owing the State EUR 111 , 816 . 46 EUR in addition to the full amount of the compensation they had been awarded . The ju d ge dismissed the applicants ' complaint regard ing the alleged violations .

12 . The applicant s appe a l ed to the E vora Court of Appeal . In a judgment of 13 D e cemb er 2005, of which they were notified on 19 De cemb er 2005, the Court of Appeal dismissed the appeal .

13 . On 12 May 2006 the applicant s lodged a constitution a l appeal against that d e cision, all e g ing that the interpr e tation of the relevant provisions of the C ourt Fees Code , particularly A rticle 66 § 2, was contrary to the princip l es of fair compen sation and the right of access to a court guaranteed in the Constitution. In their view , court fees should on no account exceed the sum awarded to them in compensation for the expropriation of their property.

14 . In a judgment of 28 March 2007 the C onstitution a l Court dismissed their appeal . First it noted that it could only examine the constitutionalit y of A rticle 66 § 2 of the Court Fees Code , the only provision the courts below had appli ed . It then went on to hold that the provision concerned was not contrary to A rticles 20 (acc es s to a court ) and 62 § 2 ( fair compen sation) of the Constitution. Concerning acc es s to a court , it pointed out that while excessively high court fees could in some circumstances be an obstacle to access to a court , this was not the case in this instance as the applicant s had to pay only EUR 15 , 000 , a sum it considered reaso nable. On the subject of fair compen sation , the C onstitution a l Court found that compensation for the loss suffered as a result of expropriation was quite unrelated to the matter of court fees , and that there was accordingly no reason why court fees should not exceed the sum awarded in compens ation.

15 . On 20 Ap ril 2007 the applicant s filed a request to have that judgment rectifi ed, claiming that the C onstitution a l Court had made a mistake, in so far as it had considered in its reasoning that the applicant s owed EUR 15 , 000 when they were in fact expected to pay court fees in the sum of EUR 111 , 816 . 46 .

16 . In a judgment of 25 S eptemb er 2007 the C onstitution a l Court acknowledged its mistake and the need to rectif y the judgment in respect of A rticle 20 of the Constitution . It found that EUR 111 , 816 . 46 was a large enough sum to have affect ed the right of access to a court . It accordingly declared A rticle 66 § 2 of the Court Fees Code , as interpr e t e d by the lower courts , contra ry to A rticle 20 of the Constitution. As regards A rticle 62 § 2 of the Constitution, however, it held that its earlier d e cision needed no rectification.

17 . On 6 N ovemb er 2007 the applicant s , wishing to know the exact sum they owed in court fees , filed a reques t for clarification of the judgment of 25 S eptemb er 2007.

18 . In a judgment of 13 N ovemb er 2007 the C onstitution a l Court reje c t ed that request , considering that it was for the lower court to d e termine the sum to be paid .

19 . In an order of 4 January 2008, the Evora court, to w hich the case had been referred back, d e cid ed that the fee s should not exc e e d the compensation awarded by more than EUR 15,000.

20 . On 20 February 2008 the applicant s paid the extra EUR 15 ,000 .

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. The Constitution of the Portuguese R e publi c

21 . A rticle 20 of the Constitution g u arant ees the right of access to a court . Article 62 of the Constitution guarantees the right of prop erty and the right to fair compen sation in the event of expropriation.

B. The C ode of Civil P roc e dure

22 . The g e n e ral rul e governing court fee s is set forth in A rticle 446 of the Code of Civil Procedure, under the terms of which it is in princip l e for the losing party to pay the court fees , which are index e d to the sum in dispute in the proceedings.

C. The Court Fees Code

23 . A rticle 66 § 2 of the Court Fees Code ( Código das Custas Judiciais ), as applicable at the material time , stipulated that court fees owed by a person whose property had been expropriated were to be “deducted” ( saem ) from the compensation awarded for the expropriation.

24 . A rticle 16 of the same code provided for the court , in certain circ um stances, to be able to exempt a party from paying all or part of the court fe e s .

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1

25 . The applicant s complained that the compensation awarded to them for the expropriation of their land had ultimately been fully absorbed by the amount they had to pay to the State in court fees . The y considered this to be in breach of A rticle 1 of Protocol No. 1 , 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 . ”

26 . The Government contested that argument .

A. Admissi bilit y

27 . The Cour t notes that this complaint is not manifest ly ill-founded within the meaning of A rticle 35 § 3 of the Convention. It further notes that it is not inadmissible on any other grounds . It must therefore be d e clare d admissi ble.

B. Merits

28 . The applicant s submitted that the court fees they were ordered to pay the State were utterly disproportion at e . They acknowledged that the State enjoyed a certain marg in of a ppr e ciation in the matter , but argued that that should not lead to a r e sult incompatible with A rticle 1 of Protocol No. 1 ; in their case the State had become the owner of the expropriated land, kept the full amount – EUR 197 , 236 . 25 – of the compensation awarded and had even received an additional EUR 15 , 000 .

29 . They added that the sum concerned could not be justifie d by the actual cost of the procedural formalities carried out by the authorities in connection with their expropriation.

30 . Referring to the case-law of the European Commission of Human Rights , the Government observed at the outset that court fees were “ contributions ” , within the meaning of A rticle 1 of Protocol No. 1. They submitted that no trace of any princip l e of international law requiring justice to be dispensed free of charge was to be found in that provision of the C onvention and that, on the contra ry, A rticle 1 of Protocol No. 1 left the States a wide marg in of appr e ciation in d e fini ng and d e termin ing what was in the g e n e ral interest . And in Portugal the law based the amount to be paid in fees and expenses on the sum in dispute , which the Government maintained could not be consid e r e d contra ry to the Convention.

31 . In this case the sum paid by the applicant s was 1 . 02 % of the val ue they themselves had placed on the subject matter of the litigation . It was true that that sum exceeded the compensation awarded for the expropriation, but that fact in itself could not be considered to be in violation of the princip l e of fair compen sation, as the C onstitution a l Court had pointed out . That princip l e did not g u arant ee that the compensation awarded should exceed the court fees to be paid . On that basis t he Government conclu ded that the fair balance to be struck between the g e n e ral interest of the balanced funding of the justice system and the applicant s ' rights had not been upset .

1. A pplicabilit y of A rticle 1 of Protocol No. 1

32 . The Cour t reiterates that A rticle 1 of Protocol No. 1 comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are not, however, distinct in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, inter alia , James and Others v. the United Kingdom, 21 February 1986, § 37, Series A no. 98, which reproduces in part the analysis given by the Court in its judgment in Sporrong and Lönnroth v. Sweden (23 September 1982, § 61, Series A no. 52); see also Kozacıoğlu v . Tur key [GC] , no. 2334/03, § 48, 19 February 2009 ).

33 . It is not in dispute that in the instant case the situation complained of falls within the scope of that provision . It must be examine d, however, which rule is applicable in this case . T he parties have not stated clearly under which part of A rticle 1 of Protocol No. 1 they think the case should be examin e d . While the applicant s se e m to believe that the relevant rule is the one concerning de privation of prop erty , the Government have focused their submissions mainly on the power of the State to control the use of property , under the third rule in A rticle 1 of Protocol No. 1 .

34 . The Cour t is of the opinion that the situation complained of here cannot be placed in any specific category . Although the origin of the dispute lies in the fact that the applicant s were deprived of their property, the lack of compensation they complain of was caus e d by the application of the rules governing court fees , which , it should be remembered , are “ contributions ” within the meaning of the second paragraph of A rticle 1 of Protocol No. 1 , which acknowledges the right of State s to enforce such laws as it deems necessary to secure the payment of contributions ( see Aires v . Portugal , no. 21775/93, Commission decision of 25 May 1995, D e cisions and Re ports 81, p. 48).

35 . In any event the situations envisaged in the second sentence of the first paragraph and in the second paragraph are only particular instance s of interference with the right to peaceful enjoyment of property as guaranteed by the general rule set forth in the first sentence ( see Beyeler v . Ital y [GC], no. 33202/96, § 106, ECHR 2000 ‑ I). T he Cour t accordingly considers it more appropriate to examine the situation complained of in the light of that g e n e ral rul e.

2. Compliance with A rticle 1 of Protocol No. 1

36 . The Cour t reiterates that to be compatible with the g e n e ral rul e laid down in the first sentence of A rticle 1 of Protocol No. 1 , any in t e r fer ence with a person ' s right to the peaceful enjoyment of his property must strike a “fair balance” between the demands of the g e n e ral inter es t of the commun ity and the requirements of the protection of the individual ' s f u ndamenta l rights ( see Sporrong and Lönnroth , cited above , § 69). Furthermore, the issue of whether a fair balance has been struck “ becomes relevant only once it has been established that the interference in question satisfied the requirement of lawfulness and was not arbitrary ” ( see Iatridis v . Gr ee ce [GC], no. 31107/96, § 58, ECHR 1999 ‑ II ).

37 . In the instant case the Cour t note s first of all that the applicant s dispute neither the lawfulness of the expropriation as such nor that of the regulations governing court fees as applied to them . Nor is there anything to indicate that the impugned in t er fer ence was at all arbitrary , the applicant s having had the opportunity, inter alia , to put their arguments to the domestic courts .

38 . The only question that remains to be examine d is thus whether a “fair balance” was struck between the g e n e ral interest and the applicant s ' rights . The Cour t reiterates that the search for this balance is reflected in the structure of A rticle 1 as a whole and entails the need for a reasonable relationship of proportionality between the means employed and the aim sought to be realised ( see , amongst other authorities , Sporrong and Lönnroth , cited above , ibid . , and Beyeler , cited above , § 114 ). In the context of the general rule enunciated in the first sentence of the first paragraph of Article 1, ascertaining whether such a balance existed requires an overall examination of the various interests in issue. Thus, without payment of an amount reasonably related to its value, a deprivation of property would normally constitute a disproportionate interference . On the other hand , the States must be able to take the me a sures they consider n e cessa ry to prot e ct the balanced funding of their justice systems in the general interest . Lastly , in situations akin to that in the pr e sent cas e , the conduct of the parties to the dispute, including the means employed by the State and their implementation, must also be taken into consideration ( see Beyeler , cited above , ibid . ).

39 . The Cour t notes that in the instant case the applicant s received formal compensation for the expropriation in the sum of EUR 197 , 236 .25 , but that following the d e termination of the court fees they had to pay , they in fact received nothing . On the contr ary , they had to pay the State an extra EUR 15 , 000 in court fees , and that was after a substanti al reduction in the sum they were initial ly ordered to pay ( see paragraphs 16 to 19 above ).

40 . In the Cour t ' s view , such conditions of compensation – or, to be more precise, such a lack of compensation – cannot in princip l e achieve the “fair balance” required under A rticle 1 of Protocol No. 1, which , like the Convention as a whole , must be interpr e t e d in such a way as to guarantee rights that are practical and effective, not theoretical or illusory ( see Comingersoll S.A. v . Portugal [GC], no. 35382/97, § 35, ECHR 2000 ‑ IV ).

41 . C oncern ing the conduct of the parties to the dispute , the Cour t has taken note of the Government ' s argument that the applicant s ha d only themselves to blame , in so far as they had recklessly placed an unrealistic economic value on the matter in issue ; however, the Government ' s argument continued , court fees were index e d to the sum in dispute so , when their complaint was rejected , the applicant s should have expected to have to pay a large amount in court fees . The Cour t considers, however, that the applicant s cannot be blamed for trying , by the proc e dura l means available to them, to persuade the court to inclu d e in the compensation figure elements they considered essenti al . It is worth noting that although their claim in that respect was disallowed, the question was nevertheless examin e d in depth by the domestic courts, the E vora court going so far as to order an additional expert report of its own motion ( see paragraph 7 above ).

42 . I t is not the Cour t ' s role to examine , generally, Portugal ' s method of calculating and fixing court fees . In the instant case, however, the concrete application of that method led to a complete lack of compensation for the property of which the applicants were effectively deprived. In the circ um stances, this situation placed an excessive burden on the applicant s , upsetting the fair balance which must be struck between the g e n e ral interest of the commun ity and the fu ndamenta l rights of the individu al .

43 . There has accordingly been a violation of A rticle 1 of Protocol No. 1.

II . ALLEGED VIOLATION OF ARTICLE 5 OF THE CONVENTION

44 . The applicant s , relying on the same facts , complained of a violation of A rticle 5 of the Convention.

45 . The Cour t reiterates that A rticle 5 contemplates only the physical liberty of the person; its aim is to ensure that no one should be dispossessed of this liberty in an arbitrary fashion ( see Amuur v . France , 25 June 1996, § 42, Reports of Judgments and D e cisions 1996 ‑ III ). As it evidently does not apply to the situation complained of in the instant case , this part of the application must be rejected as being manifestly ill-founded , pursuant to A rticle 35 §§ 3 and 4 of the Convention.

III . APPLICATION OF ARTICLE 41 OF THE CONVENTION

46 . A rticle 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

A. D a mage

47 . The applicant s claimed EUR 197 , 236 . 25 in respect of pecuniary damage, correspond ing to the compensation awarded by the Portuguese courts for the expropriation of their land . They also claimed EUR 100 in respect of non-pecuniary damage .

48 . The Government contested the claim for pecuniary damage, submitting that the sum concerned bore no relation to the subject of the application . They argued that to award such a sum would deprive the national justice system of payment for the considerable procedural activity to which the applicant s ' case had given rise. Concerning the claim in respect of non-pecuniary damage , the Government left the matter to the Court ' s discretion .

49 . The Cour t reiterates that a judgment in which it finds a breach imposes on the respondent State a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach ( see Iatridis v . Gr ee ce ( just satisfaction ) [GC], no. 31107/96, § 32, ECHR 2000-XI).

50 . In its case-law concerning de privation of prop erty, when fixing the level of compensation for the pecuniary damage sustained the Cour t takes into account the value arising from the expropriated property ' s specific features ( see , for ex a mple, Kozacıoğlu , cited above , § 83). In the present case the sum to be taken into consid e ration at the outset should be that awarded by the domestic courts as compensation for the expropriation. T he Cour t is unconvinced by the Government ' s argument that this sum has no bearing on the subject of the application : on the contrary, the non-paymen t of the sum in question is at the very heart of the case . Bearing in mind that the applicant s , having lost their case, had to pay the court fees – and actually paid EUR 15 , 000 in fees – the Cour t considers it e quitable to award the sum of EUR 190 , 000 in respect of pecuniary damage .

51 . As to non-pecuniary damage , the Cour t considers that, in the circumstances of the case, the finding of a violation of A rticle 1 of Protocol No. 1 constitutes in itself sufficient just satisfaction .

B. Costs and expenses

52 . The applicant s having made no claim for the reimbursement of costs and expenses, there is no call to make any award under this head.

C. Default interest

53 . The Cour t considers it appropri at e that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS , THE COUR T

1. D e clare s , by a majorit y , the complaints under A rticle 1 of Protocol No. 1 admissible and the remainder of the application inadmissible ;

2. Holds by five votes to two that there has been a violation of A rticle 1 of Protocol No. 1 ;

3. Holds by five votes to two that the finding of a violation c onstitutes in itself sufficient just satisfaction for the non-pecuniary damage sustained by the applicant s ;

4 . Holds by five votes to two ,

a) that the respondent State is to pay the applicant s, within three months from the date on which the judgment becomes final in accordance with A rticle 44 § 2 of the Convention, EUR 190 , 000 ( one hundred and ninety thousand euros) in respect of pecuniary damage ;

b) that from the expir y of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points ;

5 . Dismisses , unanim ously , the remainder of the applicants ' claim for just satisfaction .

Done in French , and notified in writing on 4 August 2009 , pursuant to Ru le 77 §§ 2 and 3 of the Rules of Court .

             Françoise Elens-Passos Françoise Tulkens              Deputy Registrar              Pr e sident

In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the dissenting opinion of Judge Zagrebelsky , joined by Judge Sajó , is annexed to this judgment .

F.T. F.E-P.

DISSENT ING OPINION OF JU D GE ZAGREBELSKY , JOINED BY JU D GE SAJÓ

I cannot agree with the majorit y ' s finding that there has been a violation of A rticle 1 of the Protocol No. 1, for the following reasons.

1. The aut h orit i e s legally expropri ated a piece of land belonging to the applicant s and offered them compensation . However , the applicants wanted the aut h orit i es also to take into account the profit they could have made by exploit ing a quarry located on the land in question. They therefore applied to the court to award them a much larger sum . The domestic courts ultimately decided that the applicant s ' claims concern ing the quarry were ill-founded and awarded them a sum similar to the compensation the aut h orit i es had offered them in the administrativ e expropriation proce dure . As their claim had been rejected the applicant s were ordered to pay the court fees , calculated on the basis of the sum at issue in the action the applicant s themselves brought before the courts . The fees concerned amounted to more than the compensation they were awarded .

2. The applicant s claimed that they had ultimately received no compensation for the expropriation of their land . The majorit y acknowledges that although this case origin ated in a de privation of prop erty , the lack of compen sation the applicant s complained of was caus e d by the application of the law governing court fees (paragraph 34 of the judgment ). It was because the applicant s had to pay the court fees thus calculated that the compensation they were awarded was reduced to nothing . As a result, according to the majorit y , the “fair balance” required by A rticle 1 of Protocol No. 1 was not achieved .

3. As I see it, the findings the majorit y reached confuse two different things: the compensation for expropriation and the court fees the applicant s had to pay . Those fees have nothing whatsoever to do with the compensation for expropriation; they arose solely because the applicant s lodged an ill-founded claim concerning a very large sum of money . Had they claimed a still larger sum , the fees would have been even higher . The fact that what the authorities owed the applicant s was offset by what they in turn owed the State is no reason to confuse the two sums , the cr e dit and the d e bt, which to my mind are two completely separate things .

4. The question of court fee s , the crit eri a by which they are determined under P ortug uese law and the resulting amounts could be examin e d as a possible obstacle to access to a court. However, the applicants did not lodge their complaint in those terms. In any event , linking court fee s to the sum at issue in the action brought by the claimant is not a quirk of the P ortug uese system . On the contrary, it is found in other European systems . And it is a form of payment of contributions, within the meaning of the second paragraph of A rticle 1 of Protocol No. 1.