SECOND SECTION

DECISION

Application no . 14303/11 Draško BUDIMIR against Croatia

The European Court of Human Rights (Second Section), sitting on 5 January 2016 as a Chamber composed of:

Işıl Karakaş, President, Julia Laffranque, Nebojša Vučinić, Valeriu Griţco, Ksenija Turković, Jon Fridrik Kjølbro, Stéphanie Mourou-Vikström, judges, and Stanley Naismith, Section Registrar ,

Having regard to the above application lodged on 7 February 2011,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

1. The applicant, Mr Draško Budimir, is a Croatian national, who was born in 1941 and lives in Split. He was represented by Ms V. Garafulić Kukoč and Mr I. Restović, lawyers practising in Split.

2. The Croatian Government (“the Government”) were represented by their Agent, Ms Å . Sta ž nik.

A. The circumstances of the case

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

1. Background to the case

4. Under the socialist system previously in force in former Yugoslavia, tenants who resided in socially owned flats benefited from “specially protected tenancy” agreements, which were in most cases concluded for an indefinite period and could be passed from generation to generation.

5. When Croatia became independent in 1991 and opted for a market economy, it adopted several main reforms in the housing sector which are relevant to the present case.

6. Firstly, on 3 June 1991, Parliament enacted the Specially Protected Tenancies (Sale to Occupier) Act ( Zakon o prodaji stanova na kojima postoji stanarsko pravo ) with regulations for the sale of socially owned flats previously let under a specially protected tenancy. In general, the Act entitled the holder of a specially protected tenancy in respect of a socially owned flat to purchase it under favourable conditions of sale. However, the Act excluded the holders of specially protected tenancies in most privately owned flats from such favourable treatment.

7. On 1 January 1997 the Act on Compensation for and Restitution of Property Taken under the Yugoslav communist regime ( Zakon o naknadi za imovinu oduzetu za vrijeme jugoslavenske komunističke vladavine –hereinafter “the Denationalisation Act”) entered into force. It enabled the former owners of confiscated or nationalised property, or their heirs in the first line of succession (direct descendants or spouse), to obtain, subject to certain conditions, either the restitution of property appropriated during the communist era, including dwellings which had been let under the “specially protected tenancy” scheme, or compensation for it. Thus, a number of such dwellings became private property.

8. Under section 32 of the Denationalisation Act, confiscated flats were to be awarded to their former owners. Under section 13 of the Appropriated Property Compensation Fund Act ( Zakon o Fondu za naknadu oduzete imovine ), a tenant only had the right to purchase a confiscated flat if no claim for its restitution had been submitted or if such a claim had been dismissed in a final decision.

2. The particular circumstances of the case

9. By a judgment of Split County Court of 24 June 1948, a flat in Split, measuring 84.49 square metres at Ante Jonjića Street 1, was confiscated from a private owner. It became the property of Split Municipality.

10. The applicant was an employee of a socially owned company, Brodospas, based in Split, and paid compulsory monthly contributions to its housing fund. On 28 October 1980 the Housing Commission of Brodospas approved a priority list for granting protected tenancies and the applicant was first on the list.

11. On 19 February 1983 the applicant and his family moved into the above-mentioned flat (see paragraph 9 above) and they lived there until 28 May 2012 (see paragraph 19 below).

12. On 21 August 1984 the Housing Commission of Split Municipality entered into a contract by which it ceded the flat at issue to Brodospas for a period of three years. The purpose of the agreement was to resolve the applicant ’ s housing needs temporarily; during the period in question Brodospas was obliged to find accommodation for the applicant in another flat and return the flat at issue to the Housing Commission of Split Municipality.

13. On 22 February 1985 the Workers ’ Council of Brodospas adopted a decision to grant the flat to the applicant for temporary occupation. On 7 March 1985 Brodospas and the applicant entered into a contract which granted the flat to the applicant for temporary occupation for a period of three years. The applicant was designated as the holder of a specially protected tenancy in respect of that flat.

14. On 27 March 1997 the applicant asked to purchase the flat from Split Municipality, which did not reply.

15. On an unspecified date in 2001 the applicant brought a civil action in the Split Municipal Court against the Fund for the Restitution of Expropriated Property, seeking a judgment in lieu of the contract of sale.

16. The claim was dismissed on 6 March 2006 on the grounds that the flat had been ceded to Brodospas by Split Municipality for a period of three years and that therefore the applicant could not have acquired a specially protected tenancy. The judgment was upheld by the Split County Court on 2 March 2007.

17. On 25 September 2007 the flat was returned to I.H., an heir of its previous owner.

18. The subsequent remedies used by the applicant, namely an appeal on points of law and a constitutional complaint, were unsuccessful. The former was dismissed by the Supreme Court on 9 June 2009 and the latter by the Constitutional Court on 17 June 2010. The Constitutional Court ’ s decision was served on the applicant ’ s counsel on 17 January 2011.

19. On 15 December 2011 I.H. brought a civil action in the Split Municipal Court against the applicant, seeking his eviction. On 28 May 2012 the applicant and his family moved out of the flat. On 13 February 2013 I.H. withdrew her claim.

B. Relevant domestic law

1. As regards the applicant ’ s complaint under Article 1 of Protocol No. 1 to the Convention:

(a) The Housing Act

20. The relevant provisions of the Housing Act ( Zakon o stambenim odnosima , Official Gazette nos. 51/1985, 42/1986, 22/1992 and 70/1993) read as follows:

Section 8

“A protected tenancy cannot be acquired in respect of:

1. flats designated for temporary or provisional accommodation...”

(b) The Transfer Prohibition Act

21. The Act on the Prohibition of the Transfer of Rights to Dispose of and Use Certain Items of Immovable Property in Social Ownership to other Users or into the Ownership of other Natural or Legal Persons ( Zakon o zabrani prijenosa prava raspolaganja i korištenja određenih nekretnina u društvenom vlasništvu na druge korisnike odnosno u vlasništvo drugih fizičkih i pravnih osoba , Official Gazette nos. 53/1990, 61/1991, 25/1993 and 70/1993 – “the Transfer Prohibition Act”), which entered into force on 14 December 1990, banned any transfer of property that had been acquired by means of nationalisation or confiscation.

Paragraph 2 of section 1 provided that the prohibition applied to any property appropriated by means of confiscation, irrespective of the legislation on which the confiscation had been based.

Section 6 provided that the prohibition was to apply until the introduction of legislation on denationalisation.

(c) The Denationalisation Act

22. The Act on Compensation for, and Restitution of, Property Taken during the Yugoslav Communist Regime ( Zakon o naknadi za imovinu oduzetu za vrijeme jugoslavenske komunističke vladavine , Official Gazette nos. 92/1996, 92/1999 (corrigendum), 80/2002 (amendments) and 81/2002 (corrigendum) – “the 1996 Denationalisation Act”), which entered into force on 1 January 1997, enables the former owners of confiscated or nationalised property, or their heirs in the first line of succession (direct descendants or spouse), to seek, subject to certain conditions, either the restitution of appropriated property or compensation for it. The relevant provisions of the Denationalisation Act read as follows:

I. BASIC PROVISIONS

Section 1

“ ...

(4) Ownership of confiscated property shall be awarded to its former owner in accordance with this Act, and if this is impracticable ... the former owner shall have the right to compensation in the form of money or securities.”

IV. SUBJECT OF RESTITUTION

3.1. (b) RESTITUTION OF CONFISCATED FLATS

Section 32

“Ownership of a flat appropriated [by means of confiscation] shall be awarded to its former owner.”

(d) The Specially Protected Tenancies (Sale to Occupier) Act

23. The Specially Protected Tenancies (Sale to Occupier) Act ( Zakon o prodaji stanova na kojima postoji stanarsko pravo , Official Gazette no. 27/1991 with further amendments) regulated the conditions of sale of flats let under protected tenancies.

Section 1 of the Act entitled holders of protected tenancies of socially owned flats to purchase the flats under favourable conditions, provided that each holder bought only one flat.

(e) The Appropriated Property Compensation Fund Act

24. The Appropriated Property Compensation Fund Act ( Zakon o Fondu za naknadu oduzete imovine , Official Gazette nos. 69/1997, 105/1999 and 64/2000 ), which entered into force on 12 July 1997, reads as follows, in so far as relevant:

Section 13

“The tenants (lessees) of confiscated flats in respect of which no claims for restitution have been submitted within the time-limit prescribed by [the Denationalisation Act], or where such claims have been dismissed by a final decision, shall acquire the right to purchase their flats under the provisions of that Act.”

(f) The Lease of Flats Act

25. The Lease of Flats Act ( Zakon o najmu stanova , Official Gazette no. 91/1996 of 28 October 1996), which entered into force on 5 November 1996, abolished the specially protected tenancy as such (section 30(1)) but provided that proceedings instituted under the Housing Act should be concluded under the provisions of that Act (section 8(1)).

(g) The Property Act

26. Section 161(1) of the Property Act ( Zakon o vlasništvu i drugim stvarnim pravima , Official Gazette no 91/1996) reads as follows:

“An owner has the right to seek repossession of his or her property from a person in whose possession it is.”

2. As regards the applicant ’ s complaint under Article 8 of the Convention

(a) The Constitution

(i) Relevant provisions

27. The relevant provisions of the Constitution of the Republic of Croatia ( Ustav Republike Hrvatske , Official Gazette nos. 56/1990, 135/1997, 8/1998 (consolidated text), 113/2000, 124/2000 (consolidated text), 28/2001 and 41/2001 (consolidated text), 55/2001 (corrigendum) and 76/2010) read as follows:

Article 34

“The home is inviolable.

...”

Article 140

“International agreements in force which have been concluded and ratified in accordance with the Constitution and made public shall be part of the internal legal order of the Republic of Croatia and shall have precedence in terms of their legal effects over [domestic] statutes. ...”

(ii) The Constitutional Court ’ s case-law

28. In its decisions nos. U-I-892/1994 of 14 November 1994 (Official Gazette no. 83/1994) and U-I-130/1995 of 20 February 1995 (Official Gazette no. 112/1995) the Constitutional Court held that all rights guaranteed in the Convention and its Protocols were also to be treated as constitutional rights having legal force equal to the provisions of the Constitution.

(b) The Constitutional Act on the Constitutional Court

29. Section 62(1) of the Constitutional Act on the Constitutional Court ( Ustavni zakon o Ustavnom sudu , Official Gazette no. 29/2002) reads:

“1. Anyone may lodge a constitutional complaint with the Constitutional Court if he or she deems that a decision ( pojedinačni akt ) of a State authority, local or regional government, or a legal person invested with public authority, on his or her rights and obligations, or as regards a suspicion or accusation of a criminal offence, has violated his or her human rights or fundamental freedoms, ... guaranteed by the Constitution ( ‘ constitutional right ’ ) ...”

(c) The Courts Act

30. The relevant part of the Courts Act ( Zakon o sudovima , Official Gazette no. 3/1994, 100/96, 131/97, 129/2000, 17/2004, and 141/2004), as in force at the material time, provided as follows:

Section 5

“1. The courts shall adjudicate cases on the basis of the Constitution and statutes.

2. The courts shall adjudicate cases on the basis of international agreements which are part of the [internal] legal order of the Republic of Croatia ...”

COMPLAINTS

31. The applicant complained under Article 1 of Protocol No. 1 taken alone and in conjunction with Article 14 of the Convention that his right to the peaceful enjoyment of his possessions had been violated and that he had been discriminated against as regards his rights in respect of the flat he occupied.

32. He further complained under Article 8 of the Convention that his right to respect for his home had been violated.

33. Lastly, the applicant complained under Article 6 § 1 of the Convention about the outcome of the civil proceedings in question.

THE LAW

A. Alleged violation of Article 1 of Protocol No. 1 to the Convention taken alone and in conjunction with Article 14 of the Convention

34. The applicant complained that, by dismissing his claim to purchase the flat he occupied, the domestic courts had violated the right to peaceful enjoyment of his possessions and that he had been treated differently in that respect from other holders of a specially protected tenancy. He relied on Article 1 of Protocol No. 1 and Article 14 of the Convention, which read as follows:

Article 1 of Protocol No. 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.

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.”

Article 14

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

1. Submissions of the parties

35. The Government argued that this part of the application was incompatible ratione temporis with the provisions of the Convention because the applicant had not had a protected tenancy in respect of the flat at issue on 5 November 1997, when the Convention had entered into force in respect of Croatia. The subsequent decisions of the national court had had no effect on that fact.

36. They argued further that the applicant had not had a “possession” in respect of the flat at issue within the meaning of Article 1 of Protocol No. 1. He had never been the owner of the flat. Likewise, he had never had a sufficiently recognised claim under national law to purchase the flat at issue since he had not had a specially protected tenancy in respect of the flat. The flat had been given to him for temporary occupation only and it had not been possible to acquire a specially protected tenancy in a flat given for temporary occupation. Article 1 of Protocol No. 1 did not guarantee the right to acquire ownership.

37. The Government further submitted that the flat at issue was confiscated from a private owner during the communist regime in the former Yugoslavia. Relying on the Courts case-law they argued that the legislation providing that the State should restore the property it had appropriated without compensation during the communist regime pursued an important aim in the public interest: compensating the victims of arbitrary deprivations and restoring justice and the rule of law. The fact that such legislation often authorised the former owners to claim their property back even from private individuals, whenever the latter ’ s title had been tainted by breaches of the law, did not render its approach illegitimate as such, having regard to the specific context of the transition from a totalitarian to a democratic society and the wide margin of appreciation enjoyed by the authorities in these matters (see Velikovi and Others v. Bulgaria , nos. 43278/98, 45437/99, 48014/99, 48380/99, 51362/99, 53367/99, 60036/00, 73465/01 and 194/02, §§ 170-172 , 15 March 2007; and Pavlinovi ć v. Croatia (dec.), nos. 17124/05 and 17126/05).

38. The applicant maintained that even though the flat at issue had been allocated to him for temporary occupation for three years, he had continued to dwell in it after that period and to pay rent, which showed that he had had a specially protected tenancy. Thus, he had had a legitimate expectation to purchase that flat.

2. The Court ’ s assessment

39. The Court does not have to answer all the arguments raised by the parties because the complaint under Article 1 of Protocol No. 1 taken alone and in conjunction with Article 14 of the Convention is inadmissible on the following grounds.

40. The Court notes at the outset that specially protected tenancies ( stanarsko pravo ) were abolished on 5 November 1996, when the Lease of Flats Act entered into force (see paragraph 25 above), that is, exactly one year before the date, 5 November 1997, on which the Convention entered into force in respect of Croatia. However, that Act also provided that proceedings instituted under the provisions of the Housing Act, including those involving the determination of specially protected tenancies, had to be concluded under the terms of the Housing Act.

41. In these circumstances, the Court considers that, when examining alleged violations of Article 1 of Protocol No. 1 to the Convention in relation to decisions adopted after Croatia ’ s ratification of the Convention, in which the national courts have found that a claimant had no specially protected tenancy, it does not need to determine whether a specially protected tenancy itself could be considered a “possession” protected by that Article. Rather, it must examine whether the findings of the national courts affected any of the rights derived from the specially protected tenancy, such as the right of the tenants to purchase the flats they occupied, and, more importantly, whether those derived rights could amount to a “possession” within the meaning of that provision (see, mutatis mutandis , Gaćeša v. Croatia (dec.), no. 43389/02, 1 April 2008 ).

42. The Court reiterates that an applicant may allege a violation of Article 1 of Protocol No. 1 only in so far as the impugned decisions relate to his or her “possessions” within the meaning of that provision. “Possessions” can be “existing possessions” or assets, including claims, in respect of which an applicant can argue that he has at least a “legitimate expectation” (which must be of a more concrete nature than a mere hope) that they will be realised, that is that he or she will obtain effective enjoyment of a property right (see, inter alia , Gratzinger and Gratzingerova v. the Czech Republic (dec.) [GC], no. 39794/98, ECHR 2002-VII, § 69, and Kopecký v. Slovakia [GC], no. 44912/98, § 35, ECHR 2004-IX).

43. Turning to the present case, the Court first takes the view that the applicant only claimed that he had the right to purchase the flat. The Court will therefore assess whether that claim was sufficiently established under national law.

44. The Court notes that even if it were to accept the applicant ’ s arguments that the national courts erred in their conclusions that he did not have a specially protected tenancy in respect of the flat at issue, he nevertheless did not have the right to purchase the flat he occupied. In this connection the Court notes that the flat which the applicant occupied was a confiscated flat. Under t he Appropriated Property Compensation Fund Act, tenants living in confiscated flats had the right to purchase such flats only where no requests for restitution had been submitted within the time-limit prescribed by the Denationalisation Act or where such requests had been dismissed by a final decision (see paragraph 24 above). However, I.H., an heir of the former owner of the confiscated flat which the applicant occupied, sought and obtained restitution of that flat (see paragraph 17 above).

45. Therefore, the applicant did not have a sufficient proprietary interest in respect of the flat at issue to constitute a “possession” within the meaning of Article 1 of Protocol No. 1.

46. It follows that the complaint under Article 1 of Protocol No. 1 taken alone or in conjunction with Article 14 of the Convention is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.

B. Alleged violation of Article 8 of the Convention

47. The applicant complained that his right to respect for his home had been violated. He relied on Article 8 of the Convention, which, in so far as relevant, reads:

“1. Everyone has the right to respect for his ... home ...

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

1. Submissions of the parties

48. The Government argued that there had been no interference with the applicant ’ s right to respect for his home since the national courts had not adopted any decision ordering the applicant ’ s eviction. Were the Court to find otherwise, the interference had been lawful since the applicant had had no title to occupy the flat at issue. Also, he had various properties in the village of Turjaci, near Split, where he had moved.

49. The Government further argued, in substance, that the applicant had not exhausted domestic remedies. He had moved out of the flat at issue of his own free will and the owner of the flat had then withdrawn her claim for the applicant ’ s eviction. The applicant had therefore not presented any arguments concerning his right to respect for his home before the national courts and had deprived them of the opportunity to assess the proportionality of the interference.

50. The applicant argued that the national courts had denied him any right in respect of the flat at issue and that therefore he had moved out of it.

2. The Court ’ s assessment

51. The Court stresses that the principle of subsidiarity is one of the fundamental principles on which the Convention system is based. It means that the machinery for the protection of fundamental rights established by the Convention is subsidiary to the national systems safeguarding human rights (see Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others , § 69, 25 March 2014; and Gherghina v. Romania [GC] (dec.), no. 42219/07, § 83, 9 July 2015 ) . The Convention does not lay down for the Contracting States any given manner for ensuring effective implementation of the Convention within their internal law. The choice as to the most appropriate means of achieving this is in principle a matter for the domestic authorities, who are in continuous contact with events and issues in their countries, and are better placed to assess the opportunities and resources afforded by their respective domestic legal systems (see Swedish Engine Drivers ’ Union v. Sweden , 6 February 1976, § 50, Series A no. 20; Chapman v. the United Kingdom [GC], no. 27238/95, § 91, ECHR 2001-I; and Sisojeva and Others v. Latvia [GC], no. 60654/00, § 90, ECHR 2007-II).

52. In accordance with Article 35 § 1 of the Convention, the Court may only deal with a matter after all domestic remedies have been exhausted. The purpose of Article 35 is to afford the Contracting States the opportunity of preventing or putting right violations alleged against them before those allegations are submitted to the Court (see, for example, Gherghina , cited above, § 84; Hentrich v. France , 22 September 1994, § 33, Series A no. 296-A, and Remli v. France , 23 April 1996, § 33, Reports of Judgements and Decisions 1996-II). Thus, a complaint submitted to the Court should first have been made to the appropriate national courts, at least in substance, in accordance with the formal requirements of domestic law and within the prescribed time-limits (see Vu č kovi ć , cited above, § 72). To hold otherwise would not be compatible with the subsidiary character of the Convention system (see Gavril Yosifov v. Bulgaria , no. 74012/01, § 42, 6 November 2008). Nevertheless, the obligation to exhaust domestic remedies requires only that an applicant make normal use of remedies which are effective, sufficient and accessible in respect of his Convention grievances (see Vu č kovi ć , cited above, § 73; Balogh v. Hungary , no. 47940/99, § 30, 20 July 2004, and John Sammut and Visa Investments Limited v. Malta (dec.), no. 27023/03, 28 June 2005).

53. The Court notes that while the proceedings for the applicant ’ s eviction - instituted by I.H., the owner of the flat the applicant occupied - were pending before the Split Municipal Court, the applicant moved out of the flat of his own free will, which resulted in I.H. withdrawing her claim for the applicant ’ s eviction. Thus, the applicant did not make use of the opportunity to argue his case before the national courts and to give them the possibility to assess all the circumstances pertinent to his right to respect for his home.

55. The national authorities, including the Constitutional Court, would thus have had the opportunity to respond to such arguments. The latter court has already held that rights guaranteed in the Convention and its Protocols were also to be considered constitutional rights having legal force equal to the provisions of the Constitution (see paragraph 26 above) , and has thus recognised its competence to examine alleged violations of the Convention.

56. In the light of the foregoing, the Court concludes that in accordance with the principle of subsidiarity, the applicant should, before lodging his application with the Court, have presented his arguments before the national courts, in particular the Constitutional Court as the highest court in Croatia, and thus given them the opportunity to remedy his situation (see Šimunovski v. Croatia (dec.), no. 42550/08, 21 June 2011, and Habulinec and Filipović , cited above, § 31).

57. It follows that this complaint must be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.

C. Alleged violation of Article 6 § 1 of the Convention

58. The applicant also complained that the proceedings described above were unfair, alleging that the domestic courts had erred in their application of the relevant provisions of substantive law. He relied on Article 6 § 1 of the Convention, the relevant part of which reads:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ...”

59. The Court notes that the applicant complained about the outcome of the proceedings, which the Court is unable to examine under Article 6 § 1 of the Convention unless it was arbitrary. The applicant did not complain, and there is no evidence to suggest, that the domestic courts lacked impartiality or that the proceedings were otherwise unfair. In the light of all the material in its possession, the Court considers that in the present case the applicant was able to submit his arguments before courts which offered the guarantees set forth in Article 6 § 1 of the Convention and which addressed those arguments in decisions that were duly reasoned and not arbitrary.

60. It follows that this complaint is also inadmissible under Article 35 § 3 as manifestly ill-founded and must be rejected pursuant to Article 35 § 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 28 January 2016 .

             Stanley Naismith Işıl KarakaÅŸ Registrar President