FIRST SECTION

DECISION

Application no . 27567/13 Stephen OGDEN against Croatia

The European Court of Human Rights ( First Section ), sitting on 10 February 2015 as a Chamber composed of:

Isabelle Berro , President, Mirjana Lazarova Trajkovska , Julia Laffranque , Paulo Pinto de Albuquerque , Linos-Alexandre Sicilianos , Erik Møse , Ksenija Turković , judges, and Søren Nielsen , Section Registrar ,

Having regard to the above application lodged on 15 April 2013 ,

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

The Government of the United Kingdom , having been informed of their right to intervene (Article 36 § 1 of the Convention and Rule 44 § 1 (a) of the Rules of Court), did not avail themselves of this right,

Having deliberated, decides as follows:

THE FACTS

1 . The applicant, Mr Stephen Ogden, is a British national, who was born in 1968 and lives in Cheshire . He was represented before the Court by Mr V. Dabelić , an advocate practising in Orebić .

2. The Croatian Government (“the Government”) were represented by their Agent, Ms Š. Stažnik .

A. The circumstances of the case

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

4. On 14 April 2005 the applicant concluded a sale and purchase agreement with a certain Mr I., whereby the applicant bought real property located on the Pelješac peninsula, in particular an old stone house and the surrounding land plot.

5. On 3 June 2005 the applicant, being a foreigner, requested the consent of the Minister of Justice for the acquisition of ownership of the real property in question, required by section 356(2) of the Property Act (see paragraphs 18-19 below)

6. By a decision of 20 October 2008 the Minister dismissed the applicant ’ s request because the property in question was located in the area of nature considered to be a protected significant natural landscape where , under the 2005 Nature Protection Act (see 16 below), foreign natural persons or legal entities could not acquire ownership of real property unless otherwise provided for by an international agreement. The relevant part of the Minister ’ s decision reads as follows:

“... [ the real property in question] is located outside of the construction area – [namely, in] the area of original [significant natural] landscape [ zaštita predjela izvornog prirodnog krajobraza ].

Section 113 (2) of the Nature Protection Act ... provides that foreign natural persons or legal entities cannot acquire ownership of the real property in, inter alia , significant landscape, unless otherwise provided for by an international agreement.

As the statutory requirements for issuance of the requested consent have not been met, it was decided as in the operative part of the decision.”

7. The applicant then, on 13 January 2009, brought an action for judicial review against that decision.

8. By a judgment of 23 February 2012 the High Administrative Court ( Visoki upravni s ud Republike Hr vatske ) dismissed the applicant ’ s action. The relevant part of that judgment reads as follows:

“On 1 February 2009 the Amendments to the Property Act entered into force ... Section 3 of the Amendments ... [provides for] acquisition of ownership of real property [by European Union citizens and legal entities] under the same conditions as for Croatian nationals and legal entities ... with the exception of the agricultural land ... and the nature protected areas as defined by the law ...

The plaintiff ’ s argument that the statutory requirements for his acquisition of ownership have been met under the principle of reciprocity is irrelevant. Namely, section 113(2) of the [2005] Nature Protection Act prohibits the acquisition of ownership of real property located in the enumerated protected areas of the Republic of Croatia (... significant landscape ...).

9. On 4 June 2012 the applicant lodged a constitutional complaint against that judgment, alleging violations of his constitutional right to equality of nationals and foreigners before the courts and other public authorities, and his constitutional right of ownership. In so doing he relied on Articles 26 and 48 of the Croatian Constitution.

10. By a decision of 26 September 2012 the Constitutional Court dismissed the applicant ’ s constitutional complaint and served its decision on his representative on 17 October 2012. The relevant part of that decision reads as follows:

“The complainant did not adduce relevant constitutional-law arguments on the basis of which the Constitutional Court could establish that in the proceedings before the Ministry of Justice and the High Administrative Court there were circumstances indicating [his procedural inequality ] as a foreign national compared to Croatian nationals in proceedings before those authorities.

...

The Constitutional Court protects the right of ownership [guaranteed by] Article 48 of the Constitution by preventing restriction or deprivation of that right by public authorities, unless the restriction or deprivation is provided by law.

Cases of interference with ownership by other parties (natural persons or legal entities) are usually property disputes between private parties. The Constitutional Court examines such decisions of judicial and other authorities when it finds that such decisions ... were based on unacceptable legal grounds or are so wrong and lacking legal reasoning that they could be considered arbitrary.

... the Constitutional Court did not find any such elements in the present case.”

11. Following Croatia ’ accession to the European Union on 1 July 2013 (see paragraph 15 below), on 6 July 2013 the new Nature Protection Act entered into force. It lifted the ban on the acquisition of ownership of real property in the protected areas of nature for foreign nationals or legal entities (see paragraph 17 below) .

12. On 8 January 2014 the applicant lodged an application with the Land Registry Division of the Korčula Municipal Court ( Općinski sud u Korčuli ) seeking to be recorded in the land register as the owner of the real property in question on the basis of the sale and purchase agreement of 14 April 2005 (see paragraph 4 above).

13. By a decision of 14 March 2014 the court granted his request and recorded in the land register his ownership of that property.

B. Relevant domestic and European law and practice

1. Stabilisation and Association Agreement

14 . The Stabilisation and Association Agreement between the Republic of Croatia, on the one part, and the European Communities and their Member States, on the other part entered into force on 1 February 2005. The relevant part of the Agreement read as follows:

Article 60

“(2) ... As from the entry into force of this Agreement, Croatia shall authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in Croatia by nationals of Member States of the European Union, except for areas and matters listed in Annex VII. Within four years from the entry into force of this Agreement, Croatia shall progressively adjust its legislation concerning the acquisition of real estate in Croatia by nationals of the Member States of the European Union to ensure the same treatment as compared to Croatian nationals. At the end of the fourth year after the entry into force of this Agreement, the Stabilisation and Association Council shall examine the modalities for extending these rights to the areas and matters listed in Annex VII.

... ”

Annex VII

“ACQUISITION OF REAL PROPERTY BY EU NATIONALS

List of exceptions referred to in Article 60(2)

Excluded sector

– Agricultural land as defined by the Agricultural Land Act ( Narodne novine (Official Gazette) No 54/94, consolidated text, 48/95, 19/98 and 105/99)

– Areas protected under the Environmental [Nature] Protection Act ( Narodne novine (Official Gazette) No 30/94).”

2. Accession Treaty

15 . Croatia became a member of the European Union on 1 July 2013, by virtue of Treaty concerning the accession of the Republic of Croatia to the European Union (“Accession Treaty”). The relevant part of the Treaty reads as follows:

Annex V

“ ...

3. FREE MOVEMENT OF CAPITAL

Treaty on European Union and the Treaty on the Functioning of the European Union.

Notwithstanding the obligations under the Treaties on which the European Union is founded, Croatia may maintain in force for seven years from the date of accession the restrictions laid down in its Agricultural Land Act (OG 152/08), as in force on the date of signature of the Treaty of Accession, on the acquisition of agricultural land by nationals of another Member State, by nationals of the States which are a party to the European Economic Area Agreement (EEAA) and by legal persons formed in accordance with the laws of another Member State or an EEAA State ... ”

3. Nature Protection Act of 2005

16 . Section 113(2) of the Nature Protection Act ( Zakon o zaštiti prirode , Official Gazette no. 70/05 with further amendments), which was in force between 16 June 2005 and 5 July 2013, read as follows:

“Foreign legal entities or natural persons cannot acquire ownership of real property located in ... significant landscape ... unless an international agreement provides otherwise.”

4. Nature Protection Act of 2013

17 . The Nature Protection Act ( Zakon o zaštiti prirode , Official Gazette no 80/13) , which en tered into force on 6 July 2013, contains no restrictions for foreign nationals or legal entities to own real property in nature protected areas.

5. Property Act

18 . Section 356(2) of the Property Act ( Zakon o vlasništvu i drugim stvarnim pravima , Official Gazette no. 91/96 with further amendments) provides that foreign natural persons and legal entities can acquire ownership of real property in Croatia subject to the consent of the Minister of Justice.

19 . On 1 February 2009, the Amendments of the Property Act entered into force, adding section 358a to the Act. This provision exempted the European Union citizens and legal entities from the requirement to ask for consent of the Minister of Justice, but excluded the agricultural land and the nature protected areas from its application.

6. The case-law of the Constitutional Court

20. In its decision no. U-I-673/1996 of 21 April 1999 the Constitutional Court invalidated certain provisions of the Denationalisation Act as unconstitutional. Among other provisions, it invalidated as discriminatory the provision that allowed only Croatian but not foreign nationals to obtain restitution of, or the compensation for the property appropriated during the Yugoslav Communist regime.

7. The case-law of the Court of Justice of the European Union

21. In the Konle case ( Klaus Konle v. Republic of Austria, C-302/97) the Court of Justice of the European Union (“the CJEU”) was asked to assess the conformity of the Tyrolean prior authorisation scheme for purchasing agricultural land with the Austrian Accession Treaty, which allowed Austria to maintain its existing legislation regarding secondary residences for five years from the date of accession. The CJEU held that :

“ ... the restrictive measure inherent in ... a [prior authorisation] requirement can be accepted only if it is not applied in a discriminatory manner and if the same result cannot be achieved by other less restrictive procedures.”

22. Furthermore, in the similar circumstances of the Ospelt case ( Margarethe Ospelt and Schlössle Weissenberg Familienstiftung , C - 452/01), the CJEU held that

“... measures ... which entail, by their very purpose, a restriction on the free movement of capital ... may nevertheless be permitted provided that, first, they pursue in a non-discriminatory way an objective in the public interest and, secondly, they are appropriate for ensuring that the aim pursued is achieved and do not go beyond what is necessary for that purpose ... where the granting of prior authorisation is concerned, such measures must be based on objective criteria which are known in advance and which allow all persons affected by a restrictive measure of that type to have a legal remedy available to them ... ”

COMPLAINTS

23. The applicant complained under Article 1 of Protocol No. 1 and Article 1 of Protocol No. 12 to the Convention , that for a prolonged period of time he had been, because of his nationality , unable to acquire ownership of the house he had bought.

THE LAW

24. T he applicant complained that for many years he had been unable to acquire ownership of the house he had bought and enjoy it as the owner. He also complained to the Convention that he had been discriminated against on the ground of his nationality. He relied on Article 1 of Protocol No. 1 and Article 1 of Protocol 12 to the Convention, which read as follows:

Article 1 of Protocol No. 1 (protection of property)

“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 1 of Protocol No. 12 (General prohibition of discrimination)

“1. The enjoyment of any right set forth by law 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.

2. No one shall be discriminated against by any public authority on any ground such as those mentioned in paragraph 1.”

25 . The Court, being master of the characterisation to be given i n law to the facts of the case , when communicating the application invited the parties of its own motion to submit observations also under Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1 there to. Article 14 reads as follows:

“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.”

26 . The Government disputed the admissibility of these complaints on four grounds. In particular, they argued that the applicant had abused the right of application, that he had not suffered a significant disadvantage on account of the violation(s) complained of, that he had failed to exhaust domestic remedies and that his application was, in any event, manifestly ill-founded. In the alternative, they submitted that the case should be struck out under Article 37 § 1 (b) of the Convention because the matter has been resolved.

1. The parties ’ arguments

(a) The Government

27. Given that the applicant had complained about the inability to become the owner of the property in question, and that after lodging of the application with the Court he had on 14 March 2014 successfully recorded his ownership of that property in the land register (see paragraph 13 above), t he Government argued, inter alia , that the application should be struck out of the Court ’ s list of cases under Article 37 § 1 (b) of the Convention because the matter giving rise to the application had been resolved. The Govern ment further submitted that the respect for human rights did not require further examination of the application within the meaning of that Article because the legislation denying the applicant to become the owner of the property at issue had in the meantime been repealed.

28. The Government also submitted that the applicant did not suffer any disadvantage on account of the violation(s) complained of. They argued in particular that in the period between the conclusion of the sale and purchase agreement for the real property in question and his registration as its owner in the land register, the applicant had been free to possess, use and otherwise enjoy it, and that no one, including the State, had denied him that freedom or otherwise interfered with it. In other words, the applicant had not suffered any disadvantage for not having been officially recognised as the owner of the property in that period.

(b) The applicant

29. The applicant replied that the legislation denying him to become the owner of the real property he had bought on 14 April 2005 had been repealed only on 6 July 2013 (see paragraphs 11 and 17 above). This meant that for more than eight years he had been prevented from exercising his right of ownership of that property. In his claim for just satisfaction the applicant specified that, instead of spending summer holidays in the house he had bought, in those eight years he had to pay for renting private accommodation. This pecuniary damage sustained as a result of the alleged violation totalled 3,000 euros.

2. The Court ’ s assessment

31. The Court first notes in this connection that on 14 March 2014 the applicant recorded his ownership of the property at issue in the land register (see paragraph 13 above) and thereby became its owner.

34. Accordingly, the case should be struck out of the list.

35. In view of this conclusion, the Court does not find it necessary to examine any of the Government ’ s objections on grounds of inadmissibility (see Stojanović , cited above, § 79).

For these reasons, the Court, unanimously ,

Decides to strike the application out of its list of cases.

Done in English and notified in writing on 5 March 2015 .

Søren Nielsen Isabelle Berro Registrar President