FIFTH SECTION

DECISION

Application no . 1002/09 OREL - JEDNOTA HRANICE against the Czech Republic

The European Court of Human Rights (Fifth Section), sitting on 10 September 2013 as a Chamber composed of:

Mark Villiger, President ,

Angelika Nußberger,

Boštjan M. Zupančič,

Ganna Yudkivska,

André Potocki,

Paul Lemmens,

Aleš Pejchal, judges ,

and Claudia Westerdiek , Section Registrar ,

Having regard to the above application lodged on 23 December 2008,

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

Having deliberated, decides as follows:

THE FACTS

The applicant, Orel - jednota Hranice, is a local branch of a Czech Christian sports association newly registered in 1990. It was represented before the Court by Mr Vladimír Partl, a lawyer practising in Brno.

The Czech Government (“the Government”) were represented by their Agent, Mr V.A. Schorm, from the Ministry of Justice.

A. The circumstances of the case

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

On 10 April 1991, under two laws (Law no. 173/1990 and Law no . 232/1991) governing property restitution in respect of sports associations, the applicant association filed a claim for restitution of real property with the Přerov District Cinema Administration ( Okresní správa kin v Přerově, “the Administration”), a semi-public organization. It argued that the property had been acquired by its legal predecessor in 1921 and owned until 1948 when the association had been dissolved by the then totalitarian regime.

On 9 September 1991 the applicant association concluded an agreement with the Administration on the restitution of the real property in accordance with the above laws. The agreement stipulated, inter alia , that the Administration had obtained title to the property from the Přerov District National Council (Okresní národní výbor) in 1990. Subsequently, the applicant association ’ s title was recorded in the Land Register.

On 31 March 2000 the applicant association entered into a lease agreement whereby it rented a part of the above real property to the Hranice Municipal Cinemas; the annual rent amounted to 200 000 CZK.

On 27 March 2000 the Přerov District Office ( Okresní úřad ), the legal successor of the Administration, brought an action against the applicant association for determination of the ownership of the property.

On 15 February 2001 the Přerov District Court granted the action. On 18 February 2003 the Ostrava Regional Court quashed this judgment and invited the first-instance court to deal with the validity of the restitution agreement as a preliminary question.

On 21 March 2006 the District Court considered that the real property had been expropriated by the State on 8 August 1946 under Presidential Decree no. 50/1945 on special measures in cinematography. On the basis of the documentary evidence and the Constitutional Court ’ s case-law, the court held that since the above date the property in question had been owned by the State - and not by the Czechoslovak Union of Physical Education whose property was, after its dissolution in 1990, subject to restitution under the restitution laws nos. 173/1990 and 232/1991 - and that the Administration had only had the right to use the property, not to sell or tr ansfer it. As a result, the court concluded that the Administration had not been competent to transfer title to the property to the applicant association under Acts no. 173/1990 and 232/1991 and that the applicant association was not entitled to such restitution. Indeed, the applicant association was not a legal successor of the Czechoslovak Union of Physical Education. In fact, its predecessor had been dissolved before 31 March 1948 and its property had been expropriated on the basis of Presidential Decree no. 50/1945. Therefore the restitution Acts nos. 173/1990 and 232/1991 had not been applicable and the restitution agreement concluded in accordance with these laws between the Administration and the applicant association had been null and void ab initio . The State was thus determined as the owner of the real property.

On 24 April 2007 the Ostrava Regional Court found the factual and legal assessment of the first-instance court to be correct, including the historical account of the transfer of title to the real property.

On 19 December 2007 the Supreme Court dismissed the applicant association ’ s appeal on points of law and held that the Regional Court had applied the relevant laws and the case-law correctly and that the applicant association had not raised any question of crucial legal importance.

Relying on Article 6 of the Convention and Article 1 of Protocol No. 1 the applicant association lodged a constitutional appeal, in which it complained that the lower courts had not examined all the evidence it had submitted, that they had assessed the transfer of title to the real property incorrectly and that it had missed the opportunity to file a restitution claim under Government Resolution no. 555 of 1996 as it had been using the real property in good faith during the relevant period.

On 29 May 2008, the State Office of Patrimonial Affairs took over the property; several technical defects were noticed on that occasion. The bad technical state of the building, caused by insufficient maintenance, was ascertained by an expert report dated 9 July 2009.

On 26 June 2008 the Constitutional Court dismissed the constitutional appeal as manifestly ill-founded and found that the decisions of the courts had not been unreasonable, unforeseeable or arbitrary, that the evidence submitted had been irrelevant and that the courts had applied the case-law correctly. The court did not directly address the concerns raised under Article 1 of Protocol No. 1.

By a judgment of the Přerov District Court dated 23 March 2010, the applicant association was obliged to reimburse, on account of unjust enrichment, the rent paid by its former te nant between July 2006 and June 2007.

B. Relevant domestic law and practice

1. Presidential Decree no. 50/1945 on special measures in cinematography

Section 1 provided that only the State was authorised to run film ateliers, to produce films, to proceed to their laboratory processing and public screening, and also to export and import films.

Those who had previously conducted these activities were obliged to hand on all used items, means, sources, materials and equipment, which they possessed (or leased or used in a different manner) anywhere in Czechoslovakia. The property handed on to the State was taken over by the Ministry of Finance which could transfer it to State entities in order to develop Czechoslovak cinematography. Those who had to hand on the property were to be compensated.

2. Act no. 173/1990 on organization of physical education and on regulation of certain relations concerning voluntary sport associations

Section 2 provides that property of voluntary associations which they had been deprived of under Acts no. 187/1949, no. 71/1952 and no. 68/1956 had to be returned, upon their request addressed to the legal successor of the Czechoslovak Union of Physical Education before 31 December 1991, to the Czechoslovak “Sokol” Community and to other anew created voluntary associations.

Section 2a provides that the competent authority is obliged to use the property with due diligence until it is returned to the Czechoslovak “Sokol” Community and to other anew created associations, and cannot validly transfer the ownership to anyone else.

3. Act no. 232/1991, on conditions and ways of restitution of property under Act no. 173/1990

Referring to Act no. 173/1990, this law specifies the details of filing the request for restitution with a competent authority. When the entitled entities satisfy all the requirements, the competent authority shall draw up an agreement on restitution with them and return the property to them.

4. Act no. 82/ 1998 on State liability for damage caused in the exercise of public authority by an irregularity in a decision or the conduct of proceedings

Under Sections 7 and 8 individuals who suffer loss because of a final unlawful decision that is later quashed or changed are entitled to claim damages.

Section 13 provides that the State is also liable for damage caused by an irregularity in the conduct of proceedings, including non-compliance with the obligation to perform an act or give a decision within the statutory time-limit.

5. The Economic Code (Act no. 109/1964), in force until 1 January 1992

Section 62 described the legal status of “other State organizations”, including for example semi-public organizations. According to Section 64 § 2, such organizations were only entitled to manage State property.

6. Government Resolution no. 555 of 23 October 1996

The Resolution laid down conditions under which associations could claim restitution of real property, including property which was owned by the State on the date of adoption of the Resolution. The associations had to declare in an affidavit that they were successors of the associations which had owned the property in question on 25 February 1948. The association s ’ activity had to be beneficial to public, condu cted at least until 25 February 1948 and no later than 1 January 1991. The claims had to be lodged with the Ministry of the Interior before 31 December 1996.

7. Decisions of the Czech highest courts

The Government quoted decisions of th e Supreme Court (judgment no. 2 Cdon 1360/97 of 28 May 1998) and of the Constitutional Court (decision no. I. ÚS 368/98 of 2 May 2002) holding that the persons obliged to return property pursuant to restitution l aws no. 173/1990 and no. 232/1991 are the legal successors of the Czechoslovak Union of Physical Education; such legal successor is not always the current holder of the property.

In the judgment no. 25 Cdo 1097/2002 of 26 August 2003 the Supreme Court noted that when an agreement was declared null and void ab initio , the person responsible for the fault causing the nullity was liable for the damage incurred pursuant to Section 420 of the Civil Code (in addition to the parties ’ mutual obligation of restitution under Section 457 of the Civil Code).

COMPLAINTS

1. The applicant association complained under Article 6 of the Convention that the proceedings had been lengthy, that the domestic courts had not examined all the evidence it had submitted and that they had incorrectly assessed the transfer of title to the real property.

2. The applicant association further contended that there had been a violation of Article 1 of Protocol No. 1 owing to the fact that it had been unlawfully deprived of the real property owned in good faith and that it had missed the opportunity to file a restitution claim under Government Resolution no. 555 of 1996.

THE LAW

1. The applicant association complained about the length and unfairness of the proceedings for determination of the ownership of the real property which, according to it, did not observe the requirements laid down in Article 6 § 1 of the Convention which, so far as relevant, reads as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by [a] ... tribunal.”

a) Regarding the complaint related to the length of the proceedings, the Court notes that t he applicant association did not file a claim in respect of non-pecuniary damage arising from the unreasonable length of the proceedings, which has been fo und effective f or the purposes of Article 35 § 1 of the Convention ( Vokurka v. the Czech Republic (dec.), no. 40552/02, 16 October 2007). The Court therefore considers that the applicant association has not exhausted domestic remedies within the meaning of Article 35 § 1 of the Convention.

Consequently the length complaint must be declared inadmissible according to Article 35 §§ 4 of the Convention.

b) The applicant association further alleged that the proceedings had been unfair in that the national courts had failed to examine all the evidence submitted and that they had incorrectly assessed the transfer of title to the real property.

T he Court reiterates that it is not its function to deal with errors of fact or law allegedly committed by a national court unless and insofar as they may have infringed rights and freedoms protected by the Convention. Furthermore Article 6 of the Convention does not lay down any rules on the admissibility of evidence or the way it should be assessed, which are therefore primarily matters for regulation by national law and the national courts. The Court notes that the case was considered by the courts at several levels of jurisdiction and that the applicant association was provided with ample opportunities to present its arguments which were given proper consideration. The Regional Court fully endorsed the establishment of the facts and the legal reasoning set out in the judgment of the District Court, and the Supreme Court confirmed that the relevant laws and the case-law had been applied correctly. T he Court finds that the reasons on which the national courts based their conclusions are sufficient to exclude any doubt that the way in which they established and assessed the evidence in the applicant association ’ s case was unfair or arbitrary.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

2. In its second complaint the applicant association alleged a violation of its property rights as guaranteed by Article 1 of Protocol No. 1, which provides:

“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.”

The Government contended at the outset that, the national courts having declared the restitution agreement of 9 September 1991 null and void ab initio , the applicant association canno t be considered as having had a “possession” within the meaning of Article 1 of Protocol No. 1. Nonetheless, given that the applicant association ’ s title had been recorded in the Land Register since August 1992 and that the applicant association had acted as the owner in relation to the third persons, the Government admitted that it had a “legitimate expectation” for the purposes of that provision. They further submitted that the alleged interference with the applicant association ’ s rights under Article 1 of Protocol No. 1 did not result from any act undertaken by the State within the exercise of public power but from a private dispute between the applicant association and a semi-public organization acting as a private subject, which concerned the determination of ownership. Therefore, from the point of view of the Convention, it should only be scrutinised whether the State, through its court system, had complied with its positive obligations under Article 1 of Protocol No. 1. The Government considered that that had been the case, given that the assessment made by domestic courts cannot be regarded as having been arbitrary or manifestly unreasonable, and that this aspect of the application was therefore manifestly ill-founded.

In the alternative, the Government submitted that the interference was lawful and that it aimed to protect the State property and to preserve social justice, i.e. to correct a mistake which had resulted in the applicant association unjustly acquiring the title to the property in question. They also contended that the applicant association had never brought a claim for compensation before the national courts pursuant to the provisions of the Civil Code on civil liability or unjust enrichment (see, mutatis mutandis , Lesní společnost Přimda v. the Czech Republic (dec.), no. 11997/05, 21 September 2010) and that the “threshold of hardship” (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, §§ 192 and 215, 15 March 2007) had not been reached in the present case, the applicant association having acquired the property title free of charge, having used it for several years without properly maintaining it and having obtained benefits from it.

The Government finally noted that Resolution no. 555 had only set guidelines to the Ministry of Interior as to the way of examining the relevant claims and had not given the claimants any automatic right to restitution. They also argued that the domestic courts had established that the property had been transferred to the State on 28 August 1945. Since the applicant ’ s predecessor had not owned the property on 25 February 1948, Resolution no. 555 was inapplicable in this case.

The applicant association disagreed with the objection of non-exhaustion of domestic remedies, pointing out that it had tried to preserve its property rights within the proceedings for determination of the ownership, including the constitutional appeal. It also disputed the argument that it had not become owner of the impugned property by virtue of the 1991 agreement.

The Court recalls that the concept of “possessions” in the first part of Article 1 has an autonomous meaning which is not limited to ownership of physical goods and is independent from the formal classification in domestic law: the issue that needs to be examined is whether the circumstances of the case, considered as a whole, may be regarded as having conferred on the applicant title to a substantive interest protected by that provision (see Iatridis v. Greece [GC], no. 31107/96, § 54, ECHR 1999 ‑ II; Öneryıldız v. Turkey [GC], no. 48939/99, § 124, ECHR 2004 ‑ XII ). The fact that the domestic laws of a State do not recognise a particular interest as a “right” or even a “property right” does not necessarily prevent the interest in question, in some circumst ances, from being regarded as a “possession” within the meaning of Article 1 of Protocol No. 1 (see Brosset-Triboulet and Others v. France [GC], no. 34078/02 , § 71, 29 March 2010).

Turning to the present case, the Court observes that in September 1991 the applicant association concluded a re stitution agreement with a semi ‑ public organization whereby it obtained title to a real property, which was subsequently recorded in the Land Register. Several years later, the courts concluded that the above State organization had not been competent to transfer title to the property to the applicant association under Acts no. 173/1990 and 232/1991 and that the applicant association did not fulfil the conditions set by these laws for restitution. The restitution laws upon which the agreement had been based were therefore not applicable. Consequently, the restitution agreement had been null and void ab initio . According to the Czech law, the decisions declaring this title null and void ab initio had the effect that the applicant association was considered never to have owned the property on issue. The Court considers, however, that the applicant association still had a “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention as it had possessed the property for several years, was considered as its owner for all legal purposes and exercised its property rights at least until July 2007 (see, mutatis mutandis , Gashi v. Croatia , no. 32457/05, § 22, 13 December 2007) .

Consequently, the Ostrava Regional Court ’ s judgment of 24 April 2007 declaring null and void the restitution agreement from which the applicant association derived its ownership constituted an interference with its right to peaceful enjoyment of its possessions, as guaranteed by Article 1 of Protocol No. 1. As to the question whether the interference was covered by the first or second paragraph of that Article, the Court has already found that declaring title to property null and void is to be examined under the second sentence of the first paragraph as it amounts to deprivation of possessions (see Gashi , cited above, §§ 27 ‑ 28; TomaÅ¡ić c. Croatia (dec.) , no. 39867/07, 19 November 2009). The Court must then examine whether the interference was justified.

The Court reiterates that it has only limited power to deal with alleged errors of fact or law committed by the national courts and it cannot substitute its view for that of the domestic courts on the applicant association ’ s ownership of the real property (see Jantner v. Slovakia , no. 39050/97, § 32, 4 March 2003; Čadek and Others v. the Czech Republic , nos. 31933/08, 60084/08, 6185/09, 46696/09, 52792/09, 53518/09, 10185/10, 42151/10, 3167/11 and 20939/11, § 52, 22 November 2012) . In the present case, t he Court is satisfied that the interference in the present case was “provided for by law”, i.e. by the rules on the determination of the ownership and by the laws nos. 173/1990 and 232/1991 under which the applicant association was not entitled to the restitution of the property in question. It also pursued an aim that was in the public interest, namely that of protecting the State property and preserving social justice, given that it was necessary to correct the error which had resulted in the wrongful transfer of that property to the applicant association.

Furthermore, bearing in mind the specific features of the present case, the Court, in making its assessment as to whether the Czech authorities struck a fair balance between the general interest of the community and the applicant association ’ s right to the peaceful enjoyment of its possessions, gives decisive importance to the following factors.

First, it has to be noted that the applicant association acquired the property title free of charge, had used it for several years and obtained benefits from it.

Second, the Court considers that should the applicant association have incurred any damage when deprived of the property in issue, the Czech law offered it the opportunity to claim compensation. Indeed, the Government submitted, supported by references to the case-law of the Supreme Court, that the case fell within the scope of the general provisions on civil-law liability under which the applicant association could have claimed the sum it had invested in the property, as well as compensation for pecuniary damage resulting from a defective legal act. The applicant association did not cast any doubt on the availability of such remedy and did not explain why it had not used it.

In these circumstances, the Court sees no reason to doubt that, although the courts in the proceedings for determining ownership were not able to award compensation, the applicant association could have obtained redress under the relevant provisions of the Civil Code. It is only in the light of any decision as to such compensation and the reasons given for it that the Court would be able to determine the extent of the applicant association ’ s loss, if any (see, mutatis mutandis , Lesní společnost Přimda , decision cited above; Umlaufová v. the Czech Republic (dec.), n o 3794/08, 29 January 2013 ).

The foregoing considerations are sufficient to enable the Court to conclude that the interference with the applicant association ’ s property rights in the present case was not contrary to Article 1 of Protocol No. 1 to the Convention.

It follows that this complaint is inadmissible under Article 35 § 3 (a) 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.

Claudia Westerdiek Mark Villiger Registrar President