FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 41673/98 by Marcus BRUNCRONA and Others against Finland

The European Court of Human Rights (Fourth Section) , sitting on 4 March 2003 as a Chamber composed of

Sir Nicolas Bratza , President , Mr M. Pellonpää , Mrs V. Strážnická , Mr R. Maruste , Mr S. Pavlovschi , Mr L. Garlicki , Mr J. Borrego Borrego , judges , and Mrs F. Elens-Passos , Deputy Registrar ,

Having regard to the above application lodged with the European Commission of Human Rights on 5 May 1998,

Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,

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

Having deliberated, decides as follows:

THE FACTS

The physical applicants – the late Olof Bruncrona’s heirs Marcus and Petter Bruncrona – are Finnish nationals born in 1964 and 1967 and resident in Helsinki. The estate of the late Olof Bruncrona , which in addition comprises the widow Helena Bruncrona , also acts as applicant. The applicants are represented before the Court by Mr Henrik Mattson, a lawyer practising in Helsinki. The respondent Government are represented by Mr Arto Kosonen, Director in the Ministry for Foreign Affairs.

A. The circumstances of the case

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

The applicants are the owners of the real property Karsby (register number 1:44; ”the Karsby mansion”) in the village with same name, currently part of the city of Tammisaari (Ekenäs).

The applicants claim ownership in the form of a right of permanent usufruct [1] (in Finnish vakaa hallinta-oikeus ; in Swedish ständig besittningsrätt ) in respect of the property Bergö-Högholm (register number 1:0) in the village with the same name, also within the city limits of Tammisaari. The property comprises a 165-hectare water area and some islands totalling 27 hectares. The islands originally belonged to the Swedish Crown (“Crown land”; kruunuluontoinen maa , jord av krononatur ).

Around the early 18 th century the then owners of the Karsby mansion ( kartano , säteri ) were afforded a right to make use of the islands against payment of a yearly levy ( sääntönäi s vero , stadga or stadgad ränta ). Such a levy was being collected as from 1723. The arrangement was maintained by a decision of the Senate of the then Grand-Duchy in 1862. When the land taxation was abolished in 1924 the duty to pay a levy was replaced by a liability to pay State wealth tax ( varallisuusvero , förmögenhetsskatt ). Up to that year the levy had amounted to FIM 7.68 (EUR 1.29) in today’s value.

The Bergö-Högholm property was formed through a supplementary land parcelling in 1975. At the same time it was registered as ordinary real property instead of as Crown land, the State being indicated as its owner.

The owners of the Karsby mansion made use of the Bergö-Högholm islands and the water area in an undisturbed manner until 1984, when the National Forestry Board granted fishing rights to a third party without Olof Bruncrona’s consent.

In 1985 Olof Bruncrona initiated proceedings with a view to having his ownership of the Bergö-Högholm property confirmed. In a judgment of 9 October 1987 the District Court ( kihlakunnanoikeus , häradsrätten ) of Tammisaari found it established that the plaintiff and the previous owners of the Karsby mansion had been enjoying a right of permanent usufruct in respect of the property, that right having developed into ownership.

The District Court’s judgment was quashed by the Court of Appeal ( hovioikeus , hovrätten ) of Helsinki on 22 November 1989. The appellate court found that the State had originally let the islands to the then owners of the Karsby mansion. This lease had been maintained in 1862. The State had thus never given up its ownership, but had simply consented to the Karsby mansion’s use of the property, first against payment of a rent or levy and later against payment of wealth tax.

In 1990 the Supreme Court ( korkein oikeus , högsta domstolen ) refused leave to appeal.

The registration ( lainhuuto , lagfart ) of the State as the lawful owner of the property in 1991 was challenged by Olof Bruncrona in a new civil suit seeking to obtain confirmation of his right of permanent usufruct in respect of the Bergö-Högholm property and – should that right be deemed to have developed into ownership – a confirmation of his ownership.

In a judgment of 18 October 1993 the District Court confirmed the applicant’s right of permanent usufruct and revoked the State’s title to the property.

The District Court’s judgment was quashed by the Court of Appeal on 21 March 1996 on grounds similar to those relied on in its earlier judgment . It found inter alia :

– that the first reference to the islands of Bergö and Hö g holm had appeared in a judgment book ( tuomiokirja , dombok ) of the County of Tenala in 1672, and that a yearly payment had been made in respect of the islands;

– that it could be deduced from the written material submitted to the Court of Appeal that the islands had been leased to the owner of Karsby mansion in the 1720s;

– that in the 1750s the owner of the Karsby mansion had attempted to tran s form the islands from Crown land into tax land (see “Relevant domestic law and practice” below) but that the official list of so transformed land – drawn up in 1769 – had not included the islands;

– that in 1862 the Senate had decided that the i s lands were to remain under the control of the Karsby mansion against the pr e scribed payments – rather than the lease being put up for tender for a period of six years,  as had been suggested in light of the practice with regard to certain other Crown land;

– that the owners of the Karsby mansion had enjoyed undisturbed po s session to the islands until 1984, when the state had granted fishing permit to a person with respect to the w a ter area surrounding the islands; and

– that a right of permanent usufruct in respect of Crown land continued to be recognised under Fi n nish law, on condition that there was a clear l e gal ground therefor.

The Court of Appeal concluded that originally the Crown had leased the islands to the Karsby mansion, and that the Senate had upheld that lease in its decision of 9 May 1862. The payment of rent (in Finnish vuokranmaksu ) had later ceased and the mansion had paid tax in respect of the property, just as in respect of any other real property belonging to it. The Senate’s decision had not established any right of permanent usufruct in favour of the Karsby mansion, and the appl i cants had not presented any evidence of any other acquisition upon which such a right could be founded.

Leave to appeal was refused by the Supreme Court on 12 November 1997.

Following Olof Bruncrona’s death in May 1993, Marcus, Petter and Helena Bruncrona declared the Bergö-Högholm property to form part of the overall estate of the deceased for the purposes of the inventory of his possessions ( perukirja , bouppteckning ). Inheritance tax was levied inter alia in respect of the Bergö-Högholm property.

In 1998 the National Forestry and Park Service requested the applicants to vacate the property. The applicants have apparently not yet complied with the request and no enforcement proceedings have been initiated to date.

In 1984 the Private Forestry Association of Western Uusimaa ( Nyland ) certified that the owners of the Karsby mansion had covered all the reforestation and other costs relating to the Bergö-Högholm islands and that the owners had also collected the full yield from the forestry thereon.

At the moment of introducing their application to the Court the applicants were allegedly still obliged to pay wealth tax on the Bergö-Högholm property.

In August 2001 the Government stated to the Court that the taxation authorities would correct the relevant property register ( maatilarekisteri , jordbruksregistret ) with effect from 25 September 2001. The State would then be indicated as the correct owner of the Bergö-Högholm property.

B. Relevant domestic law and practice

Account provided by the Government

According to the Government, there were no regulations in force in the early 18 th century governing the transfer of ownership in respect of Crown land, nor was there any consistency in the contracts concerning such transfers. The scope of each contract and the rights contained therein must therefore be determined in light of the particular circumstances of each case. As a rule, it was not possible to transfer the ownership of Crown land before it had been transformed into privately-owned land ( perinnöksiosto , skatteköp ). It was nevertheless possible to establish various rights relating to the enjoyment of the property and favouring private individuals, municipalities or the church. For example, the Crown could transfer a so-called permanent and exclusive right of possession in respect of the land, subject to a payment. Such a right required that the land be used for a specific purpose, and the Crown was entitled to regain possession thereof either against the payment of compensation or without having to redeem it. Over time the State’s title to the land could change into an ordinary one, whereas it was not, for example, possible to change the amount of the payment ( stadga ) collected from the holder of a right attached to the property.

Provisions on the procedure for transferring Crown land to private individuals were later included in specific Acts of Parliament such as Act no. 598/1965 ( eräiden kruununluotoisten tilojen ja tilanosien järjestelystä annettu laki , lag om reglering av vissa lägenheter och lägenhetsdelar av krononatur ). These Acts did not however govern all Crown land, nor all cases where a right of usufruct has been attached to them.

In the 1995 Land Code ( maakaari , jordabalken 540/1995) the special characteristics of Crown land are only dealt with in the provisions concerning property registration, the aim being to ensure that the registered data correspond as far as possible to the existing situation. A title may now be established to former Crown land. Any right of permanent usufruct, any leasing right or any other form of enjoyment of a property may also be registered. A title of ownership may not be registered in respect of an estate which is already subject to a permanent right of possession (see section 18a of the Act on the Implementation of the Land Code ( laki maakaaren voimaanpanosta , lagen om införande av jordabalken 541/1995).

Many scholars have supported a view according to which the permanent right of possession could be tantamount to actual ownership. Domestic courts have not accepted this view, preferring to focus on the purpose of the original transaction, even in cases where a right of usufruct was being enjoyed over a long period and in undisturbed manner. Reference is made to the Supreme Court’s judgment 1987:73.

It was possible to lease land belonging to the Crown, either for a certain period of time or indefinitely. Rights based on such lease contracts have not been transformed into ownership by means of specific legislation to that effect. Nor has a long-term de facto enjoyment of a property been considered to constitute a ground for ownership or a right of permanent usufruct in respect of land subject to a lease contract. The fact that the owner of the land has been passive or has tacitly accepted that another person uses the land does not entail a transfer of ownership.

For taxation purposes, leased Crown land has been regarded as the tenant’s  possession whenever he or she has been enjoying the right to use the property in spite of the State’s formal ownership. Thus, according to the Act on Income and Capital Gains Tax ( laki tulo - ja omaisuusverosta , lag om skatt på inkomst och förmögenhet ; Act no. 207/1920, § 14; Act no. 306/1924, § 14; and Act no. 888/1943, section 32):

“[t]he property for which taxes shall be paid includes the assets of the person liable to pay taxes, subject to the restrictions given account of below.. 

The assets shall also include:

1) any right of usufruct in respect of a real property, whether or not its validity has been defined in time or remains valid during the holder’s life-time; any timber felling right; and any other right to make use of  a real property belonging to someone else.”

The current Act on Capital Gains Tax ( varallisuusverolaki , förmögenhetsskattelagen 1537/1992) contains a comparable provision (section 9).

Anyone wishing to have already imposed taxes adjusted must make a request to that effect in accordance with the Act on the Procedure for Tax Assessment ( verotusmenettelylaki , lag om beskattningsförfarande 1558/95; chapter 5).

Account provided by the applicants

According to the applicants, the right to perpetual usufruct did exist in the early 18 th century and was established explicitly, given that transfer of owne r ship per se in respect of Crown land was prohibited. A right of usufruct was granted permanently until 1766, when the Royal Finance Collegium (in Swedish Kammarkollegiet ) decided to let Crown land for a fixed period of 6 years following a tender procedure in the form of an auction. As the right claimed by the applicants in respect of the Bergö-Högholm property had been established well before the Decree of 1766 is i r rel e vant to this case. The nature of the payment collected from the then owners of the Karsby mansion (in Swedish stadga or stadgad ränta ) was fiscal, which is ev i denced by the fact that it was entered in the column of land tax in the land register, and replaced by wealth tax in 1924.

The nature of Crown land is described in the relevant preparatory works (Gover n ment Bill 214/1996): real property was historically divided into Crown land, exempted land and tax land (in Swedish krono -, frälse - och skattejord ). Land tax was levied only on Crown land and tax land. The  distinction between Crown land and tax land was abolished by the 1995 Land Code which entered into force on 1 January 1997. As evidenced by Section 18a of the Implementation Act (541/1995) and its preparatory works, the concept of perpetual usufruct nevertheless remains recognised and may also be regi s tered.

The preparatory works to the Implementation Act set forth that in examining historical rights to Crown land it must be esta b lished whether the Crown’s intention when preparing the relevant contract was to transfer the ownership per se or to grant a right of usufruct in respect of the land. If evidence of a transfer of ownership cannot be presented, a right of perpetual usufruct shall be registered as a special right. For land registration purposes such a right shall be treated as a leasing right, and its holder may put it up as a collateral (section 18a, subsection 4 of the Implementation Act). A right of perpetual usufruct is nevertheless more extensive than a leasing right in that it entitles its holder to use and possess the land at his sole discretion and prevents the landowner from having his ownership registered or putting the land up as collateral (section 18a, subsection 2 of the Implementation Act).

COMPLAINT

The applicants complain of a deprivation of their property right in violation of Article 1 of Protocol No. 1 to the Convention. The nature of that right was either full ownership or at least a right of usufruct. By upholding the State ownership of the Bergö-Högholm property, as registered in 1991, the Court of Appeal in its judgment of 1996 effectively confiscated the applicants’ property without the requisite justification under the second paragraph of Article 1.

THE LAW

The applicants have complained of a deprivation of property in violation of Article 1 of Protocol No. 1 to the Convention 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.”

The Government consider that the applicants have failed to comply with the six-month rule stipulated in Article 35 § 1, since already on 4 July 1990 the Supreme Court refused leave to appeal against the Court of Appeal’s judgment of 22 November 1989, where the latter had confirmed the State ownership of the Bergö-Högholm property. Already in that judgment the Court of Appeal found that the islands forming part of the property had been in the possession of the Karsby mansion merely on the basis of a lease arrangement and that the ownership proper had never been transferred to the owners of the mansion. Since the applicants have explicitly complained of a deprivation of their alleged property right, the six-month period started to run from the date of the Supreme Court’s decision in the first set of the proceedings.

The Government also question whether the applicants properly exhausted the domestic remedies at their disposal. T he last sentence of their statement of appeal to the Supreme Court contained only a brief and literal reference to the Constitution and the Convention, no mention being made of Article 1 of Protocol No. 1 as such.

In the alternative, the Government submit that that the application is manifestly ill-founded. N either the Convention nor any of its Protocols protect a right to obtain possessions. As the applicants had never owned the Bergö-Högholm property the civil proceedings resulted in no “deprivation” or “confiscation” of their “possessions”. The applicants tried in vain to obtain confirmation either of their formal ownership to the property or of their right of permanent usufruct. The courts twice examined whether the ownership of the Crown land in question had been transferred from the State to the owners of the Karsby mansion, whether the owners of the mansion had a permanent right of usufruct in respect of the land and, if so, whether that right could be considered to constitute formal ownership. To that end the courts examined legal documents from the 18 th century onwards (contrast with Holy Monasteries v. Greece , judgement of 9 December 1994, Series A, No 301-A, p. 32, § 60). Different interpretations were possible, as demonstrated by the different decisions made by the courts. The legal experts relied on by the parties also disagreed with one another. The Court of Appeal found, in the light of the evidence adduced, that the applicants had never enjoyed full ownership or even a permanent right of usufruct, as that the right originally afforded to the Karsby mansion had had the character of a mere lease. The restricted right of usufruct afforded by that lease does not under current domestic law produce a right of ownership on the mere ground that the property has been in the tenant’s actual possession for a long time. It is not for the European Court to take the place of the national courts in determining whether the land in question belonged to the State or whether – contrary to the Court of Appeal’s judgment of 1996 – the applicants should have been recognised as owners of the land on one or the other legal basis.

Were the Court to conclude that Article 1 of Protocol No. 1 does come into play, the Government consider that the applicants have not been subject to a deprivation of possessions within the meaning of the second paragraph of Article 1, nor to any other interference with their rights within the meaning of its first paragraph. As a result of the domestic proceedings the applicants can no longer profit from an estate which did not belong to them in the first place. They have not made any substantiated complaint about their alleged loss of profit resulting from their having to vacate the property.

Even assuming an interference with the applicants’ property rights, the Government consider it lawful within the meaning of Article 1 of Protocol No. 1. By the time the matter was settled by the domestic courts the relevant domestic case-law had evolved in a way that had led to the relevant rule being applied consistently. Any interference was therefore consistent with the requirement of lawfulness as it did not result in an unforeseeable or arbitrary outcome or deprive the applicants of effective protection of their rights (cf. Carbonara and Ventura v. Italy , judgment of 30 May 2000, Reports of Judgments and Decisions 2000-VI, p. 107, § 65). Moreover, in the present case it was the national courts that decided on the claims by the applicants, whereas in Holy Monasteries v. Greece the legal situation was amended by the legislature.

The Government reiterate that the applicants have been able to retain the yield from Bergö-Högholm property against the payment of State tax, the initial obligation to pay rent having been abolished long ago.

Summing up, the Government consider that a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the applicants’ fundamental rights within the meaning of Article 1 of Protocol No. 1.

The applicants maintain that they have complied with the six-month rule. The first set of proceedings ending on 4 July 1990 concerned the question whether late Olof Bruncrona’s   right of perpetual usufruct had evolved into formal ownership. While the courts answered that question in the negative, in the second proceedings Olof Bruncrona primarily sought confirmation of his right of usufruct. The fact that the domestic courts examined the merits of his second action shows that the applicants’ rights in respect of the estate had not been settled in a definite manner in the first set of proceedings.

The applicants furthermore maintain that they have exhausted domestic remedies. Their request for leave to appeal to the Supreme Court concerned inter alia the grounds for establishing a right of perpetual usufruct – a matter only partly addressed by the Supreme Court in an earlier precedent – and secondarily the Court of Appeal’s decision not to examine the applicants’ ownership right. In substance they therefore brought the alleged deprivation of their possessions to the attention of the Supreme Court already in their request for leave to appeal.

The applicants contend that Article 1 of Protocol No. 1 is applicable, since their interests relating to the Bergö-Högholm property constituted  a “possession” for the purposes of Article 1 of Protocol No. 1. Their right to make use of the property was equivalent to a right of ownership peacefully enjoyed for over 300 years, the sole limitation being that the legal title could not be transferred from the State to the owners of the Karsby mansion. In all other respects those owners continuously enjoyed the rights and obligations pertaining to a de facto proprietary interest: the State levied payments of fiscal nature and later wealth tax; it levied inheritance tax following Olof Bruncrona’s death; their right was recorded as a right of perpetual usufruct in the official land register; and over the centuries the authorities on several occasions confirmed that nature of the right.

The applicants opine that in presuming – incorrectly and without explaining why – that the original contract had had the character of a lease, the Court of Appeal in 1996 shifted the burden of proof to them, requiring them to show the existence of a right of perpetual usufruct, which according to the Court of Appeal could only be asserted if it derived from a written resolution or agreement to such e f fect. The Court of Appeal thus deprived the applicants of the possibility of relying on any other means of evidence. All known relevant land register extracts and court decisions were presented in the domestic proceedings and the transfer of the relevant right to the appl i cants’ predecessors had never been based on a specific deed or agreement. As the Court found in Holy Monasteries (see the above-cited judgment , § 60) adverse posse s sion might be relied upon both against the State and against third parties after an extensive period of possession, in the absence of any legal title. The applicants’ peaceful enjoyment of the Bergö-Högholm property for over 300 years should therefore have sufficed for a claim based on adverse possession. At the very least the applicants should have been given the benefit of the doubt.

It appears to the applicants that the Court of Appeal took the Supreme Court’s precedent no. 1989:73 as a starting point. In that case however the perpetual right was found to have been established by the Senate only in 1876, whereas in the applicants’ case the Senate had, in 1862, upheld an already existing right. Even though the cases were not fully comparable, in both of them the Senate spoke of “attaching the islands to an estate against payment of a levy” (in Swedish u n derläggs ...mot en stadgad ränta ). The evidence adduced contained nothing to support the Court of Appeal’s view that the applicants’ right constituted a leasing right, as opposed to a right of perpetual usufruct. On the co n trary, the permanent nature of their right was clearly evidenced by the documentation and ex analogia by the Supreme Court’s judgment 1989:73.

The applicants note that the Government accept that the applicants’ right was “permanent and exclusive”. A leasing right cannot be perpetual in nature.

Other than the Supreme Court’s precedent no. 1989:73 – in which the existence of a perpetual right of usufruct was confirmed – the applicants are not aware of any relevant court practice. They contest therefore the Gover n ment’s claim that the domestic case-law had been applied consistently in cases involving a right of that character. The Court of Appeal’s judgment of 1996 was not foreseeable. In addition, the Court of Appeal did not refer to any public or general i n terest justifying the interference with the applicants’ property rights. Moreover, as the deprivation of the applicants’ possession took place without any compensation it did not satisfy the condition of proportionality. There were no exceptional circumstances justifying the absence of compensation, nor has the State invoked any such circu m stances.

Should the Court conclude that there was no “deprivation” of property, the applicants submit secondarily that the Court of Appeal’s judgment vi o lated the second paragraph of Article 1 of Protocol No. 1. The interference with their property right was unlawful and the Government have not even argued that it was necessary to control the use of the Bergö-Högholm property in accordance with the general interest or for other reasons.

Finally, the applicants contend that even though no eviction order has yet been issued against them, there is no guarantee that none will be issued in the future. That being so, there has been an interference with their right to the peaceful enjoyment of their possessions which amounts to a “deprivation” within the meaning of the second sentence of the first paragraph of Article 1 of Protocol No. 1 (see inter alia the Holy Mona s teries judgment cited above, § 65). At any rate, even a reasonable expectation to continue enjoying a profit or revenue qualifies as a “possession” (see the Tre Traktörer v. Sweden judgment of 7 July 1989, Series A no. 159, p. 21, § 53). The applicants notes the Government’s concession that the applicants can no longer profit from the e s tate.

The Court finds that the Government’s objections under Article 35 of the Convention are so closely connected with the merits of the case that they should be joined to those. In the light of the parties’ submissions the application raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that the application is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

For these reasons, the Court unanimously

Declares the application admissible, without prejudging the merits of the case.

Françoise Elens-Passos Nicolas Bratza                    Deputy Registrar President

[1] The applicants consistently call this “a right of perpetual usufruct”, whereas the Government speak of  “a permanent right of possession”.