FIRST SECTION

DECISION

Application no. 6525/13 Antica REMPEŠIĆ and Neven REMPE ŠIĆ against Croatia

The European Court of Human Rights (First Section), sitting on 16 March 2021 as a Committee composed of:

Krzysztof Wojtyczek, President, Erik Wennerström , Ioannis Ktistakis , judges, and Attila Teplán , Acting Deputy Section Registrar ,

Having regard to the above application lodged on 4 January 2013,

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

1 . The applicants, Mr Antica Rempešić and Mr Neven Rempešić , are Croatian nationals who were born in 1931 and 1954 respectively and live in Kraljevica . They were represented before the Court by Mr S. Bengin , a lawyer practising in Rijeka.

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

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

4 . The applicants live in a flat in Kraljevica measuring 69 square metres that is located in a building belonging to the Rijeka Port Authority.

5 . On 3 October 1960 the Northern Adriatic Maritime Administration ( Uprava pomorske oblasti Sjevernog Jadrana ) , which was the legal predecessor of the Rijeka Port Authority, requested the Kraljevica Municipality to declare the building in question a commercial building. The request stated that the building consisted of office premises, storage space and the flat of a port official.

6 . By a decision of 24 March 1961 the Kraljevica Municipality granted the request, holding that the requesting authority had to be able to make independent decisions regarding the use of premises within the building and the maintenance of the building, as well as decisions regarding the lodging of port officials.

7 . By a decision of 18 November 1965 the Jugolinija company granted to one of its employees, Mr I.R., the specially protected tenancy ( stanarsko pravo ) of a flat in Rijeka measuring 47 square metres (for an outline of the concept of the specially protected tenancy, see Statileo v. Croatia , no. 12027/10, § § 24-26, 10 July 2014 ). I.R. was the first applicant ’ s husband and the second applicant ’ s father.

8 . By a decision of 15 June 1966 the Rijeka Port Authority granted a specially protected tenancy in respect of the flat in Kraljevica (see paragraph 4 above) to a certain Mr B., as the head of the Port of Kraljevica . Under the relevant legislation, his wife, Ms M.B., automatically became a co-holder of the specially protected tenancy of the flat. After his death she became the sole holder of the specially protected tenancy of the flat in question.

9 . On 26 December 1974 the Housing Act (hereinafter “the 1974 Housing Act”) entered into force. It provided that a specially protected tenancy could not be acquired in respect of flats designated for official purposes ( stanovi za službene potrebe – hereinafter “official flats”) (see paragraph 30 below). It also stipulated that providers of socially-owned flats in their internal regulations had to (a) designate which flats in their respective housing funds were to be considered as official flats, and (b) set out terms and conditions for the use of such flats (see paragraph 32 below).

10 . On 9 May 1975 the Rijeka Port Authority adopted its internal rules governing the allocation of flats from its housing fund ( Pravilnik o davanju stanova na korištenje i djelomičnoj upotrebi sredstava za stambene svrhe ). Section 22 of those Rules provided that:

- official flats were those related to the exercise of an official post or duties,

- employees occupying official flats could not acquire a specially protected tenancy in respect of those flats, and

- the rights and obligations of occupiers of such flats had to be regulated by an agreement between the Port Authority and the respective occupier of such a flat.

11 . On an unspecified date in 1976 the Rijeka Port Authority announced a vacancy for the position of head of the Port of Kraljevica . One of the conditions the candidates had to meet was to have “a family flat” ( obiteljski stan ) that they were willing to exchange for the flat located in the Rijeka Port Authority ’ s building in Kraljevica (see paragraph 4 above).

12 . The applicants ’ respective husband and father, I.R. (hereinafter “the applicants ’ predecessor”), successfully applied for the post and was appointed head of the Port of Kraljevica .

13 . Under a swap agreement of 5 January 1976, the applicants ’ predecessor and Ms M.B. exchanged their respective flats in Rijeka and Kraljevica , in respect of which they each held a specially protected tenancy (see paragraphs 4 and 7-8 above). The agreement was concluded with the consent of the providers of the respective flats – namely the Jugolinija company and the Rijeka Port Authority, as required by law (see paragraphs 7-8 above and paragraph 31 below).

14 . Under the agreement on the use of the flat concluded on the same day the Rijeka Port Authority (as the provider of the flat in Kraljevica ) allocated it to the applicants ’ predecessor. The agreement referred to the applicants ’ predecessor as the holder of the specially protected tenancy and specified that the flat was allocated to him for an unlimited period of time . The agreement did not mention he had been allocated the flat in connection with his post or that it was an official flat.

15 . On 20 January 1979, 6 January 1988 and 5 May 1989 annexes to the agreement on the use of the flat (see paragraph 14 above) were concluded. All those annexes mentioned that the flat at issue was an official flat, and the last two annexes referred to the Rijeka Port Authority as the provider of that official flat. However, none of the annexes actually altered the terms of the agreement, since their only subject matter was that of fixing the rent to be paid for the flat. Indeed, all the annexes specifically mentioned that all other obligations arising from the agreement remained the same.

16 . On 25 December 1985 a new Housing Act entered into force (hereinafter “the 1985 Housing Act”). It retained the rule introduced by the 1974 Housing Act under which a specially protected tenancy could not be acquired in respect of official flats (see paragraph 9 above and paragraphs 30 and 35 below).

17 . On 19 June 1991 the Specially Protected Tenancies (Sale to Occupier) Act ( Zakon o prodaji stanova na kojima postoji stanarsko pravo – hereinafter “the Sale to Occupier Act”) entered into force. It entitled holders of specially protected tenancies of flats in social or State ownership, and members of their respective households, to purchase them under favourable conditions from the providers of such flats.

18 . In February 1993 the applicants ’ predecessor lodged a claim with the Rijeka Port Authority, seeking to purchase the flat in Kraljevica that he was then occupying. He relied on the Sale to Occupier Act.

19 . By a letter of 10 February 1993 the Rijeka Port Authority informed the applicants ’ predecessor that it could not sell him the flat he occupied because it was an official flat in respect of which one could not acquire a specially protected tenancy (see paragraphs 9-10 above and paragraphs 30 and 35 below).

20 . On 23 February 1994 the applicants ’ predecessor again lodged a claim with the Rijeka Port Authority, seeking to purchase the flat at issue.

21 . On 14 April 1994 the applicants ’ predecessor brought a civil action against the State in the Rijeka Municipal Court ( Općinski sud u Rijeci ) with a view to obtaining a judgment in lieu of a contract of sale.

22 . On 29 August 1996 the applicants ’ predecessor died, whereupon his children – namely the second applicant and his sister – took over the proceedings. The first applicant joined the proceedings on 14 June 2007.

23 . On 5 November 1996 the Lease of Flats Act ( Zakon o najmu stanova ) entered into force. It abolished the legal concept of the specially protected tenancy and provided that the holders of such tenancies were to become “protected lessees” ( zaštićeni najmoprimci ). Under the Act such lessees are subject to a number of protective measures, such as the duty of landlords to contract a lease of indefinite duration; the payment of protected rent ( zaštićena najamnina ), the amount of which is set by the Government and is significantly lower than the market rent; and better protection against the termination of a lease.

24 . On 30 September 2002 the relevant commission of the Government of Croatia issued a decision under the Lease of Flats Act whereby it recognised:

- the first applicant ’ s status as a protected lessee in respect of the flat at issue, and

- the status as household members of the second applicant and his two daughters.

The decision stated, inter alia , that the applicants ’ predecessor held the specially protected tenancy of the flat in question.

25 . On 20 July 2004 the Government commission and the first applicant concluded a lease agreement under the Lease of Flats Act (see paragraph 23 above) stipulating a protected rent for the flat at issue. The second applicant and his two daughters were given the right to remain living in the flat.

26 . By a judgment of 7 November 2007 the Rijeka Municipal Court dismissed the action brought by the applicants ’ predecessor (see paragraph 21 above) and ruled against them. Having regard to the facts of the case (see paragraphs 9-15 above), it held that the flat in question had been an official flat and that therefore the applicants ’ predecessor could not have acquired the specially protected tenancy of that flat. Consequently, the applicants were not entitled to purchase it under the Sale to Occupier Act (see paragraph 17 above).

27 . On 12 March 2010 the Rijeka County Court ( Županijski sud u Rijeci ) dismissed an appeal lodged by the applicants and upheld the first ‑ instance judgment of the Rijeka Municipal Court, endorsing the reasons given in it. It added that the fact that the authorities had recognised the first applicant ’ s status as a protected lessee and concluded with her a lease agreement stipulating that the rent in respect of the flat in question was to be protected (see paragraphs 24-25 above) was of no relevance for the outcome of the proceedings.

28 . On 7 June 2010 the applicants lodged a constitutional complaint against the first- and the second-instance judgments. They argued that their right to fair proceedings and the right to equality before the law, as guaranteed by the Croatian Constitution, had been breached by the contested judgments. Specifically, they submitted extensive arguments against the ordinary courts ’ finding that they had not been entitled to purchase the flat in question because it had been an official flat which had not been eligible to be let under a specially protected tenancy (see paragraph 26 above).

29 . By a decision of 17 October 2012 the Constitutional Court ( Ustavni sud Republike Hrvatske ) declared the applicants ’ constitutional complaint inadmissible on the grounds that the case did not raise a constitutional issue.

30 . The relevant provisions of the 1974 Housing Act ( Zakon o stambenim odnosima , Official Gazette of the Socialist Republic of Croatia, no. 52/74 with further amendments), which was in force between 26 December 1974 and 24 December 1985, provided as follows:

Section 6

“(1 ) A specially protected tenancy cannot be acquired in respect of:

...

3. flats designated for official purposes

...

(2) Flats designated for official purposes are those whose use is related to the exercise of an official post or duty and which are specified as such in the internal regulations of the provider of the flat (flats located in the buildings of correctional institutions, a military compound, airport or other military facility, schools, the flats of railroad linemen, road keepers, lock keepers, housekeepers, etc.).

(3) The rights and obligations of occupiers of flats ... referred to in paragraph 1 of this section shall be regulated by the internal regulations of the provider of the flat [in question] or the agreement concluded between the provider of the flat and the occupier.”

Section 54(2) and (3)

“(2 ) If a specially protected tenancy was acquired by one spouse who lives with the other, the other shall also be considered as having acquired it.

(3) If one of the spouses dies or permanently ceases to use the flat, the other spouse shall retain the tenancy, unless otherwise provided by this Act.”

31 . Section 59(1) provided that a tenant could exchange his or her flat for the flat of another tenant, with the consent of the providers of those flats. Section 61(5) provided that the relevant specially protected tenancy would be acquired on the basis of a valid swap agreement on the day of moving into the flat in question.

32 . Section 74 stipulated that providers of flats had to adopt internal regulations regarding the allocation of flats from their respective housing funds. Section 75(1) provided that those regulations had to, inter alia , specify which flats were to be considered flats designated for official purposes and to set out terms and conditions for the use of such flats.

33 . Section 77 provided that if the employee to whom an official flat had been allocated died, the members of his or her household could remain living in it until provided with another flat

34 . Section 144(2) provided that where a flat had been allocated for the exercise of an official post or duty before the entry into force of the 1974 Housing Act, and that flat had been designated as a flat for official purposes by the internal regulations referred to in section 6(3) of that Act, the occupier of that flat could use it in accordance with the terms and conditions set out in those internal regulations.

35 . Sections 8, 64(2) and (3), 69(1), 71(5), 80(1), 87 and 149(2) of the 1985 Housing Act ( Zakon o stambenim odnosima , Official Gazette of the Socialist Republic of Croatia, nos. 51/85 and 42/86, and Official Gazette of the Republic of Croatia nos. 22/92 and 70/93) – which was in force between 25 December 1985 and 4 November 1996 – were nearly identical to sections 6, 54(2) and (3), 59(1), 61(5), 75(1), 77 and 144(2) of the 1974 Housing Act (see paragraphs 30-34 above).

COMPLAINT

36 . The applicants complained of the domestic courts ’ refusal to allow them to purchase the flat they occupied.

THE LAW

37 . The applicants complained that the domestic courts ’ refusal to allow their claim to purchase the flat, in which they had been living since 1976, had not been justified. They relied on Article 6 § 1 of the Convention.

38 . Being master of the characterisation to be given in law to the facts of the case (see Guerra and Others v. Italy , 19 February 1998, § 44, Reports of Judgments and Decisions 1998 ‑ I, and Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 124, 20 March 2018), and having regard to its case-law on the matter (see GaćeÅ¡a v. Croatia ( dec. ), no. 43389/02, 1 April 2008, and Tchokontio Happi v. France , no. 65829/12, 9 April 2015), the Court, when giving notice of the application to the Government, considered that the case should be examined under Article 1 of Protocol No. 1. It accordingly invited the parties to submit observations under that Article, 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.”

(a) The Government

39 . The Government disputed the admissibility of this complaint on two grounds. They argued that the applicants had failed to exhaust domestic remedies, and that Article 1 of Protocol No. 1 was, in any event, not applicable to the present case.

40 . In particular, the Government submitted that the applicants had failed to exhaust the domestic remedies because in their constitutional complaint they had not complained of a violation of their right of ownership (see paragraph 28 above) .

41 . The Government furthermore submitted that under the legislation in force at the relevant time a specially protected tenancy could not have been awarded in respect of an official flat (see paragraphs 9 and 30 above). Since the flat in Kraljevica allocated to the applicants ’ predecessor in 1976 (see paragraphs 4 and 13-14 above) had been an official flat he had never acquired a specially protected tenancy in respect of that flat. Consequently, the applicants, as members of his household, had not been entitled to purchase it under the Sale to Occupier Act (see paragraph 17 above). That meant that the applicants ’ claim to purchase the flat had not been “sufficiently established” as to be considered a “possession” and thus to attract the applicability of Article 1 of Protocol No. 1.

(b) The applicants

42 . In reply to the Government ’ s non-exhaustion objection (see paragraph 40 above), the applicants stated that in their constitutional complaint they had submitted extensive arguments to the effect that their predecessor had acquired the specially protected tenancy of the flat at issue and that they were therefore entitled to purchase it under the Sale to Occupier Act (see paragraph 28 above).

43 . As regards the Government ’ s objection that Article 1 of Protocol No. 1 to the Convention was not applicable in the present case (see paragraph 41 above), the applicants submitted that:

- their predecessor had acquired the specially protected tenancy of a flat in Rijeka in 1965 (see paragraph 7 above),

- he had exchanged it for the one in Kraljevica (see paragraph 13 above), and

- under the relevant legislation in force at the time it had been permissible to exchange only flats that had both been let under specially protected tenancies (see paragraph 31 above).

44 . Moreover, the swap agreement of 5 January 1976 had specified that both the applicants ’ predecessor and Ms M.B. were holders of the specially protected tenancy of their respective flats (see paragraph 13 above). Likewise, the agreement of the same date whereby the Rijeka Port Authority had allocated the flat in Kraljevica to the applicants ’ predecessor had specifically referred to him as the holder of the specially protected tenancy of that flat (see paragraph 14 above). There had been no mention of it being an official flat.

45 . Furthermore, following the entry into force of the Lease of Flats Act the first applicant had been granted the status of protected lessee (from which only former holders of specially protected tenancies could benefit) in respect of the flat in Kraljevica (see paragraphs 23-25 above). The applicants had continued to live in the flat at issue after the death of their predecessor, which also indicated that it had not been an official flat linked with the position of head of the Port of Kraljevica .

46 . Therefore, the applicants as members of their predecessor ’ s household, had had the right to purchase it under the Sale to Occupier Act (see paragraph 17 above).

47 . 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 claims that are sufficiently established as to be regarded as “assets” (see, for example, Radomilja and Others , cited above, § 142).

48 . Having regard to its case-law (see Gaćeša , cited above, and Trifunović v. Croatia ( dec. ), no. 34162/06, 6 November 2008), the Court considers that the applicants ’ right to purchase the flat allocated to their predecessor constituted a “claim”, rather than an “existing possession”.

49 . Where a proprietary interest is in the nature of a claim, it may be regarded as an “asset” only if there is a sufficient basis for that interest in national law – that is to say when the claim is sufficiently established as to be enforceable (see, for example, Radomilja and Others , cited above, § 142).

50 . Therefore, the issue to be examined is whether the applicants ’ claim to purchase the flat in question had sufficient basis in national law as to be regarded as an “asset” and therefore a “possession” protected by Article 1 of Protocol No. 1.

51 . In this regard the Court notes that:

- under the relevant domestic legislation, socially owned flats could be sold to their occupiers only if they had been let under a specially protected tenancy (see paragraph 17 above),

- in the present case the domestic courts dismissed the applicants ’ claim to purchase the flat in question on the grounds that the flat at issue had been an official flat which at the time that it had been allocated to their predecessor could not have been let under a specially protected tenancy (see paragraphs 26-27 above).

52 . The applicants challenged those findings by the domestic courts, arguing that the flat in question had not been an official flat, that it had been allocated to their predecessor under a specially protected tenancy, and that they therefore had the right to purchase it (see paragraphs 43-46 above).

53 . In so far as the applicant ’ s arguments (see paragraph 43-46 above) concern the domestic courts ’ factual findings – in particular, the finding that the flat in question was an official flat (see paragraphs 26-27 above) – the Court reiterates that it is not its task to substitute its own assessment of the facts for that of the domestic courts, and that it requires cogent elements to lead it to depart from the findings of fact made by those courts (see, for example, Radomilja and Others , cited above, § 150).

54 . To the extent that the applicants ’ arguments (see paragraph 43-46 above) concern the application of the relevant domestic law by the domestic courts, the Court reiterates that its power to review compliance with domestic law is limited. This is particularly true when, as in this instance, the case turns upon difficult questions of interpretation of domestic law. Unless the interpretation is arbitrary or manifestly unreasonable, the Court ’ s role is confined to that of ascertaining whether the effects of that interpretation are compatible with the Convention. It is for that reason that the Court has held that, in principle, it cannot be said that an applicant has a sufficiently established claim amounting to an “asset” for the purposes of Article 1 of Protocol No. 1, where there is a dispute as to the correct interpretation and application of domestic law and where the question of whether or not he or she complied with the statutory requirements is to be determined in judicial proceedings (see, for example, Radomilja and Others , cited above, § 149 ).

55 . In the present case, there are no elements that would lead the Court to contradict the findings of fact of the domestic courts, or to hold that the way they applied the relevant domestic law was arbitrary or manifestly unreasonable.

56 . In particular, the Court finds it important to specifically address the applicants ’ argument that the domestic authorities had not acted consistently, given that in 2002 they had recognised the first applicant ’ s status as a protected lessee in respect of the flat in question (see paragraph 45 above). The Court considers that this fact could not be seen in isolation from the applicants ’ right to remain living in it until provided with another flat, as prescribed in section 77 of the 1974 Housing Act and section 87 of the 1985 Housing Act (see paragraphs 33 and 35 above).

57 . The Court therefore concludes that the applicants ’ claim to purchase the flat allocated to their predecessor did not have sufficient basis in national law to qualify as a “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention.

58 . It follows that the present application is inadmissible as being incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected, pursuant to Article 35 § 4 thereof.

59 . In the light of this conclusion, the Court does not find it necessary to rule on the Government ’ s remaining inadmissibility objection (see paragraphs 39-40 above).

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 15 April 2021 .

Attila Teplán Krzysztof Wojtyczek Acting Deputy Registrar President