FOURTH SECTION

DECISION

Application no. 29272/15 PANBRIT KFT against Hungary and 2 other applications (see list appended)

The European Court of Human Rights (Fourth Section), sitting on 17 November 2020 as a Committee composed of:

Carlo Ranzoni, President, Iulia Antoanella Motoc, Georges Ravarani, judges, and Ilse Freiwirth, Deputy Section Registrar ,

Having regard to the above applications lodged on the various dates indicated in the appended table ,

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 . A list of the applicants is set out in the appendix.

2 . The Hungarian Government (“the Government”) were represented by their Agent, Mr Z. Tallódi , Ministry of Justice.

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

4 . Between 1998 and 2001, the applicant company in application no. 29272/15 acquired usufruct rights over eight plots of Hungarian agricultural land (altogether 122 hectares) by concluding contracts with the owners. Under these contracts, the applicant company was entitled to use the agricultural lands in the long term and cultivated them on an ongoing basis.

5 . In 2010 the applicant in application no. 42034/15 acquired usufruct right over a plot of agricultural land, which he cultivated afterwards.

6 . In 2007 the applicant in application no. 54683/16 acquired usufruct right over a plot of agricultural land (a vineyard) by concluding an agreement with another individual. Under the agreement, she was entitled to the life-long use of the property.

7 . The applicants ’ usufruct rights were registered in the land register.

8 . Up until 31 December 2001, domestic natural and legal persons, as well as foreign natural and legal persons, were able to contract usufruct rights on agricultural land without any legal limitation. After this date, no foreign person could establish such rights over agricultural lands in Hungary. According to the Government, this legislative change resulted in an increase in the number of concealed contracts by means of which foreign natural and legal persons obtained usufruct rights in Hungary. As of 1 January 2013, new contracts between domestic natural persons for the pro futuro establishment of usufruct rights over agricultural lands were statutorily declared null and void by the implementation of an amendment contained in section 7 of Act no. CCXIII of 2012 on the Amendment of Certain Acts on Agriculture with the exception of those concluded by and between close relatives.

9 . With a view to terminating these usufruct rights over agricultural lands obtained through concealed contracts, Parliament enacted Act no. CCXII of 2013 (hereafter “the Transition Act”) on Certain Provisions and Transitional Rules related to Act no. CXXII of 2013 (hereafter “the Land Transactions Act”) on Transactions in Agricultural and Forestry Land.

10 . The Transition Act was promulgated on 12 December 2013 and came into effect on 14 December 2013. Its section 108 terminated ipso iure all usufruct rights over agricultural lands as of 1 May 2014, except for rights established between close relatives (subsection (1)), as well as any related usufruct lease rights, as of 1 September 2014 (subsection (3)).

11 . Deregistration of the rights concerned was implemented under the then effective rules of Act no. CXLI of 1997 on the Land Registry (hereafter “the Land Registry Act”). Section 94 of the Land Registry Act obliged the authority to request a declaration from natural persons affected by the measures in order to verify whether they were ‘ close relatives ’ of the owner of the land within the meaning of section 5(13) of the Land Transactions Act.

12 . The usufruct rights were struck out of the land register as a matter of course in cases where the affected natural persons failed to demonstrate ‘ close relationship ’ with the owner of the land as per above or where the usufruct right holder was a legal person.

13 . The applicants ’ usufruct rights ceased to exist ex lege on 1 May 2014.

14 . In application no. 29272/15, on various dates between 13 and 20 December 2014, the applicant company ’ s usufruct rights relating to the respective plots were struck out of the land register by decisions of declarative effect given by the Szombathely District Office in accordance with the Transition Act. The applicant company did not file an administrative appeal or pursue judicial review.

15 . In application no. 42034/15, the applicant ’ s usufruct right was deleted from the land register on 30 July 2015, by a decision of declarative effect given by the competent administrative authority in accordance with the Transition Act. The decision specified that no administrative appeal lay against the deletion, but it was susceptible to judicial review. However, the applicant did not avail himself of that legal avenue.

16 . In application no. 54683/16, on 29 June 2015 the applicant ’ s usufruct right was struck out of the land register by a decision of declarative effect given by the Keszthely District Office in accordance with the Transition Act. On 3 December 2015 the Zala County Government Office dismissed her appeal. No judicial review took place.

17 . Meanwhile, in February 2014 constitutional complaints were lodged by various complainants with the Constitutional Court against the provisions of the Transition Act, arguing that the ex lege termination of lawfully acquired usufruct rights without any indemnification or transitory period violated the constitutional protection of property rights.

18 . The Constitutional Court analysed the alleged unconstitutionality of section 108 of the Transition Act. On 21 July 2015 it found, in decision no. 25/2015. (VII.21.) AB, that the legislator had failed to enact extraordinary rules to compensate the contracting parties for the financial disadvantages deriving from the ex lege termination of the usufruct and use contracts regulated by the Transition Act. It emphasised that, given the diversity of the concerned legal relationships, the general settlement rules applicable under civil law were not capable of resolving all possible claims between the parties concerned. Therefore, as a result of the failure of the legislator to enact a statutory settlement regime, an unconstitutional omission was found. The Constitutional Court called the legislator to put an end to it by 1 December 2015 at the latest.

19 . At the date of the latest information available to the Court, the Government had not yet created the compensation scheme prescribed by the Constitutional Court.

20 . Section 108 of the Transition Act provides as follows:

“(1) Any usufruct and right of use existing on 30 April 2014, founded by a contract entered into by and between not close relatives, for indefinite or a definite period of time ending after 30 April 2014, shall cease on 1 May 2014, by operation of law.

(2) A contract on the assignment of the right to use a piece of land for a period of time following the cessation of the usufruct right is null and void if it has been entered into by the beneficiary of the usufruct right existing until the end of the period of time determined under subsection (1).

(3) A contract on the assignment of the right to use the piece of land existing until the end of the period of time determined under subsection (1), entered into by a beneficiary of the usufruct right, prior to the entry into force of Act no. XVI of 2014 on the amendment of collective investment forms and their trustees as well as of certain financial acts, ceases on 1 September 2014 by operation of law.”

COMPLAINTS

21 . The applicants complained under Article 1 of Protocol No. 1 of the Convention that the legislative measure in question amounted to an unjustifiable deprivation of possessions. The applicant in application no. 54683/16 also relied on Article 13 read in conjunction with Article 1 of Protocol No. 1.

THE LAW

22 . Having regard to the similar subject matter of the applications, the Court finds it appropriate to order their joinder (Rule 42 § 1 of the Rules of Court).

23 . The applicants complained that they had been deprived of their possessions unjustifiably. They relied on Article 1 of Protocol No. 1 to the Convention, read alone and, in one case, in conjunction with Article 13 of the Convention. Being the master of the characterisation to be given in law to the facts of the case (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, §§ 114 and 126, ECHR 2018 ), the Court considers that this complaint falls to be examined only under 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.”

24 . The Government argued in particular that the alleged violation had occurred directly and instantaneously, ex lege , on 1 May 2014 and therefore the applications were introduced outside the six-month time-limit contemplated in Article 35 § 1 of the Convention.

25 . The applicants disagreed. They argued that the six-month time-limit started to run from the date of deletions from the land register and that the ongoing unavailability of compensation for the lost possessions, as spelled out by the Constitutional Court, produced a continuing situation obviating the six-month rule.

26 . The Court reiterates that the object of the six-month time-limit under Article 35 § 1 is to promote legal certainty, by ensuring that cases raising issues under the Convention are dealt with in a reasonable time and that past decisions are not continually open to challenge (see Lopes de Sousa Fernandes v. Portugal [GC], no. 56080/13, § 129, 19 December 2017).

27 . As a rule, the six-month period runs from the date of the final decision in the process of exhaustion of domestic remedies. Where it is clear from the outset, however, that no effective remedy is available to the applicant, the period runs from the date of the acts or measures complained of, or from the date of knowledge of such acts or their effect on or prejudice to the applicant. ( see El- Masri v. the former Yugoslav Republic of Macedonia [GC], no. 39630/09, § 136, ECHR 2012, with further references).

28 . In the present case, the applicants lost their usufruct rights on 1 May 2014 pursuant to section 108(1) of the Transition Act. The Court considers that the Constitutional Court ’ s decision of 21 July 2015 (paragraph 18 above) cannot be considered to have created a “possession” within the meaning of Article 1 of Protocol No. 1, namely in the form of a “legitimate expectation” – and this for want of an assertable right not falling short of a sufficiently established, substantive proprietary interest under the national law (see Béláné Nagy v. Hungary [GC], no. 53080/13, § 79, 13 December 2016). Consequently, the legislator ’ s inaction did not create a continuing situation of interference with the applicants ’ possessions.

29 . Be it as it may, the Constitutional Court ’ s decision was delivered more than one year after the ipso iure termination of all usufruct rights on 1 May 2014. For the Court, the six-month time-limit, to be counted from the latter date, had already expired when the continuing situation, as alleged by the applicants, was produced by the Constitutional Court ’ s decision.

30 . Moreover, as regards the applicants ’ contention that the alleged violation was only triggered by the individual decisions of the authorities, the Court observes the unequivocal wording of section 108(1) of the Transition Act (paragraph 20 above), according to which “ [a] ny usufruct and right of use existing on 30 April 2014, founded by a contract entered into by and between not close relatives, for indefinite or a definite period of time ending after 30 April 2014, shall cease on 1 May 2014, by operation of law”. None of the applicants in the present applications have argued either before the domestic authorities or the Court that they fell in the sole category which, by way of exception, would have removed them from the scope of application of the law (namely, that of close relatives of the landowners within the meaning of section 5(13) of the Land Transactions Act ). In these circumstances, the ensuing procedure before the administrative authorities cannot be regarded as one concerning the merits of the cases or leading to decisions of constitutive character. Indeed, it is clear from the text of the law that the legal effect complained of was instantaneous. The subsequent decisions of the administrative authorities had only declaratory effect .

31 . For these reasons, the Court is satisfied that the starting date of the six-month period was 1 May 2014 and that the applications, lodged on the respective dates listed in the appended table, have been introduced out of time. Accordingly they must be rejected, pursuant to Article 35 §§ 1 and 4 of the Convention.

32 . In a complaint raised for the first time in his reply to the Government ’ s observations on 21 November 2018, in application no. 42034/15 the applicant extended his grievances to include Article 6 of the Convention. He submitted that the procedure leading to the deletion of his usufruct right had not been fair.

33 . The applicant has not explained how there was an infringement of Article 6 of the Convention. Accordingly, since this complaint has not been substantiated, the Court considers that there is no appearance of a violation of that provision and that the complaint must therefore be dismissed as manifestly ill-founded under Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court, unanimously,

Decides to join the applications;

Declares the applications inadmissible.

Done in English and notified in writing on 10 December 2020 .

Ilse Freiwirth Carlo Ranzoni Deputy Registrar President

Appendix

No.

Application no.

Case name

Lodged on

Applicant

Year of Birth

Place of Residence

Nationality

Represented by

1

29272/15

Panbrit Kft v. Hungary

11/06/2015

PANBRIT KFT

Szombathely.

A limited liability company incorporated under Hungarian law

Richárd SCHMIDT

2

42034/15

Pócza v. Hungary

20/08/2015

Gábor PÓCZA

1972Ardara , Ireland

Hungarian

3

54683/16

Juhász v. Hungary

12/09/2016

Edit JUHÁSZ

1952Keszthely

Hungarian

Lajos IHÁSZ