FOURTH SECTION

DECISION

Application no. 26485/11 Luis-Coreolan SEVASTRE against Romania

The European Court of Human Rights (Fourth Section), sitting on 11 February 2020 as a Committee composed of:

Faris Vehabović, President, Iulia Antoanella Motoc, Carlo Ranzoni, judges, and Ilse Freiwirth , Deputy Section Registrar ,

Having regard to the above application lodged on 22 April 2011,

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

Having deliberated, decides as follows:

THE FACTS

1 . The applicant, Mr Luis-Coreolan Sevastre, is a Romanian national who was born in 1975 and lives in Drăgănești. He was represented before the Court by Ms A.M. Com ă nescu, a lawyer practising in Gala ț i.

2 . The Romanian Government (“the Government”) were represented by their Agent, Mr. V. Mocanu, of the Ministry of Foreign Affairs.

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

4 . On 2 February 2004 the applicant submitted a request to the municipality of Tecuci, asking to buy 3,000 sq. m of a parcel of urban land measuring 17,500 sq. m which belonged to the municipality and was located in the town of Tecuci. He also asked to rent the remaining land.

5 . By a decision of 3 March 2004, the Tecuci Local Council approved the municipality ’ s sale of the land. The exact surface area, location and price of the land were not mentioned in the text of that decision.

6 . According to an expert evaluation commissioned by the municipality in March 2004, the minimum value of la nd in the area where the 17,500 sq. m were located was 243,119 old Romanian lei (ROL – approximately 60 euros (EUR)) per sq. m, and the maximum value was ROL 699,213 per sq. m (approximately EUR 170).

7 . On 28 May 2004 the municipality of Tecuci held a public auction ( licita ţ ie public ă ). The applicant and one other person participated in the auction, and each paid a deposit ( garan ţ ie ) of ROL 12,771,500 (approximately EUR 3,190).

8 . According to the record ( proces-verbal ) of the auction signed by the seven members of the auction commission, a parcel of 3,000 sq. m was offered for auction, with a starting price of ROL 127,715 (approximately EUR 32) per sq. m. The applicant won the auction with a bid of ROL 154,535 (approximately EUR 40) per sq. m. The record also stated that the remaining unsold land should be offered at a new auction in the following two weeks.

9 . On 10 June 2004, on the basis of the record of the auction of 28 May 2004, a sale contract was concluded between the applicant and the Tecuci Local Council, represented by the mayor of Tecuci. The contract stated that an area of land measuring 17,500 sq. m was being sold to the applicant, in accordance with the above-mentioned record (see paragraph 8 above), at a price of ROL 154,535,000 (approximately EUR 37,870). The contract also stated that the appli cant had paid an advance of ROL 55,168,995 (approximately EUR 13,570), and the remaining amount would be paid in monthly instalments over a maximum period of two years.

10 . On 8 April 2008 the mayor of Tecuci informed the Land Registry that the applicant had paid the contract price in full, and requested that “the land bought be listed in the land register”.

11 . On 16 April 2008 the mayor of Tecuci issued the applicant with a certificate attesting to the fact that the parcel of land measuring 17,500 sq. m was in the private ownership of the municipality and was managed by the Tecuci Local Council.

12 . On 5 May 2008 the Land Registry certified that the parcel of land of 17, 500 sq. m was listed in the land register as being the property of the municipality of Tecuci.

13 . On 11 June 2008 an audit was conducted at the municipality of Tecuci in order to investigate the public auction of 28 May 2004 (see paragraphs 7 - 8 above). In a report drafted on the same date, several irregularities were listed, including the fact that the parcel of land offered for auction had had a surface area of only 3,000 sq. m, while the c ontract of 10 June 2004 (see paragraph 9 above) had incorrectly stated 17, 500 sq. m or that the land to be sold had not been identified. Also, after the sale, no document had been drafted in order to certify possession being transferred from the municipality to the applicant. The report also mentioned that an expert evaluation of the plot of 3,000 sq. m, which had been conducted on 16 January 2004 and had established a higher value for the land in question, namely ROL 7,298 (approximately EUR 1.8) per sq. m, had never been submitted for the Tecuci Local Council ’ s approval. The audit team proposed that proceedings for the annulment of the auction be set in motion, and both criminal and civil proceedings were initiated.

14 . As regards the criminal proceedings, an investigation into abuse of office and forgery was started against the president and the secretary of the public auction commission and the municipality ’ s legal adviser. The investigation was finalised on 15 December 2009, as the prosecutor decided to close the case as there was no evidence of any crime. The president of the public auction commission stated before the prosecutor that he understood that the entire parcel of land of 17,500 sq. m had been sold. An expert report commissioned by the prosecutor during the investigation found that land in the 17,500 sq. m parcel had been worth ROL 7,928 (approximately EUR 2) per sq. m in 2004, therefore the parcel of land had had a total value of ROL 138,741,965 (approximately EUR 34,680). The prosecutor hence concluded that, in view of the fact that the applicant had paid more than this amount, the municipality had suffered no loss, and so no criminal acts had been committed by the employees under investigation.

15 . On 7 August 2008 the Tecuci Local Council instituted civil proceedings before the Tecuci District Court, asking for the annulment of the auction record of 28 May 2004 (see paragraph 8 above) and the sale contract of 10 June 2004 (see paragraph 9 above). It argued that there had been several irregularities in the municipality of Tecuci ’ s organisation of the auction, most importantly an obvious mistake as regards the surface area stated in the sale contract, which did not match the price paid by the applicant.

16 . In reply, the applicant submitted that none of the irregularities referred to was his fault, and that the price he had paid was the price for the entire parcel of land of 17,500 sq. m. He alleged that the auction record (see paragraph 8 above) had subsequently been corrected in order to reflect the fact that the entire parcel of land of 17,500 sq. m had been offered for auction. In this regard, he submitted a copy of that record, on which the area of 3,000 sq. m had been crossed out and 17,500 sq. m had been handwritten next to it. In addition, he complained that after he had paid the full price, the municipality had refused to perfect the sale contract before a notary, a fact which had caused him financial losses, since he could not proceed with his project – creating a leisure centre – and he could not use the land as a guarantee for a bank loan. Therefore, he requested compensation from the municipality for loss of profit due to its refusal to perfect the contract after 8 May 2008. The above request was supported by an expert report dated 29 April 2010, which evaluated the costs incurred by the applicant in relation to cleaning, restoring and guarding the entire parcel of land of 17,500 sq. m. The report concluded that the applicant had sustained damage in the amount of EUR 56,698 as a result of the expenses which he had already incurred and his inability to make use of the land as an owner with full rights.

17 . On 15 October 2008 the Tecuci District Court decided to annul the auction record and the sale contract (see paragraphs 8 and 9 above). The court held that the irregularities found in connection with the auction of 28 May 2004 – more specifically, the lack of informed approval from the Tecuci Local Council, the lack of details concerning the land offered for auction, and the mistakes with respect to the subject of the contract – rendered those documents null and void. The court also held that it was true that the State could not rely on its own fault, but the current case concerned a parcel of land which was of public interest, and therefore the validity of a contract with an incorrect subject could not be upheld. In this regard, it was stated that civil and criminal avenues were also available to those who considered that they had been injured by the mistakes made in the case.

18 . On 20 May 2009 the Gala È› i County Court allowed an appeal on points of law by the applicant against the above judgment, and the case was sent back for a retrial so that there could be a more thorough examination of the merits.

19 . On 25 November 2009, after re-examining the case , the Tecuci District Court decided to reject the application lodged by the Tecuci Local Council. The court considered that the council could not rely on its own irregularities in order to ask for the annulment of the two documents in dispute. Furthermore, the court considered that the mention of 3, 000 sq. m in the auction record was indeed a material error, otherwise the claimant would not have concluded the sale contract for the area measuring 17, 500 sq. m. The applicant ’ s application for damages was rejected, as the court considered it ill-founded. Both parties appealed against the above judgment.

20 . On 15 October 2010, after examining the documents added to the case file, including expert reports and witness statements, the Gala ț i County Court decided that there had been no irregularities in the organisation of the auction and that the price paid by the applicant corresponded to an area of 1,000 sq. m, since, according to the auction record – which the applicant had not contested in relation to this point – he had offered ROL 154,535 per sq. m and then paid a total amount of ROL 154,535,000 (see paragraphs 8 and 9 above). The court considered that the error made in the sale contract as regards the surface area of the land was not capable of triggering the complete annulment of the two documents in dispute. Therefore, the two documents could be considered valid up to a limit of 1,000 sq. m, and the court ordered the Tecuci Local Council to identify the parcel of land of 1,000 sq. m and perfect the sale contract in this regard. The court also ordered the Tecuci Local Council to pay the applicant 5,777. 1428 Romanian lei (RON – approximately EUR 1,300) as compensation, an amount calculated on the basis of the area of 1, 000 sq. m. Both parties lodged appeals on points of law against the above judgment.

21 . On 14 March 2011 the Galați Court of Appeal decided to reject the applicant ’ s application for damages, as he had failed to submit evidence to prove the actual loss of income or that he had been prevented from using the land throughout the period in question. The judgment of the lower court was upheld as regards the validity of the sale contract for 1,000 sq. m only.

22 . In a letter of 14 November 2018 the municipality of Tecuci informed the Government ’ s Agent that the sale contract had not yet been perfected because, following the judgment of 14 March 2011, the applicant had continued to ask for the entire area of 17,500 sq. m. The parcel of land of 17, 500 sq. m was still listed as being the property of the municipality of Tecuci in the land register. The municipality also mentioned that the applicant had never paid taxes on the land in dispute.

23 . Law no. 554 of 2004 on administrative disputes, as in force at the relevant time, provided as follows:

Article 1

“(1) Anyone whose rights or legitimate interests have been breached by a public authority through an administrative act ... may request before the administrative courts the annulment of the act in question, the recognition of the right or the legitimate interest in issue, and reparation for the damage caused.”

24 . On 26 July 2004 Law no. 348 of 2004 on the denomination of the national currency entered into force, which changed ROL 10,000 into RON 1.

COMPLAINT

25 . The applicant complained under Article 1 of Protocol No. 1 to the Convention that his right of property had been breached.

THE LAW

26 . The applicant argued that the authorities ’ refusal to recognise his right to the entire parcel of land of 17,500 sq. m, that he had lawfully acquired in a public auction, had breached his right to the peaceful enjoyment of possessions, as guarante ed by Article 1 of Protocol No. 1, 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.”

27 . The applicant alleged that 3,000 sq. m had been stated in the record of the public auction (see paragraph 8 above) by mistake, and that he had in fact bought the entire parcel of land of 17,500 sq. m, for which he had paid a higher price than its value as established in an expert report of 16 January 2004 (see paragraph 13 above). Moreover, the criminal investigation conducted in the case had also established that he had bought the entire parcel of land and had paid the correct price for it (see paragraph 14 above). He further contended that his right to the entire parcel of land had been confirmed by the documents issued by the municipality (see paragraphs 10 and 11 above) and the Land Registry (see paragraph 12 above).

28 . The Government raised a preliminary objection, arguing that the application w as incompatible ratione materiae with the provisions of Article 1 of Protocol No. 1. They submitted that the domestic courts had found that only 3,000 sq. m had been offered for auction, and the applicant had bid for 1,000 sq. m. (see paragraphs 20 and 21 above). The sale contract which had mistakenly stated 17,500 sq. m (see paragraph 9 above) had never been perfected by the authorities, the applicant had never paid taxes on the land, and he had not listed his ownership in the land register. Therefore, the Government contended that the applicant could not claim to have a “possession” within the meaning of Article 1 of Protocol No. 1.

29 . The Court reiterates that Article 1 of Protocol No. 1 applies only to a person ’ s existing possessions (see Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 64, ECHR 2007-I). An applicant can allege a violation of this Article only in so far as the impugned decisions related to his “possessions” within the meaning of this provision. “Possessions” can be either “existing possessions” or assets, including claims, in respect of which the applicant can argue that he or she has at least a “legitimate expectation” of obtaining effective enjoyment of a property right. By way of contrast, the Court has held that the hope of recognition of a property right which it has been impossible to exercise effectively cannot be considered a “possession” within the meaning of Article 1 of Protocol No. 1 (see Von Maltzan and Others v. Germany (dec.) [GC], nos. 71916/01 and 2 others, § 74, ECHR 2005-V) .

30 . Turning to the current case, the Court notes that the parties disagree as to whether the applicant had a “possession” eligib le for protection under Article 1 of Protocol No. 1. Accordingly, the Court must determine whether the applicant ’ s legal position as a result of the sale contract of 10 June 2004 was such as to attract the application of that provision.

31 . The Court firstly observes that in his letter to the authorities dated 2 February 2004 the applicant expressed his intention to buy a parcel of land of only 3,000 sq. m (see paragraph 4 above). According to the record of the public auction which was held following the applicant ’ s request, 3,000 sq. m of land were offered for sale and the applicant won the auction (see paragraph 8 above), paying a price per sq. m lower than the actual value of the land in question as assessed by the most recent evaluation (see paragraph 6 above). Like the Gala ţ i County Court in its judgment of 15 October 2010, the Court also observes that, according to the auction record, the total price paid by the applicant corresponded to an area of 1,000 sq. m (see paragraph 20 above). On this point, it must be noted that the applicant did not contest either before the domestic courts or before the Court the record ’ s provisions as regards t he price he had offered per sq. m, or the statement that out of the 3,000 sq. m, there was remaining unsold land which would be offered at a new auction (see paragraph 8 above), which clearly implied that not all the land had been sold.

32 . In addition, the documents in the file indicate that the sale contract was never perfected by the seller (see paragraph 16 above) and that, since he was never listed as the owner in the land register (see paragraph 12 above), the applicant was never considered to be the owner of the land in the eyes of the relevant authorities; he could not use the land as a guarantee for a bank loan (see paragraph 16 above), and he never paid taxes on the land in question (see paragraph 22 above). As observed in the audit report and by the domestic court, some mistakes were made by the authorities in the current case (see paragraphs 13 and 20 above); however, the Court notes that the applicant never took the initiative to correct those mistakes. Moreover, in the absence of an official document transferring possession to the applicant (see paragraph 13 above), there is no proof that the applicant lawfully possessed the plot of 17,500 sq. m in question.

34 . Lastly, the Court notes that the applicant argued that he had in fact paid a higher price than the value of the entire parcel of land of 17,500 sq. as established in an expert evaluation of 16 January 2004 (see paragraph 13 above) and confirmed by the criminal investigation conducted in the case (see paragraphs 14 and 27 above). On this point, the Court firstly notes that a copy of the expert report of 16 January 2004 has not been submitted for the file. Nevertheless, that report is mentioned in the audit report of 11 June 2008 and the prosecutor ’ s decision of 15 December 2009. However, the Court observes that the report of 16 January 2004 was said to have set a value of ROL 7,298 (approximately EUR 1.8) per sq. m, while a subsequent report drafted only two months later set a maximum value of ROL 699,213 (approximately EUR 170) per sq. m. (see paragraph 6 above). Moreover, the audit report of 11 June 2008 mentioned that the expert report of 16 January 2004 had set a higher value for the land in question (see paragraph 13 above). Bearing in mind that on 26 July 2004 a new law on the denomination of the national currency entered into force (see paragraph 24 above), the Court considers that the difference in the two values might have been triggered by reading (in the audit report and in the prosecutor ’ s decision) the value in the 16 January 2004 report in the format imposed by the denomination law. Therefore, in the absence of further elements substantiating his claim, this argument raised by the applicant cannot be upheld.

35 . In view of the above, the Court considers that the applicant cannot argue that he had a “possession ” within the meaning of Article 1 of Protoc ol No. 1. Consequently, the judgments of the national courts did not amount to an interference with the peaceful enjoyment of his possessions, and the facts of the case do not fall within the ambit of Article 1 of Protocol No. 1.

36 . It follows that the application is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3, and must be rejected in accordance with Article 35 § 4.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 5 March 2020 .

Ilse Freiwirth Faris Vehabović Deputy Registrar President