FOURTH SECTION

CASE OF PULEVA AND RADEVA v. BULGARIA

( Application no. 36265/05 )

JUDGMENT

STRASBOURG

14 February 2012

This judgment is final but it may be subject to editorial revision .

In the case of Puleva and Radeva v. Bulgaria ,

The European Court of Human Rights ( Fourth Section ), sitting as a C ommittee composed of:

Päivi Hirvelä , President, Ledi Bianku , Zdravka Kalaydjieva , judges, and Fatoş Aracı , Deputy Section Registrar ,

Having deliberated in private on 24 January 2012 ,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1 . The case originated in an application (no. 36265/05) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Bulgarian nationals, M r s Ivanka Georgieva Puleva and Mr s Daniela Panayotova R adeva (“the applicants”), on 26 S e ptember 2005 .

2 . The applicants were represented by M r s I. Iv anova , a lawyer practising in B urgas . The Bulgarian Government (“the Government”) were represented by their Agent, Mrs N. Nikolova , of the Ministry of Justice .

3 . On 6 January 2010 the President of the Fifth Section decided to give notice of the application to the Gove rnment.

4 . The application was later transferred to the Fourth Section of the Court, following the re ‑ composition of the Court ’ s sections on 1 February 2011.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5 . The applicants were born in 1946 and 1967 respectively and live in Pomorie .

6 . The two applicants are a mother and her daughter. The first applicant was an employee of a state -owned company. In 1991 and 1993 the company granted the tenancy of a house to the first applicant. In 1992 its managing body decided to sell the house to the applicants at its market value . The sale did not take place for unspecified reasons. In 1993 tenancy was also granted to the second applicant.

7 . On an unspecified date, mos t probably in 1994, the title to the house was transferred to the municipality. The applicants are still occupying the house as tenants.

8 . On an unspecified date the applicants requested the Pomorie Municipal Council to be allowed to buy the house. On 25 April 1994 the Municipal Council approved the sale and ordered the mayor to proceed with the relevant formalities and to conclude the sale until 30 June 1994 . The sale did not take place for unspecified reasons.

9 . On 17 November 1994 the applicants filed another request to the Municipal Council for purchasing the house. By letter of 26 June 1995 the municipality informed the applicants that in connection with their request they needed to submit certain documents. It is not clear whether the applic a nts submitted tho se documents. In any even t , t he re is no information that the Municipal Council allowed the sale.

10 . In the period of 1995-97 the applicants made major repairs to the house and in 2000 brought an action against the municipality, seeking reimbursement of the expenses they had incurred.

11 . In a judgment of 26 August 2003 the Burgas Regional Court allowed partially the claim. Upon appeal, on 12 October 2004 the Burgas Court of Appeal rende red a judgment in the applicant s ’ favour . This judgment became final on an unspecified date shortly thereafter as t he parties did not lodge a cassation appeal.

12 . On 5 January 2005 the applicants obtained a writ of execution against the Pomorie municipality for 21,660 Bulgarian levs ( BGN), the equival ent of approximately 11,000 euros (EUR), which included the amount awarded by the courts and the expenses incurred by the applicants during the court proceedings , as well as the relevant interest .

13 . On 25 March 2005 the applicants made a fresh request to Pomorie Municipal Council to sell them the house . In particular, they proposed to the municipality when determining the price of the house t o take into account the compensation awarded with the judgment of 12 October 2004 and to reduce the price accordingly . The applicants enclosed a copy of the writ . On 8 April 2005 they made an identical request to the mayor and again enclosed a copy of the writ.

14 . It appears that the authorities did not respond to the request s and that the situation remained unchanged until June 2008 .

15 . On 9 June 2008 the applicants made another request to the Pomorie Municipal Council to sell them the house. O n 18 July 2008 the Municipal Council ordered an inventory and assessment of the house. It also decided, in ter alia , to explore other opportunities and offer another property in order to settle the debt. It does not appear that the Municipal Council took a decision to allow the sale.

16 . On 6 April 2009 the applicants presented an assessment of the house to the municipality . App arently, no further action in this respect was taken by the authorities . O n 24 September 2009 the applicants challenged the tacit refusal of the mayor to enforce the Municipal C ouncil ’ s decision to sell the house of 25 April 1994 before the Burgas Administrative Court . On 2 April 2010 the court rejected the appeal , finding that the tacit refusal in question w as not an administrative act and was not subject to judicial review , as in concluding the sale the mayor had acted on equal footing with the applicants . The applicants did not file a cassation appeal.

17 . Meanwhile, after the entry into force of the new Code of Civil Procedure in March 2008, on 26 August 200 9 the applicant s requested the bailiff to institute enforcement proceedings against the mu nicipality. O n 7 October 2009 the bailiff presented the writ before the financial department of the municipality for execution .

18 . O n 1 March 2010 the bailiff invited the municipality to pay the debt. On 26 March 2010 the municipality informed the applicants that the amount claimed would become part of the current or next-year budget plan as at that moment the municipality did not dispose of financial means to settle the debt .

19 . On an unspecified date in the beginning of 2010 the municipality brought an action against the applicants before the Burgas Regional Court , seeking compensation from the applicants for unpaid rent. It appears that the proceedings were discontinued at first instance on 31 March 2010. It is not clear how the appeal proceedings unfolded.

20 . I n October 2010 the municipality initiated a procedure for reaching an agreement with the applicants in respect of the pending debt . The actual agreement was concluded on 11 May 2011. It stated that the municipality had a pending judgment debt against the applicants and that the applicants owed compensation for unpaid rent to the municipality. The parties agreed that the municipality would pay , in particular, the majority of the judgment debt and would sell , following the relevant formalities , the house to the applicants.

21 . Separately, in 2005 the first applicant bought a portable kiosk and requested to be allowed to rent municipally-owned land in order to be able to exploit it. Apparently, this was refused by the municipality.

II. RELEVANT DOMESTIC LAW AND PRACTICE

A . The Code of Civil Procedure

22 . Pursuant to the Code of Civil Procedure of 1952 the creditor who had a pecuniary claim, stemming from a second-instance judgment in his favour against a state authority or a municipality , could not obtain a writ of execution before the said judgment becomes final (Article 239 § 2). This legal regime differed from the general regime which stipulated that the second-instance judgments were enforceable even before they had become final (Article 237 (a)).

23 . A person w ith such an enforceable claim (e.g. a judgment debt) against a state authority or a municipality had to submit the writ of execution evidencing the claim to the authority ’ s financial department. The payment of the claim was to be made out of the funds earmarked fo r that purpose in the authority ’ s budget. If there were no funds available in the authority ’ s budget, the higher administrative authority had to ensure that funds became available in the budget for the following year (Article 39 9 § 2). Enforcement proceedings were not possible where the judgment debtor was a state authority or a municipality.

24 . This legal regime changed with the entry into force of the new Code o f Civil Procedure of 2007 in March 2008 which provided that pecuniary claims against municipalities we re to be enforced in accordance with the general rules applicable to private debtors (Article 520 § 2) . Only public municipal pr operty and subsidies received f r o m the State we re immune from enforcement.

25 . In February 2010 the Code of Civil Procedure of 2007 was amended again. It reinforced the old regime, providing that enforcement proceedings a re not possible not only against state authorities but also against municipalities . By a decision of 21 December 2010 ( реш . № 1 5 от 2 1 .12. 2010 г. , по к . д . № 9/ 2010 г., обн ., ДВ, бр. 5 от 14 .01. 2011 г. ) the Constitutional Court struck down this amendment, thus allowing enforcement proceedings against municipalities.

B . The State and Municipality Responsibility for Damage Act 1988 (the State Responsibility Act)

26 . Pursuant to section 1 the State is liable for the damage suffered by individuals as a result of unlawful decisions, actions or omissions by its organs and officials, committed in the course of or in connection with the performance of administrative action.

27 . According to the available recent case law of the Supreme Administrative Court the non-enforcement or the be late d enforcement of a judgment by the administration could not be characterised as actions or omissions committed in the course of or in connection with the performance of administrative action and thus cannot serve as a basis of a claim for damages under the State Responsibility Act ( реш . на ВАС № 7 496 от 8 юни 2009 по адм . дело № 13108 от 2008 г . ; опр . № 3292 от 8 март 2009 по адм . дело № 2207 от 2011 г . ; опр . № 6129 от 11 май 2010 по адм . дело № 5549 от 2010 г . ).

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL NO. 1

28 . The applicants complained that the Pomorie municipality had failed to honour its judgment debt in the applicants ’ favour for a period of many years. They did not rely on a particular Article of the Convention.

29 . The Court considers that this complaint falls to be examined under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 , which provide , as relevant :

Article 6 § 1

“In the determination of his civil rights and obligations ... , ev eryone is entitled to a ... heari ng ... by [ a] ... tribunal ... ”

Article 1 of Protocol No. 1

“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...”

A. Admissibility

30 . The Government contended that the applicants had failed to exhaust domestic remedies as they could have lodged an action u nder the State Responsibility Act against the municipality and claim compensation for the damage sustained because of the delay in t he enforcement of the judgment.

31 . The Court notes at the outset that the Bulgarian law and, in particular, the State Responsibility Act does not specifically provide for compensation of non-pecuniary damage resulting from non-enforcement or be late d enforce ment of domestic judgments . Also, from the limited case law of the Supreme Administrative Court on the matter it does not appear that such a claim would fall within the scope of section 1 of the State Responsibility Act (see paragraph 27 above ) . In any event , the Government failed to substantiate its objection. In particular, the domestic case-law referred to by the Government does not concern the award of damages for delays in the execution of court judgments against state authorities or municipalities and as such cannot support the assertion that an action under the said Act was an effective remedy for the applicants in the circumstances of the present case.

32 . It follows that the Government ’ s objection of non-exhaustion of domestic remedies in respect of the applicant s ’ complaint s under Article 6 § 1 and Article 1 of Protocol No. 1 must be dismissed. T he Court further notes that these complaint s are not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. Nor are they inadm issible on any other grounds. They must therefore be declared admissible.

B. Merits

33 . The applicants maintained that for a number of years the municipality failed to pay the amount due despite the applicants ’ efforts to receive pa yment or to purchase the house.

34 . The Government contested that argument. It stated that until October 2009 the applicants had not present ed the writ of execution to the financial department at the municipality but made requests to the Municipal C ouncil and the mayor for purchasing the house. In view of that the Government maintained that the applicants did not want payment of the debt but to be allowed to buy the house. The Government further submitted that despite the entry into force of the new Code of Civil Procedure of 2007 in March 2008 the applicants did not react promptly and initiated enforcement proceedings a year and a half later, in August 2009.

35 . The Court reiterates that the right of access to a court, enshrined in Article 6 § 1 of the Convention, would be illusory if a Contracting State ’ s domestic legal system allowed a final, binding judicial decision to remain inoperative to the detriment of one party. The rule of law, one of the fundamental principles of a democratic society, is inherent in all Articles of the Convention and entails a duty on the part of the State and any public authority to comply with judicial orde rs or decisions against it (see Burdov v. Russia , no. 59498/00, § 34 , ECHR 2002 ‑ III ; Sirmanov v. Bulgaria , no. 67353/01, § 31 , 10 May 2007 ).

36 . An unreasonably long delay in enforcement of a binding judgment may therefore breach the Convention. The reasonableness of such delay is to be determined having regard in particular to the complexity of the enforcement proceedings, the applicant ’ s own behaviour and that of the competent authorities, and the amount and nature of the court award (see Burdov v. Russia (no. 2) , no. 33509/04, § 66 , ECHR 2009 ‑ ... ; Raylyan v. Russia , no. 22000/03, § 31 , 15 February 2007 ).

37 . The Court notes that the Burgas Court of Appeal ’ s judgment of 12 October 2004 became final on an unspecified date but in any event before 5 January 2005 and the municipality was or should have been aware of its obligation to pay the applicants the sum awarded as of that date (see § 22 above and Burdov (no. 2) , cited above, § 72 ).

38 . The Court takes note of the Government ’ s objection that the applicants had not presented their writ of execution to the financial department of the municipality bu t instead to the mayor and the Municipal C ouncil requesting to purchase the house (see paragraph s 13 and 15 above) . The Court considers, however, that in so doing the applicants notified the responsible authority of the judgment , manifested their intention to collect the debt , be it through other means , and demonstrated readiness to cooperate with the authorities in this respect.

39 . Further , the enforcement of the judgment was of some complexity as it was not entirely clear whether the applicants wanted to purchase the house or to receive payment. The Court notes, however, that even if the applicants ’ real intention was to purchase the house and not to formally receive payment, this circumstance alone doe s not relieve the authorities from their obligation under the Convention to take timely action of their own motion, on the basis of the information available to them, with a view to honouring the judgment against the municipality . In the present case the mayor or the Municipal C ouncil, being aware of the pending debt of the municipality, failed to respond to the applicants ’ request s of 2005 and 2008 to purc hase the house (see paragraph s 14 and 15 above) or, in case purchase was impossible or unacceptable for the municipality , to transfer the request and the writ to the f inancial department for payment . The Court finds no justification for such inaction which lasted u n til March 2010 (see paragraph 1 8 above) .

40 . The Court take s into account the Government ’ s contention that instead of waiting for a year and a half the applicants should have approached the bailiff shortly after the entry into force of the Code of Civil Procedure of 2007 and notes that as of March 2008 the applicants had such opportunity in order to speed up the payment. The Court observes, however, that in the particular situation of enforcement proceedings a person who had obtained a judgment against the State may not be expected to bring separate enforcement proceedings (see Burdov (no. 2) , cited above, § 68; Metaxas v. Greece , no. 8415/02, § 19, 27 May 2004 ) and that, in any event, possible inaction on the part of the creditor does not relieve the State from its obligation to honour the pending debt (see Burdov (no. 2) , cited above, § 69; Karahalios v. Greece ( dec .), no. 62503/00, 26 September 2002).

41 . The Court observes that yet in August 2009 the applicants turned to a bailiff to assist them in recovering the debt and the bailiff sent a notification to the municipality in October 2009. In reply, t he municipality inf ormed them in March 2010 that immediate execution was not possible but that the amount claimed would become part of the current or next-year budget plan. Although t he Court accept s that a delay in the execution of a judgment could be justified in certain circumstances , i n the current case, the authorities had already been a ware of the pending debt for several year s which renders the invoked argument of budgetary constraints untenable .

42 . Finally, the Court observes that the judgment remained unenforced at least until May 2011 , for a total period of more than six years which is excessive in itself.

43 . There has accordingly been a violation of Article 6 § 1 of the Convention.

44 . Given that the b inding and enforceable judgment created an established right to payment in the applicants ’ favour, which should be considered as a “possession” within the m eaning of Article 1 of Protocol No. 1 ( see Vasilopoulou v. Greece , no . 47541/99, § 22, 21 March 2002 ), the authorities ’ prolonged failure to comply with the judgment also violated the applicants ’ right to peaceful enjoyment of their possessions (see , among many other authorities, Burdov , cited above, § 41).

45 . There is accordingly also a violation of Article 1 of Protocol No. 1.

I I. OTHER ALLEGED VIOLATIONS OF THE CONVENTION

46 . T he applicants further complained under Article 6 § 1 and Article 1 of Protocol No. 1 that they could not buy the house, that the proceedings they initiated against the municipality had been unfair, and that the first applicant could not rent municipally-owned land in or der to place and use her kiosk.

47 . The Court has examined the remainder of the applicants ’ complaints as submitted by them. However, in the light of all the material in its possession, and in so far as the matters complained of are within its competence, the Court finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols.

48 . It follows that this part of the application must be rejected as being manifestly ill-founded, pursuant to Article 35 §§ 3 (a) and 4 of the Convention .

III . APPLICATION OF ARTICLE 41 OF THE CONVENTION

49 . Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

A. Damage

50 . The applicants claimed the amount of the judgment debt with the relevant interest and the costs and expen ses incurred in the enforcement proceedings in respect of pecuniary damage and BGN 12,000 ( the equivalent of approximately EUR 6,1 00 ) in respect of non-pecuniary damage.

51 . The Government contested these claims as excessive.

52 . In respect of pecunia ry damage, t he Court notes that in accordance with the domestic law for the purposes of the enforcement of the judgment s in their favour the applicants are entitled to the recovery of the judgment debt together with the relevant interest and the incurred costs and expenses in the enforcement proceedings . The C ourt observes that the applicants are still in possession of their claim and thus no specific award in pecuniary damage should be made. It also notes that they reached an agreement with the municipality regarding payment of the debt . In these circumstances and having regard to the aforesaid , the Court considers that the respondent Government should ensure enforcement of the judgment of the Burg as Court of Appeal of 12 October 2004 in the applicants ’ favour (see Čolić and Others v. Bosnia and Herzegovina , nos. 1218/07, 1240/07 and others , § 20, 10 November 2009; Solomatin v. Ukraine , no. 8191/04 , § 30, 15 October 2009) within three months from the date o f notification of the judgment by the Court .

53 . In respect of non-pecuniary damage, t h e Court considers that the applicants must have been caused frustration as a result of the non ‑ enforcement of the final judgment in their favour. It therefore awards them EUR 4,5 00 in respect of non-pecuniary damage.

B. Costs and expenses

54 . The applicants also claimed BGN 7,000 (approximately EUR 3,6 00) for the cost s and expenses incurred before the domestic courts and for those incurred before the Court and BGN 300 (approximately EUR 155 ) for travelling expenses in relation to the execution of the judgment . In support of this claim the applicants presented a contract for legal representation, stipulating the amount of BGN 1 , 200 (the equivalent of EUR 614) as remuneration for the legal services provided .

55 . The Government contested t hese claims as excessive and un substantiated .

56 . According to the Court ’ s case-law, an applicant is entitled to reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and were reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers that the claims were substantiated to the amount of EUR 614 . In view of that it awards the sum EUR 614 for co sts and expenses .

C. Default interest

57 . The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1 . Declares the complaint s under Article 6 § 1 and Article 1 of Protocol No. 1 concerning the non-enforcement of the final judgment in the applicants ’ favour admissible and the remainder of the application inadmissible;

2 . Holds that there has been a violation of Article 6 § 1 of the Convention;

3. Holds that there has been a violation of Article 1 of Protocol No. 1 ;

4 . Holds

(a) that within three months the respondent State is to secure enforcement of the domestic judgment under consideration in the present case ;

(b) that the respondent State is to pay the applicant s jointly , within three months the following amounts which are to be converted into Bulgarian levs at the rate applicable at the date of settlement :

( i ) EUR 4,5 00 ( four thousand five hundred euros ) , plus any tax that may be chargeable , in respect of non- pecuniary damage;

(i i) EUR 614 ( six hundred and fourteen euros ), plus any tax that may be chargeable, in respect of costs and expenses;

(c ) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

5 . Dismisses the remainder of the applicants ’ claim for just satisfaction.

Done in English, and notified in writing on 14 February 2012 , pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

FatoÅŸ Aracı Päivi Hirvelä              Deputy Registrar President