Information Note on the Court’s case-law No. 102

November 2007

Kalinova v. Bulgaria - 45116/98

Judgment 8.11.2007 [Section V]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Deprivation of property

Expropriation without compensation owing to a wide interpretation of the legislation on restitution: violation

Facts : The applicant bought a house which had been expropriated, along with the land it was built on, under the Spatial and Urban Planning Act. Following the entry into force of the restitution laws, the former owners of the house applied for the expropriation decision to be set aside. The application was dismissed by administrative decree, then by the Regional Court, which found that the requisite conditions for the annulment of the expropriation set out in the restitution laws were not fulfilled in this particular case. That ruling was confirmed by a final judgment of the Supreme Court. The former owners also brought proceedings against the applicant to have the sale declared null and void under Section 7 of the Law on restitution of title to nationalised real estate. The Regional Court then the Supreme Court found that the sale was null and void because it had contravened the applicable regulation. Section 7 of the above-mentioned law was not in fact applicable to this case, so the request had to be examined in the light of the general rules governing the validity of contracts. The court found that the disputed sale had been carried out in breach of the decree on State property in force at the time, which prohibited the sale of buildings of fewer than three stories on land meant for medium-height and tall buildings. The former owners of the house then requested the reopening of the initial proceedings to have the expropriation set aside. The Regional Court annulled the expropriation of the house and part of the land and ordered their restitution to the former owners. That judgment became final following the Supreme Administrative Court’s dismissal of an appeal on points of law lodged by the municipality. The applicant left the house. By order of the mayor, she was assigned a municipal flat for which she paid a monthly rent. The price paid for her house had not yet been refunded to her. She did not seek reimbursement from the municipal authorities, considering that the amount paid at the time of the sale had become derisory because of depreciation.

Law : The annulment of the applicant’s title to her home was part of the process of restitution of nationalised or expropriated property, so the present application had to be examined in the light of the Velikovi and Others v. Bulgaria judgment(Information Note no. 95). The applicant had been the owner of a property. The cancellation of her title by a judicial decision had deprived her of her property in application of the relevant legislative and regulatory provisions. Considering the special, transitional nature of that period of economic and political changes, the interference had not lacked clarity and foreseeability. Lastly, it had pursued a legitimate aim in the public interest. As to whether the deprivation of property had struck a fair balance, it was necessary to determine whether the case clearly fell within the scope of the legitimate aims of the law on restitution and to consider the hardship the applicant had suffered. Section 7 of the law on restitution of nationalised real estate had in principle been the only legal provision under which property could be taken away from third parties who had acquired it and given back to its former owners.  However, that provision could not have applied, as the disputed house had not been expropriated in conformity with the laws referred to in the text concerned. The domestic courts had nevertheless managed to arrive at the same result by applying the ordinary law on nullity. The aim of social justice pursued by the laws on restitution was less important in this case, as the former owners of the house had been expropriated by virtue of an urban planning law and had received full compensation at the time of the expropriation. Annulling the applicant’s title did not, therefore, fall clearly within the scope of the legitimate aims of the law on restitution. This was a case in which the legislation concerned had been construed extensively. Furthermore, the applicant had acquired the house through the procedure applicable at the time and, in finding the sale null and void, the domestic courts had found no abuse or irregularity on her part or any substantive irregularity but a formal disregard of urban planning regulations. Striking a fair balance required the applicant to receive compensation reasonably in proportion with the value of the property at the time. The applicant had received none, however. She could have obtained the reimbursement of the purchase price, but the sum concerned had become derisory. Nor had she been entitled to the special compensation available to people who had lost their property as a result of the law on restitution. As to the possibility of obtaining compensation based on the State’s liability for tortious damage, there was no provision in domestic law governing the liability of the State in the particular case of people whose ownership title had been annulled because of negligence on the part of the authorities. It was true that the applicant had been assigned subsidised rental accommodation. In view, however, of the total lack of compensation for the loss of her property, that alone did not constitute adequate compensation. The applicant, whose good faith when she acquired the house had not been disputed, had been deprived of her property by an extensive application of the law on restitution, with no compensation. This had placed her in a less favourable situation than people who had acquired their property by illegal means or by abuse of their position. The authorities’ failure to establish clear limits consistent with the proportionality principle between the different situations obtaining had led to a situation of legal uncertainty and upset the fair balance between the general interest pursued by the laws on restitution and the protection of individual rights.

Conclusion : violation (unanimously).

Article 41 – question reserved.

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

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