Communicated on 8 October 2015

SECOND SECTION

Application no. 21106/13 Marija STEGIĆ against Croatia lodged on 1 March 2013

STATEMENT OF FACTS

The applicant, Ms Marija Stegić , is a Croatian national, who was born in 1935 and lives in Rijeka. She is represented before the Court by Mr J. Alač , an advocate practising in Rijeka.

A. The circumstances of the case

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

In 1984 the applicant ’ s husband M.S. was awarded a specially protected tenancy of a flat in Rijeka with a surface area of 46 m sq. Pursuant to the relevant legislation, the applicant – as his wife – automatically became a co-holder of the specially protected tenancy of the flat at issue.

On 19 June 1991 the Specially Protected Tenancies (Sale to Occupier) Act entered into force. It entitled holders of specially protected tenancies of flats in social ownership to purchase their flats from the provider of the flat under favourable conditions.

In 1993 the applicant ’ s husband applied to the Rijeka Township ( Grad Rijeka , hereinafter “the local authorities”) to purchase the flat, under the above Act.

On 20 September 1993 the local authorities, having established that the flat had been nationalised under the socialist regime, refused his request. They relied on legislation prohibiting any transfer of property appropriated (acquired by means of nationalisation or confiscation) during the socialist era.

On 1 January 1997 the Restitution Act entered into force. It allowed the sale of nationalised flats to holders of specially protected tenancies living in those properties. The former owners were entitled to compensation.

On 4 February 1997 the applicant ’ s husband reiterated his request to purchase the flat. On 20 May 1997 the local authorities again refused his request, this time because the former owner (who had owned it when the flat had been nationalised by the socialist authorities) had informed them that the applicant and her husband had been renting the flat out instead of living in it.

On 12 April 2000 the applicant ’ s husband brought a civil action against the local authorities in the Rijeka Municipal Court ( Općinski sud u Rijeci ) with a view to obtaining a judgment forcing the sale.

In the course of the first-instance proceedings the applicant ’ s husband amended his action so as to designate the Fund for the Restitution of Appropriated Property (hereinafter “the Fund”) as the defendant instead of the local authorities. The first-instance court also allowed the former owner of the flat to intervene in the proceedings. After his death his two children – as his heirs – took over his role in the proceedings.

Likewise, the applicant – as her husband ’ s heir – took over his role in the proceedings after his death on 2 October 2004.

By a judgment of 27 May 2010 the Rijeka Municipal Court ruled for the applicant. It established that the applicant and her husband had, in the period between 1987 and 1998, not been living in the flat but in a house in Tisno which they owned. The court nevertheless rejected the defendant ’ s and the interveners ’ argument that, having regard to that fact, the applicant and her husband ’ s tenancy had been terminated ex lege on the basis of section 99 of the Housing Act. That provision stipulated the non-use of the flat for a period exceeding six months without justified reason as a ground for termination of the specially protected tenancy. The court ruled for the applicant because it held that under section 99 of the Housing Act a specially protected tenancy could only be terminated following a court judgment, not ex lege .

Following an appeal by the interveners, by a judgment of 11 May 2011 the Rijeka County Court ( Županijski sud u Rijeci ) reversed the first-instance judgment and dismissed the action. That court accepted the interveners ’ argument and held that the applicant and her husband ’ s specially protected tenancy had been terminated ex lege on the basis of section 99 of the Housing Act since they had not used their flat for a period exceeding six months without justified reason. Once the court had resolved this preliminary issue, it went on to conclude that, since the applicant and her husband had lost their tenancy, they had not satisfied the most important statutory requirement for buying the flat under the Sale to Occupier Act.

The applicant then, concurrently, lodged an appeal on points of law ( revizija ) and a constitutional complaint. In her constitutional complaint she alleged a violation of her constitutional right to a fair procedure.

On 29 February 2012 the Supreme Court ( Vrhovni sud Republike Hrvatske ) dismissed the applicant ’ s appeal on points of law. It endorsed the interpretation of section 99 of the Housing Act adopted by the second-instance court, and added that it was in line with the view expressed in the Constitutional Court ’ s decision of 3 December 2007 (see below under “Relevant domestic law”).

On 3 October 2012 the Constitutional Court ( Ustavni sud Republike Hrvatske ) dismissed the applicant ’ s constitutional complaint. It served its decision on her representative on 15 October 2012.

B. Relevant domestic law and practice

1. The Housing Act

(a) Relevant provisions

The Housing Act ( Zakon o stambenim odnosima , Official Gazette of the Socialist Republic of Croatia nos. 51/1985 and 42/1986, and Official Gazette of the Republic of Croatia nos. 22/1992 and 70/1993), which was in force between 25 December 1985 and 4 November 1996, provided as follows:

Section 99

“1. A specially protected tenancy may be terminated if the tenant and the members of his/her household ... cease to use the flat for an uninterrupted period exceeding six months.

2. A specially protected tenancy shall not be terminated under the provisions of subsection 1 above in respect of a person who does not use the flat on account of undergoing medical treatment, performance of military service or other justified reasons.”

Section 105(1)

“The provider of the flat can terminate a specially protected tenancy by bringing an action before the competent court.”

(b) The Supreme Court ’ s practice

In decision no. Rev-616/1988 of 11 October 1988 the Supreme Court interpreted section 99 of the Housing Act in the following way:

“ A specially protected tenancy is not lost ex lege by the mere fact of non-use of the flat for a period exceeding six months. Rather, that is grounds for termination of a specially protected tenancy, which can only be terminated by the provider of the flat. ”

A specially protected tenancy was terminated as soon as the court ’ s judgment upholding the claim of the provider of the flat to that end became res judicata (see, inter alia , the Supreme Court ’ s decision no. Rev-1009/1993-2 of 15 June 1994).

1. In its decisions nos. Rev-777/1995-2 of 21 December 1999 and Rev-391/02-2 of 18 February 2003 the Supreme Court took the view that, even in the absence of a judgment terminating the specially protected tenancy, the courts were entitled to examine whether the grounds for its termination had been present in cases where the existence of such a tenancy was a precondition for acquiring and exercising the right of a tenant to purchase the flat under the Specially Protected Tenancies (Sale to Occupier) Act.

2. The relevant part of decision no. Rev-777/1995-2 of 21 December 1999 reads as follows:

“In [the Supreme Court ’ s] view a contract of sale of a flat concluded with a person whose specially protected tenancy ended by termination after the conclusion of [that] contract, or in respect of whom it was established that grounds for termination [of the specially protected tenancy] had existed at the time of the conclusion of [such a contract], is null and void ...

It was therefore necessary to examine whether at the time of the conclusion of the impugned contract any grounds for termination of the specially protected tenancy existed ...”

3. The relevant part of decision no. Rev-391/02-2 of 18 February 2003 reads as follows:

“The [view] of the first-instance court – which was also accepted by the second-instance court – that the existence of a judicial decision on termination of the specially protected tenancy is decisive for [resolving] the question of whether the plaintiff ’ s specially protected tenancy of the flat in question has ended, is incorrect. In [the Supreme Court ’ s] view, if grounds for termination of the specially protected tenancy were present on the plaintiff ’ s part at the time of the conclusion of the contract of sale of the flat ... or at the time [he] made a request to purchase the flat – on which issue the court should in the instant case have decided upon the defendant ’ s counterclaim (otherwise it could have decided it as a preliminary issue) – ... the plaintiff [would have no right] to demand that a contract of sale of the flat be concluded.”

(c) The Constitutional Court ’ s practice

4. In its decision no. U-III/4949/2005 of 3 December 2007 (published in the Official Gazette no. 1/2008 of 2 January 2008) the Constitutional Court ( Ustavni sud Republike Hrvatske ) dismissed a constitutional complaint lodged by the defendants in a civil case against a second-instance judgment of the Zadar County Court whereby that court upheld a first-instance judgment of the Zadar Municipal Court. The Zadar Municipal Court, ruling for the State as the claimant, adopted a declaratory judgment, finding that the defendants had not acquired the status of protected lessees under the Lease of Flats Act because grounds for termination of their specially protected tenancy had existed before the entry into force of that Act. The Municipal Court made that ruling despite the fact that the defendants ’ specially protected tenancy had never been terminated by a court judgment. The Constitutional Court agreed with that interpretation and held as follows:

“ ... [The] complainants argue that after the entry into force of the Lease of Flats Act it is no longer possible to examine in judicial proceedings any facts or circumstances in relation to a specially protected tenancy because [they] ceased to exist ex lege pursuant to section 30(1) of [that Act]. Therefore, they [i.e. the complainants] consider that in the civil proceedings in question ... [the court] was not allowed to decide on ‘ a non-existent specially protected tenancy ’ ...

In the civil proceedings [in question] it was necessary to determine whether the complainants had retained the specially protected tenancy until the entry into force of the Lease of Flats Act, that is to say, whether they had acquired the status of protected lessees in respect of the flat [in question] ...

[The] first-instance court found that the complainants had been absent from the flat for more than six months and that their specially protected tenancy had thus ended pursuant to section 99(1) of the Housing Act. Having regard to the fact that the complainants ’ specially protected tenancy had ended before the entry into force of the Lease of Flats Act ... the first-instance court found that [they] had never acquired the status of [protected] lessees. ...

When dismissing the complainants ’ appeal against the first-instance judgment, the second-instance court noted in the contested judgment that the status of a protected lessee is acquired by a person who can demonstrate that he or she was a holder of a specially protected tenancy at the time of the entry into force of the Lease of Flats Act (5 November 1996). In accepting the findings of the first-instance court that the complainants ’ specially protected tenancy had ended before the entry into force of the Lease of Flats Act (where the existence of a judicial decision on termination of the specially protected tenancy is not decisive; rather, what is decisive is whether on 5 November 1996 grounds for termination within the meaning of the Housing Act existed, specifically an unjustified absence from the flat for a period exceeding six months), the second-instance court held that the complainants had never acquired the status of protected lessees.

...

The legal views expressed in the contested judgment of the County Court are based on a correct application of the relevant substantive law and on a constitutionally acceptable interpretation of that law ...

[The Constitutional Court] considers the complainants ’ argument that after the entry into force of the Lease of Flats Act it was no longer possible to examine in the judicial proceedings at issue (or in any other judicial proceedings) any facts or circumstances in relation to ‘ a non-existent specially protected tenancy ’ unfounded. Specifically, in situations which so require (for example, in proceedings for determination of the status of protected lessee, in proceedings for conclusion of a lease of flat contract, or in proceedings for declaring a contract of sale of a flat null and void, and similar), the civil court not only can, but must, determine whether the specially protected tenancy ... was terminated or whether grounds for [its] termination existed (for example, non-use of the flat exceeding six months).”

2. Specially Protected Tenancies (Sale to Occupier) Act

The Specially Protected Tenancies ( Sale to Occupier ) Act (Official Gazette no. 27/1991 with subsequent amendments, Zakon o prodaji stanova na kojima postoji stanarsko pravo ) regulates the conditions of sale of flats let under specially protected tenancies. Section 4 of the Act entitles the tenants (or, with their permission, other members of their household) of socially-owned flats let under a specially protected tenancy to purchase the flat (in which they had been living) under favourable conditions.

3. Restitution Act

The Act on Compensation for, and Restitution of, Property Appropriated During the Yugoslav Communist Regime ( Zakon o naknadi za imovinu oduzetu za vrijeme jugoslavenske komunističke vladavine , Official Gazette nos. 92/1996, 92/1999 (corrigendum), 80/2002 (amendments) and 81/2002 (corrigendum) – hereinafter “the Restitution Act”), which entered into force on 1 January 1997, enables the former owners of confiscated or nationalised property, or their heirs in the first line of succession (direct descendants and/or a spouse), to seek under certain conditions either restitution of, or compensation for appropriated property. The relevant provision of the Restitution Act reads as follows:

Section 22

“(1) Unless they were appropriated by means of confiscation, the ownership of flats ... let under specially protected tenancies shall not be restored to their former owners.

...

(3) The former owner shall have the right to compensation and the tenant [i.e. the holder of a specially protected tenancy] shall have the right to purchase the flat.”

COMPLAINT

The applicant complains under Article 6 § 1 of the Convention that the domestic courts violated her right to a fair hearing in that they misinterpreted and misapplied the relevant domestic law when refusing her claim to purchase the flat in respect of which she held a specially protected tenancy. In particular, she submitted that under the Housing Act a specially protected tenancy could be terminated only by a court judgment in civil proceedings, and that such proceedings have never been instituted against her or her husband. She therefore retained the tenancy of the flat in question and should have been able to purchase it.

QUESTIONS TO THE PARTIES

1. Did the applicant ’ s claim to purchase the flat in respect of which she held the specially protected tenancy have a sufficient basis in national law to qualify as a “possession” and thus attract the protection of Article 1 of Protocol No. 1 to the Convention?

2. If so, did the domestic courts ’ refusal to grant the applicant ’ s claim to purchase the flat amount to an interference with her right to peaceful enjoyment of her possessions?

3. If so, was that interference in accordance with the conditions provided for by law, within the meaning of Article 1 of Protocol No. 1 to the Convention? In particular, was it foreseeable given the interpretation of section 99 of the Housing Act adopted in the applicants ’ case, which resulted from the development of the Supreme Court ’ s case-law when that Act was no longer in force?

4. If so, was the interference in question in the public interest and did it impose an excessive individual burden on the applicant?