Information Note on the Court’s case-law 54

June 2003

Stretch v. the United Kingdom - 44277/98

Judgment 24.6.2003 [Section IV]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Peaceful enjoyment of possessions

Denial of option to extend lease from local authority, on the ground that the granting of the option was ultra vires : violation

Facts : The applicant leased land from the local authority in 1969 for a 22-year period. The lease required the applicant to erect several buildings at his own expense and included a clause giving him an option to renew the lease for a further 21 years. In 1990 the applicant gave due notice of his intention to exe rcise the option and negotiations took place as to the terms. However, the local authority subsequently informed him that the option could not be exercised, in particular because it was ultra vires . This was confirmed in court proceedings.

Law : Article 1 o f Protocol No. 1 – The applicant had accepted the lease on the basis that he would be able to extend its term and neither party had been aware that there was any legal obstacle to that condition. In the circumstances, he had at least a legitimate expectati on of exercising the option to renew and this could be regarded, for the purposes of Article 1 of Protocol No. 1, as attached to the property rights granted to him under the lease. The actions of the local authority could be regarded as frustrating the app licant’s legitimate expectation and thus constituted an interference with his property rights. As to whether a fair balance was struck, the local authority obtained the agreed rent and there was no issue that it acted against the public interest or that an y third party interests or the pursuit of any other statutory function would have been prejudiced by giving effect to the renewal option; moreover, there was nothing per se objectionable or inappropriate in a local authority including such a term in a leas e. Since the local authority itself considered that it had power to grant an option, it was not unreasonable for the applicant and his legal advisers to entertain the same belief. The applicant not only had an expectation of deriving future return from his investment but the option to renew had been an important element in view of the building obligations undertaken and the otherwise limited period in which he could recoup his expenditure.

Article 41 – The Court awarded the applicant 31,000 euros in respect of pecuniary damage and 5,000 euros in respect of non-pecuniary damage. It also made an award in respect of costs and expenses.

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

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