Published on 9 October 2023

SECOND SECTION

Application no. 60969/21 Juozas SKUÄŒAS and IndrÄ— SKUÄŒIENÄ– against Lithuania lodged on 13 December 2021 communicated on 18 September 2023

SUBJECT MATTER OF THE CASE

The application concerns the annulment of a title to property.

Between 2002 and 2005 the Neringa Municipality approved the detailed plan of a plot of land in the Curonian Spit National Park, issued permits for construction of several buildings on that plot, and after the construction was finished, certified that the buildings were suitable for use. One of the entities which carried out the construction was company V.

The applicants are husband and wife. In 2006 they bought from company V. a finished residential house on the aforementioned plot.

In 2008 the prosecutor lodged a claim in the public interest, asking the court to annul the aforementioned documents issued by the Neringa Municipality, as well as the sale-purchase agreement between the applicants and company V. The prosecutor submitted that the construction had taken place in a national park which was a UNESCO-designated World Heritage Site, and it had been contrary to the requirements of environmental and cultural heritage protection established by law.

In April 2009 the first-instance court allowed the prosecutor’s claim. It annulled, inter alia , the documents permitting the construction of the house and ordered for it to be demolished. It also annulled the sale-purchase agreement between the applicants and company V. and ordered the latter to return to the applicants the amount which they had paid for the house – 1,850,000 Lithuanian litai (LTL, approximately 535,800 euros (EUR)). In December 2010 that decision was upheld by the appellate court.

In May 2012 the applicants instituted civil proceedings against the State, seeking compensation in respect of pecuniary damage. They submitted that the market price of the house had increased since 2006 and asked to be compensated for the difference between its present market price and the amount which had been awarded to them payable by company V. However, the courts dismissed that claim.

In 2011 and 2012 various representatives of the government publicly stated that the government was looking into the possibility of reaching friendly settlements with the owners of nearly twenty buildings in the Curonian Spit National Park which had been built after the issuance of all relevant permits but subsequently declared to be unlawful, in order to avoid the demolition of the buildings and the obligation for the State to pay compensation to their owners. In 2013 the Prime Minister created a working group tasked with seeking ways of resolving the situation. The enforcement of the court decisions ordering the demolition of, inter alia , the applicant’s house was suspended. In 2014 the working group issued a recommendation to amend certain territorial plans in order to make the legalisation of the impugned buildings possible. In 2016 the State Inspectorate on Territorial Planning and Construction sent the applicants a draft of a friendly settlement agreement, which would have allowed them to legalise the house. However, it appears that such an agreement was never reached.

Company V. started undergoing bankruptcy proceedings in 2014. The applicants submit that in 2018 it became evident that the company’s funds were insufficient to satisfy their claim.

In May 2018 the applicants instituted civil proceedings against the State, seeking compensation of EUR 1,172,920 in respect of pecuniary damage, consisting of the price which they had paid for the house, the increase in its value, the property tax and other related expenses, as well as EUR 3,000,000 in respect of non-pecuniary damage. They submitted that they had lost their title to the house because of mistakes made by the authorities and that they themselves had not in any way contributed to the unlawfulness of the construction. Moreover, they had no real possibility to get their money back from company V., as it was insolvent.

On 27 March 2020 the Vilnius Regional Administrative Court and on 16 June 2021 the Supreme Administrative Court rejected the claim as being time-barred. The courts considered that the applicants had been aware of the possible violation of their rights already in 2008 when the prosecutor had instituted the proceedings for the annulment of their property title, or at the latest in May 2012 when they had lodged their previous civil claim against the State. The applicants argued that the actions of the various authorities aimed at reaching a friendly settlement had meant that the State had acknowledged their claim and that the running of the statutory limitation period had been interrupted. However, the courts found that the authorities had never explicitly acknowledged the applicants’ claim and that the ongoing friendly settlement negotiations did not amount to such an acknowledgment. Therefore, the circumstances invoked by the applicants had neither interrupted the running of the statutory limitation period nor constituted grounds for renewing it.

At the time when the applicants lodged the present application, the house had still not been demolished and they were still living there.

The applicants complain under Article 6 § 1 of the Convention, Article 8 of the Convention and Article 1 of Protocol No. 1 to the Convention that they lost their title to the house, which is their only home, and that to date they have still not been compensated. They submit that the unlawfulness of the construction resulted from mistakes made by the public authorities and that the applicants should not have to bear the burden for correcting those mistakes. In view of the insolvency of company V., there is no real possibility for them to obtain compensation from it; in any event, the obligation to compensate for damage caused by the authorities’ mistakes cannot be transferred onto a private entity but must be borne by the State itself. Lastly, they submit that the excessive length of the period during which the compensation was not paid has resulted in the amount which was awarded to them in 2009 becoming inadequate to obtain a similar property.

QUESTIONS TO THE PARTIES

1. Has there been a violation of the applicants’ right to the peaceful enjoyment of their possessions under Article 1 of Protocol No. 1 to the Convention, in view of the annulment of their title to the house? In particular:

(a) Were the applicants afforded a reasonable opportunity to put their case to the responsible authorities for the purpose of obtaining adequate compensation (see G.I.E.M. S.r.l. and Others v. Italy [GC], nos. 1828/06 and 2 others, § 302, 28 June 2018)? The Court refers, in particular, to the domestic court decisions which dismissed the applicants’ claim for compensation as time-barred and rejected their arguments regarding the interruption and renewal of the statutory limitation period (see, mutatis mutandis , Megadat.com SRL v. Moldova , no. 21151/04, § 74, ECHR 2008, and Kemal Bayram v. Turkey , no. 33808/11, § 56, 31 August 2021).

(b) Did the applicants have to bear a disproportionate and excessive burden for the correction of the mistakes made by the public authorities (see Broniowski v. Poland [GC], no. 31443/96, § 150, ECHR 2004-V, and Tumeliai v. Lithuania , no. 25545/14, §§ 72 and 78-80, 9 January 2018)? The Court refers, in particular, to the applicants’ arguments that to date they have still not been compensated for the loss of their title, that they have no realistic possibility to obtain compensation from the insolvent company V., and that because of the passage of time, the amount which was awarded to them in 2009 no longer corresponds to the value of the house (see, mutatis mutandis , Almeida Garrett, Mascarenhas Falcão and Others v. Portugal , nos. 29813/96 and 30229/96, § 54, ECHR 2000 ‑ I ).

2. Has there been a violation of the applicants’ right to respect for their home under Article 8 of the Convention? The Court refers, in particular, to their argument that they have not been provided with compensation that would allow them to acquire a new home (see, mutatis mutandis , Rousk v. Sweden , no. 27183/04, § 140, 25 July 2013, and Šidlauskas v. Lithuania , no. 51755/10, § 47, 11 July 2017)?