Communicated on 9 October 2014
FOURTH SECTION
Applications nos. 39020/11 and 2866/13
Krasimir Dimitrov BEEV and Tsonka Danailova BEEVA against Bulgaria
and Bozhana Boyanova UZUNOVA and Ferad Ismail SEID against Bulgaria
lodged on 3 June 2011 and 12 December 2012 respectively
STATEMENT OF FACTS
A. The circumstances of the cases
The facts of the cases, as submitted by the applicants, may be summarised as follows.
1. Application no 39020/11, lodged on 3 June 2011
The applicants, Mr Krasimir Dimitrov Beev and Ms Tsonka Danailova Beeva, are Bulgarian nationals who were born in 1979 and 1950, respectively, and live in Velingrad. They were represented before the Court by Mr M. Ekimdzhiev, Ms K. Boncheva and Ms G. Chernicherska, lawyers practising in Plovdiv.
The first applicant owned a plot of land in Sofia measuring 2,539 square metres. In September 2009 he transferred the plot to his mother, the second applicant.
On 26 March 2010 the Council of Ministers decided to expropriate 2,529 square metres of land with a view to building the ring road of Sofia; that land included part of the second applicant’s plot. The decision said that the expropriated owners were to be given in total 540,713 new Bulgarian levs (BGN) (the equivalent of 276,400 euros (EUR)) in compensation, of which BGN 334,604 were due for the expropriated part of the second applicant’s plot. Apparently, the decision recorded the first applicant as the owner of that part of the plot and determined that the compensation in respect of it was to be paid to him.
The first applicant appealed to the Supreme Administrative Court against the amount of compensation. The Ministry of Regional Development and Public Works and the Road Infrastructure Agency took part in the proceedings as interested third parties. In a final judgment of 2 November 2010, relying on the conclusions of an expert report obtained in the course of the proceedings, the Supreme Administrative Court found that the compensation for the expropriated land should be increased from BGN 540,713 to BGN 1,085,320 (the equivalent of EUR 554,792). The court also awarded the first applicant costs in the amount of BGN 12,310 (the equivalent of EUR 6,292), to be paid to him by the Council of Ministers.
The first applicant also appealed against a decision which had allowed immediate enforcement of the expropriation decision of 26 March 2010 and commencement of construction works in the plot. In a final decision of 18 January 2011 the Supreme Administrative Court declared the appeal inadmissible, holding that the first applicant had failed to establish that he was the owner of the plot at issue as in 2009 he had transferred it to his mother.
On 27 January 2011 the Regional Governor of Sofia paid the second applicant BGN 334,604, the amount fixed as compensation for the expropriated part of her plot under the judicial decision of 26 March 2010.
Meanwhile, the first applicant requested that the court revoke the expropriation decision under section 39(3) of the State Property Act 1996 which made it possible for expropriated owners to seek revocation of the expropriation decision in case the compensation due to them had not been paid within six months after the date on which the expropriation decision had become final. On 18 April 2011 the first applicant withdrew his request, claiming that revocation had become pointless as construction works had already started.
The applicants wrote to the Prime Minister, the Ministry of Regional Development and Public Works and the Road Infrastructure Agency inviting them to abide by the judgment of 2 November 2010 by ordering payment of the outstanding amount of compensation. In accordance with section 39 of the State Property Act of 1996, the money was to be deposited in the expropriated owners’ bank account by the investor of the construction project, in that case the Road Infrastructure Agency.
By 11 June 2014, the date of the applicants’ last communication to this Court, the outstanding amount of compensation had not yet been paid. The applicants say that under Bulgarian law it is not possible to obtain a writ of execution for the outstanding amount and begin enforcement proceedings, and that their only remedy was to seek revocation of the expropriation decision, which, however, was pointless in their case.
2. Application no 2866/13, lodged on 12 December 2012
The applicants, Ms Bozhana Boyanova Uzunova and Mr Ferad Ismail Seid, are Bulgarian nationals who were born in 1978 and 1955, respectively, and live in Kardzhali. They were represented before the Court by Mr D. Mitkov and Ms S. Vasileva, lawyers practising in Sofia.
The applicants co-owned a plot of land of 15,276 square metres near the town of Kapitan Andreevo.
On 30 November 2007 the Council of Ministers decided to expropriate 6,218 square metres of the applicants’ plot with a view to building a motorway. The decision allowed preliminary enforcement of the expropriation and said that the owners were to be given BGN 13,023 (the equivalent of EUR 6,657) in compensation. The decision recorded as owner of the expropriated plot the person from whom the applicants had bought the property.
The applicants appealed against the expropriation decision to the Supreme Administrative Court. In a final judgment of 3 April 2009 that court declared the decision null and void as it had failed to specify the actual owners of the plot to whom compensation was due, and referred the case back to the administrative authorities. The Road Infrastructure Agency requested re-opening of the judicial review proceedings on the ground that it had not been able to take part in them as an interested third party even though its participation was mandatory under the State Property Act 1996 as investor in the construction of the motorway. In a judgment of 12 October 2009 a five-member panel of the Supreme Administrative Court allowed the request, quashed the judgment of 3 April 2009 and ordered that the case was to be re-examined.
In a final judgment of 28 December 2010 the Supreme Administrative Court found that compensation was due to the applicants as owners of the plot at issue and that it should be increased to BGN 59,817 (the equivalent of EUR 30,577), in accordance with the conclusions of an expert report obtained in the course of the proceedings. The court also awarded the applicants BGN 600 in costs, to be paid by the Council of Ministers.
By letter of 13 January 2011 the applicants invited the Road Infrastructure Agency to pay the compensation due to them. In its response of 21 February 2011, the Agency informed the applicants that due to some changes in the layout of the motorway, a new decision for expropriation of the affected property was being prepared.
On 5 July 2011 the Council of Ministers issued a new decision for expropriation, in accordance with which 5,215 square metres of the applicants’ plot was to be expropriated against compensation in the amount of BGN 1,794 (the equivalent of EUR 917). The applicants appealed. In a judgment of 26 June 2012 the Supreme Administrative Court allowed the appeal and declared the decision of 5 July 2011 null and void as it had failed to take account of the binding character of the judgment of 28 December 2010 which had determined the dispute between the parties with final effect.
In March 2012 the Ministry of Finance requested that the Supreme Administrative Court re-open the proceedings in respect of the judgment of 28 December 2010 but the court refused.
By letter of 4 July 2012 the applicants once again invited the Road Infrastructure Agency to pay the compensation due to them. By 12 December 2012, the date of the applicants’ last communication to this Court, the compensation had not yet been paid.
B. Relevant domestic law and practice
1. Expropriation of private property for State needs
Article 17 § 5 of the Constitution of 1991 provides that property may be expropriated for State or municipal needs only on the basis of a law, and only if those needs cannot be satisfied otherwise and following prior and adequate compensation.
The State Property Act 1996 governs the expropriation of private property by the State. Section 34a provides that the authority competent to make a decision for expropriation of private property for State needs of national importance is the Council of Ministers, and that the competent authority in all other cases is the Regional Governor. Their decisions can be appealed before the administrative courts, including with respect to the amount of compensation awarded.
In accordance with section 38(3), as in force at the relevant time, in case the expropriation decision was appealed only with respect to the amount of compensation, the appeal did not have suspensive effect and could not stay its enforcement. Section 39(1) provided that expropriation was considered to have taken effect from the moment when the compensation awarded in the decision had been deposited in the expropriated owner’s bank account. Under the second sentence of that provision, when the expropriation decision was appealed only with respect to the amount of compensation or when an immediate enforcement had been decided, expropriation was considered to have taken effect on the date on which the investor had deposited the compensation into the Council of Ministers’ or the Regional Governor’s bank account. If the court later increased the amount of compensation, the investor was to pay the owners the difference plus interest (section 39(7)).
Section 39(3) of the State Property Act 1996, applicable at the relevant time and still in force, provides for the possibility for the expropriated owners to request that the administrative courts revoke the expropriation decision in case the compensation due to them has not been paid within six months after the date on which the decision has become final.
In a decision of 10 April 2001 (реш. № 7 от 10 април 2001 г. к. д. № 1/2001 г., обн., ДВ, бр. 38 от 2001 г.), the Constitutional Court held that the requirement under Article 17 § 5 of the Constitution of 1991 that compensation for the expropriation of private property should be “prior” meant that the payment of that compensation was to be made before the expropriation. In a decision of 4 July 2006 (реш. № 6 от 4 юли 2006 г. по к. д. № 5/2006 г., обн., ДВ, бр. 57 от 2006 г.), the Constitutional Court went on to note that the phrase “prior and adequate compensation” in Article 17 § 5 of the Constitution of 1991 was to be understood as requiring that the payment of compensation mandatorily precede the transfer of title and the taking of possession of the real property being expropriated.
In a decision of 15 July 2013 (реш. № 6 от 15 юли 2013 г. к. д. № 5/2013 г., обн., ДВ, бр. 65 от 2013 г.), given pursuant to an application made by the National Ombudsman, the Constitutional Court struck down as being contrary to the Constitution and the European Convention for the Protection of Human Rights and Fundamental Freedoms several provisions of the State Property Act 1996. Among these were section 38(3) concerning the impossibility to stay the enforcement of the expropriation decision when an appeal had been lodged with the courts, the second sentence of section 39(1) about the point in time at which expropriation was considered to have taken effect, as well as provisions allowing investors to begin construction works before the date on which the expropriation decision had become final. The Constitutional Court pointed out, inter alia, that the compensation would be contrary to the constitutional requirements if it was not paid in full, and that any compensation paid before the delivery of a court decision determining its amount with final effect (in case the amount was challenged before the courts) could not be considered adequate. The court also noted that the possibility for the investor to take possession of a private property and to start construction works in it before the date on which the expropriation decision had become final was contrary to the principle of inviolability of the private property.
Following that latter decision, Parliament amended section 39(1) and it currently provides that expropriation is considered to have taken effect from the date on which the compensation determined in a final expropriation decision or in a final judgment has been deposited in the owners’ bank account. Section 39(7) was repealed.
2. Enforcement of pecuniary claims against State authorities
Under Article 519 §§ 1 and 2 of the Code of Civil Procedure 2007, a person who has an enforceable pecuniary claim (e.g. a judgment debt) against a State authority receives payment out of the funds earmarked for that purpose in the authority’s budget. That person had to submit the writ of execution evidencing the claim to the authority’s financial department. If there are no funds available in the authority’s budget, the higher administrative authority has to ensure that funds became available in the budget for the following year. Enforcement proceedings are not possible against State authorities. They are, however, possible against municipalities. Article 520 provides that pecuniary claims against municipalities are to be enforced in accordance with the general rules applicable to private debtors and that only public municipal property and subsidies received by the municipalities from the State are immune from enforcement.
In a decision of 21 December 2010 (реш. № 15 от 21.12.2010 г., по к. д. № 9/2010 г., обн., ДВ, бр. 5 от 2011 г.), given pursuant to an application made by the National Ombudsman, the Constitutional Court struck down an amendment in the Code of Civil Procedure 2007 excluding any possibility for enforcement against municipalities, holding that the complete exclusion of the municipalities from the regime of forced execution was not justified by the public interest. The exclusion was justified only in respect of the public municipal property and subsidies received from the State due to their special purpose to satisfy public needs and to allow municipalities to exercise their public functions. At the same time, the Constitutional Court did not declare unconstitutional the provision excluding forced execution against State bodies, holding that such a rule was justified on the ground of the special status of those bodies, which differed from that of any other person or body.
Under Article 269 § 2 of the Code of Administrative Procedure 2006, pecuniary claims stemming from administrative decisions or court decisions given in judicial review proceedings are, depending on the nature of the claim, to be enforced either in accordance with the Code of Civil Procedure 2007 (e.g. for pecuniary claims of private persons, pecuniary claims of the State originating from private-law relations) or the Fiscal Procedure Code 2006 (for taxes, State fees, etc.). Claims concerning obligation of State bodies to act arising out of administrative decisions or court decisions given in judicial review proceedings are to be enforced in accordance with the Code of Administrative Procedure 2006 (Article 268 et seq.).
COMPLAINTS
Relying on Article 6 of the Convention, the applicants complain of the failure of the authorities to comply with the final court decisions determining the amount of compensation due to the applicants for the expropriation of their property.
The applicants also complain under Article 1 of Protocol No. 1 of the failure of the authorities to provide them with the compensation due to them for their expropriated property.
Lastly, the applicants complain under Article 13 of the Convention of the lack of effective remedies in relation to the failure of the authorities to comply with the final court decisions determining the amount of compensation due to them.
QUESTIONS
1. Were the final judgments determining the amount of compensation due to the applicants for the expropriation of their property enforceable, in view of the wording of section 39(1) and (3) of the State Property Act 1996? If so, when did they become enforceable, were they enforced and when?
2. Did the alleged failure to enforce the final judgments determining the amount of compensation due to the applicants constitute a breach, within the meaning of Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention, of the applicants’ rights to access to court and peaceful enjoyment of their possessions?
3. Did the applicants have at their disposal an effective domestic remedy in respect of the failure to obtain the execution of the final judgments fixing the amount of compensation owed to them by the State, as required under Article 13 of the Convention in conjunction with Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 (see Burdov v. Russia (no. 2), no. 33509/04, ECHR 2009)?
Full & Egal Universal Law Academy