CASE OF BOGNÁR v. HUNGARY

FOURTH SECTION

CASE OF BOGNÁR v. HUNGARY

(Application no. 75757/14)

JUDGMENT
 

STRASBOURG

20 October 2020

This judgment is final but it may be subject to editorial revision.

In the case of Bognár v. Hungary,

The European Court of Human Rights (Fourth Section), sitting as a Committee composed of:

Branko Lubarda, President,
Carlo Ranzoni,
Péter Paczolay, judges,
and Ilse Freiwirth, Deputy Section Registrar,

Having regard to:

the application (no. 75757/14) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Hungarian national, Mr Zsolt Bognár (“the applicant”), on 18 November 2014;

the decision to give notice of the application to the Hungarian Government (“the Government”);

the parties’ observations;

Having deliberated in private on 29 September 2020,

Delivers the following judgment, which was adopted on that date:

INTRODUCTION

1.  Relying on Article 6 § 1 of the Convention (right to a fair trial) and Article 1 of Protocol No. 1 (protection of property), the applicant complained about the authorities’ failure to give a decision on the expropriation of his land for almost ten years, during which time he had been unable to make use of his property or obtain compensation.

THE FACTS

2.  The applicant was born in 1969 and lives in Budapest. The applicant was represented by Mr Cech, a lawyer practising in Budapest.

3.  The Hungarian Government (“the Government”) were represented by their Agent, Mr Z. Tallódi, of the Ministry of Justice.

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

5.  In December 1998 the applicant bought a plot of land registered under plot no. 2738 in the interior area of Leányfalu.

6.  On 16 July 2002 the Central Danube Valley Directorate of Water Management (Közép-Duna-völgyi Vízügyi Igazgatóság) established a protection zone for the water reserve of the municipality of Leányfalu. According to the decision, the applicant’s property, together with other plots of land, formed part of the inner protection zone. The decision provided that no facility was allowed to be constructed that did not serve the purposes of the water reserve and no agricultural activity could be carried out in the inner protection zone. Moreover, the owners of the plots of land were obliged to allow the use of their property for any necessary maintenance work on the water reserve.

7.  On 16 December 2002 the General Directorate of Water Management (Országos Vízügyi Igazgatóság) upheld the decision at first instance on the establishment of a protection zone for the municipality’s water reserve and rectified it to specify that the water-protection zone was the property of the Hungarian State, as represented by the Treasury Asset Management Directorate (Kincstári Vagyoni Igazgatóság). The manager of the water reserve remained Danube Regional Waterworks Inc. (Duna Menti Regionális Vízmű Zrt.), in accordance with the decision at first instance. The decision of 16 December 2002 also required that, pursuant to Article 15 § 1 of Government Decree no. 123/1997(VII.18.), if the owner of the protected water reserve was different from that of the land in the protection zone, the owner of the protected water reserve had the obligation to acquire ownership of the land in the protection zone, either through expropriation or through a sale and purchase agreement. The owners of the plots of land could initiate the purchase or expropriation themselves.

8.  On 31 August 2003 the applicant sent a letter to the Treasury Asset Management Directorate, the trustee of the water reserve, asking it to make an offer. The Directorate transferred the request to Danube Regional Waterworks Inc., stating that it had no competence for the expropriation. On 9 October 2003 Danube Regional Waterworks Inc. likewise declared that it had no jurisdiction in the matter.

9.  On 14 January 2004 the applicant requested the Pest County Regional Administrative Office (Pest Megyei Közigazgatási Hivatal) to initiate expropriation proceedings.

10.  On 5 April 2004 the applicant offered to sell his plot of land to Danube Regional Waterworks Inc., which in turn informed the applicant that it was the Treasury Asset Management Directorate that had competence to enter into an agreement.

11.  On 18 July 2005 the Pest County Regional Administrative Office issued a decision on the expropriation of the applicant’s land, assessing the amount of compensation at 23,805,800 Hungarian forints (HUF) (approximately 70,000 euros (EUR)). The decision obliged Danube Regional Waterworks Inc. to pay the full amount of compensation within thirty days.

12.  On 20 December 2005 that decision was quashed in judicial review proceedings by the Pest County Regional Court, which remitted the case to the administrative authority on the grounds that the acquisition of the property fell within the competence of the Ministry of Environmental Protection and Water Management.

13.  On 30 March 2006 the Pest County Regional Administrative Office instructed the Ministry of Environmental Protection and Water Management to make an offer to expropriate the land. An application for judicial review lodged by the Ministry was dismissed on 18 October 2006 by the Pest County Regional Court.

14.  On 7 March 2008 the Central Hungary Regional Administrative Office (Közép-Magyarország Közigazgatási Hivatal) gave its decision on the expropriation of the applicant’s plot of land and ordered the Ministry to pay compensation in the amount of HUF 31,721,500 (approximately EUR 100,000) to the applicant within sixty days. The decision set the date of handover as 15 May 2008. The Ministry paid the applicant the stated amount of compensation on 15 May 2008. The applicant handed over the property on 20 June 2008.

15.  In the meantime the Ministry also applied for judicial review of the administrative decision of 7 March 2008. In the ensuing court proceedings, the Pest County Regional Court quashed the administrative decision, finding that it was National Asset Management Inc. (Magyar Nemzeti Vagyonkezelő Zrt) (the legal successor of the Treasury Asset Management Directorate) that had competence to proceed with the expropriation. Thus, the court remitted the case to the administrative authorities. That decision was upheld by the Supreme Court on 12 April 2010.

16.  In the reopened administrative proceedings, on 24 May 2011 the Pest County Governmental Office (the legal successor of the Central Hungary Regional Administrative Office) ordered National Asset Management Inc. to serve notice of expropriation on the applicant within ninety days. National Asset Management Inc. complied with that obligation on 8 February 2012.

17.  In the ensuing proceedings, the Pest County Governmental Office issued a decision on expropriation on 17 July 2012, setting the amount of compensation at HUF 62,356,000 (approximately EUR 200,000). Both the applicant and National Asset Management Inc. sought judicial review of that decision: in the case of the applicant, for the payment of interest since he had transferred the property on 20 June 2008; and in the case of National Asset Management Inc., for a reduction in the amount of compensation.

18.  On 23 April 2013 the Budapest Regional Administrative and Labour Court remitted the case as regards the payment of interest to the administrative authority. In an interim measure it also suspended the enforcement of the compensation to the extent that it had been challenged by National Asset Management Inc. but declared the remaining amount of compensation enforceable.

19.  In a final judgment of 20 May 2014, the court reduced the amount of compensation to HUF 46,989,558 (approximately EUR 137,000).

20.  The applicant requested the enforcement of the compensation and the related interest on 25 August and 20 November 2014. The request was granted by the Pest County Governmental Office on 4 December 2014, which ordered National Asset Management Inc. to pay the remaining amount of compensation and interest owed with effect from 20 June 2008.

21.  The full amount of compensation was paid to the applicant on 29 January 2015.

RELEVANT LEGAL FRAMEWORK

22.  The relevant domestic law is set out in the Court’s judgment in Barcza and Others v. Hungary (no. 50811/10, §§ 23-25, 11 October 2016).

THE LAWALLEGED VIOLATION OF aRTICLE 6 § 1 OF THE CONVENTION

23.  The applicant complained that the length of the expropriation proceedings had been excessive and had failed to meet the “reasonable time” requirement. He relied on Article 6 § 1 of the Convention, the relevant parts of which read as follows:

“In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”

24.  The Government conceded that there had been a violation of the applicant’s right to a fair trial within a reasonable time. They submitted that the period to be taken into consideration had begun on 18 July 2005, when the Pest County Administrative Office had issued a decision on the expropriation of the applicant’s land (see paragraph 11 above), and had ended on 20 May 2014 when the Budapest Regional Administrative and Labour Court had issued a final judgment on the amount of compensation (see paragraph 19 above).

25.  The Court sees no reason to reach a different conclusion on the admissibility and merits of this complaint. It notes, however, that since the applicant’s application to the administrative authority was a necessary preliminary step to the proceedings (see Vilho Eskelinen and Others v. Finland [GC], no. 63235/00, § 65, ECHR 2007‑II, and Blake v. the United Kingdom, no. 68890/01, § 40, 26 September 2006 ) the period began to run on 14 January 2004 (see paragraph 9 above). Furthermore, the execution of a judgment is an integral part of the proceedings (see Hornsby v. Greece, 19 March 1997, § 40, Reports of Judgments and Decisions 1997‑II), and therefore the period to be taken into consideration ceased to run on 4 December 2014, when the Pest County Governmental Office ordered National Asset Management Inc. to pay the full amount of compensation and interest (see paragraph 20 above). The proceedings thus lasted some ten years and eleven months.

26.  Having regard to its case-law on the subject, the Court considers that in the instant case the length of the proceedings was excessive and failed to meet the “reasonable time” requirement.

27.  This complaint is therefore admissible and discloses a breach of Article 6 § 1 of the Convention.ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1

28.  The applicant complained that his right to peaceful enjoyment of possessions had been violated because of the domestic authorities’ continuing failure to give a decision on the expropriation of his plot of land and his consequent inability to make use of his property during that period. He relied on Article 1 of Protocol No. 1, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”Admissibility

29.  The Government requested that the Court declare this complaint inadmissible as being incompatible ratione personae with the provisions of the Convention. They argued that any disputes arising from the expropriation of the applicant’s plot of land had been settled by the Central Hungary Regional Administrative Office, which in 2008 had awarded the applicant adequate compensation in the amount of HUF 31,721,500 (see paragraph 14 above). Moreover, the total amount of compensation had been paid to the applicant on 29 January 2015. From the Government’s point of view, the applicant had thus lost his victim status.

30.  The applicant maintained that although he had eventually received the full amount of compensation for the expropriation, the domestic authorities had not acknowledged the lengthy restriction on the use of his property brought about by the deficient expropriation proceedings. He also argued that he had been compensated for the loss of his property but not for the serious restrictions that had lasted for a long time. Thus, he had not lost his victim status.

31.  The Court reiterates that a decision or measure favourable to the applicant is not in principle sufficient to deprive him or her of “victim” status unless the national authorities have acknowledged, either expressly or in substance, and then afforded redress for, the breach of the Convention (see Dalban v. Romania [GC], no. 28114/95, § 44, ECHR 1999‑VI). The issue as to whether a person may still claim to be the victim of an alleged violation of the Convention essentially entails on the part of the Court an ex post facto examination of his or her situation (see Scordino v. Italy (no. 1) [GC], no. 36813/97, § 181, ECHR 2006‑V, and Centro Europa 7 S.r.l. and Di Stefano v. Italy [GC], no. 38433/09, § 82, ECHR 2012).

32.  In the instant case the water-protection zone was established on 16 December 2002 (see paragraph 7 above) and the applicant’s plot of land was finally expropriated by a decision of the Governmental Office on 17 July 2012, as a result of which he received compensation on 29 January 2015. The expropriation put an end to the situation complained of by the applicant. However, in the Court’s view this did not constitute an implicit acknowledgment of a breach of the Convention. Furthermore, the compensation and interest due with effect from 20 June 2008 were paid in relation to the loss of land through its compulsory acquisition by the State. They did not relate to the restrictions that were previously in force while the domestic authorities were not proceeding with the expropriation, or to the fact that the applicant’s right of compensation was precarious and defeasible for a lengthy period of time, even after his property was finally transferred to the State.

33.  The Court therefore considers that the applicant’s inability to use his property for a protracted period and the delay in the expropriation proceedings were neither acknowledged nor remedied by the domestic authorities.

34.  The Court therefore dismisses the Government’s objection.

35.  The Court notes that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.MeritsThe parties’ submissions

36.  The applicant submitted that there had been an interference with his right to the peaceful enjoyment of his possessions. From 2002 onwards, owing to the creation of a water-protection zone, the land in question was subject to a number of restrictions concerning industrial, transport and agricultural activities, and to a ban on construction. Apart from those constraints, owing to the uncertainties as regards competence, the domestic authorities failed to proceed with the expropriation of the property for an excessive length of time, despite their legal obligation to do so. From the applicant’s point of view, these measures amounted to a control of the use of his property.

37.  The applicant accepted that the contested measures, namely the establishment of the water-protection zone and the expropriation, had a legal basis, but he argued that they had imposed an excessive burden on him as an individual. The question of ownership of the plot of land had remained unresolved for about ten years, rendering his right to his land precarious. During this period he had been unable to use or sell his property. He also submitted that whereas the final decision on expropriation had been issued in July 2012, he had not received the full amount of compensation until some three years later.

38.  The Government did not comment on the merits of the complaint.The Court’s assessment

39.  As the Court has stated on a number of occasions, Article 1 of Protocol No. 1 comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, inter alia, to have a measure of control over the use of property in accordance with the general interest. The three rules are not, however, distinct in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property, and should therefore be construed in the light of the general principle enunciated in the first rule (see, among many other authorities, Beyeler v. Italy [GC], no. 33202/96, § 98, ECHR 2000‑I).

40.  In the present case, the Court observes that the situation complained of by the applicant stemmed from the fact that his property was designated as part of an inner water-protection zone and that its expropriation, although ordered by law, was not carried out for a period of approximately ten years.

41.  In particular, the Court notes that following the adoption of a decision on the establishment of a water-protection zone, the applicants’ plot of land was designated as part of an inner protection zone by an entry in the land registry. The decision of the General Directorate of Water Management of 16 December 2002 stated that pursuant to Article 15 § 1 of Government Decree no. 123/1997(VII.18.), the plots of land in the inner water-protection zone should be expropriated with a view to ensuring that the water reserve had the same owner as the land where it was located. The decision did not set a time-limit for the process of expropriation. It nonetheless specified that the applicant could also initiate a transfer of ownership if the authorities failed to do so (see paragraph 7 above).

42.  The establishment of the protection zone meant that the applicant’s effective exercise of his property right was significantly reduced by the restrictions on the use of property (as regards agricultural and industrial activities) and by the ban on any construction work. Although, until the final decision on expropriation was taken, the applicant’s ownership right had not disappeared, these measures clearly amounted to control of the use of property, within the meaning of the second paragraph of Article 1 of Protocol No. 1 (see, as a similar case, Barcza and Others, cited above, §§ 42-44).

43.  The applicant’s complaint also relates to the authorities’ failure to expropriate his land for about ten years, despite a legal obligation to do so and the fact that it had been at his request. This obligation to expropriate was not intended to limit or control the use of property and did not relate to the acquisition of property in the public interest, but concerned the initial step in a procedure leading to deprivation of possession, pertaining for a lengthy period of time. These measures did not fall within the ambit of the second or third rule under Article 1 of Protocol No. 1.

44.  Given that the contested measures did not all have the same legal effect and had different aims, the Court considers that they must be looked at together in the light of the first sentence of the first paragraph of Article 1 of Protocol No. 1 (see, mutatis mutandis, Matos e Silva, Lda., and Others v. Portugal, 16 September 1996, § 85, Reports of Judgments and Decisions 1996‑IV; Barcza and Others, cited above, § 44). It needs to be ascertained whether, taken as a whole, they struck a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see, among many other authorities, Jahn and Others v. Germany [GC], nos. 46720/99 and 2 others, § 93, ECHR 2005‑VI).

45.  In determining whether this requirement has been met, the Court recognises that regional planning and environmental conservation policies, where the community’s general interest is pre-eminent, confer on the State a margin of appreciation that is greater than when exclusively civil rights are at stake (see Depalle v. France [GC], no 34044/02, § 84, ECHR 2010).

46.  In the present case, notwithstanding the eventual establishment of the water-protection zone in 2002 and the domestic authorities’ obligation to initiate an expropriation procedure with a view to acquiring ownership of the plot of land for the water-protection zone, the final decision on the expropriation was given only on 17 July 2012 (see paragraph 17 above).

47.  The Court notes that the applicant made several attempts to have the expropriation procedure completed and to have an authority designated to exercise jurisdiction over the matter; however, none of these yielded any results (see paragraphs 8 to 10 above). Finally, even after the confirmation on 12 April 2010 by the Supreme Court of the administrative authorities’ obligation to conclude the expropriation procedure (see paragraph 15 above), National Asset Management Inc., the authority designated to conduct the expropriation, took no action for a further two years before the expropriation was finally ordered by the Pest County Governmental Office (see paragraph 16 above).

48.  Owing to the unresolved issue of competence and the ongoing challenges to the administrative decisions, it remained unclear to the applicant if and when formal expropriation would take place. During this time, he could neither realistically expect to sell his property at a fair price nor obtain compensation for the expropriation. Thus, in addition to the detrimental effects of the establishment of a water-protection zone on the exercise of his right to property, over a long period of time the applicant was left in a state of uncertainty as to the fate of his plot of land (see, mutatis mutandis, Frendo Randon and Others v. Malta, no. 2226/10, § 55, 22 November 2011; Barcza and Others, cited above, § 47).

49.  Furthermore, from 2002 the applicant could not carry out agricultural or industrial activities or any construction work on the land. The Court also finds that the existence throughout this period of prohibitions on the exercise of the applicant’s right of property accentuated even further the prejudicial effects of the lengthy period of the expropriation.

50.  Finally, the Court notes that the full amount of compensation was eventually paid to the applicant some three years following the final decision on expropriation.

51.  Taken together, the series of measures in the present case created a situation which upset the fair balance which should be struck between the protection of the right of property and the requirements of the general interest, and the applicant bore an individual and excessive burden.

52.  There has therefore been a violation of Article 1 of Protocol No. 1.APPLICATION OF ARTICLE 41 OF THE CONVENTION

53.  Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”Damage

54.  The applicant claimed 30,000 euros (EUR) in respect of non‑pecuniary damage for the stress and anxiety he had suffered over a long period of time.

55.  The Government contested this claim.

56.  The Court finds that the applicant must have suffered uncertainty and frustration as a result of the violation it has found. Making its assessment on an equitable basis, as required by Article 41 of the Convention, the Court awards the applicant EUR 6,500 in respect of non‑pecuniary damage.Costs and expenses

57.  The applicant claimed EUR 6,175 plus 27% value-added tax (VAT) for the legal fees incurred before the Court. This amount corresponded to 39.5 hours of legal work charged at an hourly rate of EUR 150 plus VAT, and 5 hours of paralegal work charged at an hourly rate of EUR 50 plus VAT.

58.  The Government contested this claim.

59.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 5,000 for the proceedings before the Court.

C.Default interest

60.  The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,Declares the application admissible;Holds that there has been a violation of Article 6 of the Convention;Holds that there has been a violation of Article 1 of Protocol No. 1;Holds

(a)  that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i)  EUR 6,500 (six thousand five hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii)  EUR 5,000 (five thousand euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 20 October 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Ilse Freiwirth Branko Lubarda
Deputy RegistrarPresident

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