THIRD SECTION
CASE OF STRAISTEANU AND OTHERS v. MOLDOVA
(Application no. 4834/06)
JUDGMENT
(Just satisfaction)
STRASBOURG
24 April 2012
FINAL
24/09/2012
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.
In the case of Straisteanu and Others v. Moldova,
The European Court of Human Rights (Third Section), sitting as a Chamber composed of:
Josep Casadevall, President,
Corneliu Bîrsan,
Egbert Myjer,
Ján Šikuta,
Ineta Ziemele,
Nona Tsotsoria,
Mihai Poalelungi, judges,
and Marialena Tsirli, Deputy Section Registrar,
Having deliberated in private on 3 April 2012,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 4834/06) against the Republic of Moldova lodged with the Court on 1 February 2006 under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by three Moldovan nationals, Mr Gheorghe Straisteanu, Ms Natalia Straisteanu and Ms Daniela Straisteanu, and Codrana-Lux, a company from Moldova.
2. In a judgment delivered on 7 April 2009 (“the principal judgment”), the Court held in respect of the first applicant that there has been a breach of Article 3 taken alone and in conjunction with Article 13 of the Convention in view of the poor conditions of his detention. The Court also held that the first applicant’s detention was in breach of Article 5 §§ 1 and 3 of the Convention and awarded him non-pecuniary compensation of 10,000 euros (EUR) in respect of the above breaches.
The Court also found a breach of Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention in respect of all the applicants, on account of the upholding by the domestic courts, in breach of the principle of legal certainty, of the Prosecutor General’s actions for the revocation of a contract of sale of 14.63 hectares of land and of a contract of lease of a lake measuring 5.63 hectares.
3. Since the question of the application of Article 41 of the Convention in respect of the latter violations (Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention) was not ready for decision, the Court reserved it and invited the Government and the applicants to submit, within three months of the date on which the judgment became final in accordance with Article 44 § 2 of the Convention, their written observations on that issue and, in particular, to notify the Court of any agreement they might reach.
4. The applicants and the Government each submitted observations.
THE LAW
5. 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.”
A. Damage
1. The applicants’ submissions
6. The first applicant claimed EUR 68,097.65 for pecuniary damage caused as a result of the annulment of the contracts of sale and lease of 2001. According to him he borrowed from a person named G.A. sums of money to cover court fees, experts’ fees, and transportation and storage of private belongings after the applicants’ eviction from their property. According to the conditions of the loan the interest rates varied between 10% and 18% and the loans were made in Moldovan lei, euros and United States dollars. Some of the amount claimed by the applicant represented compensation for inflation.
7. The second applicant claimed EUR 186,680.4 in compensation for pecuniary damage caused as a result of the revocation of the contract of sale of 14.63 hectares of land. She submitted that a part of that land measuring 1.2544 hectares belonged to her and that its value was approximately EUR 100,000. The applicant submitted documents which indicated that the plot of land in question, destined for agricultural use, was bought by the fourth applicant, the company, in May 2001, from the local council and sold to the second applicant two months later. According to the applicant the value of the buildings built on the land after its acquisition was approximately EUR 85,000. The rest of the amount claimed by this applicant represented the expert’s fee and compensation for inflation. The applicant submitted an expert report in support of her claims. She also claimed EUR 100,000 in compensation for non-pecuniary damage and argued that she had suffered severe distress and frustration after losing her property.
8. The third applicant claimed EUR 4,431,168 for pecuniary damage caused as a result of the annulment of the contract of sale of 14.63 hectares of land. She submitted that a part of that land measuring 11.7261 hectares belonged to her and that its value was EUR 1,829,423. The applicant submitted documents according to which the plot of land in question, destined for agricultural use, was bought by the fourth applicant, the company, in May 2001 from the local council and sold to the first applicant in March 2004 and then to the third applicant in April 2004. The third applicant also submitted that the price of the buildings built on the land after its acquisition was EUR 1,105,119. The applicant further submitted that she had spent 36,000 Moldovan lei (MDL)[1] on two valuations of the property and that in 2004 she had taken out a loan of MDL 140,000 to build a bar and terrace on the land to make it a tourist destination. She mortgaged the land to guarantee the loan. After the 2001 contract of sale of the land was wrongfully revoked she could no longer repay the loan, and she still owes MDL 105,064 to the credit institution. The applicant also submitted that she had suffered a loss of income of MDL 14,634,000, an amount which could have been earned by her if she had been able to use the property as a tourist destination between 2006 and 2011. The applicant further submitted that she had spent MDL 20,900 in court fees when attempting to claim compensation in the domestic courts, which have not been reimbursed to her. Lastly, she claimed MDL 14,795,964 to cover losses suffered due to inflation. The applicant submitted an expert report in support of her claims. According to the report the value of the land in question depends on whether it is public or private property. Had the land been public property its value would have been MDL 68,750, whereas if it had been private property its value would have been MDL 29,986,700. The third applicant also claimed EUR 80,000 in compensation for non-pecuniary damage.
9. The fourth applicant, the company which had in its possession a lake measuring 5.63 hectares of land rented from the local council in 2001, claimed EUR 1,183,726 in compensation for pecuniary damage. It claimed that the value of the property was EUR 444,000. The applicant company further submitted that it had spent some MDL 7,000 on two valuations of the property. The applicant company also submitted that it had suffered a loss of income of some MDL 6,406,681, an amount which could have been earned by it by using the property for tourism between 2006 and 2011. The applicant company lastly claimed MDL 2,969,354 to cover losses suffered due to inflation.
10. The applicants stressed that they had a right to build on the land, and referred to a decision of the local council of 2 July 1999 in which the local authorities decided to sell the land with a view to a tourist resort being built on it. The applicants made it clear that they did not want the property back, because substantial damage had been done to it since 2006 and because it had other owners. Moreover, the hostile attitude of the local administration towards them would make it impossible for them to obtain permits and licences to continue running their business. The applicants finally requested that damages be awarded in euros and not in the Moldovan national currency.
2. The Government’s submissions
11. The Government disagreed with the amounts claimed by the applicants and expressed doubt in respect of the claims made by the first applicant. They argued in the first place that in the initial just satisfaction observations under Article 41 made by the applicants in June 2008 no claim was made by the first applicant corresponding to the one made in their observations of July 2009. Moreover, the money borrowed by the first applicant was to be spent, inter alia, on valuation, transportation and storage of the possessions of the other applicants. Accordingly, there was no causal link between the breach of Article 6 and Article 1 of Protocol No. 1 found in respect of the first applicant and any possible damage suffered by him in relation with these loans. The Government also submitted that the first applicant’s calculations were wrong, because he had used an incorrect exchange rate.
12. In respect of the other applicants the Government expressed doubt about the reliability of the expert reports presented by them and pointed to the fact that the expert had made a note to the effect that the reports have been drawn up solely on the basis of material submitted by the applicants. The Government submitted that the land belonging to the second and third applicants was only permitted to be used for agricultural purposes and nothing could be built on it unless its designation was changed and a number of planning permissions and authorisations obtained. Since none of the above was done by the applicants, all the construction on the land was unlawful. The Government drew the Court’s attention to Article 157 of the Criminal Code in force at the time of the events, according to which building without the legally required permits was a criminal offence punishable by a fine. They also cited Article 149 of the Code of Administrative Offences, under which building without the legally required permits was punishable by a fine and by demolition of the unlawful buildings. Moreover, for the applicants to conduct a business activity such as running restaurants, bars and hotels required licences granted by the State which the applicants did not possess and had not even applied for.
13. The Government further contested the claims made by the fourth applicant, the company, and submitted that it could not claim the value of the lake, because the lake was not owned by it but merely rented from the local administration.
14. The Government finally expressed the view that the second and third applicants could only claim the value of the land owned by them, estimated at MDL 51,000. However, even that was not certain, since they had not paid the full price for the land. The price of the land was to be paid in instalments over a period of ten years and the local council had received only some MDL 15,000. The Government also submitted that the applicants had been in dispute with the local authorities because they had wrongfully occupied an area of forest measuring 0.7 hectares and a public road measuring 0.35 hectares.
15. As far as the applicants’ claims for non-pecuniary damage are concerned, the Government submitted that they were excessive and without foundation. The Government made reference to several judgments in respect of Moldova in which the Court found similar breaches of the Convention and awarded EUR 2,000 for non-pecuniary damage.
3. The Court’s assessment
(a) Pecuniary damage
16. The Court notes that the applicants’ pecuniary claims could be divided into several major groups: the value of the land, the value of the buildings on the land, the lost profit, and other expenses incurred by the applicants when they were deprived of their property (loans, court fees, expenses for valuation and inflation). The Court will examine separately the claims concerning each of the above groups.
17. As far as the value of the buildings on the land is concerned, the Court notes with the Government that the land owned by the second and third applicants is agricultural land and that its designation has never been changed. The applicants submit that they had the right to develop the land for tourism by virtue of a decision of the local administration of July 1999. However, in the eyes of the Court, that decision did no more than state the reason for which the land was sold, without waiving any of the applicants’ legal obligations to obtain a change in the designation of the land and to comply with all the building regulations. Since it does not appear from the applicants’ submissions that they have complied with those requirements, the Court has doubts as to whether the buildings in question were built lawfully. The Court further notes that under the relevant domestic law unlawful building is a criminal offence and any building built in breach of planning regulations is subject to demolition. The Court sees no reason to believe that the applicants were not aware at all times that the development of the land was precarious. In those circumstances the Court does not consider that there is a causal connection between the breaches found in the principal judgment and the applicants’ claims concerning the value of the buildings built on the agricultural land of which they have been deprived. Accordingly, this part of the applicants’ claim is to be dismissed. For the same reason, the Court is not in a position to award compensation to the third applicant for a loan contracted by her with a view to building a bar and a restaurant on the property.
18. As to the lost profit claimed by the second, third and fourth applicants, the Court notes that the claimed pecuniary loss does not derive from an activity that has come into existence, namely from the applicants’ activity prior to the deprivation, but from plans that never went further than anticipation. As has been shown above, the applicants had not acquired the right to develop the property by building on it, or to exploit it in the sense desired by them. Indeed, it does not appear from the applicants’ submissions or from any documents submitted by them that they had any licences to practise activities such as running restaurants, bars and hotels or making profits in any other way by using their property as a tourist destination. Nor did the applicants show that they had made any attempts to obtain such permits from the State. The Court considers that there is a great degree of conjecture in any attempt to predict how long it would have taken for the applicants to obtain such licences, even assuming that they could have regularised the problem with the buildings, and whether they would have been able to obtain them at all, especially as the applicants themselves admitted that their relationship with the local administration was very tense. In such circumstances, the Court is not convinced that the applicants’ anticipated income has attained sufficient attributes to be considered a legally protected interest of sufficient certainty as to be liable for compensation. Therefore, this part of the applicants’ claim is also to be dismissed.
19. As to the claim concerning the value of the land, the Court notes from the outset that the applicants included in that claim the value of the lake rented by the fourth applicant from the local administration. The Court agrees with the Government that since the fourth applicant was not the owner of that lake, it could not claim its value.
As to the land which was owned by the second and the third applicants, the Court considers that they are entitled to be reimbursed its value in spite of the fact that they did not pay its entire price. In that respect, the Court sees no reasons to believe that the applicants would not have paid the remaining instalments had the land not been wrongfully taken away from them, moreover since the price owed by them appears to have been a nominal fee. That being said, the Court is not prepared to accept the applicants’ submission that the value of the land was EUR 1,929,423. In view of the findings made in paragraph 17 above and of the information in its possession concerning the price of agricultural land in Moldova, the Court, ruling on an equitable basis as required by Article 41 of the Convention, awards EUR 2,000 for the pecuniary damage sustained by the second applicant and EUR 19,000 for the pecuniary damage sustained by the third applicant.
20. The Court is similarly unable to accept the claims made by the applicants in respect of other expenses incurred by them. In particular, the expenses allegedly incurred by the applicants for the valuation of the property must be rejected as they are speculative and unrealistic. Indeed, the Court was unable to decide on the issue of just satisfaction at the same time as the merits of the case. Neither could it rely on the valuations in the present judgment.
The Court is similarly not prepared to accept the applicants’ claims concerning the money spent by them on court fees in their unsuccessful attempts to claim compensation from the domestic courts. The applicants did not adduce any evidence that their request for reimbursement of those fees had been rejected.
Nor is the Court prepared to accept the claims made by the first applicant in respect of loans allegedly taken by him from a third party for the purpose of transportation of property from the land of which the applicants had been deprived, because it was not presented with any evidence as to how the money was spent. The Court also dismisses the applicants’ claim related to inflation, as it is not applicable in the circumstances of the present case.
21. In conclusion the Court decides to award EUR 2,000 to the second applicant and EUR 19,000 to the third applicant and to dismiss the remainder of the claims.
(b) Non-pecuniary damage
22. The Court recalls that only the second and the third applicants made claims under this head. Ruling on an equitable basis it awards each of them EUR 3,000 in compensation for the non-pecuniary damage suffered.
B. Default interest
23. 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
1. Holds
(a) that the respondent State is to pay, within three months of the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention the following amounts, to be converted into Moldovan lei at the rate applicable at the date of settlement:
(i) EUR 2,000 (two thousand euros), plus any tax that may be chargeable, to the second applicant in respect of pecuniary damage;
(ii) EUR 3,000 (three thousand euros), plus any tax that may be chargeable, to the second applicant, in respect of non-pecuniary damage;
(iii) EUR 19,000 (nineteen thousand euros), plus any tax that may be chargeable, to the third applicant, in respect of pecuniary damage;
(iv) EUR 3,000 (three thousand euros), plus any tax that may be chargeable, to the third applicant, in respect of non-pecuniary damage;
(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;
2. Dismisses the remainder of the applicants’ claim for just satisfaction.
Done in English, and notified in writing on 24 April 2012, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Marialena TsirliJosep Casadevall Deputy Registrar President
[1]. During the period concerned the exchange rate of the Moldovan lei fluctuated between 15 and 17 lei for 1 euro.
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