CASE OF TOMOV AND NIKOLOVA v. BULGARIA

FIFTH SECTION

CASE OF TOMOV AND NIKOLOVA v. BULGARIA

(Application no. 50506/09)

JUDGMENT

STRASBOURG

21 July 2016

FINAL

21/10/2016

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Tomov and Nikolova v. Bulgaria,

The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:

Angelika Nußberger, President,
Ganna Yudkivska,
Khanlar Hajiyev,
André Potocki,
Faris Vehabović,
Carlo Ranzoni, judges,
Pavlina Panova, ad hoc judge,
and Claudia Westerdiek, Section Registrar,

Having deliberated in private on 28 June 2016,

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

PROCEDURE

1. The case originated in an application (no. 50506/09) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Bulgarian nationals, Mr Aleksandar Petkov Tomov and Ms Mariana Petrova Nikolova (“the applicants”), on 9 June 2009.

2. The applicants were represented by Ms N. Dobreva, a lawyer practising in Sofia. The Bulgarian Government (“the Government”) were represented by their Agent, Mrs A. Panova, of the Ministry of Justice.

3. The applicants alleged that they had been unfairly deprived of their title to a plot of agricultural land.

4. On 16 March 2015 the application was communicated to the Government.

5. On 17 April 2015 Mr Yonko Grozev, the judge elected in respect of Bulgaria, withdrew from sitting in the case (Rule 28 § 3 of the Rules of Court). Accordingly, on 1 April 2016 the President of the Section selected Ms Pavlina Panova as an ad hoc judge from the list of five persons whom the Republic of Bulgaria had designated as eligible to serve as such a judge (Article 26 § 4 of the Convention and Rule 29 § 1 (a) of the Rules of Court).

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

6. The applicants were born in 1950 and 1957 respectively and live in Sofia.

7. On 19 February 1993 the applicants, at the time a married couple, bought a plot of land of 1,000 square metres in the village of Kranevo, on the Black Sea coast. The seller, Mr O., had acquired the property in 1967 from the agricultural co-operative that existed at the time, in exchange for another plot of land of his.

8. The applicants’ possession of the land remained undisturbed until 2003, when other persons took possession of it. The applicants discovered then that the land had been collectivised after 1945 and that in 1991 the heirs of the pre-collectivisation owner, Mr K., had instituted restitution proceedings under the relevant provisions of the Agricultural Land Act (“the ALA”, see paragraph 13 below). Their restitution request had been allowed in a court judgment of 7 December 1995 and in a decision issued by the competent administrative body ‒ the local agricultural land commission ‒ on 4 April 1996. Thereafter, the heirs of Mr K. had transferred the land to the persons who had later taken possession of the plot.

9. On an unspecified date in 2003 the applicants brought a rei vindicatio action against these individuals.

10. In a judgment of 25 May 2005 the Balchik District Court dismissed their claim. It relied on the provision of section 10(13) of the ALA (see paragraph 15 below), holding on its basis that of the two rival claims to the same land the law gave priority to the one based on restitution.

11. Upon appeal, on 25 January 2007 the Dobrich Regional Court reversed that decision and allowed the applicants’ action. It considered in particular that section 10(13) of the ALA was not applicable to the case as it had only been introduced in 1997, that is to say after the restitution decision in favour of Mr K.’s heirs and after the applicants had bought the plot of land.

12. Upon further appeal, in a final judgment of 12 December 2008, the Supreme Court of Cassation quashed the Regional Court’s judgment and dismissed the applicants’ rei vindicatio claim. It took the view that section 10(13) of the ALA, introduced in 1997, had to be considered to be applicable with effect from the ALA’s entry into force in 1991 because it was merely clarifying its general restitution provisions. As to the exception contained in section 18z(3) of the Regulations for the ALA’s implementation, also introduced in 1997 (see paragraph 16 below), the Supreme Court considered it inapplicable to the case; in its view, section 18z(3) only precluded the restitution of properties which had been the subject of transactions prior to the ALA’s entry into force in 1991, whereas the applicants had bought their plot in 1993.

II. RELEVANT DOMESTIC LAW AND PRACTICE

13. The Agricultural Land Act (Закон за собствеността и ползването на земеделските земи) was adopted in 1991. It entitled individuals whose land had been collectivised, or their heirs, to request ‒ in certain circumstances ‒ the restoration of their ownership.

14. At the time of its adoption the ALA did not expressly address situations where restitution was sought in respect of plots which had been acquired by third parties after the collectivisation process. In an Interpretative Decision of 25 June 1996 (Тълкувателно решение № 2 от 25.VI.1996 г. по гр. д. № 2/96 г., ОСГК) the former Supreme Court found that in situations where the post-collectivisation buyers had acted in good faith and their title was not otherwise defective, their rights would prevail over the rights of the parties claiming restitution. It thus held that:

“[t]he legal effect of valid sale contracts, in accordance with the legislation in force at the time, excludes the rights of former owners to obtain restitution of agricultural land ...”

15. In 1997 Parliament added section 10(13) to the ALA. The new provision stipulated that former owners’ rights to plots which had not been built on were to be restored even in cases where the land in question had been sold or transferred to third parties. It also provided that those third parties could not rely on acquisitive prescription.

16. An exception to the above rules was provided for in section 18z(3) of the Regulations for the ALA’s implementation (Правилник за прилагане на Закона за собствеността и ползването на земеделските земи). Under that provision, also introduced in 1997, third parties who had acquired the land which was the subject to restitution claims would retain their property where two conditions were met: 1) the land in question had been acquired in exchange for another plot transferred to the co-operative, and 2) the land had been the subject of further transactions or had been built on.

17. In a judgment of 14 November 2000 (Решение № 13 от 14 ноември 2000 г. по к. д. № 11/2000 г.) the Constitutional Court dealt with the compatibility of section 10(13) of the ALA with the constitutional provisions guaranteeing the right to property. It found that it was compatible with these provisions, in particular because:

“the owners of land included in [agricultural co-operatives] never lost their property rights but during a certain period of time were merely unable to exercise them. That is why any contracts transferring their land cannot be opposed to them, regardless of whether or not the third parties acquiring the land acted in good faith.”

As to the provision that the third parties who acquired the land could not rely on acquisitive prescription, the Constitutional Court held:

“Through that provision, the legislator has given precedence to the rights of the owners of agricultural land included in [agricultural co-operatives], who with that [act of inclusion] were deprived of the possibility of exercising their property rights and preventing the possible acquisition of their land by third parties through adverse possession, over [the rights of] those who have acquired it through such adverse possession.

The [Constitutional] Court finds that a fair balance between the conflicting fundamental constitutional rights has thus been achieved.”

18. Even before the judgment mentioned above, in several earlier judgments, the Constitutional Court had taken the view that the collectivisation of agricultural land had not extinguished the owners’ property rights, but had merely created obstacles to their exercise (Решение № 6 от 5 юли 1992 г. по к. д. № 9/92 г.; Решение № 12 от 8 юли 1993 г. по к. д. № 12/93 г.; Решение № 8 от 19 юни 1995 г. по к. д. № 12/95 г.).

19. However, before 1989 it was considered that agricultural co‑operatives could validly sell land to private individuals (Тълкувателно решение № 16 от 11.III.1977 г. по гр. д. № 86/76 г., ОСГК). Moreover, the former Supreme Court found during that period that upon collectivisation the co-operatives became the owners of collectivised land and that former owners’ rights became extinguished (Решение № 314 от 25.II.1966 г. по гр. д. № 2484/66 г., I гр. о.; Решение № 2119 от 31.X.1966 г. по гр. д. № 1502/66 г., I гр. о.).

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1

20. The applicants complained under Article 1 of Protocol No. 1 and Article 13 of the Convention that they had been unfairly deprived of their property.

21. The Court is of the view that it suffices to examine the complaints under Article 1 of Protocol No. 1 alone, 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.”

A. Admissibility

1. Exhaustion of domestic remedies

22. The Government argued that the applicants had failed to exhaust the available domestic remedies, because they had not brought an action against Mr O. ‒ from whom they had bought the disputed property in 1993 ‒ to seek rescission of the contract of sale and recovery of the price paid at the time.

23. The applicants pointed out that they had brought a rei vindicatio action for the protection of their property rights, this being the only procedure “whereby they could raise the substance of their Convention complaints before a national authority”.

24. The Court, for its part, observes that an action of the type indicated by the Government ‒ albeit directed against private individuals and not the State ‒ could, in principle, provide redress to persons in a situation such as the applicants’ and lessen any hardship suffered by them (see, for example, the situation in Petrovi v. Bulgaria (dec.) [Committee], no. 11186/12, §§ 30‑31, 25 August 2015). However, the Government have failed to show this to be so in the circumstances of the case in question. The applicants bought their plot of land in 1993, and the 1990s were a period of galloping inflation in Bulgaria, leading to huge depreciation of the national currency. In previous cases the Court has observed that the practice of the domestic courts was to refuse revalorisation of claims brought by individuals in such a situation, who could thus only obtain a token award (see, for example, Kalinova v. Bulgaria, no. 45116/98, § 76, 8 November 2007; Maslenkovi v. Bulgaria, no. 50954/99, § 37, 8 November 2007; and Manolov and Racheva-Manolova v. Bulgaria, no. 54252/00, § 45, 11 December 2008). There is no indication that the applicants found themselves in a different position and could hope to obtain anything more than that.

25. That being so, the Court cannot conclude that the applicants forwent the possibility of obtaining any adequate redress after they lost their property. Accordingly, it dismisses the Government’s objection based on non-exhaustion of domestic remedies.

2. No significant disadvantage

26. The Government furthermore pointed out that the plot of land the applicants had lost had not been built on, and that they had not become homeless as a result of its loss. The Government thus argued that the circumstances of the case did not reveal a “serious enough” breach of their rights.

27. The applicants did not respond to this argument.

28. The Court understands that the Government wished to raise the objection that the applicants had not suffered any significant disadvantage within the meaning of Article 35 § 3 (b) of the Convention.

29. The Court has held that the admissibility criterion under that provision rests on the premise that any violation of a right, however real from a purely legal point of view, should attain a minimum level of severity in order to warrant consideration by an international court. The assessment of this minimum level is, in the nature of things, relative and depends on all the circumstances of the case (see Adrian Mihai Ionescu v. Romania (dec.), no. 36659/04, 1 June 2010; Korolev v. Russia (dec.), no. 25551/05, 1 July 2010; and Konstantin Stefanov v. Bulgaria, no. 35399/05, § 44, 27 October 2015). However, even if the Court finds that the applicant has suffered no significant disadvantage, it should not, in particular, declare an application inadmissible if respect for human rights, as defined in the Convention and the Protocols thereto, warrants an examination on the merits (see Juhas Đurić v. Serbia, no. 48155/06, § 55, 7 June 2011).

30. The present case concerns the title to a plot of land of 1,000 square metres. Even though, as noted by the Government, the applicants did not live on that land and it had not been built on, the Court cannot conclude that the applicants did not suffer any significant disadvantage as a result of having been denied their property rights to it.

31. Moreover, the Court is of the opinion that respect for human rights, as defined in the Convention, requires examination of the present application on the merits. It raises a novel issue in the context of the process of restitution in Bulgaria, namely the effect on third parties of the restitution of agricultural land, in particular under section 10(13) of the ALA, which has also been raised in other applications pending before the Court (for instance Krasteva and Others v. Bulgaria, application no. 5334/11, communicated on 26 May 2015).

32. In view of the above, the Government’s objection must be dismissed.

3. Conclusion as to admissibility

33. Lastly, the Court notes that the application is not manifestly ill‑founded within the meaning of Article 35 § 3 (a) of the Convention, nor inadmissible on any other grounds. It must therefore be declared admissible.

B. Merits

1. Arguments of the parties

34. The Government contested the applicants’ complaints and were of the view that the Supreme Court of Cassation had correctly analysed and applied the relevant national law to their case.

35. Even though they referred to the case of Velikovi and Others v. Bulgaria (nos. 43278/98, 45437/99, 48014/99, 48380/99, 51362/99, 53367/99, 60036/00, 73465/01 and 194/02, 15 March 2007, see its description in paragraphs 38-41 below), the Government urged the Court to differentiate the present case from it because in the case at hand the applicants had bought their land from a private individual, whereas in Velikovi and Others the properties the applicants had subsequently lost had been bought from the State. Moreover, unlike some of the cases examined in Velikovi and Others, the applicants had not lost their property due to errors committed by the authorities, and the State ‒ not having participated in the sale of the land in 1993 ‒ could not be held responsible for the consequences of the invalidation of their title. The Government also pointed out that the applicants had bought the disputed plot of land two years after the entry into force of the ALA in 1991. They argued that depriving the applicants of their property had been lawful, and had pursued the legitimate aim of undoing a wrong committed in the past, namely the taking of the land from its previous owners. Moreover, the interference was proportionate and the State had not exceeded the large margin of appreciation it enjoyed in implementing social and economic policies.

36. The applicants disagreed. They pointed out that in their case the domestic courts’ judgments, on the basis of the ALA, had resulted in a complete denial of their property rights.

37. The applicants argued that at the time when they bought the plot of land they had had no possibility of knowing that the property was also the subject of a restitution claim as there was no publicly available information on the matter. They contended that the 1997 amendments to the ALA (see paragraphs 15-16 above) had not been foreseeable and, at the same time, had dramatically interfered with fundamental rules of property law such as adverse possession. The applicants considered that they had been made to bear an excessive individual burden. Lastly, they contended that the Supreme Court of Cassation had taken an overly formalistic approach to their case, failing to take into account the fact that they had bought in good faith.

2. The Court’s assessment

(a) The case of Velikovi and Others and the follow-up cases

38. The Court has examined complaints concerning the effect of restitution on third parties in a number of cases against Bulgaria, most notably Velikovi and Others, cited above (see also, for example, Dimitar and Anka Dimitrovi v. Bulgaria, no. 56753/00, 12 February 2009; Vladimirova and Others v. Bulgaria, no. 42617/02, 26 February 2009; Peshevi v. Bulgaria, no. 29722/04, 2 July 2009; Madzharov v. Bulgaria, no. 40149/05, 2 September 2010; and Georgieva and Mukareva v. Bulgaria, no. 3413/05, 2 September 2010). These cases concerned the application of different legislation, which was adopted in 1992 and was applicable to urban properties, especially dwellings. Even though that legislation provided for the restoration, in principle, of titles to property owned at the time by the State, exceptionally it gave former owners of nationalised properties the possibility of seeking restitution even where such property had in the meantime been acquired by private individuals. To that end, they had to demonstrate that the buyers had acted in breach of the law or through abuse of office. It was initially provided that they could make their claims within a year following the respective legislation’s entry into force, but in 1997 the deadline was renewed. The applicants to the Court were the third parties whose properties had been taken to satisfy the former owners’ restitution claims.

39. In the many cases of this type which it has examined, the Court has developed a number of criteria to assess the applicants’ complaints. It held, first, that the years after 1989 in Bulgaria had represented a unique period of social, economic and legal transition, during which difficult decisions had had to be taken with regard to the restitution of nationalised property (see Velikovi and Others, cited above, § 166). Thus, for the Court, the taking of private property to satisfy restitution claims and the challenging of property titles ‒ some of them decades-old ‒ could only, exceptionally, be justified when associated with that transition; otherwise, it could not be reconciled with the principle of legal certainty (ibid., § 189). This led the Court to find violations of Article 1 of Protocol No. 1 in several cases where the applicants’ titles had not been challenged before the initial deadline of one year after the entry into force of the restitution legislation – the period associated with the beginning of Bulgaria’s social and legal transition – but at a later date, after the initial deadline had been renewed (see Tsonkovi v. Bulgaria, no. 27213/04, §§ 24-27, 2 July 2009; Georgieva and Mukareva, cited above, §§ 37-39; and Tonov and Others v. Bulgaria [Committee], no. 48704/07, §§ 23-26, 30 October 2012).

40. In a number of cases belonging to the Velikovi group, the Court also found problematic the fact that the applicants’ titles had been nullified because of a “breach of law” which in fact represented a minor administrative omission committed at the time of the purchase of the flats by the State authorities (see, for example, the case of Tzilevi, examined in Velikovi and Others, § 223 of the judgment cited above, and Madzharov, cited above, § 23). For the Court, this meant that the cases at issue did not fall within the scope of the legitimate aim of restoring justice and the rule of law pursued in principle by the restitution legislation (see Velikovi and Others, cited above, § 190). In these cases, as well as in others where it found that the national courts had extended excessively the scope of application of the restitution legislation, in disregard of the principle of legal certainty (see the cases of Todorova and Eneva and Dobrev, examined in Velikovi and Others, §§ 240-41 and 245-58 of the judgment), the Court held that the fair balance required under Article 1 of Protocol No. 1 could not be achieved without appropriate compensation. The applicable legislation provided for a compensation scheme, and the Court, examining its operation in practice, found that in some cases the applicants had managed to obtain compensation which sufficed to restore the fair balance required under Article 1 of Protocol No. 1, and that in other cases that they had not, in breach of the requirements of that provision.

(b) The case at hand

41. The present case is the first one in which the Court has to examine a similar situation which has arisen under the ALA. The Court sees no reason not to apply to it, in so far as appropriate, the principles developed in the cases belonging to the Velikovi group, outlined above.

42. The first question the Court has to answer is whether there was State interference with the applicants’ property rights. The Government appeared to contest this, since they argued (see paragraph 35 above) that the State authorities, not having been party to the contract of sale whereby the applicants had acquired their land, could not be held responsible for the consequences of its invalidation.

43. However, the Court notes that the applicants did not lose their property as a result of any defect in that contract; in fact, it has never been argued that there was any such defect, and even though the contract was not concluded until 1993, the plot of land had been considered to be privately owned since 1967 (see paragraph 7 above). The applicants lost title to that plot following the adoption of restitution legislation by the Parliament in Bulgaria and its subsequent application by the national courts. In particular, section 10(13) of the ALA provided that former owners’ title to agricultural land would be restored even in cases where the land had in the meantime been sold or transferred to third parties, also precluding the possibility for those third parties to rely on acquisitive prescription (see paragraph 15 above). Applying this provision to the case in question, the courts found that the heirs of Mr K. had, on the basis of restitution, become owners of the land bought earlier by the applicants (see paragraphs 10 and 12 above).

44. Accordingly, the Court is of the view that in this case there was State interference with the applicants’ right to property. As in Velikovi and Others (see §§ 159-60 of the judgment, cited above), it finds that the applicants were deprived of their property within the meaning of the second sentence of Article 1 of Protocol No. 1. In order to comply with the requirements of that provision, any deprivation of property must be lawful and in the public interest, and must strike 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.

45. The interference with the applicants’ rights was based on the relevant provisions of the ALA and the Regulations for its implementation, which, in principle, pursued an important aim in the public interest, namely the restoration of justice and the rule of law after a period of totalitarian rule in Bulgaria. The Court further finds, as in Velikovi and Others (cited above, § 167) and the follow-up cases (for example, Panayotova v. Bulgaria, no. 27636/04, § 20, 2 July 2009), that the question of the quality of the applicable law is indissociable from the question of whether the specific interference with the applicants’ property rights had a legitimate aim and was necessary in a democratic society for the achievement of this aim. Those matters will be examined below.

46. As discussed above (see paragraph 39), in the Velikovi group of cases the Court accepted that the invalidation of the applicants’ property titles could only be seen as justified and proportionate to the legitimate aim of restoring justice and the rule of law where applied as an exceptional transitional step of short duration during the period of social transformation from a totalitarian regime to democracy. Thus, where, in the cases of the Velikovi group, the applicants’ titles had been challenged in 1997-98, long after the initial deadline of one year following the entry into force of the respective restitution legislation had expired, the Court found that the interference with the applicants’ property rights could not be seen as falling within the scope of the legitimate aims that the said legislation pursued in principle, since it represented a significant departure from its transitional character (see Tsonkovi, § 23-26, and Georgieva and Mukareva, §§ 37-38, both cited above).

47. With regard to the present case, the Court observes that even though the ALA was adopted in 1991, soon after the process of political and economic transition was commenced in Bulgaria, the provision on the basis of which the applicants, having acquired their plot of land in 1993, were deprived of their property, section 10(13), was not adopted until several years later, in 1997 (see paragraphs 13 and 15-16 above). In addition, taking due account of the Bulgarian Constitutional Court’s position that former owners had not lost their property rights with the collectivisation of agricultural land, but had merely been prevented from exercising those rights (see paragraphs 17-18 above), the Court nevertheless cannot conclude that before the adoption of its section 10(13) the ALA provided any valid grounds for the restitution of title to plots which had in the meantime been transferred to private parties. The Court relies in that regard on the Supreme Court of Cassation’s position before 1997, demonstrated by its Interpretative Decision of 25 June 1996, pointing out that where buyers of agricultural land ‒ such as the applicants ‒ had acted in good faith and their title was not otherwise defective, that title had to be considered valid and could be used to combat former owners’ restitution claims (see paragraph 14 above). Moreover, before 1990 the view was held that agricultural co-operatives owned the land they used and could validly sell it to private individuals (see paragraph 19 above).

48. In view of the above, the Court concludes that the possibility of taking private property for the purposes of satisfying the restitution claims of former owners of agricultural land was introduced in the ALA with the adoption of its section 10(13) in 1997, and had no legal basis before that date. The measure cannot thus be seen as “exceptional” and strictly related to the period of political and economic transition in Bulgaria, which, as in many of the Velikovi-type cases, would have justified it in principle. It is also striking that the possibility for former owners to challenge private parties’ title to agricultural land on the basis of section 10(13) of the ALA was definitely not limited in time. Once in possession of a favourable restitution decision, those former owners could wait for years before claiming their land, since, in particular, the persons who had acquired the land could not rely on acquisitive prescription. This is precisely what happened in the present case: while the heirs of Mr K. obtained favourable restitution decisions in 1995 and 1996, in was only in 2003 that the persons to whom they transferred the land took possession of it, provoking the applicants’ defence through a rei vindicatio claim (see paragraph 8 above).

49. The Court observes in addition that, unlike the cases belonging to the Velikovi group, where the pre-nationalisation owners of the applicants’ flats had to demonstrate a defect in the applicants’ titles, namely that they had obtained the disputed properties in breach of the law or through abuse of office (see paragraph 38 above), no such thing was required under section 10(13) of the ALA. In fact, that provision quite simply wiped out the consequences of contracts of sale concluded after collectivisation without requiring that they be demonstrated to be in any way defective. This was also the situation in the case. As already noted (see paragraph 43 above), it was not argued that the applicants’ title was in itself invalid, and even though the applicants had bought the land in 1993, it had been privately owned since 1967 (see paragraph 7 above).

50. Lastly, the Court observes that the mere fact that the heirs of Mr K. had obtained restitution decisions in their favour in 1995 and 1996 could not be seen as meaning that their entitlement to restitution in kind was recognised definitively; in fact, the Court has examined a number of cases ‒ set in a similar context but raising different issues ‒ where it has held that, in cases where there were competing claims to the same land by third parties, such restitution decisions could not be seen as conclusively determining the scope of the claimants’ restitution rights, before those third parties’ claims had been examined in separate proceedings (see, for example, Nedelcheva and Others v. Bulgaria, no. 5516/05, §§ 56-58, 28 May 2013, and Karaivanova and Mileva v. Bulgaria, no. 37857/05, §§ 74-76, 17 June 2014).

51. In the light of the above-stated considerations, the Court is of the view that the taking of the applicants’ property in the case in question violated the principle of legal certainty (see Tsonkovi, cited above, § 26). Accordingly, the Court cannot conclude that the measure fell within the scope of legitimate aims such as restoring justice and the rule of law, which the restitution provisions of the ALA could have pursued in principle.

52. In the cases belonging to the Velikovi group in regard to which it reached similar conclusions, the Court held that nothing short of compensation “reasonably related to the market value” of the property lost could maintain the requisite fair balance under Article 1 of Protocol No. 1 (see the judgment on just satisfaction in those cases examined in Velikovi and Others in which the Court found a violation of Article 1 of Protocol No. 1 – Todorova and Others v. Bulgaria (just satisfaction), nos. 48380/99, 51362/99, 60036/00 and 73465/01, § 9, 24 April 2008, as well as Tsonkovi, § 27, and Georgieva and Mukareva, § 39, both cited above). Most of the applicants in these cases had access to the compensation scheme provided for under the relevant legislation, but the Court judged the actual compensation they could have obtained insufficient.

53. The legislation applicable to the present case contained no provisions concerning compensation for persons in a situation such as the applicants’.

54. For the Court, the above means that depriving the applicants of their property, in breach of the principle of legal certainty and without any compensation whatsoever, was a disproportionate measure.

55. Accordingly, there has been a violation of Article 1 of Protocol No. 1.

II. APPLICATION OF ARTICLE 41 OF THE CONVENTION

56. 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. Pecuniary damage

57. In respect of pecuniary damage, the applicants claimed 149,339 euros (EUR) for the market value of the property they had lost. In support of that claim they presented a report, prepared in August 2015 by an expert appointed by them. The report described the plot as being situated in proximity to shops, a bus station and a main road, but accessible only via a dirt road. It also noted that the area was mostly residential, and that a three‑storey hotel had been built on a neighbouring plot.

58. The report referred to recent sales of three similar plots of land in the village, at prices between 58 and 65 Bulgarian levs (BGN) ‒ the equivalent of EUR 29 to 33 ‒ per square metre. Assessing the applicants’ plot to be slightly inferior to these ones, it calculated on this basis its possible selling price at BGN 57,980, the equivalent of EUR 29,580. In addition, the report hypothesised that there might have been a more substantial potential profit from the land if the applicants had been able to keep it and had found an investor who wanted to build a hotel on it. On this basis it calculated the “just market price” indicated above and claimed by the applicants.

59. The Government contested the claim. They were of the view that the amount claimed by the applicants was “extremely exaggerated, abstract and completely unrealistic”. They pointed out that the plot of land had not been built on, was not situated close to the coast, and was only accessible via a dirt road. Such a plot could in reality therefore only be traded at an “exceptionally low price”.

60. The Court has found above that the applicants were unlawfully deprived of their property. Thus, seeing that it is impossible to order the return of the land to the applicants as it has passed to private parties, it is appropriate to make a monetary award reasonably related to its value.

61. As to the amount of that award, the only valuation of the property at issue at the disposal of the Court is the one presented by the applicants, prepared in August 2015 (see paragraphs 57-58 above). In the absence of any alternative provided by the Government, the Court will proceed on the basis of this valuation.

62. However, like the Government, the Court considers that the amount indicated in the valuation report as the “just market price” of the plot, namely EUR 149,339, is highly exaggerated. It observes that the claim made in the report that the applicants could have received a significant profit had they had a hotel built on the plot is purely speculative (see Todorova and Others, cited above, § 18) and it will not take it into account. On the basis of the remaining information contained in the report (see paragraph 58 above), the Court concludes that EUR 29,000 is an amount which appears realistically related to the market value of the plot of land. It thus awards that amount jointly to the two applicants.

B. Non-pecuniary damage

63. The applicants also claimed EUR 4,000 for each of them in respect of non-pecuniary damage.

64. The Government contested the claim, considering it exaggerated.

65. The Court is of the view that the applicants must have suffered non‑pecuniary damage, for which the finding of a violation of the Convention in the present judgment is not a sufficient remedy. Judging on an equitable basis, it awards each of them EUR 1,000 under this head.

C. Costs and expenses

66. Lastly, the applicants claimed EUR 2,800 for the work of their lawyer before the Court, Ms Dobreva, for 28 hours of work, at a rate of EUR 100 per hour. In support of that claim they presented a time-sheet. They requested that any amount awarded under this head be transferred directly into Ms Dobreva’s bank account.

67. The Government contested the claim.

68. 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.

69. In the present case, regard being had to the documents in its possession and the above criteria, the Court allows the applicants’ claim in full. As requested by the applicants, the sum awarded ‒ EUR 2,800 ‒ is to be paid directly to their legal representative.

D. Default interest

70. 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. Declares the application admissible;

2. Holds that there has been a violation of Article 1 of Protocol No. 1;

3. Holds

(a) that the respondent State is to pay, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts, to be converted into Bulgarian levs at the rate applicable at the date of settlement:

(i) EUR 29,000 (twenty-nine thousand euros), plus any tax that may be chargeable, jointly to the two applicants, in respect of pecuniary damage;

(ii) EUR 1,000 (one thousand euros) to each applicant, plus any tax that may be chargeable, in respect of non-pecuniary damage;

(iii) EUR 2,800 (two thousand eight hundred euros), plus any tax that may be chargeable to the applicants, in respect of costs and expenses, to be transferred directly into the bank account of the applicants’ legal representative;

(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;

4. Dismisses the remainder of the applicants’ claim for just satisfaction.

Done in English, and notified in writing on 21 July 2016, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

              Claudia WesterdiekAngelika Nußberger
RegistrarPresident

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