Communicated on 21 May 2015
SECOND SECTION
Application no. 42910/08
Liudmila GAINA
against Lithuania
lodged on 18 July 2008
STATEMENT OF FACTS
The applicant, Ms Liudmila Gaina, is a Lithuanian national, who was born in 1961 and lives in Kaunas.
The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
1. The applicant’s debt to the State
In 1994 the applicant obtained a loan of 30,100 Lithuanian litai (LTL, approximately 8,718 euros (EUR)) from the Savings Bank of Lithuania (Lietuvos taupomasis bankas). In 2000 the applicant took over a third party’s loan of LTL 90,036 (EUR 26,076) from the same bank. In 2001 the Savings Bank of Lithuania was privatised and became the private bank AB “Hansabankas” (hereinafter “the bank”).
On 13 August 2001 the applicant took over the right to restoration of property from a third party, A.E. The property in question was land belonging to A.E.’s grandfather, S.F., who had died in 1949. It had been determined by a ruling of the Kaunas District Court of 23 May 2001 that S.F. had owned a total of 68.26 hectares of land in Kaunas City. It appears that A.E. transferred the right to restoration of different parts of this land to over 50 individuals, including the applicant.
On 23 October 2001 the Kaunas Region Administration (hereinafter “the KRA”), by decision no. 02-01-6745, restored the applicant’s right to 1.47 hectares of land in the Kaunas City. The property rights were restored by cancelling the applicant’s outstanding debt to the State under the two loan agreements of 1994 and 2000, amounting to a total of LTL 112,896 (EUR 32,697).
In accordance with the domestic laws applicable at the time, the KRA had to inform the Ministry of Finance about the cancellation of the applicant’s debt, and the Ministry in turn had to inform the bank. On the basis of the information received from the Ministry, the bank had to reduce or cancel the applicant’s debt accordingly.
In November 2001 the KRA provided to the Ministry of Finance a list of individuals, including the applicant, whose debts to the State had been cancelled.
2. Suspension of the cancellation of debt
On 7 December 2001 the Internal Audit Office of the KRA reported that there were grounds to believe that the ruling of the Kaunas District Court of 23 May 2001, which had determined the size of land owned by S.F., had been unfounded and that S.F. had in fact owned no more than 15.58 hectares.
On the basis of this report, on 14 December 2001 the KRA adopted decision no. 02-8108 to suspend the restoration of property rights to the land of S.F. It informed the Ministry of Finance that the cancellation of debt for all the individuals on the previously submitted list, including the applicant, was suspended.
Subsequently the KRA requested the Kaunas Regional Prosecutor to apply for the reopening of the proceedings in the civil case concerning the size of the land owned by S.F. The prosecutor submitted such an application on 27 December 2001, and the proceedings were reopened by a decision of the Supreme Court on 23 October 2002.
On 21 March 2002 the Kaunas Regional Administrative Court, upon the request of the Kaunas Regional Prosecutor, suspended the enforcement of all the KRA decisions on the restitution of the land of S.F. until the end of the reopened civil proceedings.
In the reopened proceedings, in April 2003 the Kaunas District Court determined that S.F. had owned 48.40 hectares of land. In June 2004 the Kaunas Regional Court partly changed that ruling and determined that S.F. had owned 47.91 hectares of land. The KRA and the applicant participated in the reopened proceedings as third parties.
On 26 October 2004 the Kaunas Regional Administrative Court revoked the suspension of the enforcement of the KRA decisions on the restitution of the land of S.F., ordered by its earlier ruling of 21 March 2002.
On 6 December 2004 the Ministry of Finance issued a certificate confirming that the applicant’s debt to the State had been cancelled. On that same day the bank received the certificate and cancelled the applicant’s outstanding debt.
3. Payments to the bank in 2001-2004
Until 6 December 2004 the bank continued counting the interest and late payment fines (palūkanos ir delspinigiai) due from the applicant with respect to the two loan agreements of 1994 and 2000. In February 2005 the bank lodged a civil claim against the applicant concerning interest payments under the loan agreement of 1994. In February 2006 the Kaunas District Court and in June 2006 the Kaunas Regional Court found in favour of the bank and ordered the applicant to pay LTL 2,835 in interest, court fees and postal expenses.
During the period from 23 October 2001 (i.e. the KRA decision to restore the applicant’s property rights and cancel her debt) to 6 December 2004 (i.e. the certificate of the Ministry of Finance confirming the cancellation of the applicant’s debt), the applicant paid a total of LTL 20,927 (EUR 6,060) in interest and late payment fees under both the loan agreements, as well as legal expenses and court fees in the civil proceedings instituted by the bank.
4. Proceedings for damages against the KRA
In April 2007 the applicant started court proceedings against the KRA. She argued that the KRA had acted unlawfully by suspending the restoration of her property rights (decision no. 02-8108 of 14 December 2001) and by requesting the prosecutor to apply for reopening of the proceedings concerning the size of land owned by S.F. The applicant claimed pecuniary damages of LTL 20,927 and non-pecuniary damages of LTL 15,000.
On 11 June 2007 the Kaunas Regional Administrative Court dismissed the applicant’s action. It held that the principle of the rule of law obliged the KRA to ensure that restoration of property was conducted in accordance with the applicable laws. In the presence of well-founded doubts about the actual size of the land owned by S.F., the KRA had acted lawfully and diligently by suspending the restoration and initiating the reopening of the proceedings. The fact that the courts in the reopened proceedings had found that S.F. had had less land than initially determined (48.40 hectares and 47.91 hectares, as opposed to the initial estimate of 68.26 hectares) showed that the suspension was indeed well-founded.
On 12 March 2008 the Supreme Administrative Court dismissed the applicant’s appeal, although it adopted different reasoning from the first instance court. The Supreme Administrative Court distinguished between the competence of the KRA and that of the Ministry of Finance: while the KRA was responsible for restoration of property, it was the Ministry of Finance which had the authority to cancel the applicant’s debt and issue a certificate to the bank. The KRA decision no. 02-8108 of 14 December 2001 was not legally binding on the Ministry of Finance and therefore could not affect the cancellation of the applicant’s debt. Thus, the court concluded that the lawfulness of decision no. 02-8108 did not need to be examined.
The Supreme Administrative Court further held that the suspension of the enforcement of the KRA decision no. 02-01-6745 resulted not from the actions of the KRA but from the ruling of the Kaunas Regional Administrative Court on 21 March 2002, and this ruling had been revoked by that same court only on 26 October 2004. Therefore, the KRA could not be held responsible for the suspension.
COMPLAINTS
The applicant complains under Article 1 of Protocol No. 1 to the Convention that she had to pay LTL 20,927 to the bank without any legal basis. She contends that the decision of the KRA to suspend the restoration of her property rights and to request the reopening of the proceedings concerning the size of the land owned by S.F. was unlawful and unfounded. The applicant stresses that doubts regarding the exact size of S.F.’s land did not affect the 1.47 hectares which had to be restored to her because there were no claims that S.F. had less than 1.47 hectares of land. Accordingly, the KRA had no grounds to suspend the restoration of her property rights without verifying whether there were any concerns about the 1.47 hectares specifically. The applicant contends that it is unfair that she alone had to bear the financial cost of the KRA decisions.
QUESTIONS TO THE PARTIES
1. Has there been a violation of Article 1 of Protocol No. 1 to the Convention on account of the fact that the applicant had to pay interest and late payment fees to the bank until 6 December 2004?
2. Did the report of 7 December 2001 of the Internal Audit Office of the KRA specifically refer to the 1.47 hectares of land claimed by the applicant?
3. What was the amount of the applicant’s outstanding debt to the State on 6 December 2004 and did it differ from the outstanding debt on 23 October 2001?
4. The Government are requested to provide information about the division of competence among different authorities (the KRA, the Ministry of Finance, the bank, the courts, etc.) in the process of restoring the applicant’s property rights, the cancellation of the applicant’s debt and suspension of related decisions.
5. The Government are requested to provide information about the starting date of the audit into the size of the land owned by S.F., conducted by the Internal Audit Office of the KRA. If the audit was ongoing at the time of the adoption of the Kaunas District Court ruling of 23 May 2001 and/or the KRA decision no. 02-01-6745 of 23 October 2001, the Government are also requested to provide information as to whether the audit procedure was taken into account when adopting the said decisions.
6. The Government are requested to provide information as to whether in 2004 the applicant’s outstanding debt was cancelled on the basis of the KRA decision no. 02-01-6745 as it stood on 23 October 2001, or whether any changes were made to that decision.
The applicant is requested to submit a copy of her agreement with A.E. concerning the right to restoration to 1.47 hectares of land, as well as copies of the ruling of Kaunas District Court of 22 February 2006 and of the ruling of Kaunas Regional Court of 1 June 2006 in the proceedings instituted by AB “Hansabankas” against the applicant.
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