SECOND SECTION
DECISION
Application no. 10226/08
Vidosava KALUĐEROVIĆ-BRAJOVIĆ
against Montenegro
The European Court of Human Rights (Second Section), sitting on 11 February 2014 as a Chamber composed of:
Guido Raimondi, President,
Peer Lorenzen,
András Sajó,
Nebojša Vučinić,
Paul Lemmens,
Egidijus Kūris,
Robert Spano, judges,
and Stanley Naismith, Section Registrar,
Having regard to the above application lodged on 21 February 2008,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Ms Vidosava Kaluđerović-Brajović, is a Montenegrin national, who was born in 1937 and lives in Podgorica. She was represented before the Court by Ms D. Kisjelica, a lawyer practising in Herceg Novi.
2. The Montenegrin Government (“the Government”) were represented by their Agent, Mr Z. Pažin.
A. The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows:
1. Administrative proceedings
4. On 9 June 2005 the Commission for Restitution and Compensation (Komisija za povraćaj i obeštećenje Opštine Podgorica; hereinafter “the Commission”) awarded the applicant and her co-claimants a total amount of EUR 1,285,765.75 as compensation for the property which had been expropriated from their relatives in 1950 and 1962. The applicant herself was awarded 1/24 of the total amount, that is EUR 53,573.57. The decision specified that the amount was to be paid within 15 days as of the date when the decision became final.
5. On 9 November 2005 the Ministry of Finance (Ministarstvo finansija) declared the Commission’s decision null and void (oglašeno je ništavim).
6. On 2 February 2006 the Administrative Court (Upravni sud) quashed the decision of the Ministry of Finance. In so doing, the court held, inter alia, that the Commission’s decision properly (pravilno) specified the applicant and her co-claimants as being entitled to the compensation and awarded them the relevant amounts accordingly.
2. Enforcement proceedings
7. On 17 November 2005 the Court of First Instance (Osnovni sud) in Podgorica declared that it lacked competence (oglašava se nenadležnim) to decide on the applicant’s request for enforcement of the Commission’s decision dated 9 June 2005, relying on sections 268 and 269 of the General Administrative Proceedings Act as well as on section 37 of the Restitution of Expropriated Property Rights and Compensation Act (see paragraphs 30‑31 and 20 below).
8. On 20 December 2005 the High Court (Viši sud) in Podgorica upheld the said decision of the Court of First Instance.
9. On 29 June 2007 the Court of First Instance once again declared that it lacked competence to decide on the applicant’s renewed request for enforcement.
3. Other relevant information
10. In March 2006 the Compensation Fund started paying the awarded amount to the applicant in instalments pursuant to the relevant legislation (see paragraphs 17 and 23 below). By April 2011 the applicant had received EUR 10,307.25 in total.
11. On 21 December 2007 the Ministry of Finance informed the applicant, upon her enquiry, that the frequency of payment was regulated by the relevant statutory provisions and that the Ministry had no competence to make any changes in that regard.
12. On 18 September 2006 the applicant, upon her own request, was issued with bonds (obveznice), the value of which was EUR 50,002. In September 2009 she returned the bonds and had her right to pecuniary compensation re-established.
13. By April 2011 some of the applicant’s co-claimants, X and Y, had passed away and the compensation awarded to them had been transferred to and divided amongst their heirs. In particular, X’s five heirs inherited between EUR 6,122.69 and EUR 24,490.77, and out of these sums they received between EUR 3,024 and EUR 11,633.10, respectively, in pecuniary compensation and the remainder of the respective amounts in bonds. Y’s four heirs each inherited EUR 13,393.39, out of which they received by April 2011 EUR 6,777.43 in pecuniary compensation.
14. As submitted by the Government, there were 10,700 requests for restitution and/or compensation in total. The Compensation Fund received 1,118 final decisions in favour of compensation, the total value of which amounted to EUR 185,691,379.35. Of this sum more than EUR 19,000,000 was paid in money, and additional EUR 90,000,000 in bonds. The bonds worth EUR 87,701,528, that is 46.89% of the entire compensation awarded, were used on the market pursuant to section 25 of the relevant legislation (see paragraphs 18 and 24 below).
15. As submitted by the applicant 0.5% of the respondent State’s GDP in 2005 was EUR 8,450,000 and in 2006 it was EUR 9,145,000.
B. Relevant domestic law
1. The Restitution of Expropriated Property Rights and Compensation Act (Zakon o povraćaju oduzetih imovinskih prava i obeštećenju; published in the Official Gazette of the Republic of Montenegro – OG RM - no. 21/04)
16. Section 4 (2) of this Act, which entered into force on 8 April 2004, provides that the General Administrative Proceedings Act applies to proceedings concerning restitution and/or compensation, unless otherwise provided by this Act.
17. Section 22 (1) states that a “former owner, who has no right to restitution of the property rights [in integrum], can have, in accordance with this law, the right to: (a) pecuniary compensation (obeštećenje novčanim sredstvima), which shall be paid from the Compensation Fund to applicants in proportion to the amount of all the claims registered, within 30 days as of the expiration of the time-limit envisaged for submitting requests and, after that, every six months, according to the availability of funds in the Compensation Fund, until the amounts due are fully paid; or (b) compensation in bonds (obeštećenje obveznicama)”.
18. Section 25 provides, inter alia, that the bonds can be sold or used for purchase of the stocks, shares and other property of the State and State funds. The owner of these bonds is entitled to return them to the Compensation Fund within eighteen months as of the date when they were obtained, and request that the right to pecuniary compensation be re-established. The owner of the bonds that have expired also has the right to return them and to seek re-establishment of pecuniary compensation. The Compensation Fund shall issue relevant decisions recognising the right to pecuniary compensation corresponding to the value of the unused bonds.
19. Section 34 provides that the Commission for Restitution and Compensation is to decide on restitution/compensation requests and determine, inter alia, the time-period within which the compensation is to be paid (rok za obeštećenje).
20. Section 37 provides that decisions on pecuniary compensation and compensation in bonds are to be enforced by the Compensation Fund. The same provision also provides that enforcements (prinudno izvršenje) shall be carried out in accordance with the Enforcement Procedure Act.
21. Section 44 further provides, inter alia, that the Compensation Fund, a legal entity, shall be established by the Government, and that its organisation and functioning is to be regulated by a Government decree.
2. The Amendments to the Restitution of Expropriated Property Rights and Compensation Act (Zakon o izmjenama i dopunama Zakona o povraćaju oduzetih imovinskih prava i obeštećenju; published in the OG RM no. 49/07)
22. The Restitution and Compensation Act was amended in 2007, the relevant changes being as follows.
23. While Section 22 (1) still provides for the right to pecuniary compensation from the Compensation Fund in proportion to the amount of all the claims, it has now been amended so as to also provide, inter alia, that the total annual amount of compensation cannot be higher than 0.5% of the Montenegrin GDP in the previous year, that the compensation is to be paid to claimants in annual instalments according to the funds available in the Compensation Fund, and that the periodicity of the payments is to be established by the Government.
24. Section 25 provides that the bonds can also be used for paying taxes. They can be returned to the Compensation Fund within 36 months as of the day when they were obtained and their owners can seek that their pecuniary compensation be re-established.
25. The Act entered into force on 18 August 2007.
3. The Enforcement Procedure Act 2004 (Zakon o izvršnom postupku; published in the OG RM no. 23/04)
26. Section 1 (2) provided, inter alia, that the provisions of this Act were applicable to the enforcement of administrative decisions ordering pecuniary compensation, unless the law provided for a competence of some other body for such enforcement.
27. Section 3 provided that the courts were responsible for enforcement unless otherwise provided by law.
28. Section 4 § 1 provided that enforcement proceedings were to be dealt with expeditiously.
4. The General Administrative Proceedings Act 2003 (Zakon o opštem upravnom postupku; published in the OG RM no. 60/03)
29. Section 2 provides that [other] institutions and legal entities performing public functions (u vršenju javnih ovlašćenja) shall comply with this law when ruling in administrative matters.
30. Section 268 provides that administrative decisions shall, in principle, be enforced in an administrative manner (administrative enforcement).
31. Section 269 specifies that both pecuniary and non-pecuniary awards shall be enforced in an administrative manner.
32. Section 275 provides that administrative pecuniary awards shall be enforced by an administrative body responsible for the public revenue.
COMPLAINTS
33. The applicant complained under Article 6 of the Convention and Article 1 of Protocol No. 1 thereto about the breach of her property rights in that she could not obtain instantaneously the entire compensation awarded to her, but rather gradually. She also complained under Article 13 about the lack of an effective domestic remedy in that regard.
THE LAW
A. Article 6 of the Convention and Article 1 of Protocol No. 1
34. The relevant parts of these Articles read as follows:
Article 6 § 1
“In the determination of his civil rights and obligations ... everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”
Article 1 of Protocol No. 1
“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.”
1. The parties’ submissions
a. The Government
35. The Government submitted that the relevant legislation did not provide for a possibility of an instantaneous monetary payment of the entire compensation. The 15-day time-limit specified in the decision issued in favour of the applicant and her co-claimants referred rather to the obligation of the Compensation Fund to commence the payment of the relevant instalments. The relevant provisions in this regard were sufficiently clear and precise, and they were equally applied to all other former owners who were awarded compensation (see paragraphs 17-18 and 23-24 above). In this connection, the Government also maintained that the applicant’s claim that some of her co-claimants had received instantaneously the entire amount of pecuniary compensation was inaccurate and submitted the relevant data in that regard (see paragraph 13 above).
36. The only possibility for an instantaneous compensation was in bonds, which right the applicant exercised in 2006. The bonds thus obtained could have been used on the market, as was done by many other former owners (see paragraphs 14 in fine, 18, and 24 above). Three years later, however, the applicant opted to return the bonds and have the gradual pecuniary compensation resumed instead (see paragraph 12 above). These facts, which the applicant failed to reveal in her application form, refute her claim that the State obstructed her rights.
37. Pursuant to the second paragraph of Article 1 of Protocol No. 1, it was within the State’s margin of appreciation, which was particularly wide in the social and economic policy matters, to enforce such laws as it deemed necessary to control the use of property in accordance with general interest. The aim of gradual payment of compensation to former owners and the statutory limitations related to the State’s GDP, was to preserve the liquidity of the State budget and thus protect the widest interests of citizens, including former owners themselves, in the field of health, education, social contributions and all other public services financed from the budget. The payment of compensation awarded to former owners was possible only if the respondent State’s budget was stable and sustainable, and the sustainability of the State’s economic system would certainly be jeopardised should the State, as a debtor, have to pay all such compensation at once, in single instalments.
38. In view of the above, the Government concluded that the relevant legislation providing for a gradual payment of compensation struck a fair balance between the applicant’s private interests and public interests, and that the applicant’s complaints were, therefore, unfounded.
b. The applicant
39. The applicant, for her part, did not contest that she was receiving the instalments regularly. She submitted that she had returned the bonds as their market value was low and, in any event, not many other former owners used the bonds on the market.
40. In her application form she claimed that the Commission’s decision had been in the meantime fully enforced in respect of some of her co‑claimants, notably X and Y. Upon the receipt of the Government’s specified data in this regard she submitted that their heirs had already received up to half of their compensation, while she had received only one fifth.
41. Lastly, in view of the State’s GDP in 2005 and 2006 (see paragraph 15 above) the Government should have paid the former owners more. In any event, she submitted that she did not contest the right of the respondent State to protect its economic system, but maintained that the interference with her property rights was disproportionate, as she would have to wait for another 20 years for the entire sum to be paid to her and she was already more than 70 years old and of fragile health.
2. The Court’s assessment
42. The Court recalls that Article 6 § 1 secures to everyone the right to have any claim relating to his civil rights and obligations brought before a court or tribunal; in this way it embodies the “right to a court”, of which the right of access, that is the right to institute proceedings before courts in civil matters, constitutes one aspect. However, that right would be illusory if a Contracting State’s domestic legal system allowed a final, enforceable judicial decision to remain inoperative to the detriment of one party. Execution of a judgment given by any court must therefore be regarded as an integral part of the “trial” for the purposes of Article 6 (see Hornsby v. Greece, 19 March 1997, § 40, Reports of Judgments and Decisions 1997‑II).
43. The Court further recalls that an applicant may allege a violation of Article 1 of Protocol No. 1 only in so far as his or her complaints relate to “possessions” within the meaning of that provision. “Possessions” can be “existing possessions” or assets, including claims, in respect of which an applicant can argue that he has at least a “legitimate expectation” (which must be of a nature more concrete than a mere hope) that they will be realised, that is that he or she will obtain effective enjoyment of a property right (see, inter alia, Gratzinger and Gratzingerova v. the Czech Republic (dec.) [GC], no. 39794/98, § 69, ECHR 2002‑VII; Kopecký v. Slovakia [GC], no. 44912/98, § 35, ECHR 2004‑IX). By way of contrast, the hope of recognition of a property right which it has been impossible to exercise effectively after the entry into force of Protocol No. 1 with regard to the State concerned cannot be considered a “possession” within the meaning of Article 1 of Protocol No. 1 (see Gaćeša v. Croatia (dec.), no. 43389/02, 1 April 2008).
44. It is further noted that Article 1 of Protocol No. 1 does not impose any general obligation on the Contracting States to restore property which was transferred to them before they ratified the Convention, nor does it impose any restrictions on the Contracting States’ freedom to determine the scope of property restitution and to choose the conditions under which they agree to restore property rights of former owners (see Kopecký v. Slovakia [GC], cited above, § 35; and Jantner v. Slovakia, no. 39050/97, § 34, 4 March 2003).
45. Lastly, the second paragraph of Article 1 of Protocol No. 1 reserves to States the right to enact such laws, as they deem necessary to control the use of property in accordance with the general interest. In order to implement economic policies, legislatures must have a wide margin of appreciation both with regard to the existence of a problem of public concern warranting measures of control and as to the choice of the detailed rules for the implementation of such measures. The Court will respect the legislature’s judgment as to what is in the general interest unless that judgment is manifestly without reasonable foundation (see Hutten-Czapska v. Poland [GC], no. 35014/97, § 166 in fine, ECHR 2006‑VIII; J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 71, ECHR 2007‑III; see, also, in the “foreign currency context”, Trajkovski v. the Former Yugoslav Republic of Macedonia (dec.), no. 53320/99, 7 March 2002).
46. Turning to the present case, and having regard to these principles, the Court observes that on 3 March 2004, which is when the Convention and Protocol No. 1 thereto entered into force in respect of Montenegro (see Bijelić v. Montenegro and Serbia, no. 11890/05, § 69, 28 April 2009), the applicant clearly had no enforceable legal title or a legitimate expectation that she would re-acquire the property expropriated from her relatives in the past or obtain any compensation therefor.
47. The legislation enacted thereafter provided only for a possibility of gradual pecuniary compensation and/or instantaneous compensation in bonds. No provision, however, allowed for an instantaneous pecuniary compensation. It was on the basis of this legislation that the applicant obtained a decision awarding her compensation. Therefore, the applicant at no time had the right, or a legitimate expectation for that matter, under domestic law that she could obtain the entire amount of compensation instantaneously. Nor was there any such practice, given that her claim to the contrary proved to be inaccurate (see paragraph 13 above). The only legal and practical possibility for instantaneous compensation was in the form of bonds, which right the applicant duly exercised, but finally opted to have the gradual payment resumed instead (see paragraph 12 above).
48. In view of the above principles, notably those in paragraphs 43 and 44, given the number of restitution and/or compensation requests and the possible impact of the amount of awarded compensation on the economic system of the respondent State, on the one hand, as well as the wide margin of appreciation afforded to States in respect of matters involving economic policy, on the other hand, the Court considers that the relevant legislation, providing for the gradual payment of compensation (see paragraphs 17 and 23 above), as applied to the applicant, struck a fair balance between the general interest of the community and the applicant’s interest in obtaining the compensation, as well as the property rights of all others in the same situation as the applicant (see, mutatis mutandis, Ajdarpašić v. Montenegro (dec.), no. 40759/06, §§ 31 and 33, 23 November 2010; and Trajkovski v. the Former Yugoslav Republic of Macedonia (dec.), cited above).
49. In such circumstances, the Court considers that the applicant’s complaints both under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 thereto are manifestly ill-founded and must be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
B. Article 13 of the Convention
50. The applicant further complained that she had had no effective domestic remedy to expedite the payment of compensation.
51. The Government contested that argument.
52. Article 13 has been consistently interpreted by the Court as requiring a remedy in domestic law only in respect of grievances which can be regarded as “arguable” in terms of the Convention (see, for example, Powell and Rayner v. the United Kingdom, 21 February 1990, § 31, Series A no. 172). The criteria for considering a claim as arguable in general cannot be construed differently from the criteria applied when declaring claims “manifestly ill-founded” (see Powell and Rayner, cited above, § 31, and Kienast v. Austria, no. 23379/94, § 54, 23 January 2003).
53. Since the applicant’s complaints under Article 6 and Article 1 of Protocol No. 1 has been declared “manifestly ill-founded”, the Court considers that they cannot be regarded as “arguable” for the purposes of Article 13 (see A. and Others v. the United Kingdom [GC], no. 3455/05, § 123, ECHR 2009). The applicant’s complaint under Article 13 taken in conjunction with the said Articles is thus likewise manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Stanley NaismithGuido Raimondi
RegistrarPresident
Full & Egal Universal Law Academy