Information Note on the Court’s case-law 200
October 2016
Kanaginis v. Greece - 27662/09
Judgment 27.10.2016 [Section I]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Unreasonably high repurchase price demanded for expropriated land compared to compensation paid for the expropriation: violation
Facts – In 1976 a plot of land belonging to the applicant was expropriated. However, the expropriation order was revoked by the Council of State in 2002 at the applicant’s request, as the public-interest purpose for which the land had been expropriated had never come to fruition. Whereas the applicant had received some EUR 23,000 in compensation for the expropriation, the authorities readjusted that sum, pursuant to Article 12 of Law No. 2882/2001, in line with the annual average consumer price index, and requested that he reimburse approximately EUR 602,000 in return for his land. The applicant then applied to the Council of State to set aside that decision, but his application was dismissed.
The applicant complained to the European Court that the sum which he was called upon to reimburse in order to recover his property was not reasonably proportional to that which he had received in compensation for the expropriation. He submitted that the State was placing a disproportionate and excessive burden on him which could not be justified by any general reason of public interest.
Law – Article 1 of Protocol No. 1
(a) Applicability – Domestic law permitted an expropriation to be revoked subject to reimbursement by the landowner of the compensation paid with a readjustment of the amount and the Council of State had set aside the authorities’ refusal to revoke the expropriation after finding that the purpose of the expropriation had been abandoned.
The applicant therefore had a pecuniary interest which was recognised under Greek law and was protected under Article 1 of Protocol No. 1.
b) Merits – The interference with the applicant’s right to respect for his property lay in his inability to recover the expropriated land following the revocation of the expropriation by a Council of State judgment on the grounds that it had not achieved its aim, because of the allegedly exorbitant price which he would have had to pay the State. It was not disputed that the interference was prescribed by law and that it had pursued a legitimate aim, namely to ensure that the applicant’s repurchase of the land in question would not damage the State’s financial interests.
Under the Council of State’s judgment, the applicant had secured the revocation of the expropriation of the land which he had owned, giving him at least a legitimate hope of recovering his property. However, he could not be allowed to recover the land in a manner detrimental to the public interest. Therefore, given that he had been awarded full compensation when his land had been expropriated, it was not unreasonable for the State, thirty years later, to have used the relevant legislation to readjust the amount he had received.
The readjustment formula set out in section 12 of Law No. 2882/2001 involved an equation by which the expropriation compensation received by the person concerned was multiplied by the ratio between the average annual consumer price index from the year when the compensation for the recovery of the property had been established and that pertaining to the date of receipt of the expropriation compensation.
Applying that formula had prevented the competent authority from taking account of other relevant, indeed necessary, factors to ensure proper calculation of the sum to be reimbursed to the State, such as the commercial value of the land at the material time and the value of neighbouring plots of land or others in the same district which had been expropriated at the time. In fact, according to the judgment in the case of Guiso-Gallisay v. Italy (just satisfaction) [GC] (58858/00, 22 December 2009, Information Note 125), awards of compensation for expropriation for building land had to correspond to the land’s commercial value.
In order to assess the proportionality between the readjusted compensation award and the real value of the applicant’s property, regard should be had to developments on the Greek real estate market and the approximately 17 years’ length of the revocation procedure.
There was a significant difference between the amount demanded by the State and the real value of the land as indicated in the materials before the Court. That difference could not be considered reasonable in the present case.
Furthermore, under the new wording of section 12 of Law No. 2882/2001 the Administrative Board or the independent expert had to take into account several relevant factors in evaluating the price of a property, such as the value of adjacent or similar plots of land and the potential income from developing the land. Moreover, in the event of a disagreement between the State and the individual on the amount of compensation due, the competent courts could settle the dispute without been required by law to apply criteria such as the average annual consumer price index.
Furthermore, the two administrative decisions under which the competent authority established the amount to be paid to recover the land were still valid. The authorities had unfettered discretion in recalculating the compensation payable should the applicant submit to them any further request to that end. The current value of the land, as estimated by the tax authority was far below that established under the administrative decision. It was therefore clear that the applicant was now in a dead-end situation with the de facto impossibility of recovering his property.
Moreover, the Council of State had held, without explaining why, that there had been no violation of the right to the peaceful enjoyment of possessions. Consequently, the applicant had had no real opportunity to effectively challenge the measures infringing his right as secured under Article 1 of Protocol No. 1 before the judicial authorities.
Regard being had to the foregoing considerations, the formula used in the applicant’s case at the material time pursuant to section 12 of Law No. 2882/2001 and the reasoning of the Council of State in its judgment had upset the fair balance which must be struck between the requirements of the public interest and the imperatives of protecting the applicant’s right to respect for his property.
Conclusion: violation (unanimously).
Article 41: reserved.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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