MITZON v. GERMANY

THIRD SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 58182/00
by Karl-Heinz MITZON
against Germany

The European Court of Human Rights (Third Section), sitting on 9 March 2006 as a Chamber composed of:

MrB.M. Zupančič, President,
MrJ. Hedigan,
MrL. Caflisch,
MrC. Bîrsan,
MrsA. Gyulumyan,
MrsR. Jaeger,
MrE. Myjer, judges,
and Mr V. Berger, Section Registrar,

Having regard to the above application lodged on 10 May 2000,

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Karl-Heinz Mitzon, is a German national who was born in 1956 and lives in Berlin. He is represented before the Court by Mr F. Lansnicker, a lawyer practising in Berlin.

A. The circumstances of the case

The facts of the case, as submitted by the applicant, may be summarised as follows.

Since 1985 the applicant lived as a tenant in a State-owned semidetached house in East-Berlin in the German Democratic Republic (”GDR”).
The house’s former owner had left the GDR in 1961 and the house was subsequently seized and transferred into public property in 1969.
On 7 March 1990 the GDR’s parliament (Volkskammer) passed a law that allowed the purchase of State-owned buildings. On 28 March 1990 the applicant acquired the house for the sum of GDR Marks 58,010. He was entered as the owner into the land register (Grundbuch) on 21 May 1990. On 11 September 1990 the former owner requested the house’s restitution under the Resolution of Outstanding Property Issues Act/Property Act (Gesetz über die Regelung offener Vermögensfragen / Vermögensgesetz – hereinafter called Property Act).

On 13 August 1991 the Office for the Resolution of Outstanding Property Issues (Amt zur Regelung Offener Vermögensfragen) ordered the real estate’s restitution according to section 4 § 2 of the Property Act
(see “Relevant domestic law and practice” below). It stated that the house had been acquired after the key date (Stichtag) of 18 October 1989 and should not have been authorised under GDR Law.

In return for the restitution the Land of Berlin was obliged to reimburse the applicant the purchase price of GDR Marks 58,010, converted into
DEM 29,005 (EUR 14,830). On 4 December 1991 the Regional Office for the Resolution of Outstanding Property Issues (Landesamt zur Regelung Offener Vermögensfragen) rejected the applicant’s objection.
On 16 June 1992 the Berlin Administrative Court confirmed those decisions, refusing the applicant leave to appeal on points of law.

Section 4 § 2 of the Property Act was amended by the second Property Rights Amendment Act (Zweites Vermögensrechtsänderungsgesetz)
of 14 July 1992. It introduced exceptions to the key date regulation, thus allowing the new owners in certain cases to keep their property even if they had acquired it after 18 October 1989 (see “Relevant domestic law and practice” below).

The applicant then lodged a complaint against the refusal of leave to appeal on points of law with the Federal Administrative Court. He held the opinion that the old version of section 4 § 2 infringed his right of property, as it did not contain any exceptions to the key date and thus led to expropriation. Moreover, he submitted that the key date regulation was discriminatory within the meaning of Article 3 of the Basic Law. Therefore, he demanded that the new version of section 4 § 2 of the Property Act be applied to his case, in particular since the court proceedings were still pending.

On 5 March 1993 the Federal Administrative Court granted the applicant leave to appeal on points of law. On 12 November 1993 it rejected the applicant’s appeal on points of law. Having recourse to the Property Act’s travaux préparatoires, it interpreted the second Property Rights Amendment Act as applying only to proceedings which had not yet been terminated by final administrative decision (Widerspruchsbescheid).
It stated that this interpretation alone guaranteed the speedy handling of cases of outstanding property issues as intended by the legislator.
It furthermore pointed out that the latter had opted for a compromise between the interests of the former and new owners by choosing the final administrative decision instead of the final court decision as a criterion.

The court therefore applied the old version of section 4 § 2 and found that it did not violate the applicant’s right of property. It held that the restitution of the real estate had not been an expropriation within the meaning of Article 14 § 3 of the Basic Law, because all it did was to balance the competing private interests of the former and the new owners. Therefore, the impugned provision of the Property Act was a determination of the subject matter of the right to property and its limitations within the meaning of Article 14 § 1, sentence 2, of the Basic Law (Inhalts- und Schrankenbestimmung). The court recalled that the Property Act aimed at creating a socially acceptable balance between the interests of the former owners who had been expropriated contrary to the rule of law, on the one hand, and the new owners which had acquired ownership rights in good faith, on the other hand. The court pointed out that the Property Act in fact favoured those new owners by excluding restitution, but only if they had acquired the property rights before 18 October 1989. On that date Erich Honecker, President of the Council of State (Staatsratsvorsitzender) had resigned. The court stressed that the legislator had decided that in the light of those political events the purchaser of real estate could have no longer had a legitimate expectation that the acquired property rights would remain guaranteed or unaffected. The court held that for those reasons the key date regulation of section 4 § 2 complied with the requirements of Article 14 of the Basic Law, particularly in the light of the legislature’s wide margin of appreciation. Lastly, the court stated that this regulation did not violate the prohibition of discrimination under Article 3 of the Basic Law.

The applicant then lodged a constitutional complaint on 24 January 1994.

On 23 November 1999 the Federal Constitutional Court held in a pilot judgment that the key date regulation set in section 4 § 2 of the Property Act did not violate Articles 3 and 14 of the Basic Law (see “Relevant domestic law and practice” below).

On 1 December 1999 the Federal Constitutional Court refused to admit the applicant’s complaint. It confirmed the reasoning of the Federal Administrative Court, holding that in the light of the aforementioned pilot judgment of 23 November 1999, restitution based on the key date regulation did not violate Articles 3 and 14 of the Basic Law. Furthermore, the court did not find it arbitrary that the Federal Administrative Court had applied the old version of section 4 § 2 of the Property Act.

On 30 March 2000 the Land of Berlin made it known that the Federal Ministry of Finances had ordered that compensation for cases such as the present one should be provided by the Compensation Fund (Entschädigungsfonds) which, however, had not yet been established at that time.

On 10 May 2000 the applicant lodged his application with the Court.

On 19 October 2000 the Land of Berlin reimbursed the purchase price amounting to DEM 29,005 (EUR 14,830). The applicant then brought an action against the Land of Berlin for the payment of interest on arrears.

On 18 July 2002 the Administrative Court rejected the applicant’s claim, refusing him leave to appeal on points of law. On 4 July 2003 the Federal Administrative Court rejected the applicant’s complaint against the refusal of leave to appeal on points of law.

The applicant did not lodge a constitutional complaint against that decision with the Federal Constitutional Court.

B. Relevant domestic law and practice

1. Law in the Federal Republic of Germany

(a) The German Basic Law

Article 3

“(1) All persons shall be equal before the law.

...”

Article 14

“(1) Property and the right of inheritance shall be guaranteed. Their subject matter and limits shall be defined by the laws.

(2) Property entails obligations. Its use shall also serve the public good.

(3) Expropriation shall only be permissible in the public interest. It may only be ordered by or pursuant to a law that determines the nature and extent of compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In case of dispute respecting the amount of compensation, recourse may be had to the ordinary courts.”

(b) The Property Act in the version of 18 April 1991

Section 4 § 2

“Restitution is furthermore excluded if individuals, religious communities (Religionsgemeinschaften) or foundations for public utility (gemeinnützige Stiftungen) acquired in good faith ownership or rights of user in rem over property assets. This does not apply to plots of land and buildings if the legal transaction which resulted in the acquisition took place after 18 October 1989 and should not have been authorised pursuant to section 6 §§ 1 and 2 of the Regulation of the Registration of Claims for Property Assests (Anmeldeverordnung). “

(c) The Property Act as amended by the second Property Rights Amendment Act of 14 July 1992

Section 4 § 2

“Restitution is furthermore excluded if individuals, religious communities or foundations for public utility acquired in good faith ownership or rights of user in rem over property assets. This does not apply to plots of land and buildings if the legal transaction, which resulted in the acquisition, took place after 18 October 1989 without the consent of the former owner, unless

a) an application for the acquisition was made in writing or was established on record (aktenkundig angebahnt) before 19 October 1989

b) the acquisition took place pursuant to section 1 of the Act on the Sale of Buildings in Public Property of 7 March 1990 (...)

c) the acquirer made considerable investments that increased the property’s value or maintained its substance.”

This amendment was introduced in the light of the fact that many of the new owners had already applied for the acquisition of real estate before 18 October 1989, but had not been able to complete the legal transaction, because the GDR authorities were unable to process those applications in time.

(d) The leading judgment of the Federal Constitutional Court of 23 November 1999

In its judgment the Federal Constitutional Court found that the key date regulation in section 4 § 2 of the Property Act and the restitution of property thereunder did not violate Articles 3 and 14 of the Basic Law. It recalled that the legislator had had to balance the interests of the former owners requesting restitution and the interests of the new owners requesting protection of their acquired rights. It stressed that the legislator had had a wide margin of appreciation when determining that balance. While the Property Act actually favoured the new owners who had acquired the property in good faith, it had been justified to introduce a key date in order to distinguish between those who had exercised their property rights already for a certain time and those who had done so for only a short period.
The Federal Constitutional Court found that the resignation of
Erich Honnecker as the President of the Council of State on 18 October 1989 had been an adequate point in time to make that distinction.

The court also noted that the GDR had already made clear in section 7 of the Regulation of the Registration of Claims for Property Assets of
July 1990 that the authorisation procedure had to be renewed (wiederaufgreifen) in cases of acquisitions after 18 October 1989. Hence the new owners in those cases could not have reasonably expected to remain proprietors and their legitimate expectation of remaining proprietors (Vertrauensschutz) did not deserve protection.

2. Law in force in the German Democratic Republic at the material time

Section 6 § 1 of the Regulation of the Registration of Claims for Property Assets of 11 July 1990 held that that the authorisation for the purchase of real estate should be denied if the legal transaction concerned real estate that had been put, inter alia, under public administration and if the former owner did not consent to the purchase.

Section 6 § 2 stated that pending procedures for the authorisation of purchase of real estate had to be stayed until it was established whether they concerned cases of outstanding property issues. Cases of outstanding property issues were defined, inter alia, as those cases in which real estate had been transferred into public property after it had been put under public administration by an escrow.

The same applied to cases in which former owners had lodged claims, inter alia, for restitution. The authorisation could however be granted if the former owner consented to the purchase or if the former owner did not apply for restitution until 13 October 1990.

If the authorisation had already been granted, section 7 § 1 provided the following: At the former owner’s request, the authorisation procedure had to be renewed if the acquisition had taken place after 18 October 1989 and if it should not have been authorised pursuant to section 6 §§ 1 and 2.

COMPLAINTS

The applicant complained under Article 1 of Protocol No. 1 about the restitution of his property to the former owner. In general, the applicant submitted that there had been no fair balance between his and the former owner’s interests. Furthermore, when lodging the application, the applicant had not yet received any compensation for the loss of his property.

Invoking Article 1 of Protocol No. 1 in conjunction with Article 14 of the Convention, the applicant submitted that he had been discriminated against compared to those new owners who had acquired their property before the key date, because the key date regulation did not strike a fair balance. Furthermore, the applicant considered that he was discriminated against,
for the new version of section 4 § 2 of the Property Act had not been applied to his case.

In addition, the applicant complained under Article 6 of the Convention that the Property Act did not provide for an appeal, thus denying him a second instance for the assessment of the facts. Lastly, the applicant considered excessive the length of the proceedings before the Federal Constitutional Court.

THE LAW

A. Article 1 of Protocol No. 1

The applicant complained that the real estate’s restitution violated his right of property under Article 1 of Protocol No. 1, which reads:

“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.”

The Court recalls that Article 1 of Protocol No. 1, which guarantees in substance the right of property, comprises three distinct rules (see James and Others v. the United Kingdom, judgment of 21 February 1986, Series A no. 98, pp. 29-30, § 37). The first rule, which is expressed in the first sentence of the first paragraph and is of a general nature, lays down the principle of peaceful enjoyment of property. The second rule, in the second sentence of the same paragraph, covers deprivation of possessions and subjects it to certain conditions. The third rule, contained in the second paragraph, recognises that the Contracting States are entitled, among other things, to control the use of property in accordance with the general interest. The second and third rules, which are concerned with particular instances of interference with the right to peaceful enjoyment of property, must be construed in the light of the general principle laid down in the first rule
(see, among other authorities, Iatridis v. Greece [GC], no. 31107/96, § 55, ECHR 1999-II).Whether there was an interference with the right of property

The domestic courts held that the real estate’s restitution interfered with the applicant’s right of property but found that it did not constitute expropriation. The domestic courts found that the transfer of property had been conducted to balance the purely private interests of the former and new owners and had thus not been undertaken in the public interest.

The Court recalls that, in determining whether there has been deprivation of possessions, it is necessary not only to consider whether there has been a formal taking or expropriation of property, but also to look behind the appearances and investigate the realities of the situation complained of. Since the Convention is intended to guarantee rights that are “practical and effective”, it has to be ascertained whether the situation amounted to a de facto expropriation (see Sporrong and Lönnroth, cited above, pp. 24-25, § 63; Brumărescu v. Romania [GC], no. 28342/95, § 76, ECHR 1999‑VII; and Zwierzyński v. Poland, no. 34049/96, § 69, ECHR 2001‑VI).

In the present case the applicant lost his full ownership rights, which is the characteristic feature of expropriation. Furthermore, the Court refers to the aforementioned case of James, in which it had held that a transfer of property between individuals ordered by domestic legislation nevertheless constituted deprivation of property within the meaning of the second sentence of the first paragraph of Article 1 of Protocol No. 1 (see James and Others, cited above, § 38).

Consequently, the Court considers that the interference with the applicant’s rights has to be regarded as a “deprivation” of property within the meaning of the second sentence of Article 1 of Protocol No. 1.

2. Justification for the interference with the right of property

(a) “provided for by law”

The restitution was in accordance with the pertinent sections of the Property Act, which were precise and accessible to all.

(b) “in the public interest”

The Court reiterates that the compulsory transfer of property from one individual to another in pursuance of legitimate social, economic or other policies may be in the public interest, even if the community at large has no direct use or enjoyment of the property (see James and Others, cited above, §§ 40-45).

Turning to the facts of the instant case, the Court notes that the Property Act’s aim was to balance the competing interests of the former and new owners of property located on the territory of the former GDR. On the one hand it provided for the restitution of property that had been expropriated contrary to the rule of law, while on the other hand it protected those who had acquired ownership rights in good faith. Considering that the Property Act regulated a large number of cases of outstanding property issues and did not serve the interests of only a few individuals, the Court concludes that the pertinent provisions of the Property Act were introduced by the German legislator “in the public interest”.

(c) Proportionality of the interference

The Court recalls that an interference with the peaceful enjoyment of possessions must strike a fair balance between the demands of the general interests of the community and the requirements of the protection of the individual’s fundamental rights (see, among other authorities, Sporrong and Lönnroth, cited above, § 69). In particular, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions (see Pressos Compania Naviera S.A. and Others v. Belgium, judgment of 20 November 1995, Series A no. 332, p. 23, § 38). Compensation terms under the relevant legislation are material to the assessment whether the contested measure respects the requisite fair balance and, notably, whether it imposes a disproportionate burden on the applicants (see Holy Monasteries v. Greece, judgment of 9 December 1994, Series A no. 301-A, p. 35, § 71).

Turning to the instant case, the Court notes that the applicant was entitled to and received full compensation for the loss of his property rights, as he was reimbursed the purchase price converted from GDR Marks to Deutsche Marks at a rate of 2:1.

However, that payment was made almost seven years after the judgment of the Federal Administrative Court of 12 November 1993 had been rendered, and the applicant did not receive any interest on arrears.

The Court recalls that the adequacy of compensation is diminished if it is paid without reference to the circumstances liable to reduce its value, such as an unreasonable delay (see Akkuş v. Turkey, no. 19263/92, § 29, ECHR 1997-IV).

As for the delayed payment, the Court notes that the applicant’s complaint before it concerns mainly the domestic courts’ decisions allowing the restitution of his property to the former owner. As those decisions also ordered the reimbursement of the purchase price to the applicant, it follows that the two elements – restitution and reimbursement – were two inseparable components of the same decision. Therefore, the Court considers that the applicant cannot, at the same time, contest the restitution order and complain about not being paid for the loss of property he wants to avoid. It appears indeed contradictory to complain about the delayed execution of a decision whose validity one continues to contest.

As far as the non-payment of interest on arrears is concerned, the Court notes that the applicant brought an action against the Land of Berlin in this respect. In that regard the applicant failed to exhaust domestic remedies, since he did not lodge a constitutional complaint with the Federal Constitutional Court.

Having regard to the above considerations, the Court finds that the deprivation of the applicant’s property was not disproportionate and in particular did not place an excessive burden on the applicant.

Lastly, it is not for the Court to say whether the legislation under consideration was the best solution for dealing with the problem or whether the legislative discretion should have been exercised in another way, as long as the legislator remained within the bounds of the legitimate aim pursued and of the need to strike a fair balance (see, mutatis mutandis, James and Others cited above, § 45).

Thus, there is no appearance of a violation of the applicant’s rights under Article 1 of Protocol No. 1. Hence the applicant’s complaints in this respect are manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be declared inadmissible in accordance with Article 35 § 4 of the Convention.Article 1 of Protocol No. 1 in conjunction with Article 14 of the Convention

Invoking Article 1 of Protocol No. 1 in conjunction with Article 14 of the Convention, the applicant submitted that he had been discriminated against compared to those new owners who had acquired their property before the key date, because that key date regulation did not strike a fair balance. Furthermore, the applicant considered that he was discriminated against, because the new version of section 4 § 2 of the Property Act had not been applied to his case.

Article 14 of the Convention provides:

“The enjoyment of the rights and freedoms set forth in the Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

1. Applicability of Article 14 of the Convention

The Court reiterates that, according to its established case-law, Article 14 is only applicable if the facts at issue fall within the ambit of one or more of the substantive provisions of the Convention and its Protocols (see, among many other authorities, Petrovic v. Austria, judgment of 27 March 1998, Reports of Judgments and Decisions 1998‑II, § 22; Willis v. the United Kingdom, no. 36042/97, § 29, ECHR 2002-IV).

As the facts at issue fall within the ambit of Article 1 of Protocol No. 1, Article 14 is therefore applicable in the instant case.

2. Recapitulation of the relevant principles

The Court recalls that Article 14 safeguards persons who are placed in “analogous situations” against discriminatory differences of treatment
(see Lithgow v. the United Kingdom, judgment of 8 July 1986, Series A no. 102, p. 66, § 177). For the purposes of Article 14, a difference of treatment is discriminatory if it “has no objective and reasonable justification”, that is, if it does not pursue a “legitimate aim” or if there is no reasonable relationship of proportionality between the means employed and the aim sought to be realised” (see, among other authorities, Abdulaziz, Cabales and Balkandi v. the United Kingdom, judgment of 28 May 1985, Series A no. 94, p. 35, § 72). The Court recalls that the Contracting States enjoy a certain margin of appreciation when assessing whether and to what extent differences in otherwise similar situations justify a different treatment in law (see Rasmussen v. Denmark, judgment of 28 November 1984, Series A
no. 87, p. 36, § 40).

Furthermore, the Court reiterates that the German legislator enjoyed a wide margin of appreciation when regulating outstanding property issues in the aftermath of the German reunification (see, among other authorities,
von Maltzan and Others v. Germany (dec.) [GC], nos. 71916/01, 71917/01 and 10260/02 §§ 110-111, ECHR 2005-...).

3. Application of the relevant principles

(a) The key date regulation

The Property Act protected the new owners against claims of restitution only if they had exercised their ownership rights for a certain amount of time. The key date was the main criterion for determining that amount of time and thus served a legitimate aim.

The Court recalls that the resignation of Erich Honecker was an important break in the GDR’s history and that under GDR law the new owners did not have a legitimate expectation of remaining owners if they had acquired the property after 18 October 1989. Therefore, the choice of a key date in general and the choice of this specific date in particular had an objective and reasonable justification.

Having regard to the above considerations and in particular the legislator’s wide margin of appreciation, the Court concludes that the different treatment of the applicant’s case based on the date of the acquisition of his property was not discriminatory within the meaning of Article 14 of the Convention.

(b) The application of the old version of section 4 § 2 of the Property Act to the present case

The Court recalls that section 4 § 2 of the Property Act had been amended to protect certain new owners against claims of restitution even if they had acquired the property after the key date. The legislator had chosen to apply the amended version only to cases pending before the administrative authorities in order to strike a balance between the interests of the former and new owners. Therefore, the distinction served a legitimate aim.

Considering that the legislator needed to strike a balance and taking into account its wide margin of appreciation when balancing those competing interests, the Court is convinced that this distinction had an objective and reasonable justification. There is therefore no appearance of a violation of Article 14 of the Convention.

It follows that the applicant’s complaints must be rejected as manifestly ill-founded in accordance with Article 35 §§ 3 and 4 of the Convention.

C. Article 6 of the Convention

The applicant complained that the exclusion of an appeal by the Property Act as well as the length of proceedings before the Federal Constitutional Court violated his rights under Article 6 of the Convention, the relevant part of which reads as follows:

“1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. ...”The exclusion of an appeal by the Property Act

The Court recalls that Article 6 of the Convention does not guarantee an appeal in proceedings before an administrative court (see Delcourt v. Belgium, judgment of 17 January 1970, Series A no. 11, p. 14, § 25).

Hence the applicant’s complaint in this respect is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be declared inadmissible in accordance with Article 35 § 4 of the Convention.The length of proceedings before the Federal Constitutional Court

The period to be considered began on 24 January 1994, when the applicant lodged his constitutional complaint, and ended on 1 December 1999 when the Federal Constitutional Court rendered its decision. The proceedings therefore lasted five years, ten months and eight days.

The Court reiterates that the “reasonableness” of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria established by its case-law: the complexity of the case, the conduct of the parties and of the relevant authorities and what was at stake for the parties in the dispute
(see Süssmann v. Germany, judgment of 16 September 1996, Reports of Judgments and Decisions 1996-IV, p. 1172, § 48; Gast and Popp v. Germany, no. 29357/95, § 64, ECHR 2000-II).

The Court finds that the instant case was of a considerable complexity and raised similar questions as the pilot case which was adjudicated by the Federal Constitutional Court by a judgment of 23 November 1999.

As regards the applicant’s situation, the Court observes that he was supposed to receive full compensation for his property’s restitution and was furthermore not advanced in years. Therefore, his case could not be considered to be of utmost urgency.

Moreover, as outlined by the Court in its von Maltzan decision, at the material time the Federal Constitutional Court was burdened with numerous complaints dealing with fundamental questions which had arisen in the aftermath of the German reunification. Stressing that unique context, the Court did not find the length of proceedings of five years and five months before the Federal Constitutional Court to be excessive in that case (see von Maltzan and Others, cited above, §§ 131-136).

Having regard to the above considerations, the Court finds that the “reasonable time” prescribed by Article 6 § 1 was not exceeded and that there has therefore not been an appearance of a violation of that provision.

It follows that this complaint must be rejected as manifestly ill-founded in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares the application inadmissible.

Vincent BergerBoštjan M. Zupančič
RegistrarPresident

 

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