Communicated on 15 December 2014
FOURTH SECTION
Application no. 69361/12
Stoyan Yordanov NEDELCHEV against Bulgaria
and 2 other applications
(see list appended)
STATEMENT OF FACTS
A. The circumstances of the cases
The facts of the cases, as submitted by the applicants, may be summarised as follows.
1. Application no. 69361/12 lodged on 17 October 2012
The applicant, Mr Stoyan Yordanov Nedelchev, is a Bulgarian national who was born in 1927 and lives in Sofia.
In 2003 he brought proceedings under the State and Municipalities Liability for Damage Act 1988 (the SMRDA), seeking damages as a result of the Regional Governor of Sofia’s failure to carry out works in a State‑owned flat which had been rented out to the applicant.
The Sofia Court of Appeal allowed the claim on 24 July 2007 and awarded the applicant 214 new Bulgarian levs (BGN) (equivalent to 109 euros (EUR)) for pecuniary damage, and BGN 11,000 (equivalent to EUR 5,623) for non-pecuniary damage, plus interest. On 12 February 2009 the Supreme Court of Cassation did not allow an appeal on points of law, effectively upholding the lower court’s conclusions.
On 21 April 2009 the applicant obtained a writ of execution. On 21 May 2009 he presented a copy of the writ to the office of Regional Governor of Sofia and asked to be paid the sum due. On 30 May 2009 he further sent to the office information about his bank account. On 21 October 2009 he again asked the office to pay him in accordance with the writ. On 4 March 2010, at the request of the Regional Governor’s administration, the applicant sent to them the writ’s original.
In June 2009 the Regional Governor of Sofia asked the Ministry of State Administration and Administrative Reform (the Ministry) to increase the funds set aside in the Ministry’s budget for subsidising the Region’s budget in order to allow the Region to pay the amount due to the applicant. The Ministry replied that it could not provide the amount sought due to insufficient budgetary capacity for that year.
The applicant wrote to various public authorities, seeking their assistance with the enforcement of the final July 2007 judgment, to no avail.
On an unspecified date in 2011 the applicant challenged in court the Regional Governor’s failure to enforce the judgment in his favour. He relied on Article 257 of the Code of Administrative Procedure 2006 (the Code 2006) which provided for a possibility to request a court to order an administrative body to carry out an action and to set a time-limit for that. On 3 October 2011 the Sofia City Administrative Court refused the claim, holding that the procedure under Article 257 was not applicable. More specifically, while Article 257 of the Code 2006 governed situations of the authorities’ failure to perform an action stemming from a statutory provision, the case at hand concerned a failure to enforce a final court decision. The court further noted that according to Article 519 of the Code of Civil Procedure 2007 it was impossible to bring forced enforcement proceedings in respect of judgment debts against State bodies; instead, the individuals concerned had to ask the courts to impose a pecuniary sanction on the responsible officials under Article 304 of the Code 2006. The Supreme Administrative Court upheld the lower court’s judgment in a final decision of 9 April 2012.
By 20 December 2012, the date of the applicant’s last communication to the Court, the judgment in favour of the applicant had not been enforced.
It appears that in the meantime the Sofia Region administration brought civil judicial proceedings against the applicant, claiming he owed them about BGN 16,000 in unpaid rent for an apartment provided to him by the Region and which he allegedly inhabited unlawfully after his rent contract ended in 2007.
2. Application no. 39942/13 lodged on 10 June 2013
The applicant, Mr Georgi Angelov Chorbov, is a Bulgarian national who was born in 1950 and lives in Sofia. He is a lawyer practising in Sofia.
The applicant signed a contract with the then Bulgarian Ministry of Agriculture and Forests on 15 July 2004. According to the terms of the contract the applicant undertook to act as a legal representative for the Ministry in a case before the International Court of Arbitration in Paris for which the Ministry had to pay him BGN 58,100 (about EUR 29,000). This sum comprised a legal fee and all related costs and expenses incurred by him in connection with the representation.
The Ministry paid the applicant half of the amount due on the day the contract was signed. According to the terms of the contract the second half had to be paid at the end of the case proceedings.
The case proceedings ended on 28 November 2005. On 19 December 2005 the applicant asked the Ministry to pay him the remaining amount due, but the Ministry did not reply. The applicant then asked the Sofia District Court to issue him with a writ of execution against the Ministry. On 23 February 2006 the court issued the writ on the basis of the contract of July 2004 for the total amount of BGN 29,631, which corresponded to BGN 29,050 due on the basis of the contract and to BGN 581 for costs related to the proceedings.
On 24 February 2006, in compliance with the provision of Article 399 of the Civil Procedure Code 1952, a notary acting for the applicant served the original writ of execution on the Ministry, inviting the institution to pay. As the Ministry did not reply, the applicant sought the Ombudsman’s assistance. Subsequently, the Ministry informed the Ombudsman in a letter of 27 March 2006 that it had received a notary invitation for payment and the writ for enforcement in the applicant’s case. It also stated that, if money for the honouring of debts of the Ministry had not been included in the current year’s budget, it would be done in the following year’s one.
The Ministry did not pay the applicant. Instead, on 26 July 2006 the Ministry brought a civil claim against him in court, seeking damages for his failure bona fides to carry out his duties stemming from the contract of 15 July 2004. The amounts sought were USD 568,897.90 in damages and the return by the applicant of the first instalment of BGN 29,500 paid by the Ministry to him upon signing the contract. In addition, the Ministry sought BGN 4,648, which represented 8% of the total amount of BGN 58,100 due to the applicant and was envisaged in the contract as a penalty in case of him defaulting on his contract-related obligations. Those proceedings lasted between 2006 and 2011 when, in a final decision of 28 June 2011, the Supreme Court of Cassation (SCC) rejected the Ministry’s claim in respect of the amounts of USD 568,897.90 and BGN 29,050. Finding that the contract between the Ministry and the applicant was still valid as it had not been dissolved, the court granted the Ministry’s claim in respect of BGN 5,102.88, which corresponded to BGN 4,648 in penalty and BGN 418.88 for case-related costs.
On 12 July 2007 the applicant asked the Ministry, through a duly served notary invitation, to pay to him the amount of BGN 57,964.81, which corresponded to BGN 29,050 (principal amount due as a second instalment), BGN 12,874.58 (contractual interest rate), BGN 20,143.23 (legal interest rate) and BGN 581 (costs and expenses), minus the 8% default penalty in the amount of BGN 4,648 which the SCC had ordered the applicant to pay to the Ministry in its final decision of 28 June 2011.
On 15 July 2011 the Ministry replied that its debts were to be paid from its annual budget and, in case of unavailability of funds, money for outstanding debts was to be included at the latest in the following year’s budget. The Ministry also asked the applicant to submit the original writ of execution. The applicant wrote to the Ministry on 28 July 2011 that he had already served on them the original writ and specified the date and reference number of the notary invitation with which that had been done.
On 18 March 2013 the applicant again asked the Ministry to pay to him the outstanding amount. As no payment followed, he complained before the Inspectorate of the Council of Ministers about the Ministry’s failure to pay and asked for assistance.
3. Application no. 50583/13 lodged on 29 July 2013
The applicant is a legal entity called KLAAS-2006 OOD. It is represented by Nikolay Yordanov Batashki, a lawyer practising in Sofia.
In 2010 the applicant company brought proceedings against State Fund Agriculture (Държавен Фонд Земеделие), asking the court to declare null and void a 2008 administrative act with which the Fund sanctioned the applicant for declaring incorrect information in the context of an aid application submitted by the company to the Fund. The Sofia City Administrative Court granted the company’s claim on 30 May 2011 and ordered the Agriculture State Fund to pay the applicant BGN 2,050 in costs and expenses. That decision became final on an unspecified date.
On 16 July 2012 the Sofia City Administrative Court issued the applicant with a writ of enforcement for the amount of BGN 2,050. On 26 July 2012 a bailiff sent an invitation for voluntary compliance to the Fund, inviting them to pay BGN 2,781.20 of which the principal judgment debt of BGN 2,050, BGN 400 for costs and expense related to the enforcement proceedings, and BGN 331.20 in enforcement-related State fees.
The applicant informed the Court in a letter of 14 August 2014 that the Fund had not yet paid. It would appear that the reply the applicant was given by the Fund was that they would pay when and if there is budgetary availability.
B. Relevant domestic law
1. Enforcement of judgment debts against State authorities
By virtue of Article 399 (2) of the Code of Civil Procedure 1952, repealed as of 1 March 2008, a person who had an enforceable pecuniary claim (e.g. a judgment debt) against a State authority received payment out of the funds earmarked for that purpose in the authority’s budget. A writ of execution evidencing the claim had to be issued and then submitted to the authority’s financial department. If there were no funds available in the authority’s budget, the higher administrative authority had to ensure that funds became available in the budget for the following year.
Enforcement proceedings were not, and continue not to be, possible where the judgment debtor is a State authority. Article 519 of the new Code of Civil Procedure 2008 provides that forced enforcement proceedings against a State body aiming at collecting a monetary debt are not possible. If there are no funds available in the authority’s budget, the higher administrative authority has to ensure that funds become available in the budget for the following year (Article 519 (2)).
2. Enforceable titles against State bodies
Article 237 of the Code of Civil Procedure 1952 (the Code 1952) provided that enforceable titles were, among others, final judicial decisions (Article 237 (a) of the Code 1952), contracts with certified signatures by a notary (Article 237 (ж) of the Code 1952), or other documents on the basis of which writs of enforcement could be issued (Article 237 (з) of the Code 1952).
3. Judicial review of administrative failure to act
According to Article 257 of the Code of Administrative Procedure 2006 interested parties can challenge in court the failure of an administrative body to carry out an action stemming directly from a legal provision. The court can order the administrative body to act and give it a deadline for that.
4. Regional administration
According to Article 143 of the Constitution, the Bulgarian Council of Ministers appoints the Regional Governor, who is in charge of overseeing the State policy in the Region. The Regional Governor reports to the Council of Ministers and is assisted by administration which is a legal person financed from the State budget (section 57 of the Administration Act).
COMPLAINTS
All three applicants complain under Article 6 § 1 of the Convention about the failure of the State authorities to pay to them sums owed by virtue of final domestic court decisions (in applications nos. 69361/12 and 50583/13) or a writ of enforcement issued on the basis of a contract between the applicant and the State.
They further complain under Article 13 of the Convention that there was no effective domestic mechanism for enforcing monetary debts against the State.
Relying on Article 1 of Protocol No. 1 to the Convention, the applicants in applications nos. 69361/12 and 39942/13 complain that by failing to pay to them the amounts due the State breached their property rights.
CASE SPECIFIC QUESTIONS
Applications nos. 69361/12 and 50583/13
1. Were the final judicial decisions in the above cases in favour of the applicants enforced and, if yes, when?
2. If those court decisions were not enforced, did the failure to enforce constitute a breach, within the meaning of Article 6 § 1 of the Convention, of the applicants’ right to effective protection of their civil rights stemming from the said court decisions (Mancheva v. Bulgaria, no. 39609/98, 30 September 2004)?
3. Has there been an interference with the applicants’ peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1, as a result of the failure of the authorities to enforce the final judgments in their favour? If so, did that interference impose an excessive individual burden on the applicants (see Burdov v. Russia (no. 2), no. 33509/04, § 87, ECHR 2009)?
4. Did the applicants have at their disposal effective remedies under Article 13 in conjunction with Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 to the Convention (see Burdov v. Russia (no. 2), no. 33509/04, ECHR 2009) for the implementation of the final judicial decisions in their favour?
Application no. 39942/13
1. Did the applicant obtain enforcement of the State’s debt on the basis of the writ of execution issued in his name and, if yes, when?
2. If not, was there an interference with the applicant’s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1 to the Convention? Did that interference impose an excessive individual burden on the applicant, in breach of Article 1 of Protocol No. 1 to the Convention?
3. Did the applicant have at his disposal an effective remedy under Article 13 in conjunction with Article 1 of Protocol No. 1 to the Convention for enforcing the State debt in his favour?
APPENDIX
No.
Application
no.
Lodged on
Applicant name
date of birth
place of residence
Represented by
69361/12
17/10/2012
Stoyan Yordanov NEDELCHEV
28/01/1927
Sofia
39942/13
10/06/2013
Georgi Angelov CHORBOV
02/10/1950
Sofia
50583/13
29/07/2013
KLAAS-2006 OOD
Bratanitsa
Mr Nikolay Yordanov BATASHKI
Full & Egal Universal Law Academy