Communicated on 2 June 2014
FIRST SECTION
Application no. 27567/13
Stephen OGDEN
against Croatia
lodged on 15 April 2013
STATEMENT OF FACTS
The applicant, Mr Stephen Ogden, is a British national, who was born in 1968 and lives in Cheshire. He is represented before the Court by Mr V. Dabelić, a lawyer practising in Orebić.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
On 14 April 2005 the applicant executed a sale and purchase agreement with Mr I., whereby the applicant bought an old stone house and the surrounding land plot. On an unspecified date the applicant requested the consent of the Minister of Justice for the acquisition of ownership of the real property in question.
On 20 October 2008 the applicant’s request was dismissed. The relevant part of the Minister’s decision reads as follows:
“... [the real property in question] is located outside of the construction area – protection of the area of original [significant natural] landscape [zaštita predjela izvornog prirodnog krajobraza].
Section 113 (2) of the Nature Protection Act... provides that foreign natural persons or legal entities cannot acquire ownership of the real property in, inter alia, significant landscape, unless otherwise provided for by an international agreement.
As the statutory requirements for issuance of the requested consent have not been met, it was decided as in the operative part of the decision.”
The applicant then brought an action for judicial review against that decision.
On 23 February 2012 the High Administrative Court (Visoki upravni sud Republike Hrvatske) dismissed the applicant’s action. The relevant part of that judgment reads as follows:
“On 1 February 2009 the Amendments to the Property Act entered into force... Section 3 of the Amendments... [provides for] acquisition of ownership of real property [by European Union citizens and legal entities] under the same conditions as for Croatian nationals and legal entities... with the exception of the agricultural land ... and the nature protected areas as defined by the law...
The plaintiff’s argument that the statutory requirements for his acquisition of ownership have been met under the principle of reciprocity is irrelevant. Namely, section 113(2) of the Nature Protection Act prohibits the acquisition of ownership of real property located in the enumerated protected areas of the Republic of Croatia (... significant landscape...).
The applicant lodged a constitutional complaint against that judgment, alleging violations of his constitutional right to equality of nationals and foreigners before the courts and other public authorities, and his constitutional right of ownership. In so doing he relied on Articles 26 and 48 of the Constitution.
On 26 September 2012 the Constitutional Court dismissed the applicant’s constitutional complaint and served its decision on his representative on 17 October 2012. The relevant part of that decision reads as follows:
“The complainant did not adduce relevant constitutional-law arguments on the basis of which the Constitutional Court could establish that in the proceedings before the Ministry of Justice and the High Administrative Court there were circumstances indicating [his procedural inequality] as a foreign national compared to Croatian nationals in proceedings before those authorities.
...
The Constitutional Court protects the right of ownership [guaranteed by] Article 48 of the Constitution by preventing restriction or deprivation of that right by public authorities, unless the restriction or deprivation is provided by law.
Cases of interference with ownership by other parties (natural persons or legal entities) are usually property disputes between private parties. The Constitutional Court examines such decisions of judicial and other authorities when it finds that such decisions... were based on unacceptable legal grounds or is so wrong and lacking legal reasoning that it could be considered arbitrary.
...the Constitutional Court did not find any such elements in the present case.”
B. Relevant European and domestic law and practice
1. Stabilisation and Association Agreement
The Stabilisation and Association Agreement between the Republic of Croatia, on the one part, and the European Communities and their Member States, on the other part entered into force on 1 February 2005. The relevant part of the Agreement read as follows:
Article 60
“(2)... As from the entry into force of this Agreement, Croatia shall authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in Croatia by nationals of Member States of the European Union, except for areas and matters listed in Annex VII. Within four years from the entry into force of this Agreement, Croatia shall progressively adjust its legislation concerning the acquisition of real estate in Croatia by nationals of the Member States of the European Union to ensure the same treatment as compared to Croatian nationals. At the end of the fourth year after the entry into force of this Agreement, the Stabilisation and Association Council shall examine the modalities for extending these rights to the areas and matters listed in Annex VII.
...”
Annex VII
“ACQUISITION OF REAL PROPERTY BY EU NATIONALS
List of exceptions referred to in Article 60(2)
Excluded sector
– Agricultural land as defined by the Agricultural Land Act (Narodne novine (Official Gazette) No 54/94, consolidated text, 48/95, 19/98 and 105/99)
– Areas protected under the Environmental [Nature] Protection Act (Narodne novine (Official Gazette) No 30/94).”
2. Accession Treaty
Croatia became a member of the European Union on 1 July 2013, by virtue of Treaty concerning the accession of the Republic of Croatia to the European Union (“Accession Treaty”). The relevant part of the Treaty reads as follows:
Annex V
“...
3. FREE MOVEMENT OF CAPITAL
Treaty on European Union and the Treaty on the Functioning of the European Union.
Notwithstanding the obligations under the Treaties on which the European Union is founded, Croatia may maintain in force for seven years from the date of accession the restrictions laid down in its Agricultural Land Act (OG 152/08), as in force on the date of signature of the Treaty of Accession, on the acquisition of agricultural land by nationals of another Member State, by nationals of the States which are a party to the European Economic Area Agreement (EEAA) and by legal persons formed in accordance with the laws of another Member State or an EEAA State...”
3. Nature Protection Act of 2005
Section 113(2) of the Nature Protection Act (Zakon o zaštiti prirode, Official Gazette no. 70/05 with further amendments), which Act had entered into force on 16 June 2005 and was repealed on 6 July 2013, read as follows:
“Foreign legal entities or natural persons cannot acquire ownership of real property located in... significant landscape... unless an international agreement provides otherwise.”
4. Nature Protection Act of 2013
The new Nature Protection Act (Zakon o zaštiti prirode, Official Gazette no 80/13) entered into force on 6 July 2013. It lifted the ban on the acquisition of ownership of real property in the protected areas of nature for foreign nationals or legal entities.
5. Property Act
Section 356(2) of the Property Act (Zakon o vlasništvu i drugim stvarnim pravima, Official Gazette no. 91/96 with further amendments) provides that foreign natural persons and legal entities can acquire ownership of real property in Croatia subject to the consent of the Minister of Justice.
On 1 February 2009, the Amendments of the Property Act entered into force, adding section 358a to the Act. This provision exempted the European Union citizens and legal entities from the requirement to ask for consent of the Minister of Justice, but excluded the agricultural land and the nature protected areas from its application.
6. The case-law of the Constitutional Court
In its decision no. U-I-673/1996 of 21 April 1999 the Constitutional Court invalidated certain provisions of the Denationalisation Act as unconstitutional. Among other provisions, it invalidated as discriminatory the provision that allowed only Croatian but not foreign nationals to obtain restitution of, or the compensation for the property appropriated during the Yugoslav Communist regime.
7. The case-law of the Court of Justice of the European Union
In the Konle case (Klaus Konle v. Republic of Austria, C-302/97) the Court of Justice of the European Union (“the CJEU”) was asked to assess the conformity of the Tyrolean prior authorisation scheme for purchasing agricultural land with the Austrian Accession Treaty, which allowed Austria to maintain its existing legislation regarding secondary residences for five years from the date of accession. The CJEU held that
“... the restrictive measure inherent in... a [prior authorisation] requirement can be accepted only if it is not applied in a discriminatory manner and if the same result cannot be achieved by other less restrictive procedures.”
Furthermore, in the similar circumstances of the Ospelt case (Margarethe Ospelt and Schlössle Weissenberg Familienstiftung, C-452/01), the CJEU held that
“... measures... which entail, by their very purpose, a restriction on the free movement of capital... may nevertheless be permitted provided that, first, they pursue in a non-discriminatory way an objective in the public interest and, secondly, they are appropriate for ensuring that the aim pursued is achieved and do not go beyond what is necessary for that purpose... where the granting of prior authorisation is concerned, such measures must be based on objective criteria which are known in advance and which allow all persons affected by a restrictive measure of that type to have a legal remedy available to them...”
COMPLAINTS
The applicant complains under Article 1 of Protocol No. 1 and Article 1 of Protocol No. 12 to the Convention, that for a prolonged period of time he was, because of his nationality, unable to acquire ownership of the house he bought.
QUESTIONS TO THE PARTIES
1. Did the applicant’s claim to become the owner of the house he had purchased have a sufficient basis in national law to constitute an “asset” and therefore attract the protection of Article 1 of Protocol No. 1 to the Convention?
2. If so, has the applicant suffered discrimination in the enjoyment of his property rights on the ground of his nationality, contrary to Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1 thereto?
3. In the negative, has the applicant suffered discrimination on the ground of his nationality, contrary to Article 1 of Protocol No. 12 to the Convention?
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