Communicated on 27 February 2019
FIFTH SECTION
Application no. 25054/15
Severina Prodanova POPOVA and Boris Prodanov VELICHKOV
against Bulgaria
lodged on 12 May 2015
STATEMENT OF FACTS
The applicants, Ms Severina Prodanova Popova and Mr Boris Prodanov Velichkov, are Bulgarian nationals, who were born in 1951 and 1944 respectively and live in Sofia. They are represented before the Court by Mr A. Kashamov, a lawyer practising in Sofia.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
The applicants were the owners of a plot of land in the outskirts of Sofia measuring 6,001 square metres.
In a decision 21 December 2013 the Council of Ministers (Government) expropriated the applicants’ plot and other land in the area for the construction of a section of the ring road of Sofia. The decision stated that the applicants would receive monetary compensation, in the amount of 5,116 Bulgarian levs (BGN), the equivalent of 2,616 euros (EUR), or BGN 0.84 (EUR 0.43) per square metre.
The applicants applied for judicial review of the expropriation decision, arguing in particular that the compensation awarded to them was too low and bore no relationship to the fair market value of their land.
The Supreme Administrative Court appointed an expert with the task of calculating the market value of the land expropriated from the applicants. The expert submitted two reports dated 14 May and 10 September 2014. He enlisted a number of contracts concluded within the period to be taken into account and concerning land in the same area, and proposed several calculations as to the value the applicants’ land, depending on which of the plots concerned were to be taken as valid comparables, ranging from BGN 21.5 (EUR 11) to BGN 104 (EUR 53) per square metre.
The Supreme Administrative Court gave a judgment on 14 November 2014. It found that only one of the plots of land described by the expert (sold in 2012 for a price equivalent to BGN 25 (EUR 13) per square metre) could qualify as a comparable, which was insufficient to calculate an average market value. As to the remaining plots of land, they could not be considered valid comparables, because some of them were not located in the same area, and others had been jointly mortgaged in one contract without an indication of their individual values. Another plot of land had been included in the capital of a company, but this was not among the types of transactions enlisted in section 1a(2) of the supplementary provisions of the State Property Act.
Accordingly, since only one comparable had been found and it was insufficient to establish an average market value of the expropriated land, the amount of compensation had to be calculated in accordance with the Regulation on the calculation of the value of agricultural land (see below, “Relevant domestic law and practice”). As this had been the method used by the Council of Ministers when expropriating the applicants’ land and allotting them BGN 5,116 in compensation, the application for judicial review of that decision had no merit.
The judgment above was final.
In the beginning of 2015 the Council of Ministers settled several other similar cases still pending before the Supreme Administrative Court, concerning land in the same area and expropriated in the same decision of 21 December 2013, agreeing to pay compensation to the expropriated owners equivalent to BGN 20.05 (EUR 10) per square metre.
B. Relevant domestic law and practice
Section 17 § 5 of the Constitution of Bulgaria provides that property may be expropriated for State or municipal needs only on the basis of a law, only if those needs cannot be satisfied otherwise, and following prior and adequate compensation.
Section 32(1) of the State Property Act 1996 (Закон за държавната собственост) reiterates that private property can be expropriated for State needs that cannot be satisfied otherwise, in exchange of adequate compensation.
By section 34a of the State Property Act, the Council of Ministers (Government) is the body competent to take decisions for the expropriation of private property where this is needed for projects of national significance. Its decisions are subject to judicial review, including with respect to the amount of compensation allocated to the expropriated owners.
The compensation to be provided can be monetary or through other property. Section 32(2) of the State Property Act defines adequate monetary compensation as one calculated on the basis of “the market value of comparable properties situated in proximity to the expropriated one”. Further instructions are contained in section 1a(2) of the supplementary provisions of the same Act. It defines the term “market value” as the average value indicated in all contracts for valuable consideration – sales of properties, exchanges, public auctions, mortgages securing the purchase of property and others – concluded in the year preceding the assessment for the purposes of expropriation, and where, in addition, at least one of the parties is a commercial entity. At least two comparables are necessary to calculate a fair market value.
Section 32(3) of the State Property Act provides that, where no sufficient number of comparables can be found, the adequate monetary compensation is to be calculated on the basis of Government-adopted formulas. As concerns land considered to be agricultural, such formulas, taking into account the category of land and its proximity to cities or infrastructure, are contained in the Regulation on the calculation of the value of agricultural land (Наредба за реда за определяне на цени на земеделските земи), adopted by the Council of Ministers in 1998.
In 2006 a group of members of Parliament challenged the constitutionality of section 32(3) of the State Property Act. In a judgment of 4 July 2006 (Решение на Конституционния съд № 6, 4 юли 2006 г., к.д. 5/2006 г.) the Constitutional Court found that the provision, aiming to introduce common criteria, did not contradict the Constitution. It noted nevertheless that the application of that provision had to remain exceptional and to be conditioned on the “undeniable lack” of valid comparables.
COMPLAINTS
The applicants complain under Article 1 of Protocol No. 1 and Article 6 § 1 of the Convention of the lack of adequate compensation for their expropriated property and about the manner in which the Supreme Administrative Court decided on the matter.
QUESTIONS TO THE PARTIES
1. Did the interference with the applicants’ possessions comply with the requirements of Article 1 of Protocol No. 1? In particular, was the compensation awarded to them reasonably related to the value of their expropriated property (see, for example, Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, §§ 108-127, 25 October 2012) and were there any exceptional circumstances justifying a departure from that standard (see, for example, Jahn and Others v. Germany [GC], nos. 46720/99 and 2 others, §§ 111-117, ECHR 2005‑VI).
How was the compensation of BGN 20.05 per square metre, which the Council of Ministers agreed to pay to other owners of expropriated land in the area, arrived at, and why did the Council of Ministers change its position on the compensation to be awarded to them?
2. Did the applicants have a fair hearing before the Supreme Administrative Court for the determination of their civil rights and obligations, in accordance with Article 6 § 1 of the Convention?
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