AS TO THE ADMISSIBILITY OF
Application No. 24428/94
by Thordur THORS
against Iceland
The European Commission of Human Rights (Second Chamber) sitting
in private on 17 January 1996, the following members being present:
Mr. H. DANELIUS, President
Mrs. G.H. THUNE
MM. G. JÖRUNDSSON
J.-C. SOYER
H.G. SCHERMERS
F. MARTINEZ
L. LOUCAIDES
J.-C. GEUS
M.A. NOWICKI
I. CABRAL BARRETO
J. MUCHA
D. SVÁBY
P. LORENZEN
Ms. M.-T. SCHOEPFER, Secretary to the Chamber
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 23 March 1994 by
Thordur THORS against Iceland and registered on 17 June 1994 under file
No. 24428/94;
Having regard to the report provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case, as submitted by the applicant, may be
summarised as follows.
The applicant is an Icelandic citizen, born in 1928. He is
residing in Reykjavík. Before the Commission he is represented by
Mr. Jón Steinar Gunnlaugsson, a lawyer practising in Reykjavík.
The applicant and some of his siblings were the owners of a
property complex, consisting of a river, a lake and the surrounding
individual farmlands. The farmlands were individually owned by the
siblings whereas the river and the lake were common property.
On 12 November 1987 the applicant and his siblings as vendors and
MM. A and B as purchasers concluded a purchase agreement on the basis
of an offer dated 9 November 1987 with respect to the farmlands
Stóra-Hraun, Landbrot, Skjálg, Syori-Rauoamelur and Ölviskross, in the
district of Kolbeinsstaoahreppur and the farmlands of Kolvioarnes,
Akurholt, Gerouberg, Ytri-Rauoamelur and Höfoi, in the district of
Eyjarhreppur. Furthermore, the deal comprised the Haffjaroará river in
the county of Hnappadalssysla, with lake Oddastaoavatn and the islets
therein, and the fishing lodges at Geiteyri and Kvörn. The total price
fixed for the entire property was 118,200,000 ISK. The agreement
furthermore contained a provision whereby the vendors should refund the
purchasers if existing rights of pre-emption were exercised in
accordance with the provisions of the Farmlands Act, no. 65/1976 which
according to its section 1 aims at securing a proper utilisation of
farm land to the benefit of all concerned.
Section 30 of the Farmlands Act no. 65/1976, gives a right of
pre-emption to a tenant in case the land is offered for sale. The
section reads as follows:
(translation)
"In case real property rights to which this Act applies are
to be sold, cf. section 3, the local government of the
municipality in which the property is situated shall have
a right of pre-emption, except in cases where the
disposition concerns a family estate.
A tenant who has had possession of the land for ten years
or more shall have a right of pre-emption before the local
government, provided the tenant takes the land into his
full enjoyment and use."
Furthermore, section 34 of the Act reads as follows:
(translation)
"If the holder of the right of pre-emption is offered the
opportunity of exercising his right but the fixed price
offered is excessive or the purchase terms unreasonable by
comparison to general practice in such a manner that the
offer may be expected to have been made in order to prevent
the holder of the right of pre-emption from exercising this
right, the holder of the right of pre-emption may, having
obtained the approval of the Farmlands Committee, request
that the value of the property be determined by
court-appointed appraisers, and their appraisal shall then
apply as sales price.
In case a holder of the right of pre-emption decides to
request an appraisal this shall be done within 15 days from
the date an offer was received, and the appraisal shall
have been completed within three weeks.
The holder of the right of pre-emption shall then, within
one week, decide whether or not to exercise his right in
accordance with the appraisal.
The appraisers shall decide how the cost of appraisal shall
be defrayed."
On 16 November 1987 the applicant invited the tenant of the
farmland Kolvioarnes, C, to exercise his right of pre-emption in
accordance with the provisions of the Farmlands Act. C was furthermore
informed that the part of Kolvioarnes which he occupied as tenant, in
the total sum of the purchase agreement amounted to 6,000,000 ISK. As
C found this price excessive he made use of his right pursuant to
section 34 of the Farmlands Act to an appraisal of the land in question
by court-appointed appraisers.
In the opinion of 18 December 1987 the two court-appointed
appraisers concluded as follows:
(translation)
"The Considerations Providing a Basis for the Appraisal
The appraisers have inspected all the farmlands and the
structures belonging thereto, and the fishing lodges with
their appurtenances. The objective was to determine a
reasonable sales price for each individual farmland, taking
into account area, benefits, cultivation, structures in the
ownership of the appraisal respondent and their condition,
and the possibilities for utilisation of the lands.
In performing the appraisal the appraisers have also taken
into account recent sales prices of farmlands in western
Iceland, and the fact that the residences at Skjálg and at
Akurholt are subject to lease agreements for some years. As
regards the fishing lodges their condition is taken into
account and a reasonable sales price is assessed by
reference to their sizes, ages and condition.
...
Conclusions of the Appraisers
The appraisers do not consider that the sales prices of the
farmlands are unreasonable, or that the payment terms are
unreasonable in view of the prices. It can admittedly be
acknowledged that the terms are not those common to the
purchase and sale of real property, but such transactions
often diverge from common practice, and in such cases this
is taken into account when the price of the property in
question is determined.
In so far as the ten-year lease agreement attached to the
invitation to exercise the right of pre-emption, relating
to fishing in Haffjaroará and Oddastaoavatn, is concerned,
the appraisers consider that it does not accord with
general practice nowadays, neither as regards the amount of
rent nor the period of the lease. The rent for the fishing
rights is very low and the period is different from common
practice, and despite its duration there is no provision in
the agreement on its revision. When appraising the fishing
rights the agreement is taken fully into account.
By reference to the considerations outlined above the
conclusion of the appraisers are as follows:
APPRAISAL CONCLUSIONS
The sales prices of the properties now to be appraised are
determined as follows:
Ölviskross. . . . . . . . . . . . . . . ISK 2,000,000.-
Skjálg. . . . . . . . . . . . . . . . . ISK 2,200,000.-
Landbrot. . . . . . . . . . . . . . . . ISK 1,500,000.-
Stóra-Hraun . . . . . . . . . . . . . . ISK 5,000,000.-
Kolvioarnes . . . . . . . . . . . . . . ISK 2,200,000.-
Akurholt. . . . . . . . . . . . . . . . ISK 3,200,000.-
Gerouberg . . . . . . . . . . . . . . . ISK 4,700,000.-
Ytri-Rauoamelur . . . . . . . . . . . . ISK 5,200,000.-
Höfoi . . . . . . . . . . . . . . . . . ISK 4,800,000.-
Fishing lodge at Geiteyri . . . . . . . ISK 11,600,000.-
Fishing lodge at Kvörn. . . . . . . . . ISK 1,400,000.-
The property Haffjaroará. . . . . . . . ISK 66,000,000.-
Lake Oddastaoavatn with islets. . . . . ISK 1,700,000.-
Total ISK 111,500,000.-"
The last piece of farmland included in the deal between the
applicant and his siblings and MM. A and B, Syori-Rauoamelur, was
bought by the tenant under the existing pre-emption right at a price
of 6,500,000 ISK. This farmland was therefore not included in the
appraisal.
On 22 December 1987 the applicant received a letter from C
stating that he would exercise his right of pre-emption on the basis
of the conclusions of the said appraisal. An escrow account deposit
receipt of 21 December 1987 in the original was attached to the letter
signifying a deposit by C of those payments that were due upon
signature calculated on the basis of the appraisal, with interest.
On 23 December 1987 the applicant objected to the view that an
appraisal of the land under section 34 of the Farmlands Act could
lawfully take place. He stated in particular that in his view C could
not claim a right to make a purchase in accordance with the assessed
price, and that he was not lawfully entitled to appropriate the
applicant's property in this manner. The applicant also maintained that
the appraisal showed that the appraisers had not possessed complete
information on the rights and benefits attached to the land. In this
context the appraisers had failed to keep various provisions of the
Land Tenancy Act in mind. Accordingly, no purchase agreement was in
effect between C and the applicant.
Thus, as the applicant and the original purchasers A and B
disputed C's right of pre-emption on the terms envisaged by him, C
instituted proceedings on 26 February 1988 against the parties to the
purchase agreement in the District Court of Snæfellsnes- and
Hnappadalssysla requesting that the purchase agreement be declared
invalid and that the applicant be ordered to issue a deed of the land
to him in accordance with his right of pre-emption. He maintained that
the sales price of 6,000,000 ISK for Kolvioarnes was determined solely
for the purpose of preventing him from exercising his right of
pre-emption.
The applicant submitted that the property Kolvioarnes was sold
as a part of a whole and that the buyers, A and B, were merely
interested in the right to fish in Haffjaroará. Among their interests
in purchasing the land had been their wish to eliminate the risk that
its owner availed himself of the provision of section 3 of the Salmon
and Trout Fishing Act, no. 76/1970, to purchase the right to fish in
the waters adjacent to the property. They had only been able to protect
themselves therefrom by owning the land themselves. As they were
purchasing the fishing rights at the same time they had been free to
offer a high price for the property by reason of this interest.
The District Court pronounced judgment on 6 February 1991 in
which it concluded as follows:
(translation)
"The dispute in this case concerns the question whether the
purchase price determined by the parties to the purchase
agreement of 12 November 1987 was fixed `excessively high'
and `in such a manner that the offer may be expected to
have been made in order to prevent the holder of the right
of pre-emption from exercising this right', cf. section 34
of the Farmlands Act, no. 65/1976, i.e. whether or not the
conditions for an appraisal under the said provision were
fulfilled.
The Court finds that the said provision of the Farmlands
Act is to be interpreted restrictively, as it would
otherwise involve an exception from the general principle
that a right of pre-emption involves a right to enter into
a purchase agreement on the same terms as the originally
intended purchaser. When construing the provision, section
67 of the Constitution concerning the inviolability of the
right of private ownership must also be kept in mind, as
that provision protects, inter alia, the right of a person
to sell his property at the price obtainable on the free
market.
It follows from the above that section 34 is to be
construed so as to apply in cases when the purchase price
is fixed at too high a level or the terms are unreasonable
in a situation when the price is in fact different and
lower or the actual terms different and more favourable
than indicated in the offer to exercise the right of
pre-emption, and when this is done in order to prevent the
holder of the right of pre-emption from exercising his
right, Thus, the provision provides for measures which can
be taken against deception, but it is not intended to
affect agreements which are in fact concluded.
No indication has been brought forth in this case to the
effect that the stated purchase price of ISK 6,000,000 was
not paid. Therefore, the conditions for an appraisal under
section 34 of the Farmlands Act were not fulfilled. C's
requests must be dismissed already for that reason."
C appealed against the judgment to the Supreme Court on
4 April 1991 and reiterated that he had a right of pre-emption at the
price estimated by the appraisers. The applicant maintained, as before,
that the price of 6,000,000 ISK was to be seen in particular in the
light of the interest A and B had in eliminating the risk that others
purchased the right to fish in the waters in question.
In reversing the lower court's judgment the majority of the
Supreme Court stated, by judgment of 21 October 1993, in reply to the
above as follows:
(translation)
"In such circumstances (C) was, if he decided to exercise
his right of pre-emption at the fixed price, in the
situation of having to pay for these interests without
becoming their owner himself. If he had paid that price he
would nevertheless have had to invoke the conditional
provisions of section 3 of the Salmon and Trout Fishing Act
in order to purchase the right to fish in the river
adjacent to the land. The appraisal of the appraisers
appointed has not been set aside, and (the applicant) has
not established that he could have obtained a price higher
than the appraised value if he had sold the land separately
and without the buildings and cultivation owned by (C).
It has thus been established that the price at which (C)
was invited to purchase the land was excessively high, and
this should have been clear to (the applicant) when the
invitation to exercise the right of pre-emption at that
price was made.
The Court holds that in these circumstances (C) was in his
right to avail himself of the provisions of section 34 of
the Farmlands Act, and that by reference to the above he
has a right of pre-emption with respect to the purchase of
the land Kolvioarnes at the price of ISK 2,200,000
determined by the court appointed appraisers.
The provision of section 67 of the Constitution cannot be
deemed to stand in the way of this conclusion. ... .
The purchase agreement of 12 November 1987, between (the
applicant) and (A and B), relating to the farmland of
Kolvioarnes, in Eyjahreppur, Hnappadalssysla, is
invalidated. (The applicant) shall issue a conveyance of
title to the farmland of Kolvioarnes, in Eyjahreppur,
Hnappadalssysla, to (C) with the buildings and other
benefits belonging thereto and owned by (the applicant),
against the payment of the assessed price of the land
ISK 2,200,000 on the same terms as provided for in the
above-mentioned purchase agreement dated 12 November 1987."
COMPLAINTS
The applicant complains that the judgment of the Supreme Court
of 21 October 1993 whereby he has been ordered to issue a conveyance
of title to the farmland of Kolvioarnes to C against the payment of
2,200,000 ISK plus interest interfered with his right to peaceful
enjoyment of his possessions secured to him under Article 1 of
Protocol No. 1 to the Convention in a way which was not covered by the
second sentence of the first paragraph or by the second paragraph of
this provision.
THE LAW
The applicant complains that the compulsory sale to C for the
price fixed by the court-appointed appraisers constitutes a violation
of his right under Article 1 of Protocol No. 1 (P1-1) to the Convention
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."
Section 30 of the Icelandic Farmlands Act no. 65/1976 gives a
right of pre-emption to a tenant if the land is offered for sale,
provided that the tenant has held the tenancy of the land for at least
ten years and takes the land into his full enjoyment and use. The
tenant of the farmland Kolvioarnes made use of this right and by the
judgment of the Supreme Court of 21 October 1993 the applicant was
ordered to issue a conveyance of title to this farmland to the tenant.
The Commission considers that this measure constitutes an interference
with the applicant's right to the peaceful enjoyment of his possessions
and is to be considered under the second paragraph of Article 1 of
Protocol No. 1 (P1-1).
The stated aim of the interference in this case was that
described in section 1 of the Farmlands Act, i.e. to secure a proper
utilisation of farmland to the benefit of all concerned. This is in the
Commission's view a legitimate "general interest" for the purposes of
Article 1 of Protocol No. 1 (P1-1), even to the extent that it may
imply the compulsory transfer of property from one individual to
another (cf. mutatis mutandis Eur. Court H.R., the James and Others
judgment of 21 February 1986, Series A no. 98, pp. 30-32, paras. 39-
45).
Regarding the lawfulness of the interference the Commission
recalls that its powers to review compliance with domestic law are
limited (cf. for example Eur. Court H.R., the Allan Jacobsson judgment
of 25 October 1989, Series A no. 163, p. 17, para. 57 and the Håkansson
and Sturesson judgment of 21 February 1990, Series A no. 171, p. 16,
para. 47). The Commission notes that the Supreme Court found the
interference to be in accordance with Icelandic law, namely the
provisions of the Farmlands Act of 1976, and it has not been shown that
this finding was in any way arbitrary. The impugned measure thus had
a legitimate aim and was lawful for the purposes of Article 1 of
Protocol No. 1 (P1-1).
Article 1 of Protocol No. 1 (P1-1) also requires that there be
a reasonable relationship of proportionality between the means employed
and the aim sought to be realised. The requisite proportionality will
not be found if the person concerned has had to bear an individual and
excessive burden (cf. for example Eur. Court H.R., Lithgow and Others
judgment of 8 July 1986, Series A no. 102, p. 50, para. 120). In this
connection the applicant complains that he has been forced to sell his
land at a price which was far below what the original purchasers A and
B were willing to pay, and which was far below the price at which he
would have been willing to sell at all.
On this point the Commission recalls that when the applicant
decided to sell Kolvioarnes he was aware of the fact that his tenant,
C, had been living there for many years and thus had a right of
pre-emption pursuant to section 30 of the Farmlands Act. He should also
have been aware of the fact that the price of the land could on certain
conditions be subject to approval by the courts on the basis of the
expert opinions of court-appointed appraisers.
In exchange for his property the applicant eventually received
2,200,000 ISK plus interest, a sum considerably lower than the purchase
price he would otherwise have obtained according to the calculations
of the parties to the purchase agreement of 12 November 1987. The sum
the applicant received represented the land's estimated market value
as assessed by two specially appointed appraisers. There is no
substantiated allegation that the valuation was not made in accordance
with the applicable rules. Having regard to the margin of appreciation
enjoyed by the national authorities under Article 1 of Protocol No. 1
(P1-1), the Commission therefore finds that the price received by the
applicant can be considered to have been reasonably related to the
value of the land in question.
Accordingly, and in particular in view of the risks taken by him,
when he sold the property at the price fixed by him and the original
purchasers, the applicant has not, in the Commission's opinion, been
made to carry an excessive individual burden in this case.
Consequently, the application does not disclose any appearance of an
interference with the applicant's right to peaceful enjoyment of his
possessions which was not justified under the terms of the second
paragraph of Article 1 of Protocol No. 1 (P1-1) (cf. also mutatis
mutandis the above-mentioned Håkansson and Sturesson judgment, pp. 17-
18, paras. 51-55).
It follows that the application is manifestly ill-founded within
the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.
For these reasons the Commission, unanimously,
DECLARES THE APPLICATION INADMISSIBLE
Secretary to the Second Chamber President of the Second Chamber
(M.-T. SCHOEPFER) (H. DANELIUS)
Full & Egal Universal Law Academy