FIRST SECTION
DECISION
Application no. 14703/13
Gordana TOMAC and Others
against Croatia
The European Court of Human Rights (First Section), sitting on 29 September 2020 as a Committee composed of:
Aleš Pejchal, President,
Pauliine Koskelo,
Tim Eicke, judges,
and Renata Degener, Deputy Section Registrar,
Having regard to the above application lodged on 29 January 2013,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,
Having deliberated, decides as follows:
THE FACTS
1. A list of the applicants is set out in the appendix. They were represented before the Court by Mr M. Preprotić, an advocate practising in Jastrebarsko.
2. The Croatian Government (“the Government”) were represented by their Agent, Ms Š. Stažnik.The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows.
4. By a gift contract of 24 December 1997, certified by a notary public on 31 August 2000, Mr I.T. – who is the first and second applicants’ father and the third applicant’s husband and who was a co-owner of their family home and a surrounding plot of land – transferred his share in that property to the applicants.
5. The applicants submitted that on 6 September 2000 they had notified the tax authorities of that transaction and that the Ministry of Finance (Ministarstvo financija) had later exempted them from property transfer tax.Land-registry proceedings
6. On 4 September 2000 the applicants applied to the Jastrebarsko Municipal Court (Općinski sud u Jastrebarskom) with a view to recording in the land register that they had acquired I.T.’s share in the house and the plot of land, on the basis of the above-mentioned gift contract (see paragraph 4 above).
7. The Municipal Court did not immediately make the relevant entry (plomba) in the land register, as required by the relevant domestic law (see paragraph 22 below). Under the domestic law, the effect of such entries is to establish the order of priority and to make the lodging of applications regarding real property public knowledge (see paragraphs 21-22 and 24 below). The court made the relevant entry as late as on 16 September 2008.
8. Instead, according to the Government, at the time of the lodging of the application the land-registry clerk assigned to process it had inserted an informal handwritten note in the case file suggesting that I.T.’s address and the size of his share as stated in the gift contract did not correspond to the information in the land register. The applicants were not informed that there had been any problems with their application.
9. The court decided on the applicants’ application as late as on 27 August 2013, when it allowed their application and registered that I.T.’s share had passed to them. As a consequence of this delay, I.T. remained recorded in the land register as a co-owner of the property in question until that date.Security proceedings against I.T.
10. Meanwhile, on 9 June 2008 the Ministry of Finance issued a decision, holding that I.T. owed 250,052.55 Croatian kunas (HRK) in unpaid taxes and other levies to the State.
11. On 23 July 2008 the Ministry instituted security proceedings (postupak osiguranja) before the Jastrebarsko Municipal Court against I.T. with a view to securing payment of the above tax debt by means of the compulsory mortgaging of an immovable property (osiguranje prisilnim zasnivanjem založnog prava na nekretnini – “the security interest”), that is, by setting up and registering a mortgage on I.T.’s property against his will, specifically, on his share in the house and the land he had gifted to the applicants (see paragraph 4 above).
12. By a decision of 28 July 2008, the Municipal Court allowed the State’s application and on 8 August 2008 it registered the security interest on the property in question.
13. On the same day the applicants lodged a complaint (prigovor) against that decision. They submitted that on 4 September 2000 they had lodged an application with a view to recording in the land register that they had acquired I.T.’s share in the property (see paragraph 6 above). This meant that the State’s application for setting up and registering the security interest should not have been decided before their application and that their right over the property in question had priority and effectively rendered the State’s security interest nugatory.
14. Since the State did not accept the applicants’ arguments, by a decision of 20 March 2009 the Municipal Court instructed the applicants to institute civil proceedings to declare the setting up and registration of the security interest in question inadmissible.Civil proceedings for declaring the setting up and registration of the security interest inadmissible
15. On 7 April 2009 the applicants, as instructed, brought a civil action against the State in the Jastrebarsko Municipal Court, seeking to have the setting up and registration of the above-mentioned security interest declared inadmissible (see paragraph 14 above). They put the value of the subject matter of the dispute (the value of the claim, vrijednost predmeta spora) at HRK 250,000.
16. In a judgment of 24 September 2009, the Municipal Court dismissed the applicants’ action. It found that there had been a manifest error on the part of the land-registry department in processing the applicants’ application of 4 September 2000 (see paragraphs 6-7 above) and that, in the ordinary course of events, the State’s application should not have been processed before that of the applicants. However, it considered that the State, by relying on the information in the land register (according to which I.T. had still been a registered co-owner of the property in question; see paragraph 9 above), had acted in good faith. Therefore, there were no grounds preventing the registration of the security interest in favour of the State. The relevant part of that judgment reads as follows:
“[I]t is evident that the land-registry department of this court did not act in accordance with the [relevant] provisions of the [1996] Land Register Act. If it considered that the plaintiffs’ application for registration ... did not satisfy the statutory requirements for registration, it should have rendered a decision dismissing the application ...
Given the said omissions ... and having regard to sections 45 and 107 of the [1996] Land Register Act [regulating] the order of precedence in registration in the land register, it follows that the land-registry department of this court should not have decided on the registration of [the security interest] on the property in question on the basis of this court’s decision of 28 July 2008 before adopting a final decision on the previous application for registration lodged by the plaintiffs on 4 September 2000.
However ... these omissions do not call into question the application of the rules protecting reliance on [the information in] the land register. The State acted in accordance with [those rules] when submitting its application for registration of a security interest ...
Under [the relevant provisions of] the Property Act [the State] was not obliged to inquire about the actual status of the property in question. This means that the good faith of the acquirer is presumed on the basis of the principle protecting reliance on [the information in] the land register, and the plaintiffs did not point to any circumstances that could demonstrate the bad faith of [the State] at the time of submitting the application ... to register [the security interest].
A creditor who in good faith registered a mortgage on an immovable property by relying on the accuracy and completeness of [the information in] the land register enjoys protection ...”
17. The applicants appealed against the Municipal Court’s judgment. They argued, inter alia, that the State had not acted in good faith when submitting its application for registration of the security interest (see paragraph 12 above). This was because the State must have been aware that I.T. had transferred his share in the property in question to them since the applicants had notified the tax authorities of the gift contract (see paragraph 5 above).
18. By a judgment of 6 June 2012, the Velika Gorica County Court (Županijski sud u Velikoj Gorici) dismissed the applicants’ appeal and upheld the first-instance judgment, endorsing the reasons given therein. In reply to the argument put forward by the applicants in their appeal (see paragraph 17 above), the court held as follows:
“[T]he fact that notice of the gift contract in question was given to the relevant tax authorities with a view to regulating the parties’ tax obligations does not affect the lawfulness and correctness of the contested decision since that contract was not recorded in the land register.”
19. The applicants subsequently, on 31 August 2012, lodged a constitutional complaint with the Constitutional Court (Ustavni sud Republike Hrvatske).
20. In a decision of 21 November 2012, the Constitutional Court declared inadmissible the applicants’ constitutional complaint, holding that the case did not raise a constitutional issue.Relevant domestic lawLand Register Act
21. Section 45(1) of the 1996 Land Register Act (Zakon o zemljišnim knjigama, Official Gazette no. 91/96 with further amendments), which was in force between 1 January 1997 and 5 July 2019, provided that the priority order for registration in the land register was determined according to the date on which the land-registry court received the application for registration, or the decision of another court or authority ordering registration
22. Section 98(1) provided that upon receipt of an application for registration the land-registry department of the competent court had to immediately make the relevant entry in the land register, recording the date and time on which the application had arrived, with a view to making that information public.
23. Section 98(2) provided that the State was liable under the rules of strict liability for any damage which might arise if the entry referred to in paragraph 1 of that section had not been made in time.
24. Section 107 provided that the situation existing at the time when the land-registry department received the application for registration was relevant for the decision on the application.
25. Other relevant provisions of the 1996 Land Register Act are set out in Gavella v. Croatia (dec.), no. 33244/02, ECHR 2006‑XII (extracts).Civil Procedure Act
26. Section 382(1) of the Civil Procedure Act (Zakon o parničnom postupku, Official Gazette of the Socialist Federal Republic of Yugoslavia no. 4/77 with subsequent amendments, and Official Gazette of the Republic of Croatia no. 53/91 with subsequent amendments), in force since 1 July 1977, governs the admissibility ratione valoris of an appeal on points of law (revizija) and is cited in Mirenić-Huzjak and Jerković v. Croatia (dec.), no. 72996/16, 24 September 2019.
COMPLAINTS
27. The applicants complained under Article 6 § 1 and Article 13 of the Convention and Article 1 of Protocol No. 1 that the domestic courts had not decided on their application for registration, a situation which had also adversely affected their property rights, as it had enabled the State to register a security interest on their property.
THE LAWAlleged violation of Article 1 of Protocol No. 1
28. The applicants complained that the failure of the Jastrebarsko Municipal Court to decide on their application for registration had had adverse consequences for their right to the peaceful enjoyment of their possessions, as it had resulted in the State being able to register a security interest on their property. They relied on Article of Protocol No. 1, which reads as follows:
“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 parties’ submissions
(a) The Government
29. The Government disputed the admissibility of this complaint, arguing that the applicants had not exhausted domestic remedies.
30. In particular, the Government submitted that the applicants had not lodged an appeal on points of law against the second-instance judgment of 6 June 2012 (see paragraph 18 above) even though that remedy had been open to them given that the value of the subject matter of the dispute exceeded HRK 200,000 (see paragraph 26 above).
31. The Government further submitted that the applicants could likewise have lodged a civil action for compensation against the State, as under the relevant legislation the State was liable for the damage resulting from belated entries in the land register (see paragraph 23 above).
(b) The applicants
32. The applicants replied that an appeal on points of law had not been available in their case and gave detailed reasons in support of that argument. They made no comments regarding the other remedy suggested by the Government (see paragraph 31 above).The Court’s assessment
33. The Court notes that the rule set out in section 98(2) of the 1996 Land Register Act (see paragraph 23 above) seems to have been devised precisely to address situations such as the one in which the applicants found themselves in the present case. The Government therefore argued that the applicants should have brought a civil action for compensation on the basis of that provision (see paragraph 31 above). The applicants, for their part, did not argue that this remedy had been unavailable to them or that it had been ineffective (see paragraph 32 above).
34. That being so, and having regard to its case-law (see, for example, Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, § 77, 25 March 2014), the Court sees no reason that could exempt the applicants from their obligation under Article 35 § 1 of the Convention to avail themselves of that remedy. The Government’s objection regarding the exhaustion of domestic remedies must therefore be upheld.
35. In view of these findings the Court does not find it necessary to determine whether an appeal on points of law was available to the applicants (see paragraphs 30-32 above).
36. It follows that this complaint is inadmissible under Article 35 § 1 of the Convention for non-exhaustion of domestic remedies and must be rejected pursuant to Article 35 § 4.Alleged violations of Article 6 § 1 and Article 13 of the Convention
37. The applicants also complained that the failure of the Jastrebarsko Municipal Court to decide on their application for registration had been in breach of their right of access to a court and their right to an effective remedy. They relied on Article 6 § 1 and Article 13 of the Convention, the relevant parts of which read as follows:
Article 6 (right to a fair hearing)
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
Article 13 (right to an effective remedy)
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
38. The Court does not find it necessary to reproduce the parties’ arguments in detail, as these complaints are in any event inadmissible for the following reasons.
39. The applicants complained that their application for registration had never been decided on (see paragraphs 27 and 37 above). However, the Jastrebarsko Municipal Court did eventually, on 27 August 2013, decide on that application (see paragraph 9 above). In these circumstances it cannot be said that the applicants did not have access to a court.
40. This conclusion makes it unnecessary for the Court to examine Article 13 complaint, which is being absorbed by more strict requirements of Article 6 § 1 (see Kudła v. Poland [GC], no. 30210/96, § 146, ECHR 2000‑XI).
41. It follows that this part of the application is inadmissible under Article 35 § 3 (a) of the Convention as manifestly ill-founded and must be rejected pursuant to Article 35 § 4.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 22 October 2020.
Renata DegenerAleš Pejchal
Deputy RegistrarPresident
Appendix
No.
Applicant’s Name
Birth date
Nationality
Place of residence
1
Gordana TOMAC
05/01/1981
Croatian
Jastrebarsko
2
Ingrid TOMAC
16/03/1975
Croatian
Jastrebarsko
3
Veronika TOMAC
19/06/1949
Croatian
Jastrebarsko
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