ZVOLENSKY AND OTHERS v. THE CZECH REPUBLIC



                      AS TO THE ADMISSIBILITY OF

                      Application No. 33456/96

                      by Alexander ZVOLENSKY and Others

                      against the Czech Republic

     The European Commission of Human Rights (Second Chamber) sitting

in private on 14 January 1998, the following members being present:

           MM    J.-C. GEUS, President

                 M.A. NOWICKI

                 G. JÖRUNDSSON

                 A. GÖZÜBÜYÜK

                 J.-C. SOYER

                 H. DANELIUS

           Mrs   G.H. THUNE

           MM    F. MARTINEZ

                 I. CABRAL BARRETO

                 J. MUCHA

                 D. SVÁBY

                 P. LORENZEN

                 E. BIELIUNAS

                 E.A. ALKEMA

                 A. ARABADJIEV

           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 25 July 1996 by

Alexander ZVOLENSKY and Others against the Czech Republic and

registered on 16 October 1996 under file No. 33456/96;

     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 applicants, four Czech nationals born in 1931, 1945, 1917 and

1924, reside in Prague.  Before the Commission, the first applicant

represents the three others.

     The facts of the case, as submitted by the applicants, may be

summarised as follows.

     On 12 July 1976 the applicants purchased a house in Zlivice

(Czech Republic) from the South Bohemia Forest State Enterprise

(Jihoceské státní lesy). The purchase price was fixed by an expert's

report at 33,035 crowns.  The purchase contract became effective on

29 July 1976 when it was registered by the Písek State Notary.

     On 20 February 1991 the South Bohemia Forest company (Jihoceské

lesy, a.s.) ("the company"), a legal successor to the South Bohemia

Forest State Enterprise, brought before the Písek District Court

(okresní soud) an action against the applicants claiming that the

purchase contract had been void as it was contrary to the law, and that

the company was still the owner of the house.  The company stated that

the purchase price had been contrary to Price Regulation No. 43/1969

(vyhláska o cenách staveb v osobním vlastnictví a o náhradách pri

vyvlastnení) ("the Regulation").

     On 12 May 1993 the Písek District Court declared the purchase

contract void ab initio under Section 39 of the Civil Code, according

to which a legal act is void if its contents or purpose are unlawful

or are contrary to the interests of society.  The Court found that the

purchase price fixed in the purchase contract had not been in

accordance with the Regulation.  Consequently, the company remained the

owner of the house and the applicants were ordered to vacate it.  The

applicants recovered the purchase price of 33,035 crowns.

     The Court heard five witnesses.  Two of them had rented the house

before it was sold to the applicants.  They stated that they had been

interested in buying the house, but that the South Bohemia Forest State

Enterprise had informed them that the purchase price was exorbitant and

that there was another purchaser.

     The Court also examined the Ceské Budejovice Prosecutor's

investigation file from which it appeared that the prosecutor had

investigated the circumstances in which the purchase was effected and

had concluded that no criminal offence had been committed.  During the

investigation the prosecutor found that another expert's report had

valued the house at 95,236 crowns.  The prosecutor heard the expert

whose report had been taken as a basis for the purchase price. The

expert explained that he had taken a higher rate of depreciation, but

he had not been aware that the house had been renovated in 1963 at a

cost of 154,386 crowns, and that central heating had been installed in

1970.

     Finally, the Court read an expert's report which had been ordered

during the trial.  According to the report, the value of the house in

1976 was 57,124 crowns. The report explained the difference in price

as due, not to the basic valuation, but to a different way of

calculating depreciation.  It was added that the report had been

drafted solely on the basis of the documentation in the court case-

file.

     On 8 June 1994, upon the applicants' appeal, the Ceské Budejovice

Regional Court (krajsky soud) upheld the lower court's judgment.  The

Court confirmed that there had been a breach of the Regulation and

added that the purchase contract had been concluded contrary to

Ministry of Finance Directive No. 10/1964 ("the Directive"), according

to which a state organisation, when selling a house, was required to

offer it for sale to the tenants before offering it to third parties.

The Court held that according to two tenants' witness statements, they

had not been allowed to purchase.  In that respect the purchase

contract was concluded in contradiction with the interests of society

within the meaning of Section 39 of the Civil Code.  The Court did not

accept that the applicants had acquired the house by prescription.

     In their ensuing constitutional appeal to the Constitutional

Court (Ústavní soud) the applicants claimed that the District Court and

the Regional Court had breached Articles 1, 2(2), 4(1), 11(1) and (3)

of the Charter of Fundamental Rights and Freedoms which guarantee

liberty and equality, the limitation of interferences of state

authority with fundamental rights and freedoms and the protection of

property rights.  The applicants criticised in particular the courts'

legal findings and the wrong application and interpretation of the law.

     On 20 February 1996 the Constitutional Court, after a public

hearing, dismissed the applicants' constitutional appeal, finding that

there had been no violation of their rights guaranteed by the Charter

of Fundamental Rights and Freedoms.  The Court held in particular:

     "In the present case the domestic courts found that the law

     ... had been breached and that Section 39 of the Civil Code

     should have been applied because of the choice of the

     purchasers ... and the fixing of the particularly low

     purchase price.

     The judgment of the Regional Court was based on Section 39

     of the Civil Code ...  As to the applicants' submission

     that they had acquired the house by prescription, the

     Constitutional Court endorses the opinion of the Regional

     Court ...  As regards the choice of the persons interested

     in the purchase of the house ..., it appears from the

     assessment of evidence by the domestic courts that the

     former tenants were interested in the purchase, but they

     were denied the purchase contrary to the Directive of the

     Ministry of Finance ...

     From the case-file and the witnesses' statements it [also]

     appears that the sale of the house ... was effected with

     special political preferences on behalf of [the first

     applicant]. ...

     ... the principle of equality was breached by the ...

     purchase ... Moreover, the property rights established in

     the original purchase contract had no legal basis.

     According to Article 11 para. 3 of the Charter of

     Fundamental Rights and Freedoms, ownership may not be

     misused to the detriment of the rights of others or against

     legally protected public interests.  According to Article 4

     para. 3 of the Charter, any statutory limitation of the

     fundamental rights and freedoms must apply equally to all

     cases  meeting the  set conditions.  For these reasons,

     the   Constitutional Court cannot accept the

           applicants' submission that the judgments of the

           domestic courts breached the above-mentioned

           constitutional principles ...

     ... the substance of the constitutional appeal consists of

     [the applicants'] disagreement with the legal findings of

     the domestic courts, in particular that of the Ceské

     Budejovice Regional Court.  The Constitutional Court

     endorses the findings of this [Court] which duly dealt with

     the case and examined in detail [the applicants']

     submissions.  As to the assessment of evidence, the Court

     ... proceeded according to Section 132 of the Code of Civil

     Procedure. ...

     The Constitutional Court is not part of the system of

     general courts, cannot interfere with their jurisdiction

     and cannot act as an appellate court in matters which are

     within the jurisdiction of the domestic courts.  It has

     such a right only in those cases where the constitutional

     principles have been breached ...  The Constitutional Court

     also considers that the right to protection by the courts

     [has not been breached in the present case].  The case-file

     of the domestic courts indicates that the domestic courts,

     having applied the relevant provisions of the Civil Code

     and the Code of Civil Procedure, respected the principles

     laid down in Articles 36, 37 and 38 of the Charter of

     Fundamental Rights and Freedoms [which are similar to

     Article 6 of the Convention]."

COMPLAINTS

     The applicants claim, under Article 1 of Protocol No. 1 and

Article 6 para. 1 of the Convention, that by the judgments of the

domestic courts they have been deprived of their property unlawfully,

arbitrarily and not in the public interest.  They submit that they

purchased the house according to the legal provisions then in force.

The purchase price was fixed by the expert appointed by the South

Bohemia Forest State Enterprise and the applicants simply accepted it.

They also submit that the purchase contract was registered by the State

Notary without any objection and that this cannot be changed by an

expert report drafted 15 years later.  The applicants claim that the

expert appointed by the District Court stated that the only difference

in his assessment consisted of the different methodology in the

calculation of depreciation.  They maintain that the expert did not

have any technical building documentation or other material to assess

the condition of the house at the time of the conclusion of the

purchase contract.   They note that the former law prohibited only a

price higher than the law indicated.

     The applicants deny that they had an advantage in the purchase

of the house, because when they purchased the house, it had been vacant

for more than one year and there were no other potential purchasers.

They submit that it was not proved in the proceedings that the

political recommendation was a decisive element in the sale of the

house to them.  The applicants further maintain that they acquired the

house by prescription and that the amended Civil Code applies to their

case.

     The applicants claim that as they are all retired (two of them

are disabled pensioners), they have to find another suitable

accommodation.  They add that the actual value of the house is 600,000

crowns.

THE LAW

1.   The applicants allege a violation of Article 1 of Protocol No. 1

(P1-1), 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 Commission recalls that Article 1 of Protocol No. 1 (P1-1)

comprises three distinct rules.  The first rule, set out in the first

sentence of the first paragraph, is of a general nature and enunciates

the principle of peaceful enjoyment of possessions.  The second rule,

contained in the second sentence of the same paragraph, covers

deprivation of possessions and makes it subject to certain conditions.

The third rule, stated in the second paragraph, recognises that

Contracting States are entitled, amongst other things, to control the

use of property in accordance with the general interest (see Eur. Court

HR, Fredin v. Sweden judgment of 18 February 1991, Series A no. 192,

p. 14, para. 41).

     The Commission considers that although the courts nullified the

applicants' title to the house, the applicants may nevertheless be

considered as having been deprived of possessions within the meaning

of the second sentence of the first paragraph of Article 1 of Protocol

No. 1 (P1-1).

     In order to be justified, it must be shown that the deprivation

was in accordance with the conditions provided for by law and in the

public interest.  Furthermore, not only must the aim of the deprivation

of property be in the public interest, but there must also be a

reasonable relationship of proportionality between the means employed

and the aim sought to be realised (see, Eur. Court HR, Holy Monasteries

v. Greece judgment of 9 December 1994, Series A no. 301-A, p. 34, para.

70).  This implies that a fair balance must be struck between the

demands of the general interests of the community and the requirement

to protect the individual's fundamental rights, which balance would not

be found if the individual was found to have borne an excessive burden

(see Eur. Court HR, Sporrong and Lönnroth v. Sweden judgment of

23 September 1982, Series A no. 52, pp. 26-28, paras. 69-73).

     The Commission observes in this respect that the applicants'

title to the house was declared void as being contrary to the law and

the interests of society, pursuant to Section 39 of the Civil Code.

The civil courts' finding that the purchase contract was void followed

from the facts that the price fixed in the purchase contract had been

contrary to Price Regulation No. 43/1969 and that the applicants had

an unfair advantage in the purchase, contrary to Ministry of Finance

Directive No. 10/1964.  It is clear, therefore, that the deprivation

was provided for by law.

     As to the requirement of a legitimate aim in the public interest,

the Commission recalls that the deprivation of property in pursuance

of legitimate social, economic or other policies may be in the public

interest, even if the community at large has no direct use or enjoyment

of the property (see Eur. Court HR, James and Others v. the United

Kingdom judgment of 21 February 1986, Series A no. 98, p. 32, para.

45).  Moreover, because of their direct knowledge of their society and

its needs, the national authorities are in principle better placed than

the international judge to appreciate what is "in the public interest".

In performing their assessment the national authorities therefore enjoy

a wide margin of appreciation (ibidem, p. 32, para. 46).

     In the present case the Commission considers that Section 39 of

the Civil Code pursues a legitimate aim to safeguard the legality of

legal transactions and their compatibility with the interests of

society.  In these circumstances, and having regard to the State's

margin of appreciation, the Commission accepts that the deprivation

took place in the public interest.

     There must, however, also be a reasonable relationship of

proportionality between the means employed and the aim sought to be

realised and in this respect the Commission finds that in view of the

wide margin of appreciation enjoyed by the Contracting States in this

area, a decision declaring an unlawful purchase contract void may be

a proportionate measure for the enforcement of the general aim.  In

these circumstances the Commission notes that the applicants received

the purchase price, and had been living in the house for 15 years.

     The Commission finally recalls that, although Article 1 of

Protocol No. 1 (P1-1) contains no explicit procedural requirements, the

proceedings at issue must afford the individual a reasonable

opportunity of putting his or her case to the responsible authorities

for the purpose of effectively challenging the measures interfering

with his or her rights under Article 1 of Protocol No. 1 (P1-1).  In

ascertaining whether this condition has been satisfied a comprehensive

view must be taken of the applicable procedure (see, for example, Eur.

Court HR, Agosi v. the United Kingdom judgment of 24 October 1986,

Series A no. 108, p. 19, para. 55; Eur. Court HR, Hentrich v. France

judgment of 22 September 1994, Series A no. 296-A, p. 21, para. 49).

     In the present case the Commission finds that the proceedings

viewed as a whole afforded the applicants a reasonable opportunity of

putting their case to the domestic courts with a view to establishing

a fair balance between the conflicting interests at stake.  The

Commission notes that during the proceedings the applicants were

legally represented and were able to advance all their arguments.  The

courts gave detailed reasons for their factual findings and their

interpretation of the law.  Contrary to the applicants' contention,

there is no indication that the courts decided arbitrarily.  Having

regard to its finding above, the Commission considers that the

applicants during the civil proceedings could effectively challenge the

measures interfering with their rights under Article 1 of Protocol

No. 1 (P1-1).  Accordingly, there is no appearance of a violation of

Article 1 of Protocol No. 1 (P1-1) in the particular circumstances of

this case.

     It follows that this part of the application is manifestly ill-

founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

2.   The applicants also allege a breach of Article 6 para. 1

(Art. 6-1) of the Convention, which, in so far as relevant, provides:

     "In the determination of his civil rights and obligations ...

     everyone is entitled to a fair ... hearing by [a] ... tribunal

     established by law ..."

     The Commission recalls that, in accordance with Article 19

(Art. 19) of the Convention, its only task is to ensure the observance

of the obligations undertaken by the Contracting States.  In

particular, it is not competent to deal with an application alleging

that errors of fact or law have been committed by domestic courts,

except where it considers that such errors might have involved a

possible violation of the rights and freedoms set out in the Convention

(see, for example, No. 21283/93, Dec. 5.4.94, D.R. 77, p. 81).

     The Commission notes that the applicants were represented by a

lawyer throughout the proceedings at issue and that they were provided

with ample opportunity to present their views and challenge the

submissions of their adversary in the proceedings.

     In view of these circumstances, the Commission finds no

indication that the proceedings were unfair and considers, therefore,

that this part of the application is also manifestly ill-founded within

the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

     For these reasons, the Commission, by a majority

     DECLARES THE APPLICATION INADMISSIBLE.

    M.-T. SCHOEPFER                             J.-C. GEUS

      Secretary                                  President

to the Second Chamber                      of the Second Chamber

 

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