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FOURTH
SECTION
CASE OF HOLEVICH v. BULGARIA
(Application
no. 25805/05)
JUDGMENT
STRASBOURG
19 July 2011
This
judgment is final but it may be subject to editorial revision.
In the case of Holevich v. Bulgaria,
The
European Court of Human Rights (Fourth Section), sitting as a
Committee composed of:
Päivi Hirvelä,
President,
Ledi Bianku,
Zdravka Kalaydjieva,
judges,
and Fatoş Aracı,
Deputy Section Registrar,
Having
deliberated in private on 28 June 2011,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 25805/05) against the Republic
of Bulgaria lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by two Bulgarian nationals, Ms Neli Ilieva
Holevich and Mr Alexander Genov Holevich (“the applicants”),
on 5 July 2005.
- The
applicants were represented by Mr M. Ekimdjiev and Ms K. Boncheva,
lawyers practising in Plovdiv. The Bulgarian Government (“the
Government”) were represented by their Agent, Ms M. Dimova, of
the Ministry of Justice.
- The applicants alleged, inter alia, a
deprivation of their property without compensation, excessive length
of the civil proceedings brought by them under the 1988 State
Responsibility for Damage Act and lack of an effective remedy related
thereto.
- On
15 June 2009 the President of the Fifth Section decided to give
notice of the application to the Government. It was also decided to
rule on the admissibility and merits of the application at the same
time (Article 29 § 1).
- The
application was later transferred to the Fourth Section of the Court,
following the re composition of the Court’s sections on 1
February 2011. In accordance with Protocol No. 14 to the Convention,
the application was allocated to a Committee of three Judges.
- Both
the applicant and the Government filed observations.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicants were born in 1946 and 1947 respectively and live in Sofia.
They are spouses.
- On
the basis of an order of 26 September 1990 issued by the secretary of
the Sofia municipality, the applicants concluded a sale-purchase
contract with the Sofia municipality by which they bought a
State-owned apartment. The price they paid was 12,926 old Bulgarian
levs (“BGL”).
- On
a later unspecified date the municipality apparently granted the
tenancy of the same apartment to another family. In the beginning of
1992 the applicants brought a rei vindicatio action against
them claiming the possession of the apartment.
- In
a judgment of 22 February 1993 the Sofia District Court dismissed the
claim. On 7 February 1995 the Sofia City Court upheld the lower
court’s judgment. The courts found that the sale-purchase
contract of 1990 was null and void ab initio as the
administrative decision authorising the transaction had not been
signed by the mayor, as required by law, but by the secretary of the
municipality, the latter having had no power to sign in the mayor’s
stead. The applicants, thus, had not shown that they were the owners
of the apartment and could not take the possession thereof. The
applicants did not submit a cassation appeal (a “petition for
review”) before the Supreme Court. As a result, the judgment of
7 February 1995 became final on an unspecified date in 1995.
- On
an unspecified date in the beginning of 1995 the applicants brought
proceedings under the State Responsibility for Damage Act (“the
SRDA”) seeking damages from the Sofia municipality for having
sold them the apartment in breach of the statutory requirements. The
Sofia City Court held numerous hearings and adjourned the case on
various occasions. A few hearings were adjourned for correction of
the applicants’ statement of claim and in relation to their
requests for increase of the claimed amounts, which delayed the
examination of the case by several months. On 29 March 2002 the court
delivered its judgment with which it allowed the claim and ordered
the municipality to pay 24,000 new Bulgarian levs (“BGN”)
in damages as well as costs and expenses.
- On
appeal by the municipality filed on 30 May 2002, the Sofia Court of
Appeal held one hearing on 28 May 2003. In a judgment of 6 June 2003
it reversed the lower court’s judgment and disallowed the
claim. The court found that the authorities’ actions in
concluding the sale-purchase contract did not give rise to a
responsibility under the SRDA because the contract in issue entailed
civil-law consequences and the case did not concern the exercise of
State power.
- The
applicants filed an appeal on points of law on 14 October 2003. The
Supreme Court of Cassation held one hearing on 19 January 2005 and,
in a final judgment of 18 February 2005, upheld the court of appeal’s
judgment. The court held that the nullification of a civil
transaction, which was possible in relation to any transaction and
was an issue regulated by the general civil law – the Contracts
and Obligations Act, could not entail State liability under the SRDA.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. Recovery of sums under void contract and the effect
of inflation
- Pursuant
to section 34 of the Obligations and Contracts Act each party to a
void contract can recover from the other party the sums paid or the
property transferred under the contract. By section 55 (1) of the
same Act, everyone who has paid a sum of money on a non-existent
ground is entitled to seek its recovery.
- According
to section 70 of the 1951 Property Act an individual is considered to
have acted in good faith if, unaware of a procedural defect in his
title, he or she entered into possession of a piece of property.
Under section 72 a bona fidae possessor may claim the value of
improvements made in the property (also Interpretative Decree No. 6
of 1974 of the Supreme Court).
- In
accordance with the Bulgarian courts’ established practice
revalorisation of claims to reflect inflation and currency
depreciation is not possible.
B. State responsibility for damages
- The
1988 State Responsibility for Damage Act (now the State and
Municipalities Responsibility for Damage Act) provides, in its
section 1, that the State shall be liable for damage occasioned by
State bodies or State officials in the exercise of their
administrative functions. In accordance with the Bulgarian courts’
practice, claims for damages in relation to omissions in the process
of executing a sale-purchase contract are not possible under the SRDA
as such omissions occurred in the context of a civil transaction,
whereas the SRDA concerned State liability occasioned by acts in the
exercise of State power (see Velikovi and Others v. Bulgaria,
nos. 43278/98 et al., § 127, 15 March 2007).
C. Remedies in respect of length of civil proceedings
- Until
July 1999 Bulgarian law did not provide for any remedies in respect
of length of civil proceedings.
- A new procedure, “complaint
about delays”, was introduced in July 1999, by virtue of
Article 217a of the Code of Civil Procedure 1952, in force until
2007. Pursuant to this procedure, a litigant aggrieved by the slow
examination of the case could file a complaint before the president
of the higher court. The latter had the power to issue mandatory
instructions for faster processing of the case.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF
PROTOCOL No. 1 OF THE CONVENTION
- The
applicants complained that they had been deprived of their property
arbitrarily and could not receive compensation, in violation of
Article 1 of Protocol No. 1 of the Convention, 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
Government contested that argument. They
argued that the applicants had not exhausted the available domestic
remedies as they had not sought recovery of the price paid or
compensation under the general tort law.
- Insofar
as the applicants may be understood as complaining that errors
committed by State officials in 1990 led to the invalidation of their
title, the Court finds that this part of the complaint falls outside
its competence ratione temporis, which only covers the period
after 7 September 1992, the date of the Convention’s entry
into force with regard to Bulgaria.
- Insofar
as the applicants complain that the domestic courts’ assessment
in the 1992-1995 proceedings of the validity of the sale-purchase
contract was arbitrary and their approach contrary to legal
certainty, the Court need not examine whether the applicants may
claim to have had a “possession” within the meaning of
Article 1 of Protocol No. 1 even if their title was found null and
void ab initio or whether they have exhausted domestic
remedies.
- This
is so because at all events this part of the applicants’
complaint is inadmissible as being time-barred. In particular, the
issue of the contract’s validity was decided by a judgment of 7
February 1995 of the Sofia City Court which became final shortly
thereafter, whereas the present application was introduced ten years
later, in 2005 (see Todorovi v. Bulgaria (dec.),
no. 19108/04, 12 May 2009). The proceedings for damages which
ended in 2005 are without relevance to the starting point of the six
months’ time limit under Article 35 § 1 as they
concerned alleged negligence on the part of municipal employees in
relation to the execution of the 1990 contract and did not concern
the issue whether the domestic courts, in the 1992-1995 proceedings,
rendered arbitrary judgments in violation of Article 1 of Protocol
No. 1. Accordingly, this part of the complaint must be rejected as
submitted outside the six-month time limit.
- The
remaining complaint raised by the applicants under Article 1 of
Protocol No. 1 is that the refusal of the courts in the 1995-2005
proceedings to grant their claim for damages amounted to deprivation
of property. The claim in question was that the State was liable
under the SRDA to pay them pecuniary damages in an amount equal to
the market price of the apartment, as well as non-pecuniary damages,
on grounds that municipal officials had committed omissions in
relation to the execution of the 1990 contract.
- The
Court reiterates that “possessions” can be either
“existing possessions” or assets, including claims, in
respect of which the applicant can argue that he or she has at least
a “legitimate expectation” of obtaining effective
enjoyment of a property right. The applicant does not have a
“legitimate expectation” where it could not be said that
he or she had a currently enforceable claim that was sufficiently
established; the legitimate expectation must be of a nature more
concrete than a mere hope and be based in a legal provision or a
legal act such as a judicial decision (see Kopecký v.
Slovakia [GC], no. 44912/98, §§ 35, 49, ECHR 2004 IX,
Gratzinger and Gratzingerova v. the Czech Republic (dec.)
[GC], no. 39794/98, §§ 69 and 73, ECHR 2002-VII and
Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, §
65, ECHR 2007 I).
- Under
Bulgarian civil law, in cases as the applicants’, the buyer is
entitled to recover the price paid and to obtain compensation for any
improvements made in the property (see paragraphs 14-15 above). The
applicants were entitled to such payments following the declaration
of nullity of the transaction but they did not seek them from the
municipality by using the means available under the civil law. The
applicants object that they would have received a token amount had
they sought these payments as a result of the inflation and the
domestic courts’ established practice refusing revalorisation
of claims (see paragraph 16 above). The Court has already held in
this respect that Article 1 of Protocol No. 1 cannot be interpreted
as conferring upon States a positive obligation to maintain the value
of claims or any other assets in the face of inflation (see, Todorovi
v. Bulgaria (dec.), no. 19108/04, 12 May 2009 and O.N. v.
Bulgaria (dec.), no. 35221/97, 6 April 2000).
- The
applicants sought instead compensation under the SRDA which was,
according to the domestic law and practice, not applicable in
relation to the civil-law consequences of defective or void civil
transactions (see paragraph 17 above). Bulgarian law did not provide
for State liability in circumstances as those that obtained in the
applicants’ case and it was hardly surprising that the
applicants’ claims were rejected (see paragraph 13 above).
- The
Court thus finds that the applicants have not shown that they had a
claim under domestic law for compensation as a result of the
omissions made by municipal officials in relation to the 1990
contract. They cannot argue, therefore, that they had a “possession”
within the meaning of Article 1 of Protocol No. 1. Consequently,
the refusal of the domestic courts to award them the compensation
sought under the SRDA did not amount to interference with the
peaceful enjoyment of their possessions. It follows that this part of
the complaint under Article 1 of Protocol No. 1 is incompatible
ratione materiae with the provisions of the Convention within
the meaning of Article 35 § 3(a) and must be rejected in
accordance with Article 35 § 4.
- In
sum, the applicants’ complaints under Article 1 of Protocol
No. 1 must be declared inadmissible.
II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicants complained that the length of the proceedings under the
SRDA had been incompatible with the “reasonable time”
requirement, laid down in Article 6 § 1 of the Convention, which
reads as follows:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a ... hearing within a
reasonable time by [a] ... tribunal...”
- The
period to be taken into consideration began on an unspecified date in
the beginning of 1995 when the applicants brought their claim (see
paragraph 11 above) and ended on 18 February 2005, when the
Supreme Court of Cassation gave a final judgment in the case (see
paragraph 13 above). It thus lasted about ten years for three levels
of jurisdiction.
A. Admissibility
- The
Government argued that the applicants had failed to exhaust the
available domestic remedies because they had not filed a “complaint
about delays” (see paragraph 19 above).
- The
applicants replied that such a complaint had not represented an
effective remedy as it could not have led to speeding up the
proceedings or receiving an appropriate redress for the delays.
- The
Court observes that the “complaint about delays” was
introduced in Bulgarian law in July 1999. At that time the
applicants’ case had already been pending for about four and a
half years before only one level of jurisdiction (see paragraph 11
above). The delays during that period could not be thus made up (see
Djangozov v. Bulgaria, no. 45950/99, § 52, 8 July
2004 and Rachevi v. Bulgaria, no. 47877/99, § 67, 23
September 2004). In respect of the period after
July 1999, the Court notes that the case was still pending before the
Sofia City Court until 29 March 2002 which accumulated another
two years and nine months (see paragraph 11
above). It is true that the applicants could have used the “complaint
about delays” which might have speeded up the
examination of the case by several months at best (see Tzvyatkov
v. Bulgaria, no. 2380/03, §§ 30-31, 22 October 2009,
Kuncheva v. Bulgaria, no. 9161/02, § 40, 3 July 2008 and
Mincheva v. Bulgaria, no. 21558/03, §§ 104-107, 2
September 2010). However, the Court is not
convinced that this could have a significant impact on the
overall duration of the proceedings.
- In
view of the above, in the particular circumstances of the case, a
“complaint about delays” did not represent an effective
remedy to be exhausted within the meaning of Article 35 § 1 of
the Convention. The Government’s objection is therefore
dismissed.
- The
Court further finds that the applicants’ complaint about the
length of the proceedings is not manifestly ill-founded within the
meaning of Article 35 § 3 of the Convention and not inadmissible
on any other grounds. It must therefore be declared admissible.
B. Merits
- The
Government argued that the applicants’ case had been examined
within a reasonable time. The case had been factually and legally
complex because it had unfolded at a time when the relevant
legislation had been subject to amendments. Furthermore, the
applicants had been responsible for some of the delays as they had
failed to correct their statement of claim in due course and had
asked on several occasions an increase of the claim which also had
necessitated further adjournments.
- The
applicants argued that the case had not been complex and that all
delays had been imputable to the authorities.
- The
Court reiterates that the reasonableness of the length of proceedings
must be assessed in the light of the circumstances of the case and
with reference to the following criteria: the complexity of the case,
the conduct of the applicant and the relevant authorities and what
was at stake for the applicant in the dispute (see, among many other
authorities, Frydlender v. France [GC], no. 30979/96, §
43, ECHR 2000-VII).
- The
Court has frequently found violations of Article 6 § 1 of the
Convention in cases raising issues similar to the one in the present
case (see Frydlender, cited above, §§ 43-44 and
Rachevi v. Bulgaria, cited above, §§ 87-91).
Having examined all the material submitted to it, the Court has not
been persuaded by the Government to reach a different conclusion in
the present case. In particular, it observes that the proceedings
remained pending before the Sofia City Court for a period of about
seven years, which is excessive in itself in the absence of concrete
justification. No such justification was established by the
respondent Government. The Court also finds that the adjournments in
relation to the applicants’ conduct in the proceedings did not
cause a delay of more than a few months.
- In
view of the above, the Court considers that in the instant case the
length of the proceedings was excessive and failed to meet the
“reasonable time” requirement.
- There
has been, accordingly, a breach of Article 6 § 1.
III. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
- The
applicants complained under Article 13 of the Convention that they
had not had an effective domestic remedy for the length of the
proceedings under the SRDA. Article 13 reads:
“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.”
- The
Government pointed to the existence of the “complaint about
delays” not having been used by the applicants.
- In
response, the applicants reiterated that the “complaint about
delays” could not be considered as an effective remedy.
- The
Court notes that this complaint is linked to the one examined above
and must therefore likewise be declared admissible.
- The
Court reiterates that Article 13 guarantees an effective remedy
before a national authority for an alleged breach of the requirement
under Article 6 § 1 to hear a case within a reasonable time (see
Kudła v. Poland [GC], no. 30210/96, § 156, ECHR
2000-XI). A remedy is effective if it prevents the alleged violation
or its continuation or provides adequate redress for any breach that
has already occurred (ibid., § 158 and Mifsud v. France
(dec.) [GC], no. 57220/00, ECHR 2002 VIII). Even if a
single remedy does not by itself entirely satisfy the requirements of
Article 13, the aggregate of remedies provided for under domestic law
may do so (Kudła v. Poland, cited above, §
157).
- The
Court already found above, in relation to the question of exhaustion
of domestic remedies for the applicants’ complaint under
Article 6, that in the particular circumstances of the case the
“complaint about delays” did not represent an effective
remedy. A similar conclusion has been reached in a number of other
Bulgarian cases (see, for example, Stefanova v. Bulgaria, no.
58828/00, §§ 66-73, 11 January 2007, Mincheva v.
Bulgaria, cited above, § 105, Simizov v. Bulgaria,
no. 59523/00, § 55, 18 October 2007 and Maria Ivanova v.
Bulgaria, No. 10905/04, § 35, 18 March
2010). In addition, the Government have not shown that Bulgarian law
provides for other means of redress whereby a litigant could obtain
the speeding up of civil proceedings. Finally, as regards
compensatory remedies, the Court has also not found it established
that in Bulgarian law there exists the possibility to obtain
compensation or other redress for excessively lengthy proceedings
(see, for example, Rachevi v. Bulgaria, cited
above, §§ 96-104).
- Accordingly,
for the reasons set above, the Court finds that there has been a
violation of Article 13 of the Convention.
IV. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
- Lastly,
the applicants complained under Article 14 in conjunction with
Article 1 of Protocol No. 1 that, as a result of the alleged unclear
Bulgarian law and jurisprudence in the sphere of void civil
contracts, they had been treated less favourably than the State in
the transaction in issue. They also complained under Article 8 about
a violation of the right to respect for their home and under Article
6 § 1 about lack of access to court in respect of the national
courts’ refusal to examine their claim under the SRDA.
- In
the light of all the material in its possession, and in so far as the
matters complained of are within its competence, the Court finds that
they do not disclose any appearance of a violation of the rights and
freedoms set out in the Convention or its Protocols.
53. It
follows that this part of the application is manifestly ill-founded
and must be rejected in accordance with Article 35 §§ 3(a)
and 4 of the Convention.
V. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article
41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- The
applicants claimed 20,000 euros (EUR) in respect of non pecuniary
damage and EUR 63,021, the alleged market value of the flat and
alleged loss of earnings from renting it out, in respect of pecuniary
damage.
- The
Government submitted that in case a violation is found, the awarded
just satisfaction should be reduced as the amounts claimed by the
applicants are excessive.
- The
Court recalls that it declared inadmissible the complaints under
Article 1 of Protocol No. 1. It does not discern any causal link
between the violations of Articles 6 and 13 and the pecuniary damage
alleged; it therefore rejects this claim. On the other hand, it
observes that the applicants must have sustained non-pecuniary damage
as a result of the excessive length of the proceedings and lack of
effective remedy thereto. Ruling on an equitable basis and taking
into account all the circumstances of the case, it awards jointly to
the applicants EUR 3,200 in respect of non-pecuniary damage.
B. Costs and expenses
- The
applicants also claimed EUR 3,220 in lawyers’ fees for the
proceedings before the Court. They further claimed EUR 144 in costs
for the translation of their observations, EUR 19 in postage and EUR
20 in stationery costs. In support of this claim they presented a
fees’ agreement with their lawyer, a translation contract and
postage receipts. The applicants requested that the amount awarded be
paid directly to their lawyer, Mr Ekimdjiev, except for EUR 500
already paid by them in advance to the lawyer.
- The
Government contested these claims as excessive.
- According
to the Court’s case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and were
reasonable as to quantum. In the present case, regard being had to
the documents in its possession and the above criteria, the Court
considers it reasonable to award the sum of EUR 900, covering costs
under all heads, of which EUR 400 to be paid directly into the bank
account of the applicants’ legal representative.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint concerning the length of
the civil proceedings and the lack of effective remedies in that
respect admissible and the remainder of the application inadmissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention on account of the excessive length of
the proceedings;
- Holds that there has been a violation of Article
13, in conjunction with Article 6 § 1 of the Convention, on
account of the lack of an effective remedy for the excessive length
of the proceedings;
- Holds
a) that
the respondent State is to pay to the applicants, within three
months, the following amounts, to be converted into Bulgarian levs at
the rate applicable at the date of settlement:
(i) EUR
3,200 (three thousand two hundred euros), plus any tax that may be
chargeable, in respect of non-pecuniary damage;
(ii) EUR
900 (nine hundred euros), plus any tax that may be chargeable to the
applicants, in respect of costs and expenses, EUR 400
(four hundred euros) of which to be paid directly into the bank
account of the applicants’ legal representative, Mr Ekimdjiev;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicants’
claim for just satisfaction.
Done in English, and notified in writing on 19 July 2011, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Päivi Hirvelä
Deputy
Registrar President
