BRLJAČIĆ v. CROATIA
Inadmissible
Nebojša Vučinić;Paul Lemmens;Stéphanie Mourou-Vikström;Georges Ravarani;Ksenija Turković
1. The applicant, Mr Dubravko Brljačić, is a Croatian national who was born in 1955 and lives in Požega. He was represented before the Court by Mr N. Sabljar, a lawyer practising in Rijeka. 2. The Croatian Government (“the Government”) were represented by their Agent, Ms Š. Stažnik. 3. The facts of the case, as submitted by the parties, may be summarised as follows. 4. In September 1997, following a public tender for the purchase of real properties owned by a company, P.-d. (hereinafter “the company”), the applicant bought a commercial property (a retail store) from the company. 5. On the basis of the purchase contract the applicant registered his ownership of the retail store in the land register. 6. In October 1998 the applicant transferred his ownership of the retail store to his wife, D.B.B., who then duly registered her ownership in the land register. 7. On 29 March 2000 the Požega County State Attorney’s Office (Županijsko državno odvjetništvo u Požegi) indicted thirteen managers of the company before the Požega County Court (Županijski sud u Požegi) on charges of abuse of power and authority in connection with several disadvantageous contracts concluded by the company, including the one concluded with the applicant. 8. The company joined the criminal proceedings by lodging a civil claim seeking the annulment of the contracts concluded by the alleged commission of a criminal offence. 9. During the proceedings before the Požega County Court the applicant was examined as a witness concerning the criminal charges against the accused. He explained that he had intended to start his own retail business and thus he had initially rented the retail store in question from the company. However, in July 1997 he had been offered the chance to buy the store, which he had accepted. The applicant also explained that subsequently, given that he had been unemployed and thus not eligible to take out a loan to pay for the renovation of the store, he had transferred his ownership of the store to his wife, who had been in a position to take out a loan. 10. On 4 February 2002 the Požega County Court found the accused guilty as charged and sentenced them to imprisonment. It granted the company’s civil claim and declared the contracts concluded by the accused null and void, including the contract concluded with the applicant. It also held that the decision declaring the contracts null and void should not call into question the rights of parties who had bought the real properties from the company in good faith, as that would require further proceedings to establish whether they had acted in good faith when concluding the contracts, and that would be contrary to the principle of efficiency of criminal proceedings. 11. The accused and the Požega County State Attorney’s Office appealed against the first-instance judgment before the Supreme Court (Vrhovni sud Republike Hrvatske) alleging numerous substantive and procedural flaws in the findings of the Požega County Court concerning the criminal responsibility of the accused. The applicant and several other parties who had concluded contracts with the company also appealed against the first-instance judgment, challenging the annulment of the contracts on which they had based their property titles. 12. On 19 April 2006 the Supreme Court dismissed the appeals by the accused and the Požega County State Attorney’s Office as unfounded and declared the complaints lodged by the applicant and the other third parties inadmissible on the grounds that they did not have standing to lodge an appeal against the first-instance judgment. 13. The applicant then challenged the judgments of the lower courts by lodging a constitutional complaint with the Constitutional Court (Ustavni sud Republike Hrvatske). He contended in particular that the decision to declare the real property purchase contract null and void had unlawfully and unjustifiably interfered with his property rights and that the Supreme Court had declined to examine his complaint in that respect. 14. On 30 June 2010 the Constitutional Court dismissed the applicant’s constitutional complaint against the judgment of the Supreme Court as unfounded and ruled the complaints against the first-instance judgment of the Požega County Court inadmissible as they had been lodged outside the thirty-day statutory time-limit for lodging a constitutional complaint. In particular, the Constitutional Court examined the applicant’s complaint from the perspective of the right to a fair trial and found that there had been nothing unlawful or arbitrary in the decision of the Supreme Court; in its view, no other issue arose with regard to the remainder of the applicant’s complaints. 15. On 18 July 2007, relying on the final judgment of the Požega County Court by which the applicant’s purchase contract had been declared null and void, the company instituted civil proceedings against the applicant and his wife, D.B.B., before the Požega Municipal Court (Općinski sud u Požegi). It asked that the contract on the transfer of the property title from the applicant to his wife be declared null and void and that the successive entries in the land register of the applicant’s and D.B.B.’s titles to the retail store be cancelled. Alternatively, the company claimed 690,402.97 Croatian kunas (HRK) (approximately 92,600 euros (EUR)), plus statutory default interest. 16. During the proceedings the applicant and D.B.B., represented by a lawyer, contested the company’s civil claim on the grounds that they had purchased the real property at issue in good faith and that there were no grounds for annulling their property title. They also pointed out that the final judgment of the Požega County Court by which the contracts concluded by the company’s directors had been declared null and void did not call into question the rights of third parties who had obtained their property titles in good faith. 17. At a hearing on 31 March 2014 the Požega Municipal Court examined the relevant materials concerning the conclusion of the contracts and the transfer of title to the retail store from the company to the applicant and from the applicant to D.B.B. It also heard the company’s representative, the applicant and D.B.B., and read out the judgments of the Požega County Court and the Supreme Court. 18. On 29 April 2014 the Požega Municipal Court dismissed the company’s civil action on the grounds that both the applicant and D.B.B. had become owners of the real property at issue in good faith. It explained that whereas it was not possible to call into question the Požega County Court’s final judgment declaring the applicant’s purchase contract null and void, that judgment had to be read in conjunction with the relevant provisions of the Civil Obligations Act, which protected parties who had acted in good faith from being obliged to return that which they had acquired on the basis of an annulled contract. In the case at issue, the Požega Municipal Court considered that there was nothing suggesting that the applicant, and subsequently D.B.B., had not acquired title to the retail store in good faith. 19. The company lodged an appeal against the judgment of the Požega Municipal Court with the Slavonski Brod County Court (Županijski sud u Slavonskom Brodu). The company argued, in particular, that the first-instance court had erred in its findings concerning the question of whether the applicant and D.B.B. had obtained title to the retail store in good faith. 20. The company’s appeal was forwarded to the applicant’s representative, who did not respond to the company’s arguments. 21. On 16 March 2015 the Slavonski Brod County Court dismissed the company’s appeal as unfounded and upheld the first-instance judgment of the Požega Municipal Court. In its reasoning, the Slavonski Brod County Court stated that there was nothing to call into question the findings of the first-instance judgment with regard to the question of whether the applicant and D.B.B. had acquired title to the retail store in good faith. 22. On 24 April 2015 the company lodged an appeal on points of law with the Supreme Court challenging the judgment of the Slavonski Brod County Court. The proceedings before the Supreme Court are still pending. 23. The relevant provisions of the Constitution of the Republic of Croatia (Ustav Republike Hrvatske, Official Gazette nos. 56/1990, 135/1997, 8/1998, 113/2000, 124/2000, 28/2001, 41/2001, 55/2001, 76/2010, 85/2010 and 05/2014) read as follows: “In the determination of his rights and obligations or of any criminal charge against him, each person is entitled to a fair hearing within a reasonable time by an independent and impartial court established by law.” “The right of ownership shall be guaranteed ...” 24. The relevant provision of the Code of Criminal Procedure (Zakon o kaznenom postupku, Official Gazette nos. 110/1997, 27/1998, 58/1999, 112/1999, 58/2002, 143/2002 and 62/2003) provides as follows: “If the civil claim concerns the annulment of a legal transaction, and the court finds that the request is well-founded, it shall declare the full or partial nullity of that legal transaction, including its effects, without interfering with the rights of third parties.” 25. The relevant parts of the Civil Obligations Act (Zakon o obveznim odnosima, Official Gazette nos. 53/1991, 73/1991, 3/1994, 7/1996, 112/1999 and 88/1000) provide as follows: “(1) A contract that is contrary to the Constitution, peremptory rules or morals shall be null and void unless the purpose of the breached rule indicates that some other sanction or the law in a particular case provides otherwise. (2) If the conclusion of a contract is prohibited only in respect of one party, the contract shall remain valid, unless the law in a particular case provides otherwise, in which case the party that has breached the statutory prohibition shall bear the relevant consequences.” “(1) Where a contract is null and void, each contracting party is bound to return to the other everything it has received on the basis of such a contract. If that is not possible, or if the nature of the obligation performed renders [such return] impracticable, an appropriate [amount of] monetary compensation shall be given, according to the value of the object in question at the moment at which [the relevant] court decision is passed, unless the law provides otherwise. (2) However, if a contract is null and void because its substance or purpose is contrary to the Constitution and peremptory rules, the court may dismiss, fully or partially, a request for restitution [made by] the party that has not acted in good faith ...”