CASE OF GASHI v. CROATIA
Violation of P1-1;Remainder inadmissible;Just satisfaction reserved
Christos Rozakis
4. The applicant was born in 1962 and lived in Pula. 5. The applicant was an employee of a glass factory in Pula. On 20 July 1988 the factory granted the applicant and his family a flat for their use in Pula, consisting of a kitchen, one room and a communal toilet and measuring 30.60 square metres. 6. On 3 June 1991 Parliament enacted the Protected Tenancies (Sale to Occupier) Act (Zakon o prodaji stanova na kojima postoji stanarsko pravo), which regulated the sale of publicly-owned flats previously let under protected tenancies, giving the right to holders of such tenancies of publicly-owned flats to purchase them from the provider of the flat under favourable conditions. 7. Under that Act the applicant as the buyer and the Pula Municipality as the seller concluded a contract for the sale of the said flat on 8 May 1996. A copy of the contract was submitted for approval by the State Attorney's Office. On 28 May 1996 approval was given. 8. In a decision of 21 September 1998 the Pula Municipal Court (Općinski sud u Puli) recorded the applicant's ownership of the flat in the court's land register. A copy of this decision was sent for information to the Istra County State Attorney's Office in Pula (Državno pravobraniteljstvo Istarske županije u Puli). 9. On 29 March 2000 the Istra County State Attorney's Office brought a civil action against the applicant and the Pula Municipality in the Pula Municipal Court, seeking annulment of the sale contract in question. They argued that the applicant could not have obtained a protected tenancy of the flat because the glass factory where he had worked had had no right to dispose of the said flat and that such a right had been vested in the Pula Municipality alone. The Municipal Court accepted these arguments and in its judgment of 22 February 2001 annulled the sale contract. The judgment was upheld by the Pula County Court (Županijski sud u Puli) on 15 December 2003. The relevant parts of its judgment read as follows: “The Boris Kidrič Glass Factory's decision of 20 July 1988, granting the first plaintiff Shani Gashi the right to use a flat in Pula at 19 M. Oreškovićeva Street, , consisting of one room, a kitchen and a communal toilet, clearly and expressly shows that the flat in question as regards its size and equipment is to be considered an unsuitable flat (neuvjetan stan) – provisional accommodation (nužni smještaj). The question whether the first plaintiff actually acquired the flat in question as provisional accommodation cannot be assessed separately in the proceedings at issue; instead we have to accept the presumption that it was so, which the first plaintiff knew or should have known, owing to which he could not acquire a protected tenancy of the flat in question since under section 8 of the Housing Act (Official Gazette nos. 51/1985 and 42/1986) in force at the time, a protected tenancy could not be acquired in respect of flats and premises used as provisional accommodation, as correctly established by the court of first instance in the impugned judgment. Since the main condition for sale of a flat under the Protected Tenancy (Sale to Occupier) Act (Official Gazette nos. 43/1992, 69/1992, 25/1993, 2/1994 and 44/1994) is that the buyer is a holder of a protected tenancy of the flat which is the subject of the sale, the first-instance court correctly found that the contract in question concluded between the first and the second plaintiff on 8 May 1996 was null and void under section 52 of the Obligations Act because it had had no [legal] basis as the first plaintiff had not been a holder of a protected tenancy of the flat. This court likewise accepts further findings of the first-instance court: that the first plaintiff had not acquired a protected tenancy of the flat in question, and the glass factory ... had had no right to dispose of the flat to give it to the first plaintiff for his use and so that he could acquire a protected tenancy, which he had therefore not done because, as said above, the glass factory actually gave the flat to the first plaintiff merely as provisional accommodation. ... The evidence submitted does not show that the first plaintiff acquired a protected tenancy of the flat in question or that the flat was part of the glass factory's housing assets, or that the Pula Municipality or the City of Pula recognised the first plaintiff's protected tenancy of the flat ... and therefore the sale contract in question ... is in fact null and void because it has no [legal] basis – that is to say because the first plaintiff was not a holder of a protected tenancy of that flat...” 10. The applicant then lodged a constitutional complaint, arguing that a number of his constitutional rights, including his right to property, had been infringed because the lower courts' judgments had deprived him of his ownership of the flat in question. On 3 February 2005 the Constitutional Court dismissed the complaint. 11. The relevant provisions of the Housing Act (Zakon o stambenim odnosima, Official Gazette nos. 51/1985, 42/1986, 22/1992 and 70/1993) read as follows: “A protected tenancy cannot be acquired on: 1. Flats designated for temporary or provisional accommodation...” 12. The Protected Tenancies (Sale to Occupier) Act (Zakon o prodaji stanova na kojima postoji stanarsko pravo, Official Gazette no. 27/1991 with further amendments - “the Act”) regulates the conditions of sale of flats let under protected tenancies. Section 1 of the Act gave the right to the holders of protected tenancies of publicly-owned flats to purchase such flats under favourable conditions, provided that each holder bought only one flat. Section 21 obliged a seller to submit the sale contract for approval by the competent State Attorney's Office within eight days. 13. The relevant part of the Obligations Act (Zakon o obveznim odnosima, Official Gazette, nos. 53/91, 73/91, 3/94, 7/96 and 112/99), as then in force, read: “(1) Each contractual obligation shall have a permissible [legal] basis [causa]. (2)The basis is not permissible if it contravenes the Constitution, peremptory norms or morals. ...” “Where there is no [legal] basis or where it is not permissible, the contract is null and void.” “The right to plead nullity shall be inextinguishable.” 14. The relevant parts of the State Attorney's Office Act (Zakon o državnom odvjetništvu, Official Gazette no. 75/1995) read: “... ... the competent State Attorney's Office shall ... seek the annulment of a contract ... which contravenes peremptory norms.”