VUKOVIĆ v. CROATIA
Inadmissible
Dmitry Dedov;Elisabeth Steiner;Isabelle Berro-Lefèvre;Khanlar Hajiyev;Linos-Alexandre Sicilianos;Mirjana Lazarova Trajkovska;Ksenija Turković
1. The applicant, Mr Slavko Vuković, is a Croatian national, who was born in 1937 and lives in Split. He was represented before the Court by Mr I. Mirošević, an advocate practising in Split. 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. By decisions of 15 February and 10 November 1983 the Split Municipality (a) declared that four plots of land in Split in the applicant’s possession had been nationalised and become socially-owned already on 8 August 1968 with the entry into force of the Croatia’s Act Designating the Construction Land in Towns and Urban Areas (see paragraphs 23-24 below), and (b) dispossessed the applicant of the land at issue with a view to constructing a block of flats and an elementary school on them. 5. By a decision of 5 April 1985 the Split Municipality expropriated the house owned by the applicant which was built on one of the plots in question. 6. On 11 December 1989 the Split Municipality offered the applicant as compensation permanent usage (trajno korištenje) of another plot of land for the construction of a house. The applicant refused the offer and instituted non-contentious proceedings with the Split Municipal Court (Općinski sud u Splitu) with a view to obtaining compensation for his nationalised and expropriated property under the 1978 Expropriation Act. 7. On 18 February 1994 the new Expropriation Act (hereafter “the 1994 Expropriation Act”, see paragraph 26 below) entered into force. Shortly afterwards, the case was transferred to the administrative authorities, in particular to the regional office of the state administration in the Split-Dalmatia County (Ured državne uprave u Splitsko-dalmatinskoj županiji, hereinafter “the County Office”). 8. On 17 September 1995 the tax authorities carried out an onsite inspection of the nationalised land and assessed its value at 3,302,604.77 Croatian kunas (HRK). 9. On 23 May 1996 the applicant requested a total amount of HRK 9,430,140 for the land and the house. 10. On 22 September 2000 the applicant amended his request, asking for HRK 7,446.227.95 in total. 11. On 23 October 2000 the tax authorities carried out another onsite inspection and assessed the value of the nationalised land at HRK 5,304,992. On 23 April 2001 the tax authorities assessed the value of the expropriated house at HRK 514,009.01. 12. At the hearing of 6 March 2002 the applicant contested the findings of the tax authorities and undertook to submit proof of the current market value of the appropriated property. 13. The applicant engaged a court expert, Mr R., to carry out the property valuation. On 3 April 2002 Mr R. drew up a report establishing the market value of the nationalised land at HRK 7,338,715.80. The applicant submitted the report to the County Office on 19 April 2002. 14. On 12 October 2003 the applicant increased his request for compensation, arguing that the value of the nationalised land had meanwhile risen to HRK 10,361,736. He relied on the rise of land prices in 2002 and 2003 caused by the construction of the Split ring-road. 15. By a decision of 23 June 2004 the County Office awarded the applicant compensation in the overall amount of HRK 8,344,393.72. Specifically, it relied on Mr R.’s expert opinion of 19 April 2002 (see paragraph 13 above) and awarded HRK 7,338,715.80 for the nationalised land. It further awarded HRK 514,009.01 for the expropriated house, relying on valuation by the tax authorities of 23 April 2001. Lastly, it awarded HRK 491,668.91 for the construction improvements and agricultural crops, relying on an older valuation by the tax authorities. The relevant part of that decision reads as follows: “The market value is the price which an immovable property can obtain on the market, dependent on supply and demand at the time of its determination. According to the ... valuation by the tax authorities of 1995, the immovable property’s value is HRK 368 per square metre ... according to the 2000 valuation, it is HRK 616 per square metre. According to the valuation submitted by [the applicant], carried out by the court expert for civil engineering and property valuation, Mr. R., in 2002, the immovable property’s value is EUR 100 per square metre (HRK 741). As the valuation of the court expert Mr. R. is newer and does not significantly differ from the valuation [by the tax authorities] ... there were no reasons for dismissing the [Mr R.’s] valuation as it represents the price of construction land in that location.” 16. The applicant lodged an appeal against the above decision before the Ministry of Justice (Ministarstvo pravosuđa Republike Hrvatske, hereinafter “the Ministry”), arguing, inter alia, that under section 33 of the 1994 Expropriation Act (see paragraph 26 below) the compensation should have been calculated on the basis of the market value at the time when the decision on compensation was adopted. He submitted a number of items of evidence, such as newspaper articles and decisions on compensation in other cases, pointing out that the market value had risen during 2002 and 2003. 17. On 31 May 2005 the Ministry dismissed the applicant’s appeal in the part concerning the compensation for the nationalised land. At the same time it quashed the first-instance decision in the remaining part (including the compensation for the expropriated house) and remitted the case. The relevant part of that decision reads as follows: “The level of compensation for the undeveloped construction land [the applicant] was dispossessed of was correctly determined. The first-instance authority accepted the expert opinion of Mr R. of 3 April 2002, and not the earlier valuations by the tax authorities ... The argument raised in the appeal ... that the compensation was set ... too low is unfounded. Namely, in proceedings involving dispossession compensation is fixed by applying provisions of the Expropriation Act on market value compensation. However, [in such cases] the market value compensation must be determined with regard to the state of the immovable property and the modes of its usage at the time of deprivation. [The applicant’s data on the higher price of construction land] concern construction land with the entire necessary infrastructure, whereas the land in question did not have the entire infrastructure at the time of deprivation [i.e. dispossession in 1983]. Therefore, the current market value of the land in the same [location] in Split (Pujanke) cannot be used for comparison, as the state of immovable property in question in 1983 and today differs significantly in terms of infrastructure. In addition, the construction of roads and the ring-road in 2003 and 2004 contributed significantly to the rise of the price of construction land, but has no significance for the level of compensation correctly established in 2002. Therefore, the expert opinion cannot be deemed too old with regard to the date of the adoption of the first-instance decision... as it sets the price in euros as well ... However, [the applicant’s] appeal is well-founded in part concerning the compensation for the house, the construction improvements and the agricultural crops. ... [Valuations] by the tax authorities [in respect of that property] do not include any reasoning and it is unclear on the basis of which criteria this part of the compensation has been determined. Therefore, such findings cannot serve as a starting point for fixing the compensation for that property ...” 18. The applicant then brought an action for judicial review in the Split County Court (Županijski sud u Splitu) against the Ministry’s decision, maintaining that the amount of compensation for the nationalised land had not been established in accordance with the relevant legislation (see paragraph 16 above). He requested HRK 11,199,192 for the land in question. 19. By a judgment of 26 March 2007 the Split County Court dismissed the applicant’s action, endorsing the reasoning given by the Ministry. The relevant part of that judgment reads as follows: “It is undisputed that in the present case the compensation for the immovable property ... the plaintiff was dispossessed of must be determined in accordance with [section 46 of the 1994 Expropriation Act] given that he was dispossessed of [that] property by the final decisions ... of the Split Municipality of 15 February and 10 November 1983 and because ... a final decision on compensation has not been rendered [before the entry into force of the 1994 Expropriation Act]. When compensation ... is being determined by applying section 46 of the [1994] Expropriation Act it must be fixed with regard to the state of the immovable property and the modes of its usage at the time of deprivation and the market value [of such property] ... at the time the compensation was being determined (section 33 of the [1994] Expropriation Act). ... In determining level of compensation the administrative authorities assessed all the relevant circumstances, in particular the state of the immovable property at the time of deprivation (construction land without any infrastructure) [and] market supply and demand of the land of the same or similar characteristics ... at the time of assessing its value. ... [Therefore,] by fixing the compensation for the immovable property the plaintiff had been dispossessed of at HRK 7,338,715.80 the first- and the second-instance administrative authority correctly applied section 33 of the [1994] Expropriation Act.” 20. The applicant then lodged an appeal on points of law (revizija) with the Supreme Court (Vrhovni sud Republike Hrvatske) against that judgment, reiterating his previous arguments. 21. By a judgment of 29 April 2008 the Supreme Court dismissed the applicant’s appeal on points of law, endorsing the reasoning of the Split County Court and the Ministry. The relevant part of that judgment reads as follows: “As regards the plaintiff’s arguments that the compensation was not determined in accordance with the market value [of the land] at the time of adoption of the first-instance decision ... the County Court was correct to agree with the findings of the first- and the second-instance [administrative authority] whereby those arguments had been dismissed as unfounded. In so doing sufficient reasons were given, the evidence submitted by the plaintiff was examined and it was established that the data submitted [by the plaintiff] concern the immovable property which significantly differ (in terms of infrastructure) from that he had been dispossessed of. For that reason it was not possible to compare the state and the current market value of that immovable property with the state of the immovable property the plaintiff had been dispossessed of in 1983.” 22. By a decision of 29 September 2011 the Constitutional Court (Ustavni sud Republike Hrvatske) dismissed the applicant’s subsequent constitutional complaint. 1. Federal Act Designating the Construction Land in Towns and Urban Areas 23. The relevant provisions of the Act Designating the Construction Land in Towns and Urban Areas (Zakon o određivanju građevinskog zemljišta u gradovima i naseljima gradskog karaktera, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 5/68 and 20/69), which entered into force on 15 February 1968, read as follows: Section 1 “The construction land as defined in the Nationalisation of Rental Buildings and Construction Land Act [located] in towns and urban areas shall become [land] in social ownership under the conditions set out in this Act. Former owners of the construction land shall have the right to a fair compensation in accordance with the Expropriation Act.” Section 2(1) “The construction land in towns and urban areas shall be specified by ... legislation [enacted by the constituent republics of the SFRY]. Section 3(1) “Former owner of undeveloped construction land shall have the right to use it until the day he or she has, on the basis of the decision by the relevant authority, to surrender it to its [new] user.” 2. Croatia’s Act Designating the Construction Land in Towns and Urban Areas 24. By the Act Designating the Construction Land in Towns and Urban Areas (Zakon o određivanju građevinskog zemljišta u gradovima i naseljima gradskog karaktera, Official Gazette of the Socialist Republic of Croatia no. 30/68), which entered into force on 8 August 1968, Croatia fulfilled its obligation stemming from section 2(1) of the above federal legislation (see the preceding paragraph) and specified construction land in Croatian towns and urban areas, including the town of Split, which had been nationalised by the operation of law (ex lege). 3. Construction Land Act 25. The relevant provision of the Construction Land Act (Zakon o građevinskom zemljištu, Official Gazette of Croatia no. 54/80 with subsequent amendments), which was in force between 8 January 1981 and 31 December 1996, at the material time read as follows: Section 32(1) “The former owner of the construction land which became land in social ownership shall have the right to a fair compensation which shall be determined in the manner and in the procedure prescribed by the Expropriation Act” Section 35(1) “The decision to take the construction land from the possession of its former owner or its user, as well as to award that land for use [to a new user] in accordance with this Act shall be made by [the municipality] after having conducted the proceedings provided in this Act.” 4. The 1994 Expropriation Act 26. The relevant provisions of the Expropriation Act (Zakon o izvlaštenju, Official Gazette of the Republic of Croatia no. 9/94 with subsequent amendments), which was in force between 18 February 1994 and 25 June 2014, read as follows: Section 33 “(1) ... compensation [for the expropriated immovable property] shall be awarded as a sum of money equivalent to the market value of the expropriated immovable property at the time of the adoption of the first-instance decision on expropriation or at the time of reaching a settlement. (2) The market value is the price which an immovable property can obtain on the market, dependent on supply and demand at the time of its determination.” Section 46 “This Act is applicable to all pending expropriation proceedings in which, before this Act’s entry into force, a final decision has not been adopted, as well as to compensation proceedings in which a final decision has not been adopted or has been annulled or quashed.” Section 47(1) “Provisions of this Act concerning determination of compensation for expropriated immovable property shall apply mutatis mutandis to cases where the expropriation was carried out in accordance with the expropriation legislation in force before 22 March 1978, if the compensation was not paid before this Act’s entry into force ...” 27. According to the opinion by the plenary session of judges of the Administrative Court (Upravni sud Republike Hrvatske) held on 19 December 1998, the administrative authorities when applying sections 46 and 47 of the 1994 Expropriation Act, that is, in determining compensation for the immovable property expropriated before that Act’s entry into force, had to take into account (a) the state of the property at the time of expropriation, and (b) the market value of such property at the time the compensation was being determined. The conclusion reads as follows: “When compensation for the expropriated immovable property is being determined by applying sections 46 and 47 of the Expropriation Act, [it] shall be determined according to the state of the immovable property at the moment of expropriation but in accordance with the market value at the time of fixing the compensation (section 33 of the [1994] Expropriation Act).” 28. In its judgment no. Us-2034/1996 of 22 August 1996 the Administrative Court held that sections 46-47 of the 1994 Expropriation Act applied also to those cases where an immovable property (in that case, the construction land) had been appropriated by means other than expropriation (for example, by nationalisation) and its owner dispossessed of it, and the law in force at the time of the dispossession provided for compensation that had to be determined pursuant to expropriation legislation, which compensation had not been fixed or paid before the entry into force of the 1994 Expropriation Act.