CASE OF KRISTIANA LTD. v. LITHUANIA
No violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions);No violation of Article 6 - Right to a fair trial (Article 6 - Administrative proceedings;Civil proceedings;Article 6-1 - Access to court)
Carlo Ranzoni;Egidijus Kūris;Ganna Yudkivska;Iulia Motoc;Paulo Pinto De Albuquerque;Georges Ravarani
5. The applicant company is a legal entity registered in Vilnius. 6. In 1994 the Government adopted a resolution establishing the Development Plan for the Curonian Spit National Park (hereafter “the development plan”). The main objectives of the development plan were published in the Official Gazette (Valstybės žinios) (see paragraph 53 below). The development plan explicitly indicated that the buildings with a former military objective, situated in the adjacent dunes, had to be removed (nukeliami) and the natural environment fully restored. 7. In 1998 the Government decided to privatise the former Soviet (later the – Russian Federation) military buildings, without the land, in Juodkrantė, the Neringa Municipality, within the Curonian Spit National Park. There were two military barracks, a canteen, a store house and two sheds. 8. In 1999 the State Property Fund carried out a public auction, at which the applicant company was the only participant and purchased the buildings for 226,000 Lithuanian litai (LTL, approximately 65,454 euros (EUR)). The purchase agreement, which was concluded in February 2000, indicated that the applicant company had to lease the land assigned to the buildings (įsipareigoja išsinuomoti šiam objektui priskirtą žemės sklypą). 9. In September 2001 the Neringa Municipality decided to prepare a detailed plan of the area where the buildings were sited. The purpose of the plan was to designate a plot of land near the existing buildings, providing an opportunity to renovate the buildings or to build new recreational buildings. 10. In August 2002 the authorities in charge of the Curonian Spit National Park decided that renovation of the buildings had to meet the requirements applicable to the whole area. The buildings had to be integrated in the landscape; as they were sited in the forest, the purpose of the use of the land had to be changed. 11. In September 2002 the Klaipėda Region department of environmental protection decided that the purpose of the use of the land, on account of its specific location, could only be changed if the projects were approved by those managing protected areas or with the approval of the Ministry of Environment. In August 2003 the same department rejected a detailed plan submitted by the applicant company, seeking to amend the purpose of the land so that it became a recreational area. 12. The applicant company instituted court proceedings, urging the court to declare unlawful the authorities’ rejection of the detailed plan proposed by the applicant company (see paragraph 11 above) and to oblige them to accept it. 13. The applicant company’s claim was dismissed on 23 October 2003 by the Klaipėda Regional Administrative Court and on 27 January 2004 by the Supreme Administrative Court. The courts held that in accordance with domestic law there was no possibility to build new recreational buildings in the Curonian Spit National Park (see paragraph 53 below). The courts thus held that the applicant company’s detailed plan was contrary to the development plan. 14. In January 2004 the applicant company asked the authorities to conclude a lease agreement in respect of the land assigned to the buildings. The authorities replied that the applicant company had to provide a plan of the land. However, as there was no detailed plan of the area, the land could not be leased. The applicant company was also obliged to pay the land tax. 15. The applicant company instituted court proceedings and complained that it had to pay the land tax but the Vilnius Regional Administrative Court on 30 April 2004 and the Supreme Administrative Court on 17 September 2004 held that it had to pay the land tax because it had been using the land in question. 16. In February 2006 the applicant company asked the authorities to include the land in question in the landscape management recreational zone. In March, the Protected Areas Service replied that the development plan of 1994 indicated that the buildings had to be demolished. It said that it would formulate provisions in the explanatory report regarding the possibility to compensate the applicant company for the buildings. In this case, the applicant company would be able to acquire other buildings owned by the authorities. 17. In November 2011 the applicant company proposed that the land under its buildings be included in the recreational zone and that a compensation mechanism be determined for the buildings if the area had to be redeveloped. In December 2011 the authorities replied that the redevelopment of the area had been determined in 1994 and that they could not agree with the applicant company’s proposals. The authorities indicated that any decision regarding the applicant company’s buildings had to be taken by the Government. 18. In January 2012 the applicant company complained about the refusal of its proposal (see paragraph 17 above) to the State Territorial Planning and Construction Inspectorate. It claimed that it had legitimate expectations that it would be able to use its possessions in an appropriate manner, namely that it would be allowed to reconstruct the buildings without increasing their height. In February 2012 the Inspectorate replied that when approving the Curonian Spit National Park Management Plan (hereafter “the Management Plan”), a decision on a compensation mechanism and time-limits would also have to be taken. 19. In April 2012 the applicant company examined a draft of the Management Plan and found that its buildings were indicated as objects to be redeveloped (rekultivuojami objektai) but that that decision had not been explained. The applicant company asked the authorities to amend the draft so that it included the issue of compensation for the buildings or included the buildings in the landscape management recreational zone. 20. In May 2012 the Ministry of Environment and the Protected Areas Service replied that they had set up a working group to determine a compensation mechanism for the property that had to be expropriated. 21. In May 2012 the applicant company asked the authorities to inform it about the conclusions of the working group. In June 2012 the authorities replied that the working group had to be set up before 29 June 2012. 22. The working group was set on 20 July 2012 and had to provide its proposals before 19 November 2012. 23. In February 2010 the applicant company asked the authorities for planning permission to carry out major renovation work on one of the buildings, namely the canteen. The authorities replied that they could not issue planning permission and that the applicant company had to provide them with the lease agreement in respect of the land assigned to the buildings. Only after such agreement was provided, the authorities would examine the applicant company’s request. 24. The applicant company lodged a complaint with the domestic courts against the authorities’ refusal to issue planning permission for renovation of the canteen. On 30 August 2010 the Klaipėda Regional Administrative Court allowed the claim, holding that the applicant company had been paying the land tax, which was evidence that it had been using the plot of land. 25. On 9 May 2011 the Supreme Administrative Court allowed an appeal lodged by the authorities. It held that the applicant company had not provided any information proving that it was the owner of the plot of land, so the authorities had not been obliged to issue planning permission for renovation of the canteen. The applicant company applied for the reopening of the proceedings. Its request was refused by the Supreme Administrative Court in January 2012. 26. On 6 June 2012 the Government approved the Management Plan by Resolution No. 702 (see paragraph 54 below) and asked the Ministry of Environment to set up a working group to assess the legal grounds for expropriating property for public needs (dėl darbo grupės teisinėms prielaidoms paimti turtą visuomenės poreikiams sudarymo). The working group was set up on 20 July 2012 and its proposals were to be submitted by 19 November 2012. The Management Plan included the reserve land in Juodkrantė, indicating that its purpose was to compensate for the possible losses incurred by lawful owners of buildings that had been earmarked for demolition. 27. On 4 July 2012 the applicant company lodged a complaint with the Vilnius Regional Administrative Court, urging it to revoke the part of the Government Resolution where it had been decided that the buildings at 21 Miško street (the location of the applicant company’s buildings) would be demolished and to order the authorities to amend the Management Plan. The applicant company argued that the issue of compensation and the time-limits for the demolition of property had not even been mentioned in the Management Plan. It also argued that clear indications on compensation for the buildings and for the land tax were needed. 28. On 23 July 2012 the Vilnius Regional Administrative Court refused to examine the claim. The reasons were provided in two short paragraphs, which mainly reiterated the provisions of domestic law (see paragraph 62 below). The applicant company had complained about the lawfulness of the Government Resolution. The court considered that issues as to whether acts adopted by the Government were in accordance with the Constitution or laws fell within the jurisdiction of the Constitutional Court. It stated that it was not within the area of competence of the administrative courts to examine the lawfulness of the activities of, inter alia, the Government (as a collegial institution). As regards an amendment to the Management Plan, the court stated that that was linked to the first part of the claim and thus would not have any legal consequences on the applicant company. 29. In August 2012 the applicant company lodged a separate complaint and asked the Supreme Administrative Court to examine the case on the merits. It claimed that the first-instance court had misinterpreted the provisions of the Law on Administrative Proceedings, and thus limited the applicant company’s right of access to a court. The applicant company thought that when the Government had approved the Management Plan, it had been implementing the function of public administration, and that that document had had a direct influence on the applicant company’s rights and obligations, and was thus an individual legal act that had to be examined before the administrative courts. On 28 November 2012 the Supreme Administrative Court upheld the decision of the Vilnius Regional Administrative Court of 23 July 2012. It held that the applicant company had questioned the lawfulness of both the Management Plan and the development plan. The Supreme Administrative Court held that when the Government had approved the Management Plan, it had been carrying out the function of State power. Moreover, the court had already ruled on the issue of the attribution of the Management Plan to the jurisdiction of the administrative courts and had decided that it had not been attributable to those courts (see paragraph 79 below). The court indicated that a legal act could consist of textual and graphic information (tables, drawings, schemes, plans, symbols, emblems). The Constitutional Court had already held that all parts of a legal act were interrelated and were of equal legal effect (see paragraph 77 below). The court further held that the present case was in substance identical to cases already examined by it, and that there were no grounds to reach a different conclusion on the nature of the Management Plan. The court explained that the applicant company could only raise the issue of the lawfulness of the Government Resolution in the context of an individual case regarding violation of its specific rights (by complaining against an individual legal act, by which the Government Resolution and the decisions of the Management Plan would be implemented). It could then ask the court examining that case to refer the issue to the Constitutional Court. The applicant company’s request to organise the procedure to amend the Management Plan so that it included the land in question in the landscape management recreational zone was dismissed because the applicant company had failed to address the authorities or the courts after the approval of the Management Plan. 30. The applicant company then applied for the reopening of the proceedings. On 3 April 2013 the Supreme Administrative Court rejected its application on the grounds that the applicant company’s claims had been dismissed for being outside the administrative court’s jurisdiction and the proceedings could only be reopened if an administrative case had been examined on the merits. 31. In October 2011 the applicant company asked the authorities which documents were necessary for the proposed renovation work. In November 2011 the authorities replied that it was not clear from the applicant company’s request which building (“specific, not complex or nonspecific” (ypatingas, nesudėtingas ar neypatingas), as defined in the domestic law) it was aiming to renovate. The applicant company had indicated major repair work. The authorities stated that a detailed plan was not necessary, the location of the building to be renovated was not important and a document proving ownership of the land (see paragraph 25 above) was not necessary either. 32. In May 2013 the Neringa Municipality inspected the applicant company’s buildings and held that they were in a state of disrepair. It requested that the applicant company appoint a person responsible for the maintenance of the buildings before 3 June 2013, remove the damaged parts of the buildings before 1 July 2013 and renovate the buildings before 31 May 2014. 33. On 30 December 2013 the applicant company asked the authority in charge of the Curonian Spit National Park to issue planning permission to carry out major repair work in order to renovate the buildings. The same month the applicant company received a response that permission could not be issued because it would be contrary to the Management Plan of 6 June 2012 (see paragraph 26 above). 34. The applicant company instituted court proceedings before the Vilnius Regional Administrative Court against the decision of the authority in charge of the Curonian Spit National Park of 30 December 2013 (see paragraph 33 above). It urged the court to order the authority to issue the planning permission required for it to carry out major repair work and to award it EUR 48,489 in respect of pecuniary damage for the land tax and property tax it had paid between 2000 and 2014. 35. In the course of proceedings the applicant company submitted a draft friendly settlement agreement to be concluded by the State, proposing that the State compensate it for the removal of the buildings by providing the applicant company with lease rights to State-owned land measuring 0.7685 hectares in Neringa with construction rights. The State representative refused to agree to the proposal because it was in breach of domestic law (see paragraph 63 below). 36. On 14 November 2016 the Vilnius Regional Administrative Court held that the refusal of the authority in charge of the Curonian Spit National Park to issue the planning permission required to carry out major repair work was in accordance with the relevant domestic law. The applicant company also asked the court to refer the question of whether the Management Plan was in accordance with the Constitution to the Constitutional Court. The court acknowledged that the authority’s decision had lacked a seal of approval but held that that shortcoming could not be regarded as grounds to overrule the decision. The court also held that the authority had not acted unlawfully, so there were no grounds for awarding the applicant company pecuniary damages. Moreover, domestic law did not require that the Management Plan contain a compensation mechanism for the buildings to be “removed”. However, the Management Plan in question indicated that an area in Juodkrantė had been designated to compensate for the losses incurred by the lawful owners of the buildings to be removed. Thus the Management Plan provided for the opportunity to compensate for possible losses. As regards the referral to the Constitutional Court, the court held that the applicant company had mistakenly stated that the decision to remove the buildings had only been indicated in the Management Plan. The court stated that it was a commonly known fact that the applicant company’s buildings had been earmarked for removal at the time the purchase agreement had been concluded, and the applicant company, as a diligent legal entity, should have assessed the legal status of the buildings and the restrictions on their use. The legitimate expectations of the applicant company had not been breached as it had not proved the need to refer the issue to the Constitutional Court. The court also pointed out that the buildings had not been taken from the applicant company for the needs of society (see paragraph 45 below). However, when using them the applicant company had to follow the legal regulations, which established that construction in the area in question was not allowed and that it was attempting to protect its rights in the wrong way. The decision that had had legal consequences for the applicant company had been the decision to privatise the buildings and to sell them to the applicant company. 37. In December 2016 the applicant company appealed and asked the Supreme Administrative Court to refer the matter to the Constitutional Court; to overrule the decision of the authority in charge of the Curonian Spit National Park of 30 December 2013; to order the authority to issue the applicant company with the planning permission required to carry out major repair work and to award it EUR 48,489 in respect of pecuniary damage. The proceedings are still ongoing. 38. On 15 April 2015 the Government adopted Resolution No. 389 approving the start of the amendment of the Management Plan. One of the purposes set out in the resolution was to combine the interests of the State and municipalities with those of the relevant natural and legal persons. 39. In June 2016 the applicant company submitted its proposals, namely that the area in which its buildings were located be included in the landscape management zone and that the buildings there should not exceed one storey with an attic. If the proposal to redevelop the land were maintained, the applicant company wanted a clear decision on time-limits for redevelopment and a compensation mechanism. 40. On 20 June 2016 the Protected Areas Service indicated that the land on which the applicant company’s buildings were sited was not affected by the amendment of the Management Plan. It also indicated that the reply could be appealed against to the Supreme Administrative Disputes Commission (“the commission”) or to the Vilnius Regional Administrative Court in one month from its reception. 41. In July 2016 the applicant company lodged a complaint with the commission about the reply of the Protected Areas Service (see paragraph 40 above). The applicant company stated that it had paid EUR 41,887 in land tax and EUR 22,795 in property tax between 2000 and 2014. It also stated that although the Management Plan had entered into force in 2012, it had not been proven that removing the buildings was necessary in the interests of society. There had also been no indications about the exact time-limits and procedure for the removal of the buildings. The applicant company thus asked the commission to overrule the decision of the Protected Areas Service of 20 June 2016 and to order it to amend the Management Plan in accordance with the applicant company’s proposals. 42. In August 2016 the commission closed the case, stating that the issue was not within its competence. The applicant company appealed against that decision, claiming that it had been formal and lacked reasoning, and that the commission had ignored the fact that the Protected Areas Service’s reply of 20 June 2016 had indicated that it was amenable to appeal before the administrative courts or the commission (see paragraph 40 above). 43. On 15 December 2016 the Vilnius Regional Administrative Court dismissed the applicant company’s appeal. It held that the applicant company had been represented by professional lawyers and the mere fact that the Protected Areas Service had erroneously indicated that its decisions were amenable to appeal did not discharge the applicant company of the obligation to follow the appeal procedure as laid down in domestic law (see paragraph 50 below). The court held that the applicant company had to address the State Territorial Planning and Construction Inspectorate with its complaint. 44. In January 2017 the applicant company appealed before the Supreme Administrative Court. The proceedings are still ongoing.