KRPIĆ v. CROATIA
Inadmissible
Jon Fridrik Kjølbro;Julia Laffranque;Paul Lemmens;Georges Ravarani;Ksenija Turković
1. The applicant, Mr Antun Krpić, is a Croatian national, who was born in 1958 and lives in Zagreb. He was represented before the Court by Mr Z. Zaninović, an advocate practising in Zagreb. 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. The applicant held a specially protected tenancy (stanarsko pravo) of a flat in Zagreb measuring 16.25 square metres. The flat was located in a socially-owned building in the centre of Zagreb built in 1776. 5. By a decision of 16 January 1990 the local authorities decided to demolish the building because it was so dilapidated that it risked collapsing at any time and thus posed a risk to life and property. The decision specified that the building would be demolished once all the tenants (five at the time, including the applicant) had vacated it, after being provided with replacement flats pursuant to the law, in particular section 107(2) of the Housing Act (see paragraph 24 below). 6. On the basis of that decision two of the tenants living in the building were subsequently allocated replacement flats. 7. On 19 June 1991 the Specially Protected Tenancies (Sale to Occupier) Act entered into force (see paragraph 25 below). It entitled holders of specially protected tenancies to purchase the flats in respect of which they held such a tenancy under favourable conditions. In that way, a large majority of specially protected tenancies became a right of ownership for those tenants. 8. On 11 January 1993 an explosive device was detonated in front of one of the flats in the building, which caused further damage. 9. On 14 January 1993 the applicant and another tenant who were still living in the building, wrote to the local authorities housing department asking it to allocate them urgently replacement flats, as after the explosion the building was no longer suitable for habitation. 10. On 25 January 1993 the local authorities held an on-site inspection and established that due to the damage caused by the explosion, the building was indeed no longer habitable and that the two remaining tenants (of which one was the applicant) had moved in with their friends. 11. On 26 January 1993 the applicant was offered a replacement flat in Zagreb measuring 17.10 square metres. He refused the flat, stating that it “was damp and had rotten floors” and was therefore uninhabitable. 12. On 8 April 1994 the applicant, relying on section 107 of the Housing Act (see paragraph 24 below), brought a civil action against the local authorities, in particular the City of Zagreb, before the Zagreb Municipal Court (Općinski sud u Zagrebu), seeking to be provided with a replacement flat. More specifically, he asked to be awarded a specially protected tenancy of such a flat. 13. At the hearing held on 3 July 1996 the applicant stated, inter alia, that the building in which his old flat was located had been demolished. 14. On 5 November 1996 the Lease of Flats Act entered into force (see paragraph 27 below). It repealed the Housing Act, abolished the legal concept of the specially protected tenancy and provided that the remaining holders of such tenancies were to become “protected lessees” (zaštićeni najmoprimci, see paragraphs 29 and 32 below). Under the Act such lessees are subject to a number of protective measures, such as the duty of landlords to conclude a lease of indefinite duration; payment of protected rent (zaštićena najamnina), the amount of which is set by the Government and is significantly lower than the market rent; and better protection against termination of the lease (see paragraph 28 below). 15. Accordingly, in his written submissions of 4 March 1997 the applicant amended his action and sought to be awarded a replacement flat under the protected lease scheme, with an option to purchase it under the conditions set forth in the Specially Protected Tenancies (Sale to Occupier) Act (see paragraph 25 below). 16. On 1 April 1998 the applicant deregistered his domicile at the address at which his old flat was located and registered it at the address where his stepson was living. 17. By a judgment of 26 September 2006 the Municipal Court dismissed the applicant’s action. The court established, on the basis of a witness testimony, that the replacement flat the applicant had been offered but had refused (see paragraph 11 above) had indeed been unsuitable for habitation because it was shabby and had flooded floors and damp walls. It held, however, that while the local authorities had indeed been bound under section 107 of the Housing Act (see paragraph 24 below) to provide the applicant with a replacement flat, that obligation had been extinguished with the entry into force of the Lease of Flats Act, which had repealed the Housing Act and abolished the specially protected tenancy as such. 18. On 27 April 2010 the Zagreb County Court (Županijski sud u Zagrebu) dismissed an appeal lodged by the applicant and upheld the first-instance judgment by endorsing the reasons given therein. The first-instance judgment thereby became final. 19. The applicant then, on 24 June 2010, lodged an appeal on points of law (revizija) against the second-instance judgment. Aware that the value of the subject matter of the dispute, amounting to 21,000 Croatian kunas (HRK), which he had set when bringing his action did not reach the statutory threshold (HRK 100,000) for lodging an ordinary appeal on points of law, the applicant lodged a so-called extraordinary appeal on points of law under section 382(2) of the Civil Procedure Act (see paragraph 23 below), stating that the main issue in his case was important for the uniform application of the law. 20. By a decision of June 2011 the Supreme Court (Vrhovni sud Republike Hrvatske) declared inadmissible the applicant’s appeal on points of law. It found that the applicant had not complied with the formal requirements for lodging an extraordinary appeal on points of law, as stipulated in section 382(3) of the Civil Procedure Act (see paragraph 23 below), because he had not specified the legal issue for which he had lodged the appeal or explained why it was important for the uniform application of the law. 21. On 26 July 2011 the applicant lodged a constitutional complaint against the Supreme Court’s decision, alleging violations of his constitutional rights to equality before the law, equality before the courts, fair procedure and the right of ownership. 22. By a decision of 7 May 2012 the Constitutional Court (Ustavni sud Republike Hrvatske) declared inadmissible the applicant’s constitutional complaint and served that decision on his representative on 25 May 2012. It held, inter alia, that the Supreme Court’s decision was not arbitrary and that it did not raise a constitutional law issue. 23. The relevant provisions of the Civil Procedure Act (Zakon o parničnom postupku, Official Gazette of the Socialist Federal Republic of Yugoslavia no. 4/1977 with subsequent amendments, and Official Gazette of the Republic of Croatia no. 53/1991, with subsequent amendments), which has been in force since 1 July 1977, read as follows: “(1) Parties may lodge an appeal on points of law (revizija) against a second-instance judgment: - if the value of the subject matter of the dispute of the contested part of the judgment exceeds HRK 100,000, - [in certain employment disputes], - [if the second-instance court assessed the evidence and/or established the facts differently from the first-instance court or held a hearing]. (2) In cases where parties are not entitled to lodge an appeal on points of law in accordance with paragraph 1 of this section, they may [nevertheless] do so if a decision in the dispute depends on the resolution of a substantive or procedural legal issue [that is] important for ensuring the uniform application of the law and equality of citizens, for example: - if the Supreme Court has not yet ruled on that issue ... in respect of which there is divergent case-law of the second-instance courts, - if the Supreme Court has not yet ruled on that issue and the second-instance court may develop divergent case-law in respect of it, for example, because of possible different interpretations of certain statutory provisions, - if the Supreme Court has already ruled on that issue but the decision of the second-instance court is not in conformity with that ruling, - if the Supreme Court has already ruled on that issue and the decision of the second-instance court is in conformity with that ruling but ... the case-law should be revisited in view of changes in the legal system occasioned by new legislation, international treaties or decisions of the Constitutional Court or the European Court of Human Rights. (3) In the [extraordinary] appeal on points of law referred to in paragraph 3 of this section, the appellants must specify the legal issue for which they are lodging the appeal and give reasons as to why they find that issue important for ensuring the uniform application of the law and equality of citizens. (4) An appeal on points of law must be lodged within thirty days of the service of the second-instance judgment.” “A belated, incomplete or inadmissible [in the strict sense] (section 386) appeal on points of law shall be declared inadmissible by a decision of the judge rapporteur of the Supreme Court, unless the first-instance court ... has not already done so.” 24. The relevant provision of the Housing Act (Zakon o stambenim odnosima, Official Gazette nos. 51/1985, 42/1986, 22/1992 and 70/1993), which was in force between 25 December 1985 and 5 November 1996, read as follows: “(1) A specially protected tenancy shall be terminated if, on the basis of a decision issued by the relevant authority or in the proceedings for enforcement of a decision on expropriation, the building or part of the building in which the flat is located has to be demolished. (2) If, in the case referred to in paragraph (1) of this section the tenants have to move out, on the basis of a decision [issued] by the housing authority, the municipality or the person to whose benefit the building is being demolished shall provide them with another [replacement] flat which does not significantly reduce the quality of their housing. (3) If the relevant authority establishes that a building has to be demolished or reconstructed because it poses a risk to life or property, or for other reasons specified in separate legislation, the specially protected tenancy of flats in such a building shall be terminated and the provider of the flats ... shall provide the tenants with other [replacement] flats which do not significantly reduce the quality of their housing.” (4) ... (5) ...” 25. The Specially Protected Tenancies (Sale to Occupier) Act (Zakon o prodaji stanova na kojima postoji stanarsko pravo, Official Gazette no. 27/91 with subsequent amendments – “the Sale to Occupier Act”), which entered into force on 19 June 1991, entitled holders of specially protected tenancies of flats in social or State ownership to purchase the flats in respect of which they held such tenancy under favourable conditions. 26. Section 3(1) subparagraph 1 excluded the application of the Act to the sale of flats located in buildings in respect of which proceedings for demolition had been instituted. 27. The Lease of Flats Act (Zakon o najmu stanova, Official Gazette no. 91/1996 of 28 October 1996), which entered into force on 5 November 1996, regulates the legal relationship between landlords and lessees with regard to the lease of flats. 28. Transitional provisions (sections 30-49) of the Lease of Flats Act establish a special category of lessees (“protected lessees” – zaštićeni najmoprimci), namely, those who previously held specially protected tenancies in respect of privately owned flats or those who did not purchase their flats under the Specially Protected Tenancies (Sale to Occupier) Act. Such lessees are subject to a number of protective measures, such as the obligation of landlords to conclude a lease of indefinite duration; payment of protected rent (zaštićena najamnina), the amount of which is set by the Government; and a limited list of grounds for termination of the lease. 29. Section 30 of the Act provided for the abolition of the remaining specially protected tenancies and holders of such tenancies became “protected lessees” once the Act entered into force. 30. Section 51 provided, inter alia, that within six months of the Act’s entry into force the local authorities had to adopt criteria for renting out flats in their ownership. 31. Section 52(1) provides that proceedings instituted under the Housing Act must be concluded under the provisions of that Act. 32. Section 53 provided that on the date of the Act’s entry into force, the Housing Act was repealed. 33. In its decision no. U-III-1925/2005 of 19 December 2007 the Constitutional Court held that after the repeal of the Housing Act, the right of a holder of a specially protected tenancy to be provided with a replacement flat under section 107 of the Act (see paragraph 24 above) had been transformed into the right to be provided with such a flat with an option to purchase it under favourable conditions, as provided for in the Sale to Occupier Act (see paragraph 25 above). 34. In that case the complainant’s flat, in respect of which she held a specially protected tenancy, was located in a building that had to be demolished. The local authorities eventually allocated a replacement flat to the complainant in 1998, that is, after the repeal of the Housing Act. She therefore could not acquire a specially protected tenancy of the replacement flat (see paragraph 29 above). 35. The complainant sued the local authorities before the ordinary courts, seeking to purchase the replacement flat under favourable conditions, a right granted to holders of specially protected tenancies under the Sale to Occupier Act. The ordinary court held that the complainant’s specially protected tenancy of her old flat had been extinguished in 1990 when the local authorities had decided to demolish the building in which the flat was located. Furthermore, the complainant did not have a specially protected tenancy of the replacement flat for the reason stated (see the preceding paragraph). Consequently, she had no right to purchase that flat, as under the Sale to Occupier Act such a right was granted only to holders of specially protected tenancies. 36. The Constitutional Court allowed the constitutional complaint, found a violation of the complainant’s constitutional right to equality before the law and quashed the judgments of the ordinary courts. It held as follows: “[From the complainant’s submissions] it is evident that her constitutional complaint is essentially based on the view that, despite the fact that her specially protected tenancy had undoubtedly been extinguished by the operation of the law, there is a need for more extensive interpretation of the relevant legislation, in which case her right to purchase a flat would continue to exist. The applicant considers that she was prevented from exercising her right to purchase a flat only because the time-limits for submitting a request to that effect had expired, which was not due to her fault, but the fault of [the local authorities] which had offered her appropriate replacement flat ‘too late’. The contested decisions [of the ordinary courts] are based exclusively on the fact that the complainant’s specially protected tenancy had been extinguished in 1990 on the basis of section 107 of the Housing Act ... Bearing in mind that the Sale to Occupier Act recognises the right to purchase flats only in respect of tenants, and that after the entry into force of the Lease of Flats Act a specially protected tenancy could no longer be acquired, the [ordinary] courts took the view that, because she had lost the status of a holder of a specially protected tenancy, the complainant did not have the right to purchase the flat, and [thus] dismissed her action. ... The purpose of the Sale to Occupier Act was, regarding specially protected tenancies of socially-owned flats, to precisely define owners of socially-owned property, and that the owners would primarily be the persons who legally occupied such flats thus far. The said Act was amended on several occasions in ways that clearly indicate that its purpose was, taking into account the objective social circumstances and the legal and factual difficulties, to facilitate the exercise of the right [to purchase the flat] for those who under that Act were entitled to do so. The loss of rights of citizens because of the expiry of time-limits, prescription or similar reasons was not the aim of the Act, as this would have been contrary to its purpose. Therefore, the court, in principle, finds well-founded the arguments raised in the constitutional complaint ... concerning the need for an extensive interpretation of the relevant legal norms, when this is in accordance with the Constitution. ... [T]his means that the complainant had lost her specially protected tenancy of the old flat but that, under the assumption that she was allocated another appropriate flat while the Housing Act was still in force, she would have reacquired the rights and obligations of a holder of a specially protected tenancy on the basis of the mere fact that she had previously held such a tenancy. It is evident that in the period between the termination of one and the acquisition of another specially protected tenancy there can be no ‘legal vacuum’. On the contrary, during this period the rights inherent to a specially protected tenancy exist as ‘pending’ rights. It is beyond doubt that citizens who were at the same time in the same legal situation as the complainant, save for the fact that in their cases the proceedings for allocating replacement flats were shorter, had acquired specially protected tenancies and, as holders of such tenancies, had acquired the right to purchase their flats under the Sale to Occupier Act. In the end, they had acquired ownership of those flats. In this case, however, the procedure for allocating another appropriate flat to the complainant was not completed while the Housing Act was still in force. The Act was repealed by the entry into force of the Lease of Flats Act on 5 November 1996 ... However, section 52(1) of the Lease of Flats Act provides that proceedings instituted under the Housing Act must be concluded under the provisions of that Act. This provision implies that even in the changed legislative circumstances the interpretation that the rights inherent in the specially protected tenancy ..., which have been the subject of proceedings [instituted] while the Housing Act was in force but not completed before the entry into force of the Lease of Flats Act, exist even after the repeal of the Housing Act. Otherwise, the meaning and purpose of section 52(1) of the Lease of Flats Act would be called into question. It is clear that since the Housing Act has been repealed the legal basis for acquiring a specially protected tenancy no longer exists ... However, respecting the principles and values of the constitutional order of the Republic of Croatia ... requires the legislature and the authorities ... applying the law ... to be guided by these principles and values ​​and to follow them. ... The legal views expressed in the judgments of the competent courts are based on a constitutionally unacceptable interpretation of the relevant substantive law because it neglects the constitutional guarantee of equality. The scope and effects of this principle in the present case are not determined by the mere mechanical subsuming of the facts under the relevant provisions of the Housing Act and the Lease of Flats Act, but also by giving effect to the other highest values of the constitutional order of the Republic of Croatia.”