CASE OF SRAMEK v. AUSTRIA
Violation of Art. 6-1;Pecuniary damage - claim dismissed;Costs and expenses award - domestic proceedings;Costs and expenses award - Convention proceedings
C. Russo
8. The applicant, who is a United States citizen, lives in Munich in the Federal Republic of Germany. Wishing to build a holiday residence in Hopfgarten, a village in the Austrian Tyrol, she approached, with the assistance of municipal officials, the owners of a plot of land which had until then been used for agricultural purposes. Sale negotiations began in 1971 and apparently led, in 1973, to an initial contract. One year later, Mrs. Sramek paid to the vendors the greater part of the agreed price. However, the definitive contract was not drawn up until 13 January 1977. 9. Under section 3 of the Tyrolean Real Property Transactions Act (Grundverkehrsgesetz) 1970, as amended by, inter alia, an Act of 28 November 1973 which came into force on 1 January 1974 ("the 1970/1973 Act"), the contract could not take effect unless it were approved by the local Real Property Transactions Authority (Grundverkehrsbehörde); in fact, it contained a clause which so provided. The 1970/1973 Act applies to agricultural and forestry land and also to any land over which rights are acquired by, in particular, a natural person who does not possess Austrian nationality (section 1(1) and (2)). 10. The local Real Property Transactions Authority for Hopfgarten at the office of the Kitzbühel District Administration (Bezirkshauptmannschaft), to which the contract had been submitted, approved it on 7 March 1977; the decision (Bescheid) was dated 31 March. 11. On 6 April, the Real Property Transactions Officer (Landesgrundverkehrsreferent, "the Transactions Officer", see paragraph 23 below) at the Government Office of the Tyrol (Amt der Landesregierung) in Innsbruck exercised his right of appeal (Berufung) to the Regional Real Property Transactions Authority (Landesgrundverkehrsbehörde; section 13(3) of the 1970/1973 Act and see paragraphs 22-23 below). In his view, the contract fell foul of section 4(2) of the 1970/1973 Act. Under that sub-section, where the purchaser of real property is a foreigner a contract of the kind in question can be approved only "if the acquisition of rights (Rechtserwerb) is not contrary to political (staatspolitisch), economic, social (sozialpolitisch) or cultural interests; such a conflict (Widerspruch) is deemed to exist, in particular, where, (a) having regard to the extent of existing foreign ownership or to the number of foreign owners, there is a risk of foreign domination (Uberfremdung) in the municipality or locality concerned, (b) ... ." In the submission of the Transactions Officer, there were, in fact, already 110 foreign landowners in Hopfgarten and it could be seen from a series of decisions of the Regional Authority that this municipality was one of those where the danger of foreign domination was imminent. The contract in question was therefore contrary to social and economic interests within the meaning of the above-mentioned Act. The applicant received a copy of the appeal but did not file any observations in reply. 12. The Government Office of the Tyrol was organised in a number of "groups" and each group comprised several "divisions". In the present case, the Transactions Officer was the director of group III; his secretariat was provided by one of the seven divisions in that group, namely division III b. 2. 13. On 3 June 1977, the Regional Real Property Transactions Authority at the Government Office of the Tyrol held a hearing. The Regional Authority sat in camera but the parties, namely the Transactions Officer and Mrs. Sramek, were present. The latter appeared in person, without the assistance of a lawyer. In accordance with section 13(4), no. 1, of the 1970/1973 Act (see paragraph 24 below), the Regional Authority was composed as follows: the elected mayor of a municipality in the Tyrol, who was a farmer experienced in real estate matters, as chairman; a judge of the Innsbruck Court of Appeal; a civil servant from division III b. 3 - one of the seven divisions in group III - of the Government Office, as rapporteur; the head of group III d; the director of the Regional Forestry Service, being the head of group III f; a farmer; and a lawyer. The secretariat was provided by division III b. 3, to which the rapporteur belonged. 14. According to the minutes of the hearing, the rapporteur presented the facts and read out the expert opinions and observations received during the course of the investigation; the latter concerned, inter alia, the percentage of the parcels of land in Hopfgarten which was in foreign hands. The Transactions Officer then requested the Authority to uphold his appeal on the ground that as there was already a risk of foreign domination in Hopfgarten, the acquisition of the land in question would be contrary to social and political interests. The applicant stated that she had signed the initial contract (Erstvertrag), which could not then be found, on 13 March 1973. As early as 23 January 1971, she had reached an agreement to purchase (Vertragsabsprachen) and had received assurances that all would go well. Since that time, she had come to Austria several times each year to settle the matter. Her husband was living with the family in Munich, where he worked, but would be retiring shortly. She declared that she herself was prepared to apply for Austrian nationality. Their permit to reside in the Federal Republic was temporary and she did not wish to return to the United States. She added that she had already made a first payment of 111,591 schillings. In conclusion, she requested that the contract be approved. 15. On the same day, that is 3 June 1977, the Regional Authority upheld the appeal: referring to the above-mentioned section 4(2)(a) of the 1970/1973 Act, it refused to approve the transfer of title. Its decision (Bescheid) was dated 16 June. The Authority noted firstly that according to a statement from the municipality of Hopfgarten, which had not been challenged at the hearing, there were 110 foreign landowners in Hopfgarten, owning 5.6 hectares of land. There were 4,800 inhabitants and 1,100 families in the locality, though not all of them were landowners. The proportion of non-Austrian owners already exceeded 10 per cent and the extent of their holdings revealed a tendency towards foreign domination. The Authority then recalled that for some years past it had been refusing to approve the transfer of land in Hopfgarten to foreigners since it had concluded that there was a risk of foreign domination in the area. It had to take account, inter alia, of the effects of its decision on third parties. According to the Authority, experience showed that the approval of a contract between a landowner and a foreigner led to an influx of other foreigners who also wished to buy land in the locality. This caused prices to rise substantially, making it very difficult, if not impossible, for the indigenous population to find housing for themselves. For these reasons and in view of the scarcity of building plots in the Tyrol, very strict legal (gesetzlich) control had to be exercised: sales and purchases could normally be approved only if they contributed to the establishment or maintenance of an effective (leistungsfähig) agricultural population or if they served to satisfy domestic land needs (inländischer Bodenbedarf) for any kind of public or social purposes. However, Mrs. Sramek was intending to use the land in question - at least for some time - for the construction of a holiday residence. Such an objective could easily be satisfied by the local hotel trade which, furthermore, was losing potential customers as a result of the construction of villas by foreigners. The acquisition contemplated was therefore prejudicial to economic and social interests and thus fell foul of, in particular, section 4(2)(a) of the 1970/1973 Act. Lastly, the Regional Authority rejected the applicant’s argument that she had already concluded a contract in 1973, that is at a time when American citizens were treated on an equal footing with Austrians by virtue of a bilateral treaty dating from 1928. The Authority emphasised firstly that it had to base itself on the factual and legal situation obtaining at the time when the decision had to be taken. In its view, the 1928 treaty had not established any equality between citizens of the two States in the area concerned. In the case in question, the transfer of ownership contemplated fell under Article 1 para. 2, as interpreted by the Ministry of Foreign Affairs in a 1973 memorandum which stated that the general regulations with regard to foreigners were applicable. Even if this interpretation had not been known at the time when the initial contract had allegedly been concluded (13 March 1973, see paragraph 14 above) - though this was not the case, since the above-mentioned memorandum dated from early 1973 -, Mrs. Sramek could not claim that she had acted in good faith: she was obliged under section 15 of the 1970/1973 Act to seek approval of the contract within two months and she alone bore the responsibility for not having done so. 16. On 22 August 1977, the applicant appealed to the Constitutional Court (Verfassungsgerichtshof) against the decision of the Regional Authority. She claimed that her right to inviolability of property and her right to a decision by the legally competent court (gesetzlicher Richter) had been infringed and relied on Article 5 of the Basic Law (Staatsgrundgesetz), Article 83 para. 2 of the Federal Constitution (Bundes-Verfassungsgesetz) and Article 6 (art. 6) of the Convention. As concerns the first complaint, Mrs. Sramek alleged that the Regional Authority had applied section 4(2)(a) of the 1970/1973 Act in a misconceived (denkunmöglich) manner by adopting an illogical approach; amongst other things, it had concluded that there was a danger of foreign domination in Hopfgarten without being in possession of detailed documentation, without defining the risk in question and without enquiring into the actual position in Hopfgarten regarding real property ownership. She further contended that the Regional Authority was not an "independent tribunal" within the meaning of Article 6 (art. 6) of the Convention. On these grounds, she requested the Constitutional Court to annul the decision under appeal or, in the alternative, to refer the case to the Administrative Court (Verwaltungsgerichtshof). Mrs. Sramek supplemented her grounds of appeal on 9 March 1978. She asserted that her lawyer had not been able to consult the minutes of the Regional Authority’s deliberations. She had, in fact, learnt that the Authority had not given its ruling on 3 June 1977, immediately after the closure of the hearing. She inferred from this that the decision complained of had not been taken by the legally competent court. She requested the Constitutional Court to provide her lawyer with an opportunity of reading the above-mentioned minutes. 17. The Constitutional Court dismissed the appeal on 3 March 1979 (Erkenntnisse und Beschlüsse des Verfassungsgerichtshofes, 1979, vol. 44, no. 8501). It took the view that the Regional Authority was indeed a "tribunal" within the meaning of Article 6 (art. 6) of the Convention. It gave decisions which the executive could neither annul nor vary. As regards its members - who included a judge -, they had a degree of independence equal to that of judges. They were not bound by any instructions in the exercise of their functions and they could not be removed during their three-year term of office, except for reasons which would have precluded their appointment or if they were permanently prevented from carrying out their duties. The Constitutional Court accordingly held that Article 6 (art. 6) had not been violated. The applicant’s other ground of appeal was also rejected. Recalling that it had already held in another case, in 1974, that it was not misconceived to conclude that there was a danger of foreign domination in Hopfgarten, the Constitutional Court stated that it saw no reason to change its opinion in the instant case. As regards the facts noted by the Regional Authority, they had not been the subject of any dispute during the administrative proceedings. The Constitutional Court sat in camera and gave judgment without holding a hearing. 18. Even before the above-mentioned judgment had been delivered, the plot in question was sold to an Austrian who, according to the Government, turned it back into grazing-land. The Regional Authority had taken the view that it could examine the new contract, provided that its decision was held in abeyance pending the outcome of the Constitutional Court’s proceedings. 19. The Government stated that during the last ten years or so the Regional Authority had not approved any acquisition of real property in Hopfgarten by a foreigner. They supplied a list of thirteen refusals in the period between July 1973 and February 1983; according to the applicant, the list was insufficiently detailed to be conclusive. 20. Under Article 15 of the Federal Constitution, as interpreted by the Constitutional Court, the regulation of real property transactions is a matter coming within the jurisdiction of the Länder. Most of the Länder have enacted legislation whereby all contracts relating to agricultural or forestry land and also, in some cases, real property transactions with foreigners have to be approved by special authorities. 21. In the Tyrol (see paragraph 9 above), section 15(1) of the 1970/1973 Act obliges the purchaser to seek such approval within two months of the conclusion of the contract. No entry can be made in the land register until the transaction has been approved by the competent authority (section 1(4)). If approval is withheld, the acquisition is null and void (section 16(1)). 22. When the contract relates to agricultural or forestry land and irrespective of the purchaser’s nationality, the first-instance authority is the Höfekommission ("Farm Commission") (section 13(1)(a)). The Farm Commission is established at the seat of the District Administration and has three members: the head of the District Administration, or a legally qualified (rechtskundig) official of that Administration appointed by him, as chairman; a person designated by the chamber of agriculture of the district; and another person, designated by the municipality in question, who is engaged in agriculture or forestry (section 9 of the Tyrolean Farms Act of 12 June 1900; Gesetz betreffend die besonderen Rechtsverhältnisse geschlossener Höfe). The decisions of the Farm Commission are taken by majority vote (section 13(2) of the 1970/1973 Act); they are subject to appeal to the Regional Authority (see paragraph 24 below) by, amongst others, the parties to the contract or the Transactions Officer (section 13(3)). 23. The Transactions Officer, who is appointed for three years by the Government of the Tyrol, must be a person who is experienced in real property transaction matters (section 14). His secretariat is provided by a division of the Office of the said Government. 24. If the case is referred to it, the Regional Real Property Transactions Authority established at the Office of the Land Government takes a decision as the second and final instance (section 13(4)). Its membership varies according to the subject-matter of the contract to be examined. In the case of agricultural or forestry land - whether the buyer be Austrian or foreign - its voting members are (section 13(4), no. 1): "(a) a person experienced in real property transaction matters, who shall act as chairman; (b) a member of the judiciary (Richterstand); (c) a legally qualified civil servant from the Office of the Regional Government, with training in real property transaction matters, who shall act as rapporteur; (d) a senior civil servant from the Agricultural Services Department (technischer Agrardienst) of the Office of the Regional Government; (e) a senior civil servant from the Forestry Services Department (forsttechnischer Dienst); (f) an agricultural expert; (g) a lawyer (Rechtsanwalt or Notar)." 25. The above-cited provision, which was introduced by the Act of 28 November 1973 (see paragraph 9 above), replaced a text which the Constitutional Court had held to be incompatible with Article 6 (art. 6) of the Convention, as interpreted by the European Court in its Ringeisen judgment of 16 July 1971 (Series A no. 13). The Constitutional Court had ruled that the Regional Authority, as it was constituted under the original Act of 1970, could not be considered an "independent and impartial" tribunal because its members included, as chairman, one of the members of the Government of the Tyrol (section 13(1), no. 1(a), former version). Furthermore, so the Constitutional Court held, the Act did not fix the duration of the members’ term of office, conferred on the said Government the power of appointing the members (save for a judge, who was appointed by the Federal Minister of Justice) and did not lay down the circumstances in which members might be removed from office (judgment of 29 June 1973, Erkenntnisse und Beschlüsse des Verfassungsgerichtshofes, 1973, vol. 38, no. 7099). 26. Following this judgment, the Tyrolean legislature amended, by the same Act of 28 November 1973, the provisions in section 13 concerning, inter alia, exercise of the office of member of the Regional Authority. Sub-sections 5 to 13 of that section read as follows: "(5) The member of the Regional Real Property Transactions Authority appointed from the judiciary (sub-section 4, no. 1 (b)), shall be appointed by the Federal Minister of Justice and the remaining members, by the Regional Government. For each member a substitute member shall be similarly appointed. (6) Only Austrian citizens who have reached the age of 25 years and are in full possession of their legal rights shall be eligible for appointment as members or substitute members. Persons who by reason of a criminal conviction are disqualified from jury service or from acting as lay assessors shall be ineligible. (7) Members and substitute members shall hold office for three years. Members or substitute members who are appointed within the general three-year term of office shall cease to hold office at the end of that term. Re-appointment is possible. Members and substitute members shall continue to perform their duties after expiry of their term of office until they have been replaced. (8) The quorum of the Regional Real Property Transactions Authority shall be constituted if the chairman, the member appointed from the judiciary, the rapporteur and at least two other members are present. Decisions shall be taken by majority vote. If the votes are equally divided, the chairman shall have a casting vote. Abstention shall count as a negative vote. (9) In the performance of their duties the members of the Regional Real Property Transactions Authority shall not be subject to any instructions; the executive may neither annul nor vary their decisions. (10) The details of the Real Property Transactions Authorities’ procedure (such as the convening of sittings, summoning of substitute members, conduct of voting, keeping of minutes and signing of decisions) shall be laid down by the Regional Government in rules of procedure (Geschäftsordnung) for the said Authorities. (11) Unless they are civil servants, members of the Real Property Transactions Authorities shall receive for their work remuneration and a travel allowance, the amount of which shall be laid down in regulations made by the Regional Government. (12) A member or substitute member shall be removed from office, before the end of his term of office, if: (a) circumstances intervene which would have made him ineligible for appointment; (b) the regular performance of his duties becomes per80 manently impossible. (13) If an official of a "territorial" authority (Gebietskörperschaft) is suspended from duty under the regulations governing his employment, he shall cease to exercise his functions as a member or substitute member of a Real Property Transactions Authority for the duration of the suspension." Sub-section (9), cited above, corresponds to Article 20 para. 2 of the Constitution, which reads: "If a Federal or a Land Act makes provision for the last-instance decision to be given by a collegiate body at least one of whose members is a judge and whose decisions cannot be annulled or varied by the executive, the other members of that body shall also not be subject to any instructions." Article 20 para. 3 of the Federal Constitution obliges the members of the Regional Authority not to disclose facts which have come to their knowledge in the exercise of their functions, if the interests of a "territorial" authority or of the parties so require (Amtsverschwiegenheit). 27. Procedure before the Real Property Transactions Authorities is governed by the General Administrative Procedure Act 1950 (Allgemeines Verwaltungsverfahrensgesetz). The parties are entitled to consult the case-file (section 17) and must be given an opportunity of presenting their arguments (section 37). The competent authority may decide to hold a hearing (section 39(2)), which will not take place in public; the parties have the right to be heard (rechtliches Gehör) and, inter alia, to adduce their arguments and evidence and comment on facts presented and submissions made by other persons appearing, witnesses or experts (section 43(3)). In certain circumstances which may give reason to doubt his impartiality, the civil servant concerned must arrange to be replaced (section 7). 28. By an order (Verordnung) of 13 September 1966, the Government of the Tyrol issued rules of procedure for the Real Property Transactions Authorities. Under Article 3 para. 1, the Authorities shall deliberate and vote in the absence of the parties, if appropriate after oral hearings. The deliberations shall be recorded in minutes to which the right to consult the case-file (Akteneinsicht), guaranteed by Article 17 of the General Administrative Procedure Act, does not extend (Article 3 para. 3). The Authorities’ resolutions (Beschlüsse) must be recorded, but may be altered as long as they remain unpublished (nicht nach aussen in Erscheinung getreten) (Article 3 para. 4). Their decisions (Bescheide), which are to be reached on the basis of those resolutions (Article 4 para. 1), shall be given in writing but may in case of urgency be given orally by the chairman (Article 4 para. 2). Before the Regional Real Property Transactions Authority, the rapporteur shall, after setting out and commenting on the results of the investigation (Ermittlungsverfahren), present conclusions (Antrag); those who wish to propose alternative conclusions (Gegen- oder Abänderungsanträge) shall give reasons for them (Article 9 para. 2). The chairman shall decide the order in which voting on the conclusions is to take place (Article 9 para. 3). 29. Decisions of a Regional Authority may be challenged before the Constitutional Court but not before the Administrative Court (Verwaltungsgerichtshof; Articles 133 para. 4 and 144 of the Federal Constitution).