CASE OF HÅKANSSON AND STURESSON v. SWEDEN
Violation of Art. 6-1;No violation of P1-1 and 14+P1-1;Not necessary to examine Art. 13;Pecuniary damage - claim dismissed;Costs and expenses award - domestic proceedings;Costs and expenses award - Convention proceedings
C. Russo
7. Mr Gösta Håkansson is resident at Höör and a police officer by profession, and Mr Sune Sturesson is resident at Skånes Fagerhult and a farmer by profession. 8. On 4 December 1979 the applicants bought for 240,000 Swedish crowns (SEK) at a compulsory sale by auction (exekutiv auktion; "the 1979 auction") an agricultural estate called Risböke 1:3 in the municipality of Markaryd. Their main competitors at the auction, Mr Bertil Bjarnhagen and Mr Michael Borg, bid 235,000 and 220,000 SEK, respectively. The property had been seized in July 1979 in order to secure the payment of the previous owners’ debts to three banks. According to a valuation made public before the auction, the market value (saluvärde) of the property was estimated at 140,000 SEK. 9. At the auction the public was, according to the minutes drafted by the representative of the County Administrative Board (länsstyrelsen) of the County of Kronoberg, informed of the regulations contained in section 2, sub-section 10, and section 16 of the Land Acquisition Act 1979 (jordförvärvslagen 1979:230; "the 1979 Act"), whereby a purchaser would have to resell the property within two years unless he had obtained in the meantime from the County Agricultural Board (lantbruksnämnden) of the same County a permit to retain it or fell under one of the listed exceptions from the permit requirement (see paragraphs 28 and 32 below). The applicants maintained that a representative of the County Administrative Board had stated, at the public viewing of the property on 27 November 1979, that, in this case, the requisite permit would certainly be granted speedily; they further claimed that this had been confirmed by the County Administrative Board at the auction. In support of these allegations, the applicants submitted three affidavits, each of which was signed in 1989 by a person who had been present either at the auction or at the public viewing. 10. On 7 January 1980 the County Administrative Board drew up a sale contract (köpebrev) in which the applicants were reminded of the wording of section 16 para. 1 of the 1979 Act. On the same day the applicants submitted a request to the County Agricultural Board for a permit to retain the estate Risböke 1:3. 11. By letter of 5 February 1980, the County Agricultural Board informed the applicants that the estate had, in view of its size, situation and nature, to be considered as a "rationalisation unit" (rationaliseringsfastighet) which ought to be used for the purpose of consolidating other properties in the area that were capable of further development. It added that, as neighbours were interested in acquiring the property, the request might be refused under section 4 para. 1, sub-section 3, of the 1979 Act (see paragraph 30 below). The County Agricultural Board also indicated that there were reasons to believe that the price paid was too high for redemption (inlösen - see paragraph 34 below). On 15 February 1980 the County Agricultural Board rejected the applicants’ request on the ground that the estate was a "rationalisation unit". 12. The applicants appealed to the National Board of Agriculture (lantbruksstyrelsen), which rejected the appeal on 5 September 1980. In its decision the National Board of Agriculture noted the following. Risböke 1:3 had an area of 41 hectares of which 18 hectares were forest and 8 hectares pasture. There were no buildings on the property. Mr Sturesson’s estate, which comprised 63 hectares of forest and 10 of pasture, was 25 kilometres away. Through their purchase the applicants had intended to build up units which would, in the short run, create opportunities for employment and, in the long run, become financially sound properties to be exploited by their children. The Board noted however that in the opinion of the County Agricultural Board, there was only room for one active farmer in the region. Finally, Mr Michael Borg, who leased two neighbouring properties, one of which was owned by his father, had shown a great interest in acquiring the applicants’ property. The Board concluded: "The National Board of Agriculture finds, as did the County Agricultural Board, that the real estate at issue lacks the prerequisites for remaining as a separate cultivation unit. Moreover, the National Board considers that a new establishment on the property would be likely to make it more difficult for the active farmer in the area to develop his business." 13. The applicants appealed to the Government (Ministry of Agriculture), which rejected the appeal on 26 February 1981. 14. A new request, dated 4 January 1982, for a permit to retain Risböke 1:3 was rejected by the County Agricultural Board on 25 January 1982. The Board stated that the estate was considered to be a unit suitable for rationalisation purposes, which ought to be used to consolidate properties within the area that were capable of further development. It furthermore stated that it was not prepared to redeem the estate at the price of 240,000 SEK. 15. The applicants appealed to the National Board of Agriculture. After inspecting the property, it rejected the appeal on 15 November 1982, on the ground that there were no new circumstances justifying a departure from its previous decision. 16. The applicants’ further appeal to the Government was dismissed on 27 October 1983. 17. In a letter of 11 January 1985 the applicants requested the Government to reconsider their decision of 27 October 1983. The Government, recalling that the case had been finally settled by them on the latter date, decided on 14 March 1985 not to take any further action in respect of the request. 18. The applicants brought proceedings before the Real Estate Court (fastighetsdomstolen) of Växjö requesting that the State redeem the Risböke 1:3 in accordance with section 14 of the 1979 Act (see paragraph 34 below). In a judgment of 11 December 1981 the court rejected the claim, stating that in view of the clear wording of section 14 this provision could not be applied by analogy to the applicants’ situation. The applicants appealed to the Göta Court of Appeal (Göta hovrätt), which on 1 July 1982 confirmed the judgment of the Real Estate Court. On 14 July 1983 the Supreme Court (högsta domstolen) refused leave to appeal. 19. At the request of the County Agricultural Board, the County Administrative Board ordered, on 10 November 1983, the compulsory resale by auction of Risböke 1:3 in accordance with the provisions of sections 16 and 17 of the 1979 Act (see paragraphs 36-38 below). The Enforcement Office (kronofogdemyndigheten) in Växjö was responsible for arranging the auction. 20. In February and March 1984 the National Board of Forestry (skogsvårdsstyrelsen) assessed the value of the property in accordance with the price-control regulations (that is, in principle, by reference to its yield) at 100,000 SEK and its market value as not exceeding 200,000 SEK. In April 1984 the Senior Land Surveyor (överlantmätaren) of the County of Kronoberg made a new valuation of the property, resulting in an estimated market value of 125,000 SEK. 21. On 19 April 1984 the Enforcement Office determined that the estate had a value of 125,000 SEK. The applicants challenged this before the Göta Court of Appeal but the court dismissed the action on 4 June 1984, stating that it was not possible to appeal against such a determination as it was only a preparatory step for a subsequent decision on the sale of the estate (see paragraph 39 below). The applicants appealed against this decision to the Supreme Court, which on 23 August 1984 refused leave to appeal. On 26 June 1984, at the applicants’ request, the County Administrative Board appointed two special valuers (see paragraph 37 below). In their report of October 1984, the valuers concluded that the property had an estimated market value of 172,000 SEK, taking into account certain expenditure deemed necessary for thinning out trees (mainly Christmas trees) that had been newly planted by the applicants. 22. The auction took place on 18 June 1985 ("the 1985 auction"). The Enforcement Office noted that the estate had an estimated market value of 172,000 SEK and a taxable value of 107,000 SEK. It decided that the lowest bid which could be accepted would be 172,000 SEK. At the auction, there was, in fact, only one bid. It was an offer of 172,000 SEK made by the County Agricultural Board and it was accepted by the Enforcement Office. After the costs of the valuation and the auction had been deducted the applicants received 155,486.50 SEK. 23. Prior to the auction in June 1985, five requests for advance permits (förhandstillstånd) to acquire the property had been filed with the County Agricultural Board (see paragraph 36 below). On 10 April 1984 the Board granted the request filed by Mr Michael Borg and Mr Thorwald Borg on condition that they applied, within two months from the public auction, for a merger of Risböke 1:3 and the two neighbouring properties which they now owned (cf. paragraph 12 above). The other requests were rejected by the Board on 10 and 14 June 1985. 24. On 19 June 1985 the applicants appealed to the Göta Court of Appeal requesting that the compulsory sale be annulled. They argued that the property had not been sold at the market price, as required by law, since the valuation which had arrived at the figure of 172,000 SEK had been based only on an assessment of the yield from the property. The applicants stated that they intended to submit to the court a new valuation report. However, on 3 July 1985 the Court of Appeal dismissed the appeal. 25. The applicants filed a further appeal with the Supreme Court, in which they also challenged the impartiality of the two special valuers on the ground that they had had a duty, under section 6 of the Land Acquisition Ordinance 1979 (see paragraph 37 below), to consult with the County Agricultural Board - which had in the event been the buyer of the estate - when making their valuation. They did not raise any complaint in respect of the absence of any public hearing before the Court of Appeal. On 20 August 1985 the Supreme Court refused to grant leave to appeal. 26. On 17 December 1985 the County Agricultural Board sold the property to Mr Michael Borg and Mr Thorwald Borg for 125,000 SEK. On 17 January 1986 they applied for its merger with their two properties as required in their acquisition permit (see paragraph 23 above) and on 11 April 1986 the merger was accepted by the local property formation agency (fastighetsbildningsmyndigheten). 27. The Land Acquisition Act 1979 was enacted in order to implement the agricultural guidelines adopted by the Riksdag in 1977 and also to meet the policy goals of forestry and regional planning. Among the aims to be specially furthered by the Act are the creation and preservation of viable family holdings so as to strengthen the connection between cultivation and ownership, and also the promotion of a continuous structural rationalisation of agriculture and forestry. 28. Under section 1 of the Act, a permit is required for the acquisition of real estate assessed for tax purposes as an agricultural holding. Section 2 lists a number of exceptions: for example, no permit is required when the property is acquired by a State authority other than a commercial undertaking (sub-section 2) or at a compulsory sale by auction (sub-section 10) other than such as take place in accordance with section 17 of the Act (see paragraph 36 below). 29. When deciding on an application for a permit, the authorities shall take into account that the setting up and development of rational enterprises in agriculture, forestry and horticulture should be promoted (section 3). 30. Section 4 para. 1 provides that a permit to acquire a property shall be refused, inter alia: "1. If the price or other consideration exceeds, to an extent which is not insignificant, the value of the property in view of its yield and other circumstances, 2. if it can be assumed that the acquisition is effected mainly as an investment, 3. if the property is required for the rationalisation of agriculture or forestry, ..." Paragraph 2 of this section provides inter alia that sub-section 1 of the first paragraph does not apply to the acquisition of real estate at a compulsory sale by auction under section 17 of the Act (see paragraph 36 below). 31. Section 12 specifies that the acquisition permit shall, in principle, be applied for within three months of the purchase. Under this section the question whether or not to grant the permit may not be examined before the acquisition, except in certain circumstances, none of which obtained at the 1979 auction. However, in the case of a public auction under section 17 (see paragraph 36 below), such as the one held in 1985, the acquisition permit shall be issued before the auction. 32. Under section 16 para. 1, a property acquired at a compulsory auction in circumstances which, in case of an ordinary purchase (see paragraph 28 above), would have required a permit shall be re-sold within two years, unless the said circumstances have by then ceased to exist or unless the purchaser has obtained a permit from the County Agricultural Board to retain the property. The granting of such a permit is subject inter alia to the provisions of sections 3 and 4, with the exception of section 4, sub-section 1. The sale contract issued after the compulsory auction shall contain a note recalling the regulations laid down in section 16. 33. A decision by the County Agricultural Board not to grant permission to retain property acquired at a compulsory auction may be appealed to the National Board of Agriculture and ultimately to the Government. 34. "If a purchase becomes invalid because the necessary permit is refused as a result of the application of section 4 para. 1, sub-section 3", i.e. on the ground that the property is required for the rationalisation of agriculture or forestry, the State is, according to section 14, "obliged to redeem the property at the agreed purchase price if the seller so requests". However, under the same section, no such obligation exists if the purchase price exceeds, to an extent which is not insignificant, the value of the property in view of its yield and other circumstances, or if the terms are unreasonable in other respects. There is no obligation on the State to redeem property acquired at a compulsory auction as in such a case a permit is not required for a valid acquisition of the property (see paragraphs 18 and 28 above). 35. Under section 14 para. 2, applications for redemption shall be filed with the Real Estate Court, whose decisions may be appealed to a Court of Appeal and ultimately, if leave to appeal is granted, to the Supreme Court. 36. If, in a case where this is required under section 16 (see paragraph 32 above), the property has not been re-sold within the prescribed time-limit, the County Administrative Board shall, according to the same section and on application by the County Agricultural Board, order that the property be sold at a compulsory auction by the Enforcement Office in accordance with the provisions of section 17. At such an auction the property may only be sold to someone who has received an acquisition permit (see paragraph 31 above) or who is, like the County Agricultural Board, exempted from the permit requirement by virtue of section 2 of the 1979 Act (see paragraph 28 above). 37. Section 17 specifies that no sale at a compulsory auction may take place unless the purchase price offered amounts at least to the value to be attributed to the property in accordance with the provisions of Chapter 12 of the Code of Enforcement (utsökningsbalken, see in particular section 3). Under section 17 of the 1979 Act this estimated value is to be fixed by the Enforcement Office or, if the owner of the property makes a timely request for a special valuation, by valuers appointed by the County Administrative Board. In both cases the valuation shall be made in consultation with the County Agricultural Board (section 6 of the Land Acquisition Ordinance 1979, jordförvärvsförordningen 1979:231, enacted by the Government). 38. Section 17 also provides that, if the property is not sold at the auction, the County Agricultural Board may, within a period of two years, request the County Administrative Board to hold a new auction. If no such request is made, or if no acceptable bid is made at the second auction, the owners are no longer required to sell the property. 39. The Enforcement Office’s decisions in respect of a compulsory auction may, according to Chapter 18, section 1, of the Code of Enforcement, be brought before a Court of Appeal and ultimately, with leave to appeal, before the Supreme Court. However, according to section 6 (2) of the same Chapter, an appeal against a decision that is merely a preparatory step for a final decision may, in general, be lodged only in connection with an appeal against the latter. Appeals follow the rules of the 1942 Code of Judicial Procedure (rättegångsbalken), as far as these are relevant (Chapter 18, section 1, of the Code of Enforcement). Chapter 52, section 10, of the Code of Judicial Procedure specifies that: "Where it is necessary for the purposes of the investigation of a case that a party or other person be heard orally by the Court of Appeal, the Court of Appeal shall decide on such a hearing as it finds appropriate." If the Court of Appeal decides to hold such a hearing, the hearing is open to the public under Chapter 5, section 1, of the Code of Judicial Procedure.