CASE OF GRIGALIŪNIENĖ v. LITHUANIA
Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions)
Krzysztof Wojtyczek;Nona Tsotsoria;Vincent A. De Gaetano
5. The applicant was born in 1955 and lives in Kaunas. 6. In February 1993 the Kaunas Region Municipality (Kauno rajono savivaldybė) assigned a plot of land measuring 0.15 hectares in the settlement of Noreikiškės to the applicant for the construction of a house (hereinafter “the land”). In May 1995 she signed a land purchase agreement with the municipality and bought the land for 29.70 “single-use investment vouchers” (investiciniai čekiai). The purchase agreement indicated that the nominal value of the land was 2,976 Lithuanian litai (LTL approximately 862 euros (EUR)). The applicant subsequently obtained a building permit and built a storehouse on the land. 7. On 10 May 2002 the Constitutional Court found that Government regulations which allowed land in Noreikiškės to be sold to private individuals were contrary to the Constitution of the Republic of Lithuania and the Restitution Law (see Padalevičius v. Lithuania, no. 12278/03, § 18, 7 July 2009). 8. In December 2003 the Kaunas County Administration (hereinafter “the KCA”) brought a claim before the Kaunas District Court (Kauno rajono apylinkės teismas) seeking the annulment of the administrative decisions and the purchase agreements on the basis of which plots of land had been sold to the applicant and to several other individuals. The KCA argued that the land in question had to be returned in natura to its former owners and thus had been sold to the applicant and other individuals unlawfully. 9. On 4 June 2004 the Kaunas District Court allowed the KCA’s claim. The court annulled the administrative decision of 1993 assigning the land to the applicant and the land purchase agreement of 1995, and ordered the Kaunas Region Municipality to return 29.70 “single-use investment vouchers” to the applicant. 10. On 7 February 2005 the Kaunas Regional Court partially quashed the first-instance judgment. It found that the lower court had correctly annulled the administrative decision and purchase agreement, and upheld the judgment in that part. However, it noted that the “single-use investment vouchers” could no longer be used as a means of payment. Thus, in accordance with the Civil Code, the applicant should have received the monetary equivalent of what she had paid in 1995. The court remitted that part of the case for re-examination in order to assess the monetary equivalent. On 3 October 2005 the Supreme Court upheld the Regional Court’s judgment. 11. The remitted part of the case was subsequently re-examined by the Kaunas Regional Court sitting as the court of first instance. During those proceedings, the applicant argued that the unlawful allocation and sale of the land had resulted from the State authorities’ negligence. The applicant claimed that she, as a bona fide purchaser, was therefore entitled to receive compensation for the full market value as it was at the time of expropriation, in accordance with Article 6.147 § 2 of the Civil Code (see paragraph 16 below). 12. On 6 March 2008 the Kaunas Regional Court dismissed the applicant’s request for compensation equating to the full market value of the land. The court found that the authorities could not be held solely responsible for the unlawful sale because the applicant had also had a duty to verify whether she had been buying the land lawfully. Thus, the court held that, for the purposes of Article 6.147 § 2 of the Civil Code, the applicant could not be considered a bona fide purchaser and was not entitled to compensation for the full market value. The court awarded her the nominal value of the land in 1995, which it assessed to be LTL 29.70 (EUR 8.60). The court also noted that if the applicant considered that she had suffered pecuniary damage, she had the right to institute separate proceedings against the State for damages. 13. On 19 August 2008 the Court of Appeal partially amended the Regional Court’s judgment. It reiterated that the applicant could not be considered a bona fide purchaser merely because she had bought the land from the State – she had also had a duty to verify the lawfulness of the sale. However, the Court of Appeal found that the lower court had incorrectly assessed the nominal value of the land in 1995. Referring to the text of the purchase agreement (see paragraph 6 above), the court awarded the applicant LTL 2,976 (EUR 862). 14. On 27 January 2009 the Supreme Court upheld the judgment of the Court of Appeal; however, it partially amended the reasoning. The Supreme Court stated that the nominal value of the land had been indicated in the purchase agreement, so it had not been necessary to apply Article 6.147 of the Civil Code and assess the monetary equivalent. As a result, the applicant’s good faith had been irrelevant in determining the amount of compensation and should not have been examined. Nonetheless, the Supreme Court considered that that error had not affected the lawfulness of the Court of Appeal’s judgment.