CASE OF STRAIN AND OTHERS v. ROMANIA
Violation of P1-1;Violation of Art. 6-1 concerning the reasonable time;Inadmissible under Art. 6-1 concerning the others complaints;Pecuniary damage - financial award;Non-pecuniary damage - financial award;Costs and expenses partial award - domestic proceedings;Costs and expenses partial award - Convention proceedings
4. The applicants were born in 1914, 1920, 1921 and 1945 respectively. The first lives in Timişoara, the second in Delémont (Switzerland) and the others in Arad. 5. The first two applicants and their deceased brother, Mircea Stoinescu, whose heirs are the other two applicants, were the owners of a house in Arad. In 1950 the State took possession of that house under Decree no. 92/1950 on nationalisation. The house was converted into four flats intended for rental. 6. On 27 September 1993 the first two applicants and Mircea Stoinescu brought an action for the recovery of possession of immovable property in the Arad Court of First Instance against Arad Town Council and R., a State-owned company responsible for the management of property belonging to the State. After the death of Mircea Stoinescu, the action was pursued by his heirs, Mrs Felicia Stoinescu and Mrs Maria Tăucean. The applicants sought a declaration that they were the rightful owners of the house and appurtenant land that the State had, in their opinion, wrongfully seized in 1950. They claimed that, under Article 2 of Decree no. 92/1950, property belonging to persons in certain social categories was not subject to nationalisation, and that they fell within such a category. In their view, the nationalisation of the house in question had therefore been improper and unlawful. 7. In a judgment of 12 April 1994, the Arad Court of First Instance dismissed the applicants' action, refusing to rule on the merits on the ground that they could not obtain redress for the damage they had sustained until the enactment of special legislation introducing reparation measures. The judgment was upheld by the Arad County Court on 3 November 1995. The applicants appealed against that decision. 8. In 1996 the tenants of the flats making up the house applied to purchase them, relying on Law no. 112/1995. Arad Town Council informed the R. company that a dispute was pending concerning the title to the house and instructed it not to pursue the sale of the flats in question. 9. Consequently, the tenants of three flats had their purchase applications rejected, but not H.D. (a former football player and international celebrity) and his wife, to whom the R. company sold flat no. 3 on 18 December 1996. 10. On 25 February 1997 the Timişoara Court of Appeal upheld an appeal by the applicants and remitted the case to the Arad Court of First Instance for a decision on the merits. 11. On 12 May 1997 Mr and Mrs D. applied to intervene in the Court of First Instance proceedings on the ground that they had been the owners of flat no. 3 since its sale on 18 December 1996. 12. Further to the couple's application to intervene, the applicants requested the court to find that the sale of flat no. 3 was null and void. In their view, as the nationalisation had been improper and unlawful, the State could not have been the rightful owner of the property and thus could not lawfully have sold any part of it. The applicants relied in particular on Article 966 of the Civil Code, whereby an undertaking entered into on an erroneous or unlawful basis could not produce any useful effect. 13. On 7 June 1997 the Arad Court of First Instance held that the nationalisation of the house had been unlawful and that the applicants were therefore the rightful owners. However, the court rejected the request for the rescission of the contract of sale between the State and Mr and Mrs D., on the ground that the couple had made the purchase in good faith. 14. The applicants appealed against that judgment. On 28 November 1997 the Arad County Court allowed the appeal and remitted the case to the Court of First Instance for reconsideration. 15. In a judgment of 6 July 1998, the Arad Court of First Instance held that the nationalisation of the house had been unlawful, that the applicants were the rightful owners and that the contract of sale between the State and Mr and Mrs D. was null and void. 16. On 2 February 1999 the Arad County Court allowed an appeal by Mr and Mrs D. and dismissed the applicants' action, finding that the nationalisation had been lawful and that, consequently, the sale by the State of flat no. 3 was also lawful. 17. The applicants appealed to the Timişoara Court of Appeal, which gave its judgment on 30 June 1999. It partly allowed the applicants' appeal in so far as it found the nationalisation to have been unlawful and acknowledged that they had remained the rightful owners of the property. However, it dismissed the appeal as regards the rescission of the sale of flat no. 3, considering that the State had been presumed to be the owner of the property at the time of the sale, in spite of the dispute over the property that was pending in the courts. It moreover relied on the fact that Law no. 112/1995, which had formed the statutory basis for the sale of the property, did not provide for any penalty in respect of property sold when the title to it was in dispute before the courts. The Court of Appeal did not address the applicants' argument relating to the principle of unjust enrichment (see paragraph 27 below). 18. On 20 August 2001 the applicants again requested the Arad Court of First Instance to order the rescission of the sale of flat no. 3, contending that the purchasers had broken the law. Their action was dismissed on 13 December 2001 on the ground that the matter had become res judicata. 19. The relevant provisions of Decree no. 92/1950 on the nationalisation of certain immovable property are as follows: “... in order to ensure the proper management of dwellings which wealthy capitalists and exploiters who possess a large number of properties have allowed to fall into dilapidation as a means of sabotage; [and] In order to deprive exploiters of an important means of exploitation; The immovable property appearing in the schedules ... annexed to and forming part of this Decree shall be nationalised. The listed property comprises: (1) immovable property belonging to former industrialists, owners of large estates, bankers, owners of large trading enterprises and other representatives of the wealthy capitalist class; (2) immovable property belonging to real-estate exploiters ...” “The immovable property of workers, civil servants, small artisans, persons working in intellectual professions and retired persons shall be excluded from the scope of this Decree and shall not be nationalised.” “Individuals who formerly owned residential property which passed lawfully into the ownership of the State or of another artificial person after 6 March 1945 and which was still in the possession of the State or another artificial person on 22 December 1989 shall be entitled to benefit, by way of reparation, from the measures in this Law. The provisions of this Law shall apply equally to the successors in title of such former owners, subject to existing statutory provisions.” “The persons referred to in section 1 shall be entitled to restitution in the form of the restoration to them of their ownership of flats in which they currently live as tenants or which are vacant. In respect of other flats, those persons shall receive compensation as provided in section 12 ...” “The tenants of flats which are not returned to the former owners or their successors in title [in accordance with the procedure laid down in this Law] may opt, after the expiry of the period provided for in section 14, to purchase such flats by payment in full or in instalments. ...” “Persons entitled to claim restitution or compensation shall lodge an application for such purpose within a period of six months after this Law comes into force.” 21. On 23 January 1996 the Government adopted decision no. 20/1996 implementing Law no. 112/1995. The decision provided that immovable property that had passed into State ownership under a legislative provision was to be regarded as immovable property legally vested in the State. It also specified that Law no. 112/1995 did not apply to immovable property held by the State where its right of property was not based on any legislative provision. 22. On 18 February 1997 the Government adopted decision no. 11/1997, supplementing decision no. 20/1996. Paragraph 1 (3) of decision no. 11/1997 provided that, in order for property to be defined as having been acquired by the State under Decree no. 92/1950, it had to have been acquired in accordance with the decree and the person referred to as the owner in the lists enumerating nationalised property had to have been the true owner at the time of the nationalisation. 23. The relevant provisions of Law no. 10/2001 of 14 February 2001 on the rules governing immovable property wrongfully seized by the State between 6 March 1945 and 22 December 1989 read as follows: “(1) Immovable property wrongfully seized by the State ... between 6 March 1945 and 22 December 1989 and property expropriated under the Requisitions Act (Law no. 139/1940) that has not been returned shall be subject to restitution, normally consisting of the return of the property in question ... (2) Where the property cannot be returned, alternative measures of redress shall be taken. Such measures may consist of compensation in the form of other items or services ..., the allotment of shares in commercial companies listed on the stock market, securities at face value used exclusively in the privatisation process or pecuniary compensation.” “(1) Within a period of six months after the entry into force of the present Law, the claimant shall serve notice on the artificial person in possession of the property and seek the return of that property ...” Section 40 “A special law shall be enacted within one year of the expiry of the six-month period fixed for the service of notice. That law, on the basis of the estimates, shall provide for the payment of compensation, stipulating the conditions, amounts and procedures and possibly fixing a ceiling.” “(1) The sale or donation of immovable property unlawfully seized by the State shall be declared null and void, save where such transactions were entered into in good faith. ...” 24. The relevant provisions of Legislative Decree no. 115/1938 on land registers read as follows: “Rights in rem vested in immovable property may be acquired if it is so agreed between vendor and purchaser and if the corresponding creation or conveyance of such a right is entered in the land register.” “Rights in rem shall be acquired without being entered in the land register by means of succession, accession, sale in execution or expropriation; however, the holder of the right shall have the capacity to alienate his or her property, by virtue of the land register, only after the right has been entered therein.” “Save in respect of statutory restrictions or exceptions, the entries in the land register shall be regarded as correct for the benefit of the person who has acquired a right in rem through a legal transaction for valuable consideration if, at the time the right was acquired, the land register did not mention any action whereby the information therein might be challenged or if the person concerned has not, in any other manner, become aware of an inaccuracy.” 25. Article 966 of the Civil Code reads: “An obligation without legal basis or based on an erroneous or unlawful ground cannot produce any useful effect.” 26. Under Romanian law, an action for recovery of possession is one of the principal remedies for the protection of a right of property. Such action is not governed per se by statute but has emerged from case-law. An action for recovery of possession can be defined as the bringing of proceedings to enforce a right in rem in which a dispossessed owner claims back his or her property from the person currently in possession of it. The main outcome of such an action, if successful, is the acknowledgment by the court of the claimant's title to the property, with retrospective effect, thus obliging the defendant to return the property. If physical restitution is no longer possible, that obligation is replaced by an obligation to pay compensation on the basis of an equivalent sum (see, for example, Liviu Pop, Dreptul de proprietate şi dezmembrămintele sale (Ownership and its Attributes), Lumina Lex, Bucharest 1997, pp. 278-90, and Ion Dogaru and T. Sâmbrian, Elementele dreptului civil, vol. 2, Drepturile reale (Elements of Civil Law, vol. 2, Rights in rem), Oltenia, Craiova 1994, p. 160). 27. In legal systems derived from Roman law there is an equitable rule that when a person has been unjustly enriched at the expense of another, the latter may claim compensation in the amount by which that person has been enriched (see François Terré, Philippe Simmler and Yves Lequette, Droit civil : les obligations (Civil Law: Obligations), Dalloz, 5th edition, 1993, pp. 742-44, and Ion Filipescu, Drept civil : Teoria generală a obligaţiilor (Civil Law: General theory of obligations), Editura Actami, Bucharest 1994, p. 98). Whilst an action for tortious liability enables the injured party to claim exact reparation for the loss sustained as a result of negligence on the part of an enriched person, in an action for unjust enrichment the claimant can only seek an amount corresponding to the other party's gain, provided that some pecuniary benefit has been obtained, without just cause, at the expense of the claimant (see Terré, Simmler and Lequette, op. cit., p. 744, and Filipescu, op. cit., p. 98).