CASE OF VRZIĆ v. CROATIA
No violation of Article 8 - Right to respect for private and family life (Article 8-1 - Respect for home);No violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions;Article 1 para. 2 of Protocol No. 1 - Control of the use of property)
Jon Fridrik Kjølbro;Julia Laffranque;Nebojša Vučinić;Stéphanie Mourou-Vikström;Ksenija Turković
5. The applicants were born in 1955 and live in Poreč. 6. The facts of the case, as submitted by the parties, may be summarised as follows. 7. On 5 February 2009 the applicants and their company, M.N., entered into an agreement with M.G. and his company, E. By virtue of that agreement the applicants acknowledged their debt of 580,000 Croatian kunas (HRK) to M.G. and their company’s debt of HRK 180,000 to company E. In order to secure the overall loan, the applicants used their house as collateral, allowing M.G. to register a charge on it. It was stipulated that unless the applicants and their company paid their outstanding debts by 1 May 2009, the creditors were entitled to institute enforcement proceedings for payment of the debt through the sale of the applicants’ house. 8. On 20 October 2009 M.G. and his company E. instituted enforcement proceedings against the applicants before the Poreč Municipal Court (Općinski sud u Poreču), seeking the judicial sale of the house. They argued that the applicants had failed to pay their debt to M.G., while the company M.N. had managed to pay only part of its debt to the company E. The applicants’ outstanding debt amounted to HRK 703,643.05. 9. On 17 November 2009 the Poreč Municipal Court granted that request and issued an enforcement order against the applicants. The applicants did not appeal and the enforcement order became final on 17 December 2009. 10. On 11 December 2009 the Poreč Municipal Court registered the enforcement order on the applicants’ house in the land register. 11. A hearing to assess the value of the property was held before the Poreč Municipal Court on 4 May 2010. Both applicants were properly summoned, but only the first applicant appeared. He undertook to submit an expert valuation of the house within two days. The creditor asked the Municipal Court to commission an expert for that purpose. The first applicant did not comply with his undertaking. 12. On 16 June 2010 the valuation of the house was carried out on site by a civil engineer and a surveyor, in the presence of the first applicant. 13. The civil engineer submitted his report on 20 August 2010, stating that the value of the house was HRK 2,463,092.48 (approximately 323,860 euros). The applicants made no objections to the valuation. 14. On 7 October 2010 another set of enforcement proceedings against the applicants was joined to the proceedings at issue. In the former proceedings an enforcement order had been issued against the applicants at the request of the Poreč Municipality on 12 May 2010, in respect of a claim of HRK 24,352.94 (approximately 3,200 euros). Since the applicants had not lodged an appeal, the enforcement order had become final on 12 June 2010. 15. On 25 October 2010 the Municipal Court set the value of the applicants’ house at HRK 2,463,092.48. 16. On 25 January 2011 a first public auction was held. However, there were no interested buyers. The applicants, though properly summoned, did not appear. 17. A further set of enforcement proceedings against the applicants was joined to the proceedings at issue on 13 May 2011. In those proceedings, an enforcement order had been issued against the applicants at the request of Bank P. on 24 January 2011, in respect of an unpaid loan of 14 February 2006 in the amount of 159,688.87 Swiss Francs. Since the applicants had not lodged an appeal, the enforcement order had become final on 31 March 2011. 18. A second public auction for the sale of the applicants’ house was postponed several times at the request of the creditors. 19. The second public auction was eventually held on 30 March 2012 and the applicants’ house was sold to M.G. for HRK 821,040 (approximately 109,000 euros). The applicants, though properly summoned, did not appear. 20. On 2 April 2012 the Poreč Municipal Court granted M.G. title to the applicants’ house, on condition that he paid HRK 821,040 as the purchase price. 21. On 23 April 2012 the applicants lodged an appeal against that decision, arguing that the judicial sale had been disproportionate since the true value of their house had been about 700,000 euros (EUR). They also argued that the Municipal Court had failed to comply with the provisions of the Enforcement Act, which stated that courts should respect the dignity of debtors subject to enforcement and should make the enforcement process as humane as possible. 22. On 8 May 2012 the applicants submitted a statement that the value of their house was EUR 640,000. 23. On 28 December 2012 the Pula County Court (Županijski sud u Puli) dismissed the applicants’ appeal. It found that the applicants’ house had been sold at a second public auction for more than one-third of its value, that the first public auction had been unsuccessful, and that M.G. had been the only bidder. Furthermore, the value of the house had been set by the Poreč Municipal Court on 25 October 2010 and the applicants had not objected to it. In the County Court’s view, the sale of the applicants’ house was in accordance with the Enforcement Act. 24. On 31 January 2013 the Poreč Municipal Court entered M.G.’s title to the applicants’ house in the land register. 25. On 20 February 2013 the applicants lodged an appeal on points of law against the decision of the Pula County Court, relying on section 382(2) of the Civil Procedure Act. They argued that the actual value of their house was around EUR 700,000, and that their house should have been exempted from enforcement as it was “meeting their basic human needs”. 26. On the same day, the applicants applied to the Poreč Municipal Court for a stay of enforcement. 27. On 22 February 2013 the Poreč Municipal Court declared the applicants’ appeal on points of law inadmissible on the grounds that such an appeal was allowed in enforcement proceedings only if based on section 382(2) of the Civil Procedure Act, which was not the case. The applicants lodged an appeal. 28. On the same day the Poreč Municipal Court declared the applicants’ request for a stay of enforcement inadmissible, finding that they had failed to meet the statutory conditions for such a request. The applicants lodged an appeal. 29. On 8 March 2013 the Croatian Electricity Company (Hrvatska Elektroprivreda, hereinafter “HEP”) cut off the applicants’ electricity at M.G.’s request. The applicants immediately applied to the Poreč Municipal Court for an interim measure prohibiting M.G. from having the electricity and water cut off and from making alterations to the house, ordering HEP to reconnect the electricity, and authorising them to keep the house until the enforcement proceedings were complete. On the same day the Poreč Municipal Court issued the interim measure, prohibited M.G. from having the electricity and water cut off and ordered HEP to reconnect the electricity. That decision was quashed by the Pula County Court on 21 May 2013 and the applicants’ request for an interim measure was denied. 30. On 19 June 2013 the Municipal Court decided to transfer ownership of the house at issue to M.G. The applicants lodged an appeal, which was declared inadmissible by the Municipal Court on 10 July 2013. 31. On 26 July 2013 the Poreč Municipal Court held a hearing on the division of the proceeds (dioba kupovnine) from the sale of the house. The applicants, though properly summoned, did not appear. 32. On 17 September 2013 the Poreč Municipal Court ordered the eviction of the applicants. The applicants lodged an appeal, arguing that enforcement should not have been carried out by the sale of their house, which served to “satisfy their basic needs”: they lived there with their family and it also served as their business premises. 33. On 21 October 2013 the Municipal Court scheduled the eviction of the applicants for 13 December 2013, ordering the court bailiff to carry out the eviction. However, the eviction was postponed for three months. 34. On 19 November 2013 the applicants applied for an interim measure prohibiting the sale of their house and their eviction. 35. On 20 December 2013 the Poreč Municipal Court decided to conclude the enforcement proceedings for the payment of monetary debts. 36. On 20 January 2014 the Pula County Court dismissed the applicants’ appeal against the decision of 17 September 2013 (see paragraph 32 above), finding that the Municipal Court had acted in accordance with the law, namely the provisions of the Enforcement Act. The enforcement proceedings were about to be concluded since the sale of the applicants’ house had been completed. 37. On 23 January 2014 the Pula County Court accepted the applicants’ appeal against the decision of 22 February 2013 (see paragraph 27 above) and remitted the applicants’ appeal on points of law to the Municipal Court. 38. On the same day the Pula County Court, in a different decision, dismissed the applicants’ appeal against the decision of 22 February 2013 by which their request for a stay of the enforcement proceedings had been dismissed (see paragraph 28 above). 39. On 12 March 2014 the applicants withdrew their appeal on points of law referred to in paragraphs 25 and 37 above. 40. On 13 March and 28 April 2014 M.G. sought the applicants’ eviction. 41. The applicants have not yet been evicted.