European Court of Human Rights

 

 

FIRST SECTION

CASE OF PORÁZIK v. HUNGARY

(Application no. 59026/14)

 

 

 

 

 

 

JUDGMENT

STRASBOURG

15 April 2021

 

This judgment is final but it may be subject to editorial revision.

In the case of Porázik v. Hungary,

The European Court of Human Rights (First Section), sitting as a Committee composed of:

          Alena Poláčková, President,
          Péter Paczolay,
          Raffaele Sabato, judges,
and Liv Tigerstedt, Deputy Section Registrar,

Having regard to:

the application (no. 59026/14) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Hungarian national, Ms Lászlóné Porázik (“the applicant”), on 22 August 2014;

the decision to give notice to the Hungarian Government (“the Government”) of the application;

the parties’ observations;

Having deliberated in private on 16 March 2021,

Delivers the following judgment, which was adopted on that date:

INTRODUCTION

1.  The case concerns the authorities’ failure over a long period of time to register the applicant’s ownership title in the land register, and their failure over almost four years to expropriate her land, during which time the applicant was unable to make use of her property or to obtain compensation.

THE FACTS

2.  The applicant was born in 1948 and lives in Dunakeszi. She was represented by Mr D.A. Karsai, a lawyer practising in Budapest.

3.  The Government were represented by their Agent, Mr Z. Tallódi, of the Ministry of Justice.

4.  The facts of the case, as submitted by the parties, may be summarised as follows.

5.  In 1995 the applicant purchased part of a share in an undivided common property, a piece of land registered under plot no. 14770/1 and located in the interior area of Budapest District III. The share in question amounted to 339/1000 of the whole. Of this share, the applicant bought a part of one-eighth (hereinafter “the asset”).

At the time of the applicant’s acquisition of the asset, the local zoning plan designated the whole property as an interior area (belterület).

6.  Also in 1995, the applicant submitted a request for the registration of her ownership title to the asset to the first-instance administrative authority.

7.  On 11 April 2005 the request was refused by the authority. The applicant appealed. On 12 January 2006 the second-instance authority quashed the first decision and ordered new proceedings. Subsequently, on an unspecified date in 2007, the ownership title to the applicant’s asset was registered in the land register and was expressed as a 84/2000 part of the whole.

8.  On an unspecified date in 2009 the Budapest III District Municipality (hereinafter “the Municipality”) reclassified - by virtue of Decree no. 31/2009 (VI.25) (hereinafter “the Municipal Decree”) - the designation of a 339/1000 part of the whole property from interior area to public area (közterület), with the aim of preparing for the expropriation of the property for the development of transport infrastructure.

9.  Under section 6(3) b) of Government Decree no. 253/1997 (XII. 20) on national town-planning and construction requirements, public areas, such as transport infrastructure areas, are not intended for construction purposes.

10.  On 22 January 2010 the Municipality filed a request for the expropriation of a 336 sq. m part of the whole property. On 23 February 2011 the Budapest Government Office (hereinafter “the expropriation authority”) expropriated that part of the property on the ground that it was needed for the extension of a bus terminal.

11.  An application for judicial review of that decision was lodged by the applicant and other owners of the property. The Budapest Administrative and Labour Court, in a decision of 3 April 2013, quashed the expropriation decision and ordered new proceedings. It stated that the necessary public-interest purposes had not been justified, because the Municipality had failed to substantiate the need for the extension of the bus terminal.

12.  Various subsequent sets of proceedings were ultimately terminated by the expropriation authority on 4 June 2014, on the ground that the Municipality requesting the expropriation had failed to comply with the expropriation authority’s call to submit additional documents, and this failure had hampered the ability to ascertain the facts. The Municipality has not reapplied for the expropriation of the property since then.

13.  The designation of the property as a public area, which included the designation of the applicant’s asset, was not revoked following the termination of the expropriation proceedings and was kept in place until an unspecified date.

14.  On 25 March 2015 a third party produced a letter of intent to purchase (vételi szándéknyilatkozat), proposing the price of 250,000,000 Hungarian forints (HUF) (approximately 1,116,000 euros (EUR)) for the 339/1000 share of the property. It was stipulated that the transaction made on the basis of the letter of intent would be concluded only when the zone for the property had been changed to that of interior area.

15.  The 339/1000 share was sold on 31 December 2015 to a third party for HUF 120,000,000 (approximately EUR 566,000). The applicant submitted that she was entitled to 45.8% of that amount, taking into account the costs she had incurred for the proceedings that had taken place.

RELEVANT LEGAL FRAMEWORK

16.  Act no. CXXII of 2007 on Expropriation entered into force on 1 January 2008 and provided, as in force at the material time, as follows:

Section 2

“Real property may be expropriated for the following public-interest purposes provided that the conditions under section 3 are met:

...

(e) development of transport infrastructure ...”

Section 5

“(1) Under section 2, points (n)-(o), the owner of the real property shall also have the right to initiate the purchase or expropriation of his property, where

(a) the owner acquired ownership of the property prior to the imposition of the proprietary restriction specified in point (b) or (c), and

(b) under the local building regulations or regulation plans the property has been selected for a public-interest purpose specified in the law and to be realised in the future, where the realisation of that purpose cannot be expected from the owner, and the selection of his property for that purpose substantially obstructs or terminates his proprietary and building rights; or

(c) a public-purpose right of use, cable right or easement related to the expropriation objectives specified in section 2, point (o),, once created, substantially obstructs or terminates the proper use of the property.

(2) In the case specified in subsection (1), point (b), the owner of the property may request that the beneficiary of the public-interest purpose or, in the absence of such a beneficiary, the municipality, be obliged to submit an expropriation request, where no agreement on the sale and purchase of the property has been reached within three years of the initiation of such an agreement.”

Section 6

“...

(2) A part of the property may also be expropriated (partial expropriation).”

Section 22

“...

(2) The expropriation procedure shall be carried out by the territorially competent State administration body of the Government. The competent authority shall be the general territorial State administrative body of the Government according to the location of the property to be expropriated.”

17.  Section 6(3) of Government Decree no. 253/1997 (XII.20) on national town planning and construction requirements provides that certain sectors of an administrative area (igazgatási terület) are not intended for general construction purposes but can be used for, among other purposes, the placement of transport and utilities facilities.

THE LAW

I.       ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

18.  The applicant complained that her right to the peaceful enjoyment of her possessions had been violated because of (i) the delay in the registration of her ownership title in the land register, (ii) the domestic authorities’ continued failure to give a decision on the expropriation of her asset, and (iii) her consequent inability to make use of her asset during that period. She relied on Article 1 of Protocol No. 1, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

A.     Admissibility

19.  The Court observes that part of the applicant’s complaints concerns the delay in the registration of her ownership title in the land register. However, the Court considers that in relation to this issue, the starting-point for the six-month time-limit contemplated by Article 35 § 1 of the Convention is the eventual registration of the ownership title. This took place on an unspecified date in 2007. It follows that this part of the application has been lodged out of time and must be dismissed pursuant to Article 35 §§ 1 and 4 of the Convention.

20.  The Court further notes that the remainder of the application is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B.     Merits

1.    The parties’ submissions

21.  The applicant submitted that there had been an interference with her right to the peaceful enjoyment of her possessions. From 2010 onwards, owing to the land in question being redesignated as a public area, it had been subject to a number of restrictions on construction work. In addition to those constraints, because of the uncertainties as to the legal basis of the expropriation, the domestic authorities had failed for an excessive length of time to expropriate the property, despite their legal obligation to do so. From the applicant’s point of view, those measures had amounted to a burdensome control of the use of her asset.

22.  The applicant further complained that the contested measures, namely the establishment of the public area by the Municipal Decree and the ensuing expropriation, had had no legal basis, and had imposed an excessive burden on her as an individual. During this period, she had been unable to use or sell her asset.

23.  The Government contested the applicant’s claims in general terms and argued that the expropriation procedure had been in line with the applicable law.

2.    The Court’s assessment

24.  As the Court has stated on a number of occasions, Article 1 of Protocol No. 1 comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, inter alia, to have a measure of control over the use of property in accordance with the general interest. The three rules are not, however, distinct in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to the peaceful enjoyment of property, and should therefore be construed in the light of the general principle enunciated in the first rule (see, among many other authorities, Beyeler v. Italy [GC], no. 33202/96, § 98, ECHR 2000 I).

25.  In the present case, the Court observes that the situation complained of originated in the fact that the part of the land comprising the applicant’s asset had been designated as a public area by the Municipality in order to prepare for the property to be expropriated, and that the expropriation - which had been requested by the Municipality itself - was not carried out for a period of approximately four years owing to the failure of the Municipality to substantiate the request (see paragraphs 10-12 above).

26.  In particular, the Court notes that, by virtue of the Municipal Decree, the part of the property in question was redesignated from interior area to public area. The designation as a public area meant that the applicant’s effective exercise of her property right was significantly reduced by the restrictions on the use of the property, in that the designation as a public area resulted in a ban on any construction work (see paragraph 9 above). Although the applicant retained her ownership right during the period of the expropriation proceedings (see paragraph 12 above), those measures amounted to control of the use of property, for the purposes of the second paragraph of Article 1 of Protocol No. 1 (see Barcza and Others v. Hungary, no. 50811/10, §§ 42-44,11 October 2016).

27.  The applicant’s complaint also relates to the authorities’ failure to expropriate her asset for approximately four years, despite the Municipality’s request for expropriation. The Court observes that that request for expropriation was not intended to limit or control the use of property, but was the initial step in a procedure leading to her being deprived of her possession, for the public purpose of the development of transportation infrastructure, namely the establishment of a bus terminal extension (see paragraph 10 above).

28.  Although the contested measures did not all have the same legal effect and had different aims, the Court considers that they must be looked at together in the light of the first sentence of the first paragraph of Article 1 of Protocol No. 1 (see, mutatis mutandis, Matos e Silva, Lda., and Others v. Portugal, 16 September 1996, § 85, Reports of Judgments and Decisions 1996 IV, and Barcza and Others, cited above, § 44). It needs to be ascertained whether, taken as a whole, they struck a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see, among many other authorities, Jahn and Others v. Germany [GC], nos. 46720/99 and 2 others, § 93, ECHR 2005 VI).

29.  In determining whether this requirement has been met, the Court recognises that regional planning and environmental conservation policies, where the community’s general interest is pre-eminent, confer on the State a margin of appreciation that is greater than when exclusively civil rights are at stake (see Depalle v. France [GC], no 34044/02, § 84, ECHR 2010).

30.  In the present case, notwithstanding the fact that the expropriation proceedings were terminated on account of the failure of the Municipality to substantiate the expropriation request, the final decision on the expropriation was not given until 4 June 2014 (see paragraph 12 above).

31.  Owing to the failure of the Municipality to substantiate the expropriation request in the period from 2010 to 2014 (see paragraphs 10-12 above), it remained unclear to the applicant if and when the formal expropriation would take place. During this time, she could neither realistically expect to sell her asset at a fair price nor obtain compensation for the expropriation. Thus, in addition to the detrimental effects of the redesignation of the land on the exercise of her property rights, which was kept in place even after the termination of the expropriation proceedings (see paragraph 13 above), the applicant was left in a state of uncertainty over a long period of time as to the fate of her property (see, mutatis mutandis, Frendo Randon and Others v. Malta, no. 2226/10, § 55, 22 November 2011, and Barcza and Others, cited above, § 47).

32.  Furthermore, from 2009 the applicant could not carry out any construction work on the property. The Court finds that the existence of prohibitions on the exercise of the applicant’s right of property throughout this period accentuated even further the prejudicial effects of the lengthy period of the expropriation.

33.  Taken together, the series of measures in the present case created a situation which upset the fair balance to be struck between the protection of the right of property and the requirements of the general interest, and the applicant bore an individual and excessive burden.

There has therefore been a violation of Article 1 of Protocol No. 1.

II.    APPLICATION OF ARTICLE 41 OF THE CONVENTION

34.  Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

A.     Damage

35.  The applicant claimed EUR 2,250,365 in respect of pecuniary damage. This amount corresponded to the loss of enjoyment of property she had suffered as a result of the fact that she had been unable to use her asset, taking into account the transaction offered in the letter of intent (see paragraph 14 above) which had not materialised. The applicant also claimed compensation for non-pecuniary damage in the amount of EUR 50,000 for stress and anxiety suffered over a long period of time.

36.  The Government contested these claims as excessive.

37.  Among the matters which the Court takes into account when assessing compensation are pecuniary damage, which is the loss actually suffered as a direct result of an alleged violation, and non-pecuniary damage, which is the anxiety, inconvenience, uncertainty and other non-pecuniary loss caused by the violation (see Žilinskienė v. Lithuania, no. 57675/09, § 60, 1 December 2015). In addition, if one or more heads of damage cannot be calculated precisely, or if the distinction between pecuniary and non-pecuniary damage proves difficult, the Court may decide to make an overall assessment (see Comingersoll S.A. v. Portugal [GC], no. 35382/97, § 29, ECHR 2000-IV).

38.  In the present case, the Court considers that the applicant must have incurred a certain degree of pecuniary loss, as well as suffering uncertainty and frustration as a result of the violation found in the present case.

39.  Making its assessment on an equitable basis, the Court awards the applicant a lump sum of EUR 13,000 in respect of pecuniary and non-pecuniary damage combined.

B.     Costs and expenses

40.  The applicant claimed EUR 3,400 plus 27% value-added tax (VAT) for legal fees incurred before the Court. This amount corresponded to seventeen hours of legal work charged at an hourly rate of EUR 200 plus VAT.

41.  The Government contested this claim.

42.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award EUR 2,000 under this head.

C.     Default interest

43.  The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1.      Declares the complaint concerning the delay in the registration of the applicant’s ownership title in the land register inadmissible and the remainder of the application admissible;

2.      Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;

3.      Holds

(a)   that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i) EUR 13,000 (thirteen thousand euros), plus any tax that may be chargeable, in respect of pecuniary and non-pecuniary damage combined;

(ii) EUR 2,000 (two thousand euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

4.      Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 15 April 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

   Liv Tigerstedt                                                                    Alena Poláčková
Deputy Registrar                                                                       President