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European Court of Human Rights
You are here: BAILII >> Databases >> European Court of Human Rights >> PINE VALLEY DEVELOPMENTS LTD AND OTHERS v. IRELAND (ARTICLE 50) - 12742/87 [1993] ECHR 2 (9 February 1993)
URL: http://www.bailii.org/eu/cases/ECHR/1993/2.html
Cite as: (1993) 16 EHRR 379, [1993] ECHR 2, 16 EHRR 379
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In the case of Pine Valley Developments Ltd and Others v.
Ireland*,
The European Court of Human Rights, sitting, in accordance
with Article 43 (art. 43) of the Convention for the Protection
of Human Rights and Fundamental Freedoms ("the Convention")** and
the relevant provisions of the Rules of Court, as a Chamber
composed of the following judges:
Mrs D. Bindschedler-Robert, President,
Mr L.-E. Pettiti,
Mr C. Russo,
Mr J. De Meyer,
Mr S.K. Martens,
Mrs E. Palm,
Mr I. Foighel,
Mr R. Pekkanen,
Mr J. Blayney, ad hoc judge,
and also of Mr M.-A. Eissen, Registrar,
Having deliberated in private on 23 September 1992 and
1 February 1993,
Delivers the following judgment, which was adopted on the
last-mentioned date:
_______________
Notes by the Registrar
* The case is numbered 43/1990/234/300. The first number is the
case's position on the list of cases referred to the Court in the
relevant year (second number). The last two numbers indicate the
case's position on the list of cases referred to the Court since
its creation and on the list of the corresponding originating
applications to the Commission.
** As amended by Article 11 of Protocol No. 8 (P8-11), which came
into force on 1 January 1990.
_______________
PROCEDURE AND FACTS
1. The case was referred to the Court by the European
Commission of Human Rights ("the Commission") and by the
Government of Ireland ("the Government") on 11 July and
11 September 1990, respectively. It originated in an application
(no. 12742/87) against Ireland lodged with the Commission in 1987
by two companies registered in that State, Pine Valley
Developments Ltd ("Pine Valley") and Healy Holdings Ltd ("Healy
Holdings"), and an Irish national, Mr Daniel Healy.
2. By judgment of 29 November 1991 ("the principal judgment"),
the Court held, inter alia, that Healy Holdings and Mr Healy
(hereinafter together referred to as "the applicants") had been
victims of discrimination contrary to Article 14 of the
Convention, taken in conjunction with Article 1 of
Protocol No. 1 (art. 14+P1-1), in that section 6 of the Local
Government (Planning and Development) Act 1982 ("the 1982 Act")
had retrospectively validated all planning permissions in the
relevant category other than theirs (Series A no. 222,
paragraphs 61-64 of the reasons and point 6 of the operative
provisions, pp. 26-27 and 29).
The only outstanding matter to be settled is the question
of the application of Article 50 (art. 50). As regards the
facts, reference should be made to paragraphs 8-34 of the
principal judgment (ibid., pp. 8-17).
3. At the Court's hearing on 21 May 1991, counsel for the
Government and the Delegate of the Commission both reserved their
position on the claims for just satisfaction advanced by the
applicants.
In the principal judgment, the Court therefore reserved the
whole of this question and invited the Government and the
applicants to submit, within the next three months, their written
comments thereon and, in particular, to notify the Court of any
agreement reached between them (paragraphs 67-68 of the reasons
and point 8 of the operative provisions, pp. 28-29).
4. Following the failure of settlement negotiations and in
accordance with the foregoing invitation and the President's
directions, submissions and observations relating to the claims
under Article 50 (art. 50) were filed by the applicants on
28 February, 19 March, 20 and 22 April and 30 June 1992, by the
Government on 27 March, 10 April and 15 June 1992 and by the
Delegate of the Commission on 10 April 1992. The materials
furnished to the Court included valuations by chartered surveyors
of the land owned by Healy Holdings, to which outline planning
permission had initially been attached ("the Clondalkin site").
5. On 23 September 1992 the Court decided that there was no
need to hold a hearing.
6. At the deliberations on 1 February 1993 Mr R. Ryssdal and
Mr J. Pinheiro Farinha, who had sat to consider the merits of the
case but were unable to be present on that date, were replaced
by Mrs D. Bindschedler-Robert, who sat as President of the
Chamber, and Mr S.K. Martens, substitute judge, respectively;
Mrs Bindschedler-Robert in her turn was replaced by Mr R.
Pekkanen, also a substitute judge (Rules 21 para. 5, 22 para. 1,
24 para. 1 and 54 para. 2).
AS TO THE LAW
7. Under Article 50 (art. 50) of the Convention,
"If the Court finds that a decision or a measure taken by
a legal authority or any other authority of a High
Contracting Party is completely or partially in conflict
with the obligations arising from the ... Convention, and
if the internal law of the said Party allows only partial
reparation to be made for the consequences of this decision
or measure, the decision of the Court shall, if necessary,
afford just satisfaction to the injured party."
The applicants claimed under this provision compensation for
pecuniary damage and reimbursement of costs and expenses,
together with interest. Mr Healy also sought compensation for
non-pecuniary damage.
A. Pecuniary damage
8. The applicants claimed compensation for the pecuniary damage
they had sustained by reason of the fact that the 1982 Act had
not retrospectively validated the outline planning permission
which had been granted in 1977 in respect of the Clondalkin site
and had been declared by the Supreme Court in 1982 to be a
nullity.
9. It was common ground between the applicants, the Government
and the Delegate of the Commission that this was a proper case
for an award of compensation for pecuniary damage. The
applicants stated that they were not seeking to recoup the
profits which they would have earned had they been able to
develop the site; their claim was formulated on the basis that
the loss to be made good to them was the difference between the
values, on the relevant date, of the site with and without the
outline planning permission. It was also common ground between
the applicants and the Government that the relevant date in this
connection was 28 July 1982, being the date on which the 1982 Act
had entered into force. Whilst the Delegate of the Commission
expressed reservations about the use of that date, the Court
considers that it is not an inappropriate one for the present
purposes.
10. The principal point of contention on this part of the case
was the value which the Clondalkin site would have had in July
1982 if the outline planning permission granted in 1977 had still
been in force. Relying on valuation reports by chartered
surveyors, the applicants and the Government advanced in this
connection figures of IR£2,200,000 and IR£550,000, respectively.
11. Faced with a difference of this magnitude, the Court has
sought in the first place to extract from the material before it
elements in respect of which there is no, or a lesser degree of,
dispute. In doing so, it has noted the following.
(a) Pine Valley purchased the 22-acre - or, according to
the Government, 21.5-acre - Clondalkin site in November 1978, in
an arms-length transaction, for IR£550,000, that is to say at a
price of approximately IR£25,000 per acre.
(b) A site of 4.5 acres, considered by the Government to
be comparable to that of the applicants, was sold at public
auction in June 1981 for IR£200,000, that is IR£44,444 per acre.
Whilst a calculation cannot be made on a simple per acre basis,
this example demonstrates that the period from 1978 to 1981
witnessed an increase in the value of properties for development.
Since it was not disputed that the applicants' land was a prime
development site, there is no reason to suppose that by July 1982
its market value, with outline planning permission, would not
have increased beyond the IR£550,000 obtaining in 1978. Indeed,
the Government themselves estimated that if it had been capable
of immediate development and if no abnormal costs had been
involved (as to which points, see the next two sub-paragraphs),
it would have been worth IR£1,600,000 in July 1982, that is
approximately IR£73,000 per acre.
(c) The Government laid great stress on what they described
as the "inherent defects" of the Clondalkin site, namely that it
had an awkward shape, that access to it was by a narrow road over
which the applicants had only a right of way and that it was not
equipped with public water and sewage services. The applicants
did not maintain that these points were factually incorrect, nor
did they contest the quantum of the deductions which the
Government suggested had to be made in order to arrive at an
open-market value which took these drawbacks into account
(IR£535,000); they pointed out rather, as regards the second and
third of the defects, that the outline planning permission
attaching to the land was not subject to any conditions as to the
improvement of the access or the installation of public services.
The Court, however, considers that these are matters which are
relevant to an assessment of the open-market value of the site:
a prospective purchaser would doubtless have taken into account
any abnormal costs which he would have to incur in order to
provide the development with appropriate facilities, such as
access and services, even if the outline permission imposed no
conditions to that effect.
(d) Although this was questioned by the applicants, the
Government also relied on the fact that there would have been
considerable delay in obtaining the requisite full planning
approval and bye-law approval for the development of the site.
The Court does not consider that those approvals could have been
secured as rapidly as the applicants appear to suggest, since a
purchaser would have had to decide on the precise type of
development he wanted, have detailed plans prepared giving effect
to such decision and finally have those plans approved by the
planning authority. Furthermore, neither the Government nor the
applicants referred in this context to the fact that the
applicants' outline planning permission, had it been
retrospectively validated by the 1982 Act, would have expired on
10 March 1984 and could not have been extended unless substantial
works had already been carried out before that date (see the
principal judgment, p. 10, para. 16). The resultant need for
speedy action on the part of a developer was likely, in the
Court's opinion, to have limited the circle of potential
purchasers and, in consequence, the market value of the land.
(e) The applicants initially asserted that the July 1982
value of their site without the outline planning permission was
IR£50,000, being the sum for which it was sold on the open market
in 1988. However, they subsequently accepted the Government's
proposition that its value in July 1982 for agricultural or
amenity purposes was IR£65,000.
(f) The applicants themselves admitted that, in assessing
compensation on the basis suggested by them, a deduction of
IR£13,500 should be made to cover the potential rental income
from the property in the period from 1982 to 1988.
12. The Court finds itself unable to accept the arguments
advanced by the Government on the following points.
(a) It does not consider that, in quantifying the damage
sustained by the applicants, allowance should be made for the
capital gains tax to which they would have been liable on a sale
of the site or for the stamp duty which such a transaction would
have attracted. This is because what has to be assessed, having
regard to the manner in which the applicants' claim was
formulated, is the value of the land in their hands, rather than
the net proceeds which they would have received had they disposed
of it.
(b) The Court is not satisfied that the Government have
established grounds for the making of the deduction referred to
in their final submission as "Defer for 4 years at 15% per annum:
IR£590,000".
(c) The Court agrees with the Delegate of the Commission
that no reduction should be made to reflect the fact that, in the
principal judgment, it held that there had been no breach of
Article 1 of Protocol No. 1 (P1-1) to the Convention: that is a
matter that had no influence on the quantum of the damage flowing
from the discrimination of which the Court found that the
applicants had been victims.
13. The applicants submitted that the Court's award should
include interest from the date of the violation of the
Convention, namely 28 July 1982, on the ground that if
compensation had been paid to them on that date, it would have
earned interest since then.
14. The Court agrees with the Delegate of the Commission that
interest should be paid. Since the applicants' claim is not
based on loss of development profits, it is not persuaded by the
Government's argument that to award interest would amount to
providing compensation for property speculators. Nor does it
share the Government's view that the applicants are estopped from
claiming interest by reason of their failure to do so in the
domestic proceedings, since it would have been open to the court
of its own motion to award interest in those proceedings.
In connection with the claim for interest, the Court
considers that it should have regard to the rates applicable to
Irish court judgments; the commercial rates cited by the
applicants appear to be more appropriate to a claim based on lost
development profits.
15. Having regard to the foregoing and making an assessment on
an equitable basis, the Court concludes that the applicants
should be awarded a global sum, including interest, of
IR£1,200,000 under this head.
B. Non-pecuniary damage
16. Mr Healy claimed a "very substantial", but unquantified, sum
for non-pecuniary damage, to compensate him for the effects which
the violation found by the Court had had on his personal
circumstances, namely loss of status, prospects and enjoyment of
life, inability to obtain employment, and bankruptcy. He left
the assessment of the award to the Court's discretion.
The Delegate of the Commission considered that Mr Healy
should receive some compensation under this head. The Government
took the contrary view, on the ground that he had not established
a clear causal connection between the violation and the
deterioration in his circumstances. In the alternative, they
maintained that an award of compensation for pecuniary damage,
coupled with the declaratory relief afforded by the principal
judgment, would suffice to meet the justice of the case.
17. The Court is unable to accept the Government's submissions.
Even assuming that, as they suggested, Mr Healy's personal
difficulties originated in problems encountered with other
development projects with which he was involved, there is no
reason to suppose that the inability to proceed with the
Clondalkin development did not compound and aggravate those
difficulties. The violation of the Convention therefore caused
him non-pecuniary damage and, in the Court's view, the finding
in the principal judgment does not of itself constitute
sufficient just satisfaction therefor.
Making an assessment on an equitable basis, the Court awards
Mr Healy IR£50,000 under this head.
C. Costs and expenses
18. The applicants sought reimbursement of legal costs and
expenses totalling IR£449,415.11, this amount being made up as
follows:
(a) costs incurred in Ireland after 28 July 1982, in
proceedings in the High Court and the Supreme Court, together
with interest: IR£42,655.11;
(b) costs referable to the proceedings in Strasbourg,
including those relating to the application of Article 50
(art. 50): IR£406,760.
The Government disputed this claim, which they saw as
"greatly inflated": in their view, a reasonable sum (inclusive
of value-added tax) for both the domestic and the Strasbourg
proceedings would be IR£80,455.97.
The Delegate of the Commission too found that the amount
claimed was high, but he left it to the Court to assess a
reasonable figure.
19. The Court has examined the matter in the light of the
principles that emerge from its case-law.
It notes, in the first place, that it is not contested that
the costs claimed were actually and necessarily incurred. The
amount sought in respect of the domestic proceedings should, it
finds, be reimbursed in full: the quantum of fees and expenses
cannot be regarded as unreasonable and the addition of interest
is warranted (see, on the latter point, the Observer and Guardian
v. the United Kingdom judgment of 26 November 1991, Series A
no. 216, p. 38, para. 81).
On the other hand, the Court agrees that the claim in
respect of the Strasbourg proceedings is excessive. Taking into
account the amount paid to Mr Healy by the Council of Europe by
way of legal aid in respect of fees and making an assessment on
an equitable basis, the Court awards for this item IR£70,000,
together with any value-added tax that may be due.
D. Interest on the Court's award
20. The applicants also sought interest on the sums awarded (at
least, those for pecuniary damage and for costs) for the period
between the date of the present judgment and the date of payment.
21. Neither the Government nor the Commission adverted to this
claim. The Court does not consider it appropriate to accede to
it in this instance.
FOR THESE REASONS, THE COURT UNANIMOUSLY
1. Holds that Ireland is to pay, within three months:
(a) to Healy Holdings Ltd and Mr Healy jointly the sum of
IR£1,200,000 (one million two hundred thousand Irish
pounds) for pecuniary damage, the sum of IR£42,655.11
(forty-two thousand six hundred and fifty-five Irish pounds
and eleven pence) for domestic costs and expenses and the
sum of IR£70,000 (seventy thousand Irish pounds), together
with any value-added tax that may be due, for Strasbourg
costs and expenses;
(b) to Mr Healy the sum of IR£50,000 (fifty thousand Irish
pounds) for non-pecuniary damage;
2. Dismisses the remainder of the claim for just satisfaction.
Done in English and in French, and notified in writing under
Rule 55 para. 2, second sub-paragraph, of the Rules of Court on
9 February 1993.
Signed: Denise BINDSCHEDLER-ROBERT
President
Signed: Marc-André EISSEN
Registrar