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Cite as: [2007] ECHR 423

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FIRST SECTION

CASE OF BISTROVIĆ v. CROATIA

(Application no. 25774/05)

JUDGMENT

STRASBOURG

31 May 2007

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Bistrović v. Croatia,

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

Mr C.L. Rozakis, President,
Mr L. Loucaides,
Mrs N. Vajić,
Mrs E. Steiner,
Mr K. Hajiyev,
Mr D. Spielmann,
Mr G. Malinverni, judges,
and Mr S. Nielsen, Section Registrar,

Having deliberated in private on 10 May 2007,

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

PROCEDURE

The case originated in an application (no. 25774/05) against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Croatian nationals, Mr Josip Bistrović and Mrs Jasenka Bistrović (“the applicants”), on 7 June 2005.

The applicants were represented by Mr M. Ramušćak, a lawyer practising in VaraZdin. The Croatian Government (“the Government”) were represented by their Agent, Mrs Š. StaZnik.

On 12 September 2006 the Court decided to give notice of the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the application at the same time as its admissibility.

THE FACTS

THE CIRCUMSTANCES OF THE CASE

The applicants were born in 1951 and 1955 respectively and live in Gojanec, Croatia.

The applicants, a husband and wife, owned a house and a surrounding plot of land in Gojanec, Croatia. On an unspecified date “Croatian Roads”, a public company based in Zagreb, instituted expropriation proceedings before the VaraZdin County State Administration, Office for Urban Planning, Environment, Construction and Property Affairs (Ured drZavne uprave u VaraZdinskoj Zupaniji, SluZba za prostorno uređenje, zaštitu okoliša, graditeljstvo i imovinsko-pravne poslove, hereinafter the “VaraZdin County Administration”), requesting that part of the applicants' plot of land be expropriated with a view to building a motorway. The applicants opposed this proposal, asking that their estate, namely the house and the surrounding land, be expropriated in its entirety. The applicants argued that with only partial expropriation they, as farmers, would have no further use for the house and the small area around it, since the house and the agricultural land on which it was built represented an inseparable unity. Furthermore, there would be no vehicle access to the courtyard. As farmers, the applicants could not use their property without access for tractors and other vehicles used in agricultural activity.

In addition, the planned motorway would pass in close proximity to the house, thus causing significant noise pollution due to the high traffic frequency. The motorway and the exit road would pass less then twenty metres and five metres respectively from the house.

They pointed out that the construction of 4.5-metre plastic noise-protection walls would transform their house and its surroundings into a cage, without efficiently protecting them from noise and pollution. The entire ground floor, the terrace and a part of the attic would be situated only 2 to 3 metres from the protection walls.

They argued that the value of the remaining property would significantly decrease, since construction of the motorway would deprive them of the living conditions they hitherto enjoyed, such as direct road access, pleasant surroundings, a huge courtyard and low noise exposure, all of which made the property very suitable for agricultural activity. For these reasons the applicants asserted that they had no economic interest in retaining the house and the surrounding courtyard.

The VaraZdin County Administration held three hearings and obtained an expert opinion on the effects of the motorway construction on the applicants' living conditions in the remaining house and courtyard, and another expert opinion on the market value of the agricultural land.

The applicants contested the proposed level of compensation, asserting that they were entitled to the market value of their expropriated land, and claiming that the market value of land suitable for construction in the area was 180 Croatian Kunas (HRK) per square metre, a figure which was significantly higher than the amount proposed.

By a decision of 16 April 2003, VaraZdin County Administration ruled that part of the applicants' estate, namely an agricultural plot and three plots of land suitable for construction measuring 795 m², 221m² and 507m² respectively, was expropriated with a view to building a motorway. The applicants retained ownership of the house and a surrounding courtyard.

Compensation was fixed at HRK 105,610.00, based on the sum of HRK 22.00 per square metre for agricultural land, assessed on the basis of the report submitted by a court expert for agriculture, and HRK 70.00 per square metre for land suitable for construction, assessed according to the criteria laid down by the Ministry of Finance, Tax Administration, VaraZdin Office.

The relevant part of the decision reads as follows:

“During the expropriation proceedings a representative of “Croatian Roads” limited liability company (d.o.o.), Zagreb, offered the owners compensation in the amount of HRK 22 per square metre for agricultural land, on the basis of its market value as established by an agricultural expert, agricultural engineer Ivan Bašić, ... and HRK 70 per square metre for the land suitable for construction, on the basis of data submitted by the Tax Administration... The owners did not accept the above offer, however, but persisted with their request that parcel no. 9854 in the VaraZdin Municipality Land Register be expropriated in its entirety, pursuant to section 7 of the Expropriation Act, claiming that they had no interest in using the remaining parts of their estate. More precisely, they sought expropriation of the entire estate together with the house and all other objects built on the estate...

...this Department has also obtained the expert opinion of a sworn court expert Dragutin Gergely, architecture engineer,... and the submissions of BoZidar Jagec, the engineer who drew up the project,... from which it transpires that there is no need for total expropriation and that the remaining property continues to enjoy unhindered road access and that provision has been made for noise-protection walls.

...furthermore, if the owners' request for total expropriation is accepted, all other houses and economic objects which are at an equal or even lesser distance from the motorway... will also [have to] be expropriated...

In addition, the owners' argument that the partial expropriation of parcel no. 9854 would significantly deteriorate their housing conditions is unfounded because they ... do not live at that address.”

The applicants filed an appeal against that decision, but the second-instance administrative body failed to rule on it.

On 16 December 2003 the applicants filed a claim with the VaraZdin County Court (Zupanijski sud u VaraZdinu) under Section 42(a) § 3 of the Expropriation Act, seeking expropriation of their entire estate. They reasserted the arguments previously submitted to the administrative authority. The applicants further contended that the expert opinion had been drawn up without the expert ever actually visiting the site and without any study of traffic frequency on the road passing the applicants' house or on the effect of traffic pollution on their quality of life. The expert opinion had been prepared on the basis of a map of the land plot on which the applicants' house had been erroneously drawn.

The applicants also complained about the amount of compensation awarded to them and reiterated that the market value of the expropriated plots had not been established. Instead, the amount was fixed according to VaraZdin Tax Administration tables. The applicants complained that their objections had not been adequately examined and addressed by the administrative authority.

On 30 December 2003 the VaraZdin County Court held a hearing at which the applicants' representative repeated their arguments, but no new evidence was presented or requested by the court. On the same day the County Court dismissed the applicants' claim. The relevant part of its judgment reads as follows:

“The reasoning of the cited decision clearly indicates that compensation corresponding to the market value of the plaintiffs' (the former owners) estate was determined in the expropriation proceedings. The market value of the agricultural land was assessed by a sworn court expert for agriculture... and the market value of the land suitable for construction was assessed according to the opinion of construction experts and the data submitted by the Tax Administration.

Relying on the reasoning in the above-mentioned decision, this court has further established that, ... in respect of the plaintiffs' request for expropriation of their remaining estate and the existence of a road access to the estate, the expert opinion of a sworn court expert for construction ... had been obtained as well as the opinion of a geodesic engineer..., from which it followed that the plaintiffs' request for total expropriation was not founded because there were a number of other houses and other objects in the same area which were at an equal or lesser distance from the motorway and that noise protection had been ensured to all expropriated [properties] and that the remaining plaintiffs' property continued to enjoy road access. It follows that there are no well-founded reasons for the plaintiffs' request for total expropriation of their estate...

... this court has established that no procedural defects, and especially no grave procedural defects, were made in the administrative proceedings and that the substantive law had been correctly applied, both concerning the dismissal of the plaintiffs' request for total expropriation of their estate and in respect of the amount of compensation fixed for agricultural land and the land suitable for construction.

As has already been stated, while the plaintiffs are not entitled to bring any new facts in the proceedings before this court, except those presented in the administrative proceedings, they are allowed to bring new evidence in respect of the facts presented in the administrative proceedings.

However, the plaintiffs have, neither in their claim nor during the proceedings, presented any evidence concerning their objections and the reasons for which they seek annulment of the VaraZdin County State Administration Office... decision of 16 April 2003, which would be capable of calling into question the facts on which the cited decision was based...”

The applicants then filed a constitutional complaint, arguing that their right to equality before the law, their right to a fair trial and their right of appeal had been violated in that they had been unable to submit new evidence to the VaraZdin County Court and that that court had reached its decision without having any evidence presented to it. Thus, their objections with regard to the expert opinion and their assertions about the effects of the motorway construction on their living conditions and on the value of their remaining property had remained unaddressed. The applicants also argued that their right to compensation for the market value of their expropriated property had been violated.

On 16 December 2004 the Constitutional Court dismissed the applicants' complaint as ill-founded. The decision of the Constitutional Court reads as follows:

“1. The constitutional complaint is lodged against the VaraZdin County Court's judgment no. P-1/03-9 of 30 December 2003, by which the applicants' (plaintiffs') claim, filed against the Ministry of Justice as defendant, Administration and Local Self-government, seeking the annulment of the decision of the VaraZdin State Administration, Office for Urban Planning, Environment, Construction and Property Affairs, class: UP/I-943-04/02-01/1936, no. 2186-05-05-03-11 of 16 April 2003, was dismissed.

The first instance administrative decision accepted the proposal by “Croatian Roads” d.o.o., Zagreb, for partial expropriation of parcel no. 9854, VaraZdin Municipality Land Registry, owned by the applicants, and established the compensation for the expropriated land, for investments in the land and for the agricultural crops at HRK 105,610.

2. The applicants claimed a violation of their constitutional rights under Article 14 § 2, Article 18, Article 29 § 1 and Article 50 § 1 of the Constitution.

In their constitutional complaint the applicants argued that, in the preceding proceedings, the facts had been incorrectly established and that their estate should have been expropriated in its entirety. They maintained that the County Court should have obtained the entire administrative case-file and verified the experts' opinions with regard to the finding that there was no need for total expropriation, and the findings with regard to the amount of compensation, which they claimed did not correspond to the market value but had been fixed on the basis of the Tax Administration tables. They further asserted that their right to an appeal had been violated because in the proceedings before the County Court they had not been allowed to present new facts and for that reason the whole proceedings had been arbitrary.

They asked the Constitutional Court to quash the impugned judgment.

The constitutional complaint is unfounded.

3. Section 62 paragraph 1 of the Constitutional Court Act (Official Gazette no. 49/02) provides that everyone may lodge a constitutional complaint with the Constitutional Court if he or she deems that an individual act of a state body, a body of local and regional self-government or a legal person invested with public authority, which resulted in a decision on his or her rights and obligations, or on suspicion or accusation of a criminal act, has violated his or her constitutional right.

While deciding whether constitutional rights were violated in proceedings concerning the assessment of an individual's rights and obligations, within the scope of the claim contained in the constitutional complaint, the Constitutional Court does not, in principle, consider whether the courts correctly and completely established the facts and assessed the evidence. For the Constitutional Court the only facts to be taken into consideration are those relevant for the assessment of a violation of a constitutional right.

4. The proceedings before the VaraZdin County Court were instituted by the applicants pursuant to section 42a § 3 of the Expropriation Act (Official Gazette nos. 9/94, 35/94, 112/00 – the Constitutional Court's decision and 114/01) because the appellate administrative body (the Ministry of Justice) did not decide on their appeal within the fixed time-limit. In such proceedings, a court assesses the legality of the first-instance decision concerning expropriation on the basis of the facts presented in the claim filed with that court and the defendant body's reply (if the reply reaches the court within the fixed time-limit), ... pursuant to section 42e § 3 of the same Act.

The proceedings in connection with the applicants' claim were conducted under section 42e §§ 1 and 2 of the Expropriation Act, which provides:

The Chamber considers and decides on the basis of the facts presented in the administrative proceedings.

A claimant is not allowed to present new facts, but may present new evidence concerning the facts presented in the administrative proceedings.

As regards the compensation for the expropriated land, the County Court found that the compensation fixed corresponded to its market value. As regards the agricultural land, the compensation was assessed by a sworn court expert for agriculture, while the compensation for the land suitable for construction was assessed on the basis of an opinion by a construction expert and data provided by the Tax Administration.

As regards the applicants' request for total expropriation, the County Court upheld the first instance body's decision finding that there had been no need for expropriation of the applicants' estate in its entirety, in that the evidence presented to that administrative body had clearly demonstrated that there existed a number of other houses and other economic objects in the same area which were at an equal or lesser distance from the corridor of the future motorway and that all expropriated [properties] had been provided with protection against noise. In particular, it was established that the applicants' remaining estate continued to enjoy unhindered road access, and therefore there existed no justification for the expropriation of the applicants' remaining estate within the meaning of section 7 of the Expropriation Act.

The VaraZdin County Court established that no grave procedural defects had occurred in the expropriation proceedings, nor had the material law been wrongly applied; in particular, it established that the applicants had failed to present any new evidence capable of calling into question the facts on which the impugned decision had been based.

5. The applicants further claimed in their constitutional complaint that the impugned judgment had violated the constitutional guarantee of equality of all before the law, provided for under Article 14 § 2 of the Constitution.

Having established that the legal opinions of the VaraZdin County Court in the present case did not diverge from the established practice in the application of relevant substantive law, and were not discriminatory on any basis, the Constitutional Court does not accept the applicants' allegations that, in the present case, equality before the law was not secured to them, as guaranteed under Article 14 § 2 of the Constitution.

6. Furthermore, after analysing the constitutional complaint, the findings of the impugned decisions and the case-file, the Constitutional Court has established that the constitutional complaint's allegations about the violation of the applicants' right to an appeal, provided for under Article 18 of the Constitution, are not founded, in that the competent court addressed all of the arguments submitted by the applicants in the appellate proceedings, the competence of which is regulated by section 42a of the Act on Amendments to the Expropriation Act (Official Gazette no. 114/01).

7. The Constitutional Court considers further that the applicants' constitutional right to a fair trial before an independent and impartial tribunal established by law (Article 29 § 1 of the Constitution) has not been violated.

The right to a fair trial would have been violated if a party to the proceedings had not been given an opportunity to be heard and to participate in the proceedings within the frames set out by laws; if a party had not been given an opportunity to present facts and evidence and a competent court had failed to rule on those of the party's arguments which were relevant to its decision; if, contrary to law, reasons had not been given for an individual act and if a party had in other way been prevented from having a fair trial before the competent body established by law.

Since the VaraZdin County Court verified the legality of the impugned decision within the meaning of the Expropriation Act on the basis of the evidence presented to it and by scrutinising the reasoning of the impugned decision on expropriation, it follows that the proceedings were conducted ... in conformity with the relevant provisions of substantive and procedural law; the Constitutional Court therefore considers that the applicants' right to a fair trial was not violated.

8. The applicants' further claimed a violation of their constitutional right contained in Article 50 § 1 of the Constitution, which provides:

Any restriction [of property rights] or confiscation of property shall be done by law, in the interest of the Republic of Croatia, and compensation of the market value shall be paid.

Since the competent County Court established that the expropriation proceedings had been conducted in accordance with the provisions of the Expropriation Act, with the correct application of substantive law and without grave procedural defects, and since the same court established that the applicants had received compensation for their expropriated estate equal to its market value, the cited constitutional right has not been violated.

9. For these reasons and pursuant to sections 73 and 75 of the Constitutional Court Act it has been so decided.”

II. RELEVANT DOMESTIC LAW

The relevant parts of the 1994 Expropriation Act (Zakon o izvlaštenju, Official Gazette nos. 9/94, 35/94, 112/00 and 114/01) provide as follows:

Section 7 entitles the owner of an estate subject to partial expropriation to request its total expropriation if he or she has no interest in using the remaining property.

Sections 8 and 33 require that compensation for expropriated property equals the market value of that property on the date on which the first-instance decision in expropriation proceedings is adopted.

Section 42 § 1 enables an action to be brought before the competent county court against a second-instance administrative decision on expropriation.

Section 42(a) § 3 provides that such an action may also be brought if the second-instance administrative body fails to decide on appeal against the first-instance administrative decision.

Section 42(b) stipulates that, unless otherwise provided, the Administrative Disputes Act is to be applied in expropriation proceedings conducted before the competent county court.

Section 42(e) §§ 1 and 2 obliges the competent county court to decide on the basis of the facts presented in the preceding administrative proceedings, and prevents a claimant from presenting any new facts, while at the same time allowing presentation of new evidence before the county court.

Section 42(e) § 3 requires that the county court, when dealing with an action brought under Section 42(a) § 3, examines the case on the basis of the facts presented in such an action and of the submissions of the administrative body which issued the impugned decision.

Section 60 of the Administrative Disputes Act (Zakon o upravnim sporovima, Official Gazette nos. 53/1991, 9/1992 and 77/1992) provides for the application of the Civil Procedure Act to proceedings concerning administrative disputes, in so far as these proceedings are not regulated by the Administrative Disputes Act.

Section 428(a) of the Civil Procedure Act enables an applicant in respect of whom the European Court of Human Rights has found a violation of the Convention or its Protocols to request, within 30 days of the Court's judgment becoming final, the re-opening of the domestic proceedings in question. In the new proceedings the domestic courts are obliged to follow the reasons given in the Court's judgment.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1

The applicants complained that they had not received the full market value of their expropriated property and that no account had been taken in the expropriation proceedings of the significantly decreased value of their remaining property. They relied on Article 1 of Protocol No. 1 of the Convention, 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.”

The Government contested that argument.

A. Admissibility

The Government argued that the applicants had failed to exhaust domestic remedies because they did not file a civil action seeking damages for noise exposure and dangerous emissions. They relied on the Court's findings in the case of Cokarić v. Croatia ((dec), no. 33212/02, 19 January 2006) where it was found as follows:

“under section 156 of the Civil Obligations Act anyone can seek the prevention of damage, inter alia, to the environment. Moreover, under the same section, the owners of property may seek compensation for the damage actually sustained on account of activities in the general interest. Noting the case-law of the Supreme Court in this respect, which shows that the above section covers material damage as well as the possible drop in the value of property, the Court is satisfied that the applicants should have filed such an action with the competent domestic courts, which all but three of them failed to do.”

25. The applicants maintained that their situation had no relation to the Cokarić case because all of the decisions relevant to the expropriation of their property had to be taken in the course of expropriation proceedings.

26. The Court observes that the rule of exhaustion of domestic remedies contained in Article 35 § 1 of the Convention requires that normal recourse should be had by an applicant to remedies which are available and sufficient to afford redress in respect of the breaches alleged (see, among other authorities, Akdivar and Others v. Turkey, judgment of 16 September 1996, Reports of Judgments and Decisions 1996 IV, p. 1210, § 65). The existence of the remedies in question must be sufficiently certain not only in theory but in practice, failing which they will lack the requisite accessibility and effectiveness (ibid.).

In addition, the application of the rule must make due allowance for the fact that it is being applied in the context of machinery for the protection of human rights that the Contracting Parties have agreed to set up (ibid., § 69). Accordingly, the Court has recognised that Article 35 § 1 must be applied with some degree of flexibility and without excessive formalism (see, for example, Cardot v. France, judgment of 19 March 1991, Series A no. 200, p. 18, § 34). It has further recognised that the rule of exhaustion is neither absolute nor capable of being applied automatically; in reviewing whether it has been observed it is essential to have regard to the particular circumstances of each individual case (see, for example, Van Oosterwijk v. Belgium, judgment of 6 November 1980, Series A no. 40, p. 18, § 35). This means, amongst other things, that it must take realistic account not only of the existence of formal remedies in the legal system of the Contracting Party concerned but also of the general legal and political context in which they operate as well as the personal circumstances of the applicants (see the Akdivar judgment cited above, p. 1211, § 69).

The Court notes at the outset that in the Cokarić case relied on by the Government, the applicants complained that they had suffered damaging effects to their living conditions and their property due to the close proximity of a newly established sewage works, a complaint raised irrespective of any domestic proceedings involving a possibility of awarding the applicants compensation of any kind. However, the present case concerns expropriation proceedings in which a part of the applicants' estate was subject to expropriation. It is normal in the course of such proceedings that compensation be assessed, taking into account all relevant factors such as a decrease in the value of remaining property due to any circumstances. The Court therefore considers that the applicants, who were a party to the expropriation proceedings and who submitted their objections concerning the compensation fixed in the course of these proceedings, were not obliged to institute separate civil proceedings in this respect. In these circumstances such a requirement would overstretch their duties under Article 35 § 1 of the Convention.

29. The Court notes further that this complaint 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

Submissions of the parties

After summarising the principles established by the Court's case-law in respect of Article 1 of Protocol No. 1, the Government submitted that the legality of interference and the legitimate aim were not disputed in the present case. As to whether the interference had been proportional, they maintained that the applicants only objected to the fact that their estate had not been expropriated in its entirety since, as they alleged, the house and its surrounding area were not agreeable for living in that they were situated too close to the motorway under construction. The Government submitted that these objections were entirely unfounded, since the applicants' remaining estate was presently situated 40 metres from the motorway and, on completion of the motorway, would be situated 80 metres from it. Furthermore, fourteen other houses were at a similar distance from the motorway and these houses had not been expropriated. Noise-protection measures had been envisaged. Finally, they contended that the applicants had not objected to the amount of compensation before the first-instance administrative body. In the Government's view, the applicants had obtained the market value of their property and the State had therefore satisfied its obligations under Article 1 of Protocol No.1. They argued that the Court's case-law did not establish any obligation for the States to expropriate someone's property in its entirety.

The applicants contested these arguments and asserted that an excessive individual burden had been placed on them, in that they had not received the market value for their expropriated property, and because of the decreased value of their remaining property and insupportable living conditions in their house, which was now situated less than 3 metres from the motorway. They further contested the Government's assertion that there were fourteen other houses at the same or lesser distance from the motorway, claiming that theirs was the only house in extreme proximity to the motorway.

The Court's assessment

The Court notes at the outset that it was common ground in the present case that the applicants had been deprived of their property in accordance with the provisions of the Expropriation Act with a view of building a motorway, and that the expropriation thus pursued a lawful aim in the public interest. Accordingly, it is the second sentence of the first paragraph of Article 1 of Protocol No. 1 which is applicable in the instant case (see, among other authorities, the judgments in Mellacher and Others v. Austria, 19 December 1989, Series A no. 169, pp. 24-25, § 42 and Papachelas v. Greece [GC], no. 31423/96, § 45, ECHR 1999 II).

The essential object of Article 1 of Protocol No. 1 is to protect individuals against unjustified interference by the State with the peaceful enjoyment of their possessions. However, by virtue of Article 1 of the Convention, each Contracting Party “shall secure to everyone within [its] jurisdiction the rights and freedoms defined in [the] Convention”. The discharge of this general duty may entail positive obligations inherent in ensuring the effective exercise of the rights guaranteed by the Convention. In the context of Article 1 of Protocol No. 1, those positive obligations may require the State to take the measures necessary to protect the right of property (see Sovtransavto Holding v. Ukraine, no. 48553/99, § 96, ECHR 2002-VII and Broniowski v. Poland [GC], no 31443/96, § 143, ECHR 2004-V), particularly where there is a direct link between the measures which an applicant may legitimately expect from the authorities and the effective enjoyment of his possessions (see Öneryıldız v. Turkey [GC], no. 48939/99, § 134, ECHR 2004 XII). This means, in particular, that the States are under an obligation to provide judicial procedures that offer the necessary procedural guarantees and therefore enable the domestic courts and tribunals to adjudicate effectively and fairly any cases concerning property matters (see, mutatis mutandis, Sovtransavto Holding v. Ukraine, cited above, § 96).

In each case involving an alleged violation of this provision, the Court must determine whether, due to the State's interference or passivity, a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights. The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1 of Protocol No. 1 (see Sporrong and Lönnroth v. Sweden, judgment of 23 September 1982, Series A no. 52, p. 26, § 69 and Novoseletskiy v. Ukraine, no. 47148/99, § 101, 22 February 2005). Compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance and, notably, whether it does not impose a disproportionate burden on the applicant. In this connection, the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference that cannot be justified under Article 1. That Article does not, however, guarantee a right to full compensation in all circumstances, since legitimate objectives of “public interest” may call for less than reimbursement of the full market value (see Holy Monasteries (The) v. Greece, judgment of 9 December 1994, Series A no. 301 A, pp. 34-35, §§ 70-71 and Papachelas v. Greece, cited above, § 48).

In order to assess the conformity of the State's conduct with the requirements of Article 1 of Protocol No. 1, the Court must have regard to the fact that the Convention is intended to guarantee rights that are practical and effective. It must go beneath appearances and look into the reality of the situation, which requires an overall examination of the various interests in issue; this may call for an analysis not only of the compensation terms – if the situation is akin to the taking of property (see, for example, Lithgow and Others v. the United Kingdom, judgment of 8 July 1986, Series A no. 102, pp. 50-51, §§ 120-121) – but also, as in the instant case, of the conduct of the parties to the proceedings, including the steps taken by the State (see Beyeler v. Italy [GC], no. 33202/96, § 114, ECHR 2000 I, and Novoseltskiy v. Ukraine, cited above, §102).

Turning to the particular circumstances of the present case, the Court notes that the applicants requested the VaraZdin County Court to reconsider the administrative decision expropriating a part of their estate and assessing the compensation to be paid for this expropriation. The Court notes that the matter to be decided represented the most serious interference with the applicants' right guaranteed under Article 1 of Protocol No. 1, since it concerns expropriation of their property. Bearing in mind the utmost importance of the consequences of the expropriation for the applicants' property rights, the Court considers that a careful examination of all relevant factors by a court dealing with the case was necessary to ensure that the requirements of Article 1 of Protocol No.1 were complied with.

In this respect the Court also reiterates that proceedings before courts must conform to the rule of law, which can be identified with the good administration of justice and that, in the absence of any obligation for a judicial authority to give reasons for their decisions, the rights guaranteed by the Convention would be illusory and theoretical. Without requiring a detailed response to each argument presented before a court, this obligation nevertheless presupposes the right of a party to the proceedings to have his or her essential contentions carefully examined (see Novoseletskiy v. Ukraine, cited above, § 111).

The Court notes that in the present case there was a serious dispute as to the primary facts. Throughout the proceedings the applicants argued that partial expropriation significantly decreased the economic value of the remaining property as well as rendering it useless to them for a variety of reasons, such as the lack of vehicle access to the property, the motorway's very close proximity to their house and inadequate protection from noise and pollution. However, although the County Court addressed a part of the applicants' arguments, it did not answer their main objections concerning the administrative authority's findings.

Thus, a number of questions relevant to the applicants' rights under Article 1 of Protocol No.1, such as the method of calculating the market value of the applicants' property, the precise effect of the planned motorway on their living conditions, the applicants' assertion that the expert opinion relied on in the administrative body's decision had been drawn without the expert ever visiting the actual site, remained unanswered. Furthermore, a crucial question concerning the effect of the partial expropriation on the value of the applicants' remaining estate was never addressed and thus the potential decrease in this value in assessing the compensation to be awarded was not taken into account.

In this respect, the Court recalls that it has already examined on many occasions domestic authorities' refusal to fix a special indemnity for properties remaining to their owners after a partial expropriation. In some cases the Court found that, when fixing the compensation, the domestic courts had not had regard to the nature of the construction and whether or not it provided any advantage for the owners, but had only fixed compensation with regard to the plots actually expropriated. The Court considered, however, that, having regard to the margin of appreciation left under Article 1 of Protocol No.1 to the national authorities, there appeared no indication warranting the conclusion that the refusal to grant special indemnities might amount to a violation of Article 1 of Protocol No.1 (see, for example, Azas v. Greece, no. 50824/99, §§ 51-53, 19 September 2002 and Interoliva ABEE v. Greece, no. 58642/00, 10 July 2003).

In the case of Ouzounoglou v. Greece, however, the Court found that the construction of a motorway in the near vicinity of the applicant's house (about 15 metres) must have limited the free disposition of her right to use the house, which limitation was found to amount to an interference with the applicant's right to peaceful enjoyment of her possessions, and that the nature of the construction had evidently contributed more directly to the substantial depreciation of the value of the remaining property than in the other cases concerning Greece, mentioned above (see Ouzounoglou v. Greece, no. 32730/03, § 30, 24 November 2005). Therefore, such interference might warrant the granting of additional compensation for the limited use of the house.

In the Court's view the present case falls in the latter category of cases. In this respect the Court notes that the applicants argued that the future motorway would pass two to three metres from their house and that the estate had lost its hitherto pleasant surroundings, a huge courtyard and low noise exposure, all of which had made the property very suitable for agricultural activity. The Court notes that none of these factors were taken into account by the domestic authorities when fixing the compensation for the applicants' expropriated property.

Furthermore, throughout the domestic proceedings the applicants asserted that the expert's report serving as a basis for assessing the effects of the motorway on their remaining property had been drawn up without the expert ever visiting the actual site, which had resulted in their house being erroneously drawn. The Court considers that it was necessary to have these facts established in a precise manner by further verifying the applicants' argument that their house had been erroneously drawn on the map of the land plot. Only after such verification of all factors concerning the effects of the motorway construction on the applicants' remaining property, such as the decrease in the value of their estate, the possibility of selling it and the applicants' interest in further use of the remaining estate, would it be possible for the domestic authorities to fix adequate compensation in the expropriation proceedings.

The Court therefore finds that, by failing to establish all the relevant factors for establishing the compensation for the applicants' expropriated property, and by failing to grant indemnity for the decrease in the value of their remaining estate, the national authorities have failed to strike a fair balance between the interests involved and have failed to make efforts to ensure adequate protection of the applicants' property rights in the context of expropriation proceedings which involved the ultimate interference on the part of the State with these rights.

Having regard to the foregoing, the Court finds that there has been an infringement of the applicants' right to the peaceful enjoyment of their possessions, as guaranteed by Article 1 of Protocol No. 1.

II. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION

The applicants contended that the proceedings which they had brought under Croatian law before the VaraZdin County Court in order to challenge an administrative decision concerning the expropriation of their property had not complied with Article 6 § 1 of the Convention, which, in so far as relevant, provides:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by [a] ... tribunal...”

The Government submitted that it was necessary, firstly, to establish to what extent the applicants' rights, as guaranteed under Article 6 § 1 of the Convention, had been protected in the administrative proceedings preceding the County Court's examination of the case.

In this respect they maintained that the basic principles governing proceedings before the administrative bodies, such as the principle of legality, the principle of material truth, providing an opportunity to the parties to present their case, the independent assessment of evidence and the right to appeal, all demonstrated that these proceedings had been conducted in accordance with the guarantees enshrined in Article 6 § 1 of the Convention. In the present case, the competent administrative body had held three hearings at which the applicants were able to present their evidence and facts. However, the applicants had failed to present any evidence at those hearings. The case was examined by the competent county court which, in the Government's view and having regard to sections 42 (a) to 42(h) of the Expropriation Act, satisfied the requirements of a court of full jurisdiction in that such a court had jurisdiction to examine questions of both fact and law. The only restriction concerned the presentation of new facts which had not been previously presented in the administrative proceedings. However, such a restriction had not undermined the full jurisdiction of the county court, because the principle of legal certainty and the efficient conduct of the proceedings required that the possibility of presenting new facts be denied after a certain stage in proceedings, usually at the appellate stage, without affecting the full jurisdiction of appellate courts.

The Government further contended that the applicants had merely repeated the objections already presented in the course of the administrative proceedings, without submitting any new evidence, which they had also failed to do at the hearing before the VaraZdin County Court. The County Court, finding that the administrative bodies' application and interpretation of the relevant legal provisions had been correct, had dismissed the applicants' claim. In the Government's view the expropriation proceedings, taken as a whole, had satisfied the requirements of Article 6 of the Convention.

The applicants contested these arguments.

Without rejecting the Government's submissions as to the general nature of the administrative proceedings in Croatia, the Court notes at the outset the undisputed fact that the VaraZdin County State Administration Office is an administrative body which cannot be considered a tribunal within the meaning of Article 6 § 1 of the Convention. The Court reiterates that Article 6 § 1 requires that in the determination of civil rights and obligations, decisions taken by administrative or other authorities which do not themselves satisfy the requirements of that Article - as is the case in this instance with the VaraZdin County State Administration Office - must be subject to subsequent control by a “judicial body that has full jurisdiction”, including the power to quash in all respects, on questions of fact and law, the challenged decision (see, mutatis mutandis, the following judgments: Bendenoun v. France, 24 February 1994, Series A no. 284, pp. 19-20, § 46; Fischer v. Austria, 26 April 1995, Series A no. 312, p. 17, § 28; Schmautzer v. Austria, 23 October 1995, Series A no. 328 A, p. 15, § 34; Umlauft v. Austria, 23 October 1995, Series A no. 328-B, pp. 39-40, §§ 37-39; and Wos v. Poland (dec.), no. 22860/02, § 92, ECHR 2005 ...).

Under Croatian law a party which is dissatisfied with the findings in expropriation proceedings conducted before the competent administrative bodies is entitled to bring an action in the competent county court. The county courts are, in general, ordinary courts of appellate jurisdiction in civil and criminal matters and first-instance courts in respect of serious crimes. While the appellate jurisdiction of county courts in civil and criminal matters is regulated by the Civil Procedure Act and the Criminal Procedure Act respectively, their appellate jurisdiction in respect of expropriation proceedings is regulated by special law, namely the 1994 Expropriation Act.

The Court notes that, under the above Act, a county court has jurisdiction when examining an action to examine all aspects of a matter before it. Its examination is not restricted to points of law but may also extend to factual issues, including the assessment of evidence. The only restriction concerning the examination of a case before a county court is that no new facts may be submitted to it. However, if a county court disagrees with the findings of the administrative bodies, it has the power to quash the decisions appealed against. Therefore, the Court concludes that the rules governing the powers of a county court in expropriation proceedings do not deprive such courts of acting as courts of full jurisdiction.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

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

The applicants claimed 349,665.05 euros (EUR) in respect of pecuniary damage and EUR 20,000 in respect of non-pecuniary damage.

The Government deemed the requested amounts excessive.

As to the pecuniary damage claimed the Court, having regard to its findings concerning Article 1 of Protocol No. 1 to the Convention (see § 45 above) and the insufficiency of the proceedings conducted before the VaraZdin County Court, the Court considers that it cannot speculate as to whether or not the applicants were granted the market value of their two expropriated plots of land and to what extent the value of their remaining property was decreased. Thus, on account of the shortcomings in the domestic proceedings, the Court is unable to assess the applicants' claim for pecuniary damage. In this respect the Court specifically refers to the opportunity available to the applicants to request re-opening of the proceedings in accordance with section 428(a) of the Civil Procedure Act, which would allow for a fresh examination of their claims concerning the expropriation of their property. It is now for the applicants to make use of that opportunity. Only after a fresh examination of the applicants' objections, in expropriation proceedings conducted in compliance with the requirements of Article 1 of Protocol No. 1 to the Convention, would the Court be in a position to rule on the applicants' potential claim concerning pecuniary damage sustained by them.

On the other hand, the Court considers that the applicants must have sustained non-pecuniary damage - such as distress resulting from the lack of respect for their rights guaranteed under Article 1 of Protocol No. 1 - which is not sufficiently compensated by the finding of a violation. Ruling on an equitable basis, it awards the applicants EUR 5,000 jointly in respect of non-pecuniary damage, plus any tax that may be chargeable on this amount.

B. Costs and expenses

The applicants also claimed 20,764.40 Croatian Kunas (HRK) for the costs and expenses incurred before the Court.

The Government left to the Court to assess the necessity of the costs incurred.

Under the Court's case-law, an applicant is entitled to reimbursement of his costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and were reasonable as to quantum. In the present case, regard being had to the information in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 2,800 for the proceedings before it.

C. Default interest

The Court considers it appropriate that the default interest 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

Declares the complaint under Article 1 of Protocol No.1 admissible and the remainder of the application inadmissible;

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

Holds

(a) that the respondent State is to pay the applicants jointly, within three months from the date on which the judgment becomes final according to Article 44 § 2 of the Convention, the following amounts which are to be converted into the national currency of the respondent State at a rate applicable at the date of settlement:

(i) EUR 5,000 (five thousand euros) in respect of non-pecuniary damage;

(ii) EUR 2,800 (two thousand eight hundred euros) in respect of costs and expenses;

(iii) any tax that may be chargeable on the above amounts;

(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;

Dismisses the remainder of the applicants' claim for just satisfaction.

Done in English, and notified in writing on 31 May 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Søren Nielsen Christos Rozakis
Registrar President