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FOURTH SECTION

CASE OF BENNICH-ZALEWSKI v. POLAND

(Application no. 59857/00)

JUDGMENT

STRASBOURG

22 April 2008

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 Bennich-Zalewski v. Poland,

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

Nicolas Bratza, President,
Lech Garlicki,
Stanislav Pavlovschi,
Ljiljana Mijović,
David Thór Björgvinsson,
Ján Šikuta,
Päivi Hirvelä, judges,
and Lawrence Early, Section Registrar,

Having deliberated in private on 27 March 2008,

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

PROCEDURE

The case originated in an application (no. 59857/00) against the Republic of Poland lodged with the European Commission of Human Rights (“the Commission”) on 21 May 1998 under former Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Polish national, Mr Juliusz Bennich-Zalewski (“the applicant”).

The Polish Government (“the Government”) were represented by their Agent, Mr J. Wołąsiewicz of the Ministry of Foreign Affairs. The applicant was represented by Ms A. Zemke-Górecka, a lawyer practising in Białystok.

The application was transmitted to the Court on 1 November 1998, when Protocol No. 11 to the Convention came into force (Article 5 § 2 of Protocol No. 11).

The applicant alleged, in particular, that the length of administrative proceedings which he had instituted in 1991 was unreasonable and contrary to Article 6 of the Convention. He also complained under Article 1 of Protocol No. 1 of the Convention that he had been unable to obtain effective enjoyment of his property rights confirmed by a judicial decision given in 2001.

On 28 November 2005 the President of the Section decided to give notice of the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it was decided to examine the merits of the application at the same time as its admissibility.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

The applicant was born in 1966 and lives in Warsaw.

1. Administrative proceedings

(a) Proceedings in which the applicant sought to have the expropriation decision declared null and void

In 1945 a factory owned by the applicant's legal predecessor was de facto taken over by the State in the context of a countrywide campaign of nationalisation of industry. It was subsequently run by a State owned enterprise.

Pursuant to a decision given on 5 July 1966, the Ministry of Infrastructure stated that the factory and the land on which it was situated had become the property of the State under the provisions of the 1958 Act on Regulation of Legal Status of Properties Managed by the State.

In 1991 the applicant's mother lodged an application with the Ministry of Industry to have the expropriation decision declared null and void under Article 156 of the Code of Administrative Procedure.

In March 1994 the applicant's mother died. The applicant joined the proceedings as her legal successor.

In 1996 the Ministry found that it lacked competence to deal with the case and referred it to the Ministry of Construction. In January 1997 the case was referred to the Ministry of Housing as the Ministry of Construction had ceased to exist. In October 1997 that Ministry forwarded the case file to the Ministry of Internal Affairs for a decision.

On 27 October 1997 the applicant complained to the Supreme Administrative Court about the failure of the administration to rule on his 1991 application.

On 18 January 1997 the Minister of Internal Affairs declared that he was competent to deal with the case.

On 22 January 1999 the Supreme Administrative Court, having examined the applicant's complaint, ordered the Minister of Internal Affairs to issue a decision concerning the case within one month from the date of the service of its judgment.

On 27 July 1999 the Minister of Internal Affairs, having gathered various documents concerning the legal status of the property, declared that the 1966 expropriation decision was null and void as it had been given in flagrant breach of the laws applicable to properties de facto taken over by the State.

On an unspecified date before August 1999 the State-owned enterprise was transformed into an independent public company, Izolacja, the structure and functioning of which were governed by the provisions of the Commercial Code. The State however retained a minority shareholding in the company. In August 1999 the Izolacja company, which was running the factory as the legal successor of the former State-owned enterprise, requested that the case be re examined. Subsequently, the Ministry summoned the parties to submit their further pleadings and documents.

On 17 April 2000 the Minister, having re-examined the case, upheld its previous decision and declared that the expropriation decision was null and void.

The public company in possession of the factory requested that the enforcement of this decision be stayed pending the outcome of the proceedings in which it had appealed against the decision of the Minister to the Supreme Administrative Court. On 12 September 2000 the Supreme Administrative Court allowed this request. On 16 November 2000 the applicant's request to have this decision set aside was dismissed by the same court.

On 12 January 2001 the Supreme Administrative Court upheld the decision of 17 April 2000.

(b) Proceedings in which the applicant challenged the transfer of ownership from the State Treasury

On 30 November 1992 the Kalisz Governor gave a decision to the effect that from 5 December of that year the ownership of the factory and the right of perpetual use of the land on which it was situated was to be vested in the Izolacja company. On an unspecified later date this hitherto State owned company changed its status and became an independent public company governed by the Commercial Code and in which the State was a minority shareholder (see also paragraph 16 above).

In February 1997 the applicant instituted proceedings in which he sought to have that decision declared null and void.

On 7 April 1997 the Kalisz Governor stayed those proceedings, pending the outcome of the administrative proceedings described above.

The proceedings were resumed on 11 September 2000.

On 17 October 2001 the President of the Office for Housing Matters declared that the 1992 decision was null and void. The company requested that the case be re examined.

On 11 January 2002 the President of the Office for Housing Matters, having reconsidered the case, upheld his earlier decision.

2. Events after the expropriation decision was declared null and void

(a) Proceedings for repossession of the production hall

In 1997 the applicant instituted civil proceedings before the Kalisz Regional Court, seeking recovery of possession of the production hall of the factory.

On 19 February 1998 the court stayed the proceedings pending the outcome of the administrative case, holding that the outcome of the administrative proceedings in which the lawfulness of the 1966 decision was being examined (see paragraphs 7-19 above) was decisive for any decisions to be taken by a civil court. The applicant appealed. On 1 April 1998 his appeal was dismissed by the Łódź Court of Appeal. The proceedings were later resumed. At a hearing held on 24 October 2000 the court stayed the proceedings again. On 24 April 2001 the court resumed the proceedings. On 22 January 2002 the court, having regard to the parties' concordant request, stayed the proceedings, with a view to the possibility that they might settle the case.

28. On 1 September 2003 the applicant and other successors of the factory's former owner submitted a settlement offer to the defendant company. The proceedings were resumed on 9 October 2003 at the defendant's request.

On 7 July 2004 the court adopted a judgment by which it ordered the defendant company to clear the production hall and return it to the applicant. On 1 and 3 September 2004 respectively the defendant company and the applicant appealed against that judgment.

On 22 December 2004 the Łódź Court of Appeal quashed the judgment and remitted the case. On 18 August 2005 the defendant company informed the court that on 10 August 2005 it had concluded an agreement with the applicant concerning the settlement of arrears in the payment of compensation for non contractual use of the property for the period from May 2002 to August 2005. They had agreed that the defendant company would pay the applicant 177,040 Polish zlotys (PLN) in three instalments. In addition, the parties concluded a lease contract valid until 31 December 2007. As the applicant refused to withdraw his case in so far as it concerned the claim for repossession of the production hall, the proceedings were continued. They are currently pending.

(b) The proceedings against the Izolacja company for payment

(i) For February 2001

On 10 February 2001 a lawyer representing nine legal successors of the former owner, including the applicant, called on the Izolacja company to pay PLN 18,000 per month for using their property without a contractual basis. On 13 November 2001 the applicant, together with six other legal successors, brought a civil action against the company in the Jarocin District Court, demanding payment for non contractual use of the property in February 2001.

On 12 February 2003 the Jarocin District Court gave judgment. It ordered the defendant company to pay PLN 11,025 plus default interest to the legal successors of the former owner in damages for the use of the property in February 2001. The court observed that the company had been in possession of the factory in bad faith at least since the judgment of the Supreme Administrative Court given in January 2001 (see paragraph 19 above). This judgment was upheld on 25 June 2003 by the Kalisz Regional Court.

(ii) For other periods after February 2001

Subsequently, the applicant brought civil actions in the Jarocin District Court, seeking compensation from the Izolacja company for non contractual use of the property during the following periods: March and April 2001, May and June 2001, July and August 2001, and a number of further similar actions covering the period from May 2002 until March 2005.

The Jarocin District Court joined his two first actions and allowed the applicant's claim on 14 January 2004. Its judgment was upheld on 24 September 2004 by the Kalisz Regional Court.

The parties concluded an out of court settlement in respect of the third action and the civil proceedings were discontinued. The remaining actions were joined and transferred to the Warsaw-Praga District Court, before which they are currently pending.

(iii) 6 May 1992 - 5 January 2001

On 14 October 2004 the applicant brought another civil action in the Jarocin District Court, seeking compensation for the company's effective enjoyment of ownership from 6 May 1992 to 5 January 2001.

On 20 December 2004 his action was dismissed. The court, bearing in mind the presumption of lawfulness of final administrative decisions, considered that in that period the defendant company had been holding the property in question as an independent possessor in good faith. Hence, it was not obliged to pay. This judgment was upheld by the Kalisz Regional Court on 6 May 2005.

(iv) Proceedings for compensation against the State Treasury

On 17 April 2003 the applicant requested the Ministry of Internal Affairs to pay him damages for the period during which the State owned factory had been using his property. He relied on Article 160 of the Code of Administrative Procedure in connection with the decision of 17 April 2000 declaring the 1966 expropriation decision null and void.

On 31 March 2004 the Minister for Infrastructure refused to grant compensation to the applicant and the other legal successors. He considered that they had not proved that they had sustained damage as a result of the 1966 expropriation decision, and that no link between the alleged damage and the decision had been shown.

On 14 May 2004 the applicant brought a civil action in the Warsaw District Court against the State Treasury, seeking compensation for the damage resulting from the unlawful expropriation decision issued in 1966. He based his claim on Article 417 of the Civil Code. The applicant specified that the damage should be assessed as the difference in the value of the enterprise between 1945 and 2004. He also claimed one-quarter of the profits which the enterprise had made between 1945 and 2003.

On 28 February 2005 the Warsaw-Śródmieście District Court dismissed the applicant's action. It was of the view that the applicant had failed to show that he had suffered damage. It noted that it was open to him to bring a claim for repossession against the company. The only damage that could be examined was the alleged difference in the value of the property on the date when it had been taken over by the State Treasury and the date on which the unlawfulness of the expropriation decision had been recognised. However, it transpired from the evidence submitted by the applicant that the buildings on the property had been modernised by the company. Hence, the value of the property had in fact increased.

On 11 April 2005 the judgment, together with its reasoning, was served on the applicant. The applicant did not appeal and on 26 April 2005 the judgment became final.

The factory remains in the possession of the Izolacja company and monthly rent for the lease is paid to the applicant.

II. RELEVANT DOMESTIC LAW

A. Administrative proceedings by which a final administrative decision can be challenged

Under Polish law no provisions have been enacted allowing specifically for the redressing of wrongs committed in connection with expropriations effected in the context of agrarian reform. Therefore, no specific legal framework is available, enacted with the purpose of mitigating the effects of certain infringements of property rights.

However, it is open to persons whose property was expropriated or their legal successors, to institute, under Article 156 of the Code of Administrative Procedure, administrative proceedings in order to claim that the expropriation decisions should be declared null and void as having been issued contrary to law. In particular, a final administrative decision can be declared null and void at any time if it was issued without a legal basis, or in flagrant violation of law.

If the flaw that taints the challenged decision is of a substantive character, i.e. if the decision had been given without a legal basis or in flagrant violation of law, the administrative authority shall declare it null and void.

Decisions flawed as a result of lesser procedural shortcomings, listed under items 1, 3, 4 and 7 of Article 156 § 1, such as those given by an authority which lacked competence to issue a decision in a given case, or in a case which had already been decided or addressed to a person not being a party to the proceedings, can only be declared null and void if less than ten years have elapsed from the date on which such decisions were given. In respect of such decisions it is only possible to declare that they were issued contrary to law; the decisions themselves remain valid.

A decision to declare the old decision null and void, or a refusal to do so, may ultimately be appealed to the Supreme Administrative Court.

B. Compensation proceedings for damage arising out of an unlawful administrative decision

Article 160 of the Code of Administrative Procedure, as applicable at the material time, read in its relevant part:

"A person who has suffered a loss on account of the issuing of a decision in a manner contrary to Article 156 § 1 or on account of the annulment of such a decision shall have a claim for compensation for actual loss, unless he has been responsible for the circumstances mentioned in this provision."

An administrative decision in respect of the compensation claim could be appealed against in a civil court.

C. Length of administrative proceedings

1. Before 30 June 1995

Under Article 35 of the Code of Administrative Procedure of 1960, the administration was obliged to deal with cases without undue delay. Simple cases should be dealt without any delay. In cases requiring some enquiry a first-instance decision should be given in no more than one month. In particularly complex cases decisions should be taken within two months.

If the decision had not been given within those time limits, a complaint under Article 37 of the Code could be filed with the higher instance authority, which should fix an additional time limit, establish the persons responsible for the failure to deal with the case within the time limits, and, if need be, arrange for preventive measures to be adopted in order to prevent further delays.

2. From 30 June 1995 until 1 February 2004

In 1995 the Supreme Administrative Court Act was adopted, which entered into force on 1 October 1995. It created further procedures in which a complaint about the administration's failure to act could be raised.

Under Article 17 of that Act, that court was competent to examine complaints about the administration's inactivity in administrative proceedings in cases referred to in Article 16 of the Act.

Pursuant to Article 26 of the Act, if a complaint about the inactivity of an administrative authority was well-founded, the court should oblige the competent authority to give a decision, or to carry out the factual act, or to confer or acknowledge an individual entitlement, right or obligation.

On 1 January 2004 the Law on Administrative Courts came into force, which replaced the 1995 Act and established a two-tiered system of appeals against administrative decisions to administrative courts.

THE LAW

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

The applicant alleged a violation of Article 6 § 1 of the Convention, arguing that the administrative proceedings in which he had sought to have the expropriation decision given in 1966 declared null and void had been excessively lengthy.

The relevant provisions of Article 6 § 1 read:

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal ...”

A. Admissibility

The Government submitted that after 1 October 1995, the date on which the Supreme Administrative Court Act 1995 had entered into force, the applicant could have lodged a complaint with that court about the failure of the ministries dealing with his case to give a decision. They averred that he had not availed himself of this remedy.

The Court notes that on 27 October 1997 the applicant complained to the Supreme Administrative Court about the failure of the administrative authorities to rule on his 1991 application. A relevant judgment was given by that court on 22 January 1999 (see paragraph 14 above).

Therefore, the Court considers that the applicant has exhausted domestic remedies as required by Article 35 § 1 of the Convention.

It follows that the Government's preliminary objection must be dismissed. The Court notes 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

1. Period to be taken into consideration

The Court notes that the proceedings began in 1991 and ended on 12 January 2001, when the Supreme Administrative Court gave its judgment (see paragraph 19 above). They therefore lasted ten years, of which seven years and eight months fall within the Court's temporal jurisdiction, Poland having recognised the right of individual petition as from 1 May 1993. Given its jurisdiction ratione temporis, the Court can only consider the period which has elapsed since 1 May 1993, although it will have regard to the stage reached in the proceedings on that date (see, among other authorities, Zwierzyński v. Poland, no. 30210/96, § 123, ECHR 2000-XI).

2. Reasonableness of the length of the proceedings

The Government argued that the case had been complex as to both the facts and the law; that what had been at stake for the applicant had been of a purely pecuniary character; and that the authorities had shown appropriate diligence when dealing with the case. The applicant disagreed.

The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and the relevant authorities and what was at stake for the applicant in the dispute (see, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII, and Beller v. Poland, no. 51837/99, § 67, 1 February 2005).

The Court has frequently found violations of Article 6 § 1 of the Convention in cases raising issues similar to the one in the present case (see Frydlender, cited above).

Having examined all the material submitted to it, the Court considers that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case. The Court further notes that the proceedings, instituted on an unspecified date in 1991, remained practically dormant from 1991 to 1997, when the applicant availed himself of the procedure provided for by the Code of Administrative Procedure and complained to the Supreme Administrative Court about the failure of the administration to rule on his application. That court, by its judgment of 22 January 1999, obliged the administrative authorities to give a decision within two months. This judgment was not complied with as the relevant administrative decision was ultimately given on 27 July 1999.

Having regard to its case law on the subject, the Court considers that in the instant case the length of the proceedings was excessive and failed to meet the “reasonable time” requirement.

There has accordingly been a breach of Article 6 § 1.

II. OTHER ALLEGED VIOLATIONS OF ARTICLE 6 § 1 OF THE CONVENTION

The applicant further complained that he had been deprived of the right of access to a court in that in 1998 the civil court had stayed the civil proceedings in which he had sought recovery of possession of the factory pending the outcome of the administrative case.

The Court is of the view that the fact that the civil court stayed the proceedings pending the outcome of the administrative case, which was aimed at the determination of the ownership of the property and was therefore of crucial relevance to the outcome of the civil case, does not amount to a breach of the right of access to a court. It further observes that the civil proceedings were resumed after the Supreme Administrative Court had given its judgment on 12 January 2001.

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

The applicant complained that despite the fact that in 2001 he had obtained a judgment by which the expropriation decision had been declared null and void, the State had not taken sufficient steps to enable him to obtain effective enjoyment of his property rights in respect of the property concerned. He relied on Article 1 of Protocol No. 1 to the Convention, which reads:

“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

1. Incompatibility ratione temporis with the provisions of the Convention

The Government submitted that the alleged violation of the applicant's property rights had originated in the decisions given in 1966 and 1992. The application was therefore incompatible ratione temporis with the provisions of the Convention because the alleged violation had taken place before 10 October 1994, the date on which Poland had ratified Protocol No. 1 to the Convention. The applicant disagreed.

The Court's jurisdiction ratione temporis covers only the period after the date of ratification of the Convention or its Protocols by the respondent State. From the ratification date onwards, all the State's alleged acts and omissions must conform to the Convention or its Protocols and subsequent facts fall within the Court's jurisdiction even where they are merely extensions of an already existing situation (see, for example, Almeida Garrett, Mascarenhas Falcão and Others v. Portugal, nos. 29813/96 and 30229/96, § 43, ECHR 2000-I). Accordingly, the Court is competent to examine the facts of the present case as to their compatibility with the Convention only in so far as they occurred after 10 October 1994, the date of ratification of Protocol No. 1 by Poland. It may, however, have regard to the facts prior to ratification inasmuch as they could be considered to have created a situation extending beyond that date or may be relevant for the understanding of facts occurring after that date (see Hutten Czapska v. Poland [GC], no. 35014/97, §§ 147-153, ECHR 2006-...).

The Court further observes that the applicant's complaint is not directed against the 1966 expropriation decision as such, nor against the 1992 decision to transfer the ownership from the State Treasury to the Izolacja company. It rather relates to the applicant's alleged difficulties in obtaining practical recognition of the legal effects of the decision of 1999, confirmed in 2001 by the Supreme Administrative Court, that the expropriation had been unlawful. The Government's plea of inadmissibility on the ground of lack of jurisdiction ratione temporis must accordingly be dismissed.

2. Incompatibility ratione personae with the provisions of the Convention

The Government submitted that the applicant could not claim to be a victim of a breach of the Convention since he had already obtained satisfaction within the domestic system. He had obtained full redress for any delay in having the possession of the property restored to him by the Izolacja company. Under the lease contract which he had concluded with that company, he had recovered independent possession of the property on 1 September 2005 and had agreed to grant dependent possession to the Izolacja company. Additionally, he had obtained compensation for the period after January 2001 during which he had been deprived of the use of his property.

The applicant disagreed.

The Court considers that the Government's objection is closely linked to the substance of the applicant's complaint under Article 1 of Protocol No. 1 to the Convention. Its examination should therefore be joined to the merits of the case.

3. Exhaustion of domestic remedies

The Government argued that the applicant had failed to exhaust the relevant domestic remedies. He had not brought a civil action against the Izolacja company for repossession of the entire property. He had only sought repossession in respect of the production hall. The applicant had not brought an action for compensation in respect of the period starting from 1 April 2005. He had never sought reimbursement from the company of the taxes due for the real estate. He had not instituted proceedings to have the ownership entry in the relevant land register updated, following the judgment of January 2001, as the applicable laws obliged him to do. Likewise, the applicant had failed to appeal against the judgment of 28 February 2005 dismissing his action for compensation against the State Treasury for damage allegedly sustained between 1945 and 2003 (see paragraph 42 above). It was also open to him to claim compensation from the State Treasury under Article 417 of the Civil Code for the alleged damage, if any, caused to him by the fact that he had not been able to recover possession of his property after January 2001.

As to the administrative remedies, the applicant had failed to institute proceedings under Article 160 of the Code of Administrative Procedure as applicable at the material time, which made it possible to seek compensation for damage caused by the administrative decision which had subsequently been declared null and void.

The applicant disagreed. He submitted that the legal avenues indicated by the Government had been time consuming, costly and had not offered any guarantee that all his claims arising from the unlawful expropriation would be satisfied. As a result, the burden of ensuring that the legal effects of the expropriation decision were eradicated in practice had fallen entirely on the applicant.

The Court notes that insofar as the applicant complains about the fact that he did not receive compensation from the State Treasury for the period during which the State owned company had been using his property, he failed to appeal against the judgment of the Warsaw-Sródmieście District Court of 28 February 2005 (see paragraphs 38-42 above). It has not been argued or shown that under the applicable domestic law an appeal would not have offered reasonable prospects of success. However, in the circumstances of the applicant's case the Court considers that it does not have to decide on this issue at this stage for the following reasons.

The essence of the applicant's grievance is the failure of the domestic legal system to secure his enjoyment of his rights which were ultimately vindicated by the Supreme Administrative Court's judgment of 12 January 2001. Whether that contention is borne out by the facts is a question to be resolved on the merits, taking into account the means of redress available to the applicant, the scope of the State's obligations in this context and the response given at the domestic level to the applicant's use of remedies. These matters are more appropriately addressed in an overall analysis. Accordingly, and as with the Government's challenge to the applicant's victim status, the issues raised by their non-exhaustion arguments should be joined to the merits of the case.

In conclusion, the Court notes 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

1. The parties' submissions

The Government submitted that the relevant administrative decisions and the judgment of the Supreme Administrative Court in the applicant's case did not impose any obligations on the public authorities, such as an obligation to physically deliver the property to the owners. The only, albeit essential, result of the administrative decision adopted by the Minister for Internal Affairs on 17 April 2000, which was later upheld by the Supreme Administrative Court, had been to declare that the expropriation decision was null and void. This decision had had a declaratory character. It had not imposed on the State any obligations to take any practical steps in respect of the property concerned. Nor had it lent itself to any active enforcement measures to be taken under the provisions governing administrative enforcement procedure (“the 1966 Act”). This Act applied only to measures aiming to ensure implementation of public-law obligations by way of concrete steps to be pursued by the administrative authorities.

The Government further submitted that on no occasion had the public authorities refused to comply with the judgment of 12 January 2001. Following this judgment, the administrative decision declaring the expropriation null and void had become final and had produced immediate effects on the civil rights and obligations of the persons concerned. In particular, the applicant and other legal successors had regained the unchallenged ownership of the property. By the same token, the State Treasury and the defendant company had lost their ownership. Since then the applicant's legal title to the property had been recognised by all domestic authorities. The courts, in their civil judgments concerning various cases brought by the applicant after 12 January 2001 in connection with the property, had accepted his ownership as a given.

On the strength of this judgment all third parties had been obliged to respect his ownership and not interfere with it. The rights and obligations stemming from the applicant's ownership had clearly been of a civil character and the civil courts had had jurisdiction to resolve any disputes arising in connection with their exercise. No legal provision had reserved the competence to deal with such disputes to the administrative authorities.

The State Treasury, which under the 1966 decision had been regarded as the owner until 2001, had not been a party to the civil-law disputes between the applicant and Izolacja company. From August 1999 at the latest Izolacja, a public company, had been a legal entity separate from the State Treasury and the latter had not been liable in respect of any obligations contracted by the former. The State Treasury had not had in this connection any legal means at its disposal to influence the outcome of the civil proceedings between the applicant and the company. The State Treasury had possessed shares in the company, but as it was a minority shareholder, even its indirect influence on the company's organs, through the normal voting mechanisms applicable to public companies, had not offered any certainty of success.

The applicant stressed that as a result of the judgment of January 2001 the expropriation decision had ultimately become null and void. However, no administrative procedure had been available for ensuring compliance with that judgment. The judgment should have automatically restored physical possession of the factory to the applicant. Notwithstanding, it had fallen entirely to the applicant to pursue legal remedies capable of improving his situation and to ensure that possession of the factory was indeed restored to him. This had made it necessary for him to bear considerable legal costs, if only in court fees. Such an obligation had imposed on the applicant a considerable burden from which he should have been released by the active efforts of the public authorities, not by his own efforts.

The applicant further stressed that in 1992 the authorities had issued a decision to transfer the ownership from the State Treasury to the company, even though they had been aware that the administrative proceedings in which he had sought to have the legal title to the property restored to him were already pending. This was contrary to the principle that in administrative proceedings the State should act in such a way as to strengthen the citizen's confidence in the fairness of such proceedings.

2. The Court's assessment

a. General principles

The Court first reiterates that Article 1 of Protocol No. 1 contains three distinct rules. They have been described thus (in James and Others v. the United Kingdom, judgment of 21 February 1986, Series A no. 98, pp. 29 30, § 37; see also, 31524/96, § 51, ECHR 2000-VI):

“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, amongst other things, to control 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 peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule.”

b. Whether there was a possession

The Court points out that the concept of “possessions” in Article 1 of Protocol No. 1 has an autonomous meaning (see Beyeler v. Italy [GC], no. 33202/96, § 100, ECHR 2000-I). Consequently, the issue that needs to be examined first is whether the circumstances of the case, considered as a whole, conferred on the applicant a substantive interest protected by Article 1 of Protocol No. 1.

In this connection, the Court notes that the applicant's complaint is focused on the inability to enjoy what he perceives as his rights protected by Article 1 of Protocol No. 1. This inability has resulted from the fact that after the judgment of the Supreme Administrative Court given on 12 January 2001, he had to take further proceedings in order to be able to effectively enjoy his rights originating in this judgment (see paragraph 86 above).

The Court notes that the Supreme Administrative Court declared the expropriation decision null and void. Under the provisions of the Polish law such a decision gives rise, on the part of former owners or their legal successors, to a right to have the property restored to him or her, or, failing that, to a right to compensation. Hence, the decision to set aside the final expropriation decision had consequences for the applicant which should be regarded as conferring on him a proprietary interest falling within the ambit of possessions within the meaning of Article 1 of Protocol No. 1 to the Convention.

c. Compliance with the requirements of Article 1 of Protocol No. 1 to the Convention

The Court reiterates that 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 obligation to secure the effective exercise of the rights defined in that instrument may result in positive obligations for the State (see, among other authorities, X and Y v. Netherlands, judgment of 26 March 1985, Series A no. 91, p. 11, §§ 22-23). In such circumstances, the State cannot simply remain passive and “there is ... no room to distinguish between acts and omissions” (see, mutatis mutandis, Airey v. Ireland, judgment of 9 October 1979, Series A no. 32, p. 14, § 25).

As regards the right guaranteed by Article 1 of Protocol No. 1, such positive obligations may entail certain measures necessary to protect the right to property (see, among other authorities and mutatis mutandis, López Ostra v. Spain, judgment of 9 December 1994, Series A no. 303-C, p. 55, § 55), even in cases involving litigation between private individuals or companies (see Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 83, ECHR 2007 ... and Sovtransavto Holding v. Ukraine, no. 48553/99, § 96, ECHR 2002-VII).

The Court observes that the applicant's complaint does not relate to a simple failure on the part of the State to conduct enforcement proceedings in respect of a final judicial decision given against it in the applicant's favour (in respect of which obligation, see Prodan v. Moldova, no. 49806/99, ECHR 2004 III (extracts) and Lupacescu and Others v. Moldova, nos. 3417/02, 5994/02, 28365/02, 5742/03, 8693/03, 31976/03, 13681/03, and 32759/03, 21 March 2006). Rather, it is tantamount to saying that it was left to him to take such measures as would have made it possible for him to fully enjoy the economic advantages arising out of his rights originating in the judgment of the Supreme Administrative Court given in 2001.

The Court notes that the property in question, a factory, was not held by any public authority either when the judgment of the Supreme Administrative Court was given in 2001, or at any later time (contrast Zwierzyński v. Poland, cited above, § 67, ECHR 2001 VI). It was held by the Izolacja company, the legal successor of the former State owned enterprise which had previously owned and run the factory. Even if the State retained a minority of the shares in the company, it nevertheless enjoyed, as pointed out by the Government (see paragraph 85 above), complete operational and financial autonomy and was governed by the provisions of the Commercial Code (see paragraphs 16 and 28 above).

The Court observes that the status of the company has a bearing on the nature of the State's obligations under Article 1 of Protocol No. 1. In particular, having regard to the institutional and operational independence of the Izolacja company from the State, the latter must be taken to be absolved from responsibility under the Convention for that company's acts and omissions. For the Court, the State's obligation in the circumstances of this case is confined to ensuring an effective enforcement of the decision declaring the expropriation null and void, by having in place a legal framework making it possible for the applicant to recover possession of his property and to settle claims arising between him and the private-law entity, the Izolacja company, which was in possession of the property at the time of the impugned decision (see, mutatis mutandis, Sovtransavto Holding v. Ukraine, cited above, § 96).

In this context, the Court acknowledges that difficult legal issues may arise in connection with legal proceedings pursued in order to remedy infringements of the right to the peaceful enjoyment of possessions committed in the past by the communist authorities (Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, ECHR 2005 VI, mutatis mutandis).

It observes that in the situation concerned in the present case, after a State owned enterprise had been running the factory for a long period of time and incurring expenditure to maintain it, a complex legal situation involving reciprocal claims arose between the applicant as the former owner and the Izolacja company which is the legal successor of this enterprise. The Court notes that under domestic law, it was open to the applicant to have recourse to various types of proceedings in order to have the 2001 judgment implemented in practice and, in particular, to have these complex claims and counterclaims determined by the courts. The applicant had recourse to them, firstly by instituting several sets of proceedings in which he sought damages from the enterprise for the use of the property after the expropriation decision had been declared null and void in 2001. The courts ruled in his favour in two of these sets of proceedings and awarded damages to him. The Court further notes that the applicant also successfully instituted proceedings in which he sought to have possession of the factory returned to him. Furthermore, it was open to him to claim damages for the period during which the State Treasury had been using his property. The first-instance court dismissed his claim. It was open to the applicant to lodge an appeal, but he failed to do so (see paragraphs 38- 42 above).

It is further to be observed that there was no impediment under domestic law to the negotiation of private contractual arrangements between the applicant and the Izolacja company regarding the lease of the property to the latter. In fact such a contract was successfully concluded between the parties (see paragraph 30 above).

Hence, the domestic law provided an effective framework of a judicial character by which the applicant could seek to have the economic value of his rights arising out of the Supreme Administrative Court's judgment of 12 January 2001 recognised in practice.

Having regard to the circumstances of the case seen as a whole, the Court is of the view that the State has not failed to comply with its obligation to secure to the applicant the effective enjoyment of his rights guaranteed by Article 1 of Protocol No. 1 to the Convention. On that account, the Court finds that it unnecessary to rule on the Government's preliminary objections relating to victim status and non exhaustion of domestic remedies (see paragraph 80 above, in fine)

Therefore, there has been no violation of Article 1 of that provision.

IV. OTHER ALLEGED VIOLATIONS OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

The applicant complained that the length of the proceedings in which he had sought to have the expropriation decision declared null and void amounted to a breach of Article 1 of Protocol No. 1.

The applicant complained that he could not seek compensation for the damage he had suffered as a result of the protracted length of the restitution proceedings.

The Court notes that this complaint is linked to the one examined above and must therefore likewise be declared admissible.

The Court considers that this complaint under Article 1 of Protocol No. 1 complaint does not give rise to any issue separate from the one which has already been examined under Article 6 of the Convention (see, for example, Zanghì v. Italy, judgment of 19 February 1991, Series A no. 194 C, § 23, and Di Pede v. Italy, judgment of 26 September 1996, Reports of Judgments and Decisions 1996 IV, p. 17, § 35).

V. 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 applicant claimed 50,000 Polish zlotys (PLN) in respect of the pecuniary and non pecuniary damage resulting from the breach of Article 6 § 1 of the Convention. He further claimed PLN 271,800 for pecuniary damage and PLN 40,000 for non pecuniary damage in connection with the breach of Article 1 of Protocol No. 1 to the Convention.

The Government contested the claim for pecuniary damage as being exorbitant.

The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore dismisses this claim. On the other hand, it awards the applicant 3,500 euros (EUR) in respect of the non pecuniary damage sustained in connection with the violation of the right to a hearing within a reasonable time.

B. Costs and expenses

The applicant also claimed EUR 3,400, referring to relevant invoices he submitted, for the costs and expenses incurred before the Court.

The Government did not express an opinion on the matter.

According to 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 awards the applicant's claim in full.

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

1. Joins to the merits the Government's preliminary objections concerning non-exhaustion of domestic remedies and the applicant's victim status in respect of the complaint under Article 1 of Protocol No. 1 to the Convention and dismisses the remaining objection;

Declares the complaints concerning the excessive length of administrative proceedings and the alleged failure to secure the applicant's right to the peaceful enjoyment of his possessions as confirmed by the judgment of the Supreme Administrative Court of 12 January 2001 admissible, and the remainder of the application inadmissible;

Holds that there has been a violation of Article 6 § 1 of the Convention;

Holds that there has been no violation of Article 1 of Protocol No. 1 of the Convention and finds that it is not necessary to rule on the Government's above-mentioned preliminary objections;

5. Holds that there is no need to examine separately the complaint concerning the length of the proceedings under Article 1 of Protocol No. 1 to the Convention;

Holds

(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 3,500 (three thousand five hundred euros) in respect of non-pecuniary damage and EUR 3,400 (three thousand four hundred euros) in respect of costs and expenses, to be converted into Polish zlotys at the rate applicable at the date of settlement, plus any tax that may be chargeable;

(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 applicant's claim for just satisfaction.

Done in English, and notified in writing on 22 April 2008, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Lawrence Early Nicolas Bratza
Registrar President