(Application no. 31811/04)
15 January 2009
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 Michael Theodossiou Ltd v. Cyprus,
The European Court of Human Rights (First Section), sitting as a Chamber composed of:
Sverre Erik Jebens,
George Nicolaou, judges,
and Søren Nielsen, Section Registrar,
Having deliberated in private on 11 December 2008,
Delivers the following judgment, which was adopted on that date:
2. The applicant company was represented by Mr G. Savvides, a lawyer practising in Cyprus. The Cypriot Government (“the Government”) were represented by their Agent, Mr P. Clerides, Attorney-General of the Republic of Cyprus.
I. THE CIRCUMSTANCES OF THE CASE
A. The compulsory acquisition proceedings
B. The building permit applications
C. The proceedings concerning compensation
“The relevant case-law of the Court was referred to, not to dispute the time relevant for determination of compensation, a point which was clearly determined by the law, but rather to emphasise that, given that the delay in payment was attributed to the applicant company for not using the proceedings available to have it determined, and while the municipality had consistently offered to provide compensation on the basis of the value at the time of notification of the acquisition, the core of the applicant company’s claim had vanished.”
II. RELEVANT DOMESTIC LAW AND PRACTICE
“(1) Every person, alone or jointly with others, has the right to acquire, own, possess, enjoy or dispose of any movable or immovable property and has the right to respect for such a right...
(2) No deprivation or restriction or limitation of any such right shall be made except as provided in this Article.
(3) Restrictions or limitations which are absolutely necessary in the interests of public safety or public health or public morals, or town and country planning or the development and use of any property for the promotion of the public benefit or for the protection of the rights of others, may be imposed by law on the exercise of such a right.
Just compensation shall be promptly paid for any such restrictions or limitations which materially decrease the economic value of the property; in the event of disagreement, such compensation is to be determined by a civil court.
(4) Any movable or immovable property or any right over or interest in any such property may be compulsorily acquired by the Republic, or by a municipal corporation or by a commune for educational, religious, charitable or sporting institutions, bodies or establishments within its competence and only from the persons belonging to its respective community, or by a public corporation or a public utility body on which such a right has been conferred by law and only
(a) for a purpose which is to the public benefit and shall be specially provided by a general law for compulsory acquisition which shall be enacted within a year from the date of the coming into operation of this Constitution;
(b) when such purpose is established by a decision of the acquiring authority and made under the provisions of such law stating clearly the reasons for such acquisition;
(c) upon payment in cash and in advance of just and equitable compensation, to be determined in case of disagreement by a civil court.”
“(1) At any time after the publication of a notice of acquisition and before the payment or the deposit of compensation as in this Law provided, the acquiring authority may, by an order published in the Official Gazette of the Republic, revoke such notice and any relative order of acquisition that may have been published, either generally or in respect of any particular property or part of property referred to therein; and thereupon all proceedings consequential to such notice or order of acquisition shall abate and the acquisition shall be deemed to have been abandoned either generally or in respect of such particular property or part of property, as the case may be.
(3) Where the acquisition of any property or any part of any property is deemed to have been abandoned under the provisions of sub-section (1) or subsection (2), the acquiring authority shall pay to any person interested in such property any costs or expenses reasonably incurred by such person, and shall compensate him for any loss he has suffered since the publication of the notice of acquisition and in consequence of such notice or of any relative order of acquisition that may have been published; and in the event of any dispute as to the amount to be paid as aforesaid, such amount shall be determined by the Court.”
“The acquiring authority, within 10 months after the publication of a notice of acquisition, shall enter into negotiations for the acquisition of the property to which such notice relates by private treaty and the determination, by agreement, of the compensation payable therefor and of its apportionment amongst the persons interested.”
In the event that no such agreement is reached the acquiring authority shall proceed with payment of compensation as assessed by itself.”
“If, within one month of the publication of an order of acquisition, no agreement as in section 8 has been reached, or if, notwithstanding that the said period of one month has not elapsed, no such agreement can in the circumstances be foreseen, the acquiring authority or any person interested may apply to the Court for the determination of the compensation payable for the acquisition of the property or, where appropriate, for the apportionment of such compensation amongst the persons interested.”
“In the event that the procedure of compulsory acquisition of immovable property was not completed by the time of entry into force of the present Law the following provisions shall apply:
(a) The acquiring authority shall, within ten months from the day of entry into force of the present Law, commence negotiations for acquisition of the property subject to compulsory acquisition and, if no agreement is reached within the afore-mentioned period, the acquiring authority shall proceed to offer the amount it had estimated as compensation.
(b) the owner is not estopped from accepting the offered compensation reserving his right to seek determination of the amount of compensation by an appropriate court, .... In such a case the owner must refer the case to the court within seventy-five days at the latest for determination of the amount of compensation; following the lapse of such period it will be presumed that the owner and the acquiring authority have reached an agreement.
For the purposes of determination of compensation referred to in paragraphs (a) and (b) above an annual interest of seven per cent from the date of publication of the notification of acquisition shall be estimated until the date of entry into force of the present Law ...and interest of nine per cent from the date of entry into force of the present Law until such time as the relevant compensation is paid.”
“the value of the property, shall, subject as hereinafter provided, be taken to be the amount which the property, if sold in the open market on the date of the publication of the relative notice of acquisition by a willing seller, might be expected to realise”.
“(g) in the case of acquisition of immovable property the value of which has been affected by the imposition of any restrictions or limitations under the provisions of the Antiquities Law or any other Law, account shall be taken of any compensation which may be deemed payable in accordance with the provisions of Article 23 of the Constitution”.
“an annual interest rate of nine per cent is included in the amount of payable compensation, assessed from the date of notification of the acquisition until the date of payment of the relevant compensation”.
“for the assessment of compensation in accordance with paragraphs (f) and (g) of the present section, the circumstances of the case existing at the time of notification of the acquisition are taken into account.”
“Upon being agreed or determined under the provisions of this Law, the compensation payable shall be paid promptly and in cash to the person or persons interested.”
“On payment ... of the sum agreed or determined to be paid as compensation for the acquisition of any property, such property shall vest in the acquiring authority free from all encumbrances; and where the property is immovable property, production of satisfactory evidence of such payment or deposit shall be sufficient authority to the Chief Lands and Surveys Officer of the Republic to cause registration of such property to be made in the name of the acquiring authority on payment of any fees or charges which, under the provisions of any Law in force, are leviable on such registration.”
“In the event that payment of compensation is not made at the same time as publication of the acquisition notice, which under the law is the critical time for assessment of payable compensation, the owner of property continues to possess it and enjoys the possibility to use it and even take a mortgage on its basis. At the same time, he is aware that the property will at some time pass to the acquiring authority and ought to know that the critical time for assessment of its value is the time of publication of the notice of acquisition. Therefore, if his intention is to replace it with another property of equal value he should not delay... We find that the provision for payment of interest until the date of payment of compensation, constitutes a just measure for preserving the value of the amount that would have been received by the owner had he accepted the offer outright, or had the parties reached an agreement concerning the value of the property at the material time of publication of the notice.... The plaintiffs’ claim that they are additionally entitled to compensation by the total amount of yearly increase of the value of the property, is equated in essence to a claim for compensation equal to the value of the property as on the day of payment instead of the time of publication of the notice of acquisition. This is an unrealistic claim which does not accord either with the letter or the spirit of the law. Should it be adopted, it would encourage all sorts of delaying tactics by owners aiming to receive compensation amounting to the yearly increase of their property while at the same time enjoying the use and benefit of the property.”
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION
“In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...”
II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
“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.”
1. The parties’ submissions
(a) The Government
(b) The applicant company
(c) The Court’s assessment
1. The parties’ submissions
(a) The Government
(b) The applicant company
(c) The Court’s assessment
i. The nature of the interference
ii. The lawfulness of the interference
iii. The aim of the interference
iv. The proportionality of the interference
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
“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. The parties’ submissions
B. The Court’s decision
FOR THESE REASONS, THE COURT UNANIMOUSLY
(a) the question on the application of Article 41 is not ready for decision; accordingly,
(b) it reserves the said question;
(c) invites the Cypriot Government and the applicant company to submit, within the forthcoming three months, their written observations on the matter and, in particular, to notify the Court of any agreement they may reach;
(d) reserves the further procedure and delegates to the President of the Chamber power to fix same if need be.
Done in English, and notified in writing on 15 January 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Christos Rozakis