CASE OF VASKRSIĆ v. SLOVENIA
(Application no. 31371/12)
25 April 2017
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 Vaskrsić v. Slovenia,
The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:
András Sajó, President,
Vincent A. De Gaetano,
Paulo Pinto de Albuquerque,
Egidijus Kūris, judges,
Boštjan Zalar, ad hoc judge,
and Marialena Tsirli, Section Registrar,
Having deliberated in private on 4 April 2017,
Delivers the following judgment, which was adopted on that date:
1. The case originated in an application (no. 31371/12) against the Republic of Slovenia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Slovenian national, Mr Zoran Vaskrsić (“the applicant”), on 22 May 2012.
2. The applicant was represented before the Court by Odvetniška Družba Čeferin in Partnerji, a law firm practising in Grosuplje. The Slovenian Government (“the Government”) were represented by their Agent, Mrs B. Jovnik Hrasnik, State Attorney.
3. The applicant alleged, in particular, that the sale of his house at public auction had amounted to a violation of Article 1 of Protocol No. 1 to the Convention and that he had had no effective remedy in that regard as required by Article 13 of the Convention.
4. On 2 December 2014 the complaints under Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention were communicated to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court.
5. Mr Marko Bošnjak, the judge elected in respect of Slovenia, was unable to sit in the case (Rule 28 of the Rules of Court). Accordingly, the President of the Fourth Section decided to appoint Mr Boštjan Zalar to sit as an ad hoc judge (Article 26 § 4 of the Convention and Rule 29 § 1).
I. THE CIRCUMSTANCES OF THE CASE
6. The applicant was born in 1980 and lives in Kresnice.
7. The applicant and his family lived in a house in Litija which was sold in the impugned enforcement proceedings, described below.
A. Outline of enforcement actions taken against the applicant in the course of the enforcement proceedings
8. During the proceedings described below the applicant was the subject of enforcement claims brought by three different creditors, namely a public water-supply company JP Vodovod-kanalizacija J. (hereinafter “company J.”), private company Porsche Kredit in Leasing SLO (hereinafter “company P.”), and an individual, A.A. Each creditor was seeking to enforce its own claim against the applicant. Although company P. had initially requested that the enforcement be carried out by seizing the applicant’s house, its claim was subsequently paid from the applicant’s bank account. Having been unsuccessful in securing the payment of its claim by the sale of movable property, company J. subsequently requested that enforcement action be taken against the applicant’s house. The house was ultimately sold at public auction for the purposes of enforcing company J.’s claim. A.A. joined the proceedings with his claim after the house had been awarded to the successful bidder at the aforementioned public auction. As the applicant repaid the debt to company J. after the auction, the proceeds from the sale of the house were used to cover his debt to A.A. Taxes and the outstanding mortgage on the house were also paid from the proceeds.
B. Enforcement proceedings
9. Company J. is based in Ljubljana and is the largest public water-supply company in Slovenia. On 18 December 2007 it sent the applicant a water bill in the amount of 124 euros (EUR), which was due to be paid on 5 January 2008.
10. As the applicant had not settled the aforementioned water bill of 18 December 2007, company J. instituted enforcement proceedings against him on 28 May 2009. It sought enforcement of the principal amount of EUR 124 plus default interest.
11. On 2 June 2009 the Ljubljana District Court issued an enforcement decision - a writ of execution - against the applicant, ordering the seizure of his movable property as requested by company J. The decision contained a notice that an objection could be lodged by the debtor within a time-limit of eight days. The decision was served on the applicant on 24 June 2009. Since the applicant did not object to it, it became final on 3 July 2009. The case was subsequently transferred to the Litija Local Court for further consideration.
12. On 7 January 2010 an enforcement officer went to the applicant’s house with a view to seizing movable property. A report drawn up by the enforcement officer stated that nobody was at the property. The enforcement officer left a note, which included information concerning the attempted enforcement of the principal debt, interest and costs totalling EUR 376. He also wrote to the applicant inviting him to pay the debt voluntarily.
13. On 2 March 2010 company P. instituted enforcement proceedings seeking payment of EUR 1,576 together with interest accrued as from 10 July 2009 until payment. It proposed several means of enforcement, including the sale of the applicant’s house. The Ljubljana Local Court granted the request and the decision was served on the applicant on 9 March 2010. Since the applicant did not lodge an objection, the decision became final on 18 March 2010 and was transferred to the Litija Local Court for further consideration.
14. On 21 April 2010, as part of the proceedings instituted by company P., the Litija Local Court ordered a valuation of the applicant’s house. The order was served on the applicant through his father. Subsequently, on 2 June 2010, a property valuer submitted a report in which he set the market value of the house at EUR 140,000. He also stated that the applicant had assured him on the phone that the debt had already been repaid, but had then failed to submit confirmation of such repayment. The report was sent to the applicant for comment. As neither the applicant nor any other adult member of his household was found at the address, a note was left on 8 June 2010 directing the applicant to collect the report at the post office. However, he failed to do so, and on 24 June 2010 the report was left in his mailbox (see paragraphs 52 and 53 below). The applicant did not react to the report.
15. In the meantime, on 29 April 2010, the enforcement officer inspected the interior of the applicant’s house in the presence of the applicant’s wife and concluded that it contained no objects which could be seized and sold to cover the debt concerned in the proceedings instituted by company J. The officer again left a note inviting the applicant to pay the debt, now amounting to EUR 516, voluntarily. In his report, he proposed that the creditor choose some other means of enforcement, because enforcement directed against movable property would not suffice for the payment of the enforcement costs, let alone the debt. It was also established that the applicant’s car was leased and therefore could not be seized for enforcement purposes.
17. On 17 June 2010 the Litija Local Court granted company J.’s application and issued a decision allowing enforcement to be carried out by means of the sale of the applicant’s house. The decision was served on the applicant via his wife on 21 June 2010. The applicant did not lodge an objection. Subsequently, the court joined company J.’s application to the proceedings instituted by company P.
18. On 1 July 2010, the Litija Local Court set the amount to be paid to the property valuer. This was then paid from the deposit made by company P. On the same day the court also issued a decision setting the market price of the applicant’s house at EUR 140,000. After an unsuccessful attempt to serve both decisions on the applicant, they were left in the applicant’s mailbox (see paragraphs 52 and 53 below). The applicant did not appeal against the decisions.
19. On 31 August 2010 the Litija Local Court discontinued the enforcement proceedings pursued by company P. because the debt had been paid by means of the seizure of assets from the applicant’s bank account.
20. On 1 September 2010 the Litija Local Court ordered that a public auction of the applicant’s house be held on 7 October 2010. Following an unsuccessful attempt on 3 September 2010 to serve the order and the summons on the applicant, they were left in his mailbox (see paragraphs 52 and 53 below) on 20 September 2010.
21. On 2 September 2010 the Litija Local Court discontinued the enforcement action in respect of the applicant’s movable property because company J. had not lodged a new application within three months of the failed attempt (see paragraph 15 above). The decision was served on the applicant on 6 September 2010.
23. On 8 October 2010 the Litija Local Court ordered a second public auction to be held on 18 November 2010. Following an unsuccessful attempt to serve the order and the summons on the applicant on 14 October 2010, a note was left directing the applicant to collect them at the local post office. As he failed to do so, they were left in his mailbox (see paragraphs 52 and 53 below) on 2 November 2010.
24. In the meantime, on 18 and 25 October 2010, company J. applied to the Litija Local Court for an extension of the enforcement order to other means of enforcement, namely the attachment of the applicant’s bank account and his salary respectively.
26. On 19 November 2010 the Litija Local Court issued a written decision awarding the property to the bidder, M.L. (sklep o domiku). The award decision, together with a copy of the minutes of the second auction, was served on the applicant via his wife on 23 November 2010.
27. On 22 November 2010 the Litija Local Court granted company J.’s application and attached to the enforcement order the applicant’s salary and bank account. The decision was served on the applicant on 24 November 2010. The decision mentioned that enforcement had previously been ordered against movable property, but contained no mention of the judicial sale of the house. It was noted that up to two thirds of the salary the applicant was receiving from his employer K. could be seized, provided that the applicant was left with the statutory minimum guaranteed income. The decision also contained a notice to the bank, which stated, among other things, that if no assets were currently available, the bank should proceed with the seizure once assets became available; if no assets became available within a year of the decision being served on the bank, the latter should inform the court to that effect.
28. On 22 November 2010 another creditor, A.A., applied to the court for enforcement of a court judgment granting him compensation together with costs and interest, totalling EUR 5,112, with accrued interest. He requested that the enforcement be carried out by attachment of the applicant’s house.
29. On 24 November 2010 the applicant lodged an appeal against the award decision in which he informed the court that he had repaid the debt (see paragraph 26 above). He argued, inter alia, that he had been unable to go to the auction and that he had only learned from the impugned decision that the auction had been held. He further submitted that in the meantime he had repaid his debt. He had been having financial difficulties throughout that year since his father had died and his mother had lost her job. In this connection he submitted that he had needed to support her in addition to his wife, who had also been unemployed, and his two children. He stressed that in the event that the award decision were not revoked, his family would risk becoming homeless. Moreover, his employer, company K., had received the same day the enforcement order directed against his salary.
30. Following the applicant’s repayment of the debt on 24 November 2010, company J. on the same day applied to the court for discontinuation of the enforcement proceedings.
33. The applicant lodged an objection to the above decision (see paragraph 32 above), stating that the enforcement proceedings instituted by company J. had already been discontinued and that he wished to have A.A.’s claim enforced by the seizure of his monetary assets and repaid in twelve monthly instalments. On 19 January 2011 the Litija Local Court dismissed the applicant’s objection and refused to adjourn the enforcement proceedings in respect of the attachment of the applicant’s house. It also refused to allow the enforcement by means of seizure of the applicant’s monetary assets as proposed by the applicant because it had not been shown that such means would lead to the settlement of the debt within a year (see paragraph 49 below). That decision was served on the applicant on 21 January 2011. The applicant did not appeal against it.
34. On 29 December 2010 the Ljubljana Higher Court dismissed an appeal lodged by the applicant against the award decision issued in favour of M.L. (see paragraphs 26 and 29 above), which thus became final. The court held that the applicant had been properly summoned to attend the public auction, which he had not disputed in his appeal, and that he had not given a reason why he had been unable to go to the auction. The court dismissed his allegations that he had been unable to repay the debt. It explained that the enforcement decision concerning the debt of EUR 124 had become final in July 2009, whereas he was relying on circumstances which had taken place in 2010. Moreover, the debt was of minor value. The court further pointed out that the applicant had been properly served with all the court documents in the proceedings but had not reacted to them, which had been entirely his choice. It also found that there was no reason to suggest that the applicant’s family would end up on the street, although their standard of living might worsen as a result of the sale of their house. Lastly, the court referred to Constitutional Court decisions nos. Up-35/98 and Up-77/04 (see paragraph 55 below), stressing that the subsequent repayment of the debt could not lead to the revocation of an award decision that had already been pronounced, regardless of the amount of money to be paid.
35. On 12 January 2011, following the full payment of the sale price by M.L., the Litija Local Court transferred the property sold at public auction to him and ordered that his name be entered as the owner in the Land Register. It further ordered the applicant to vacate the house within thirty days of receipt of the decision.
36. On 21 January 2011 the applicant, now represented by a law firm, lodged an appeal against the decision concerning the transfer of title and applied for revocation of the finality of the award decision. He argued, inter alia, that following the discontinuation of the enforcement proceedings on 25 November 2010, the court should have, in accordance with section 76 of the Enforcement and Securing of Civil Claims Act (hereinafter “the Enforcement Act”, see paragraph 48 below), annulled any enforcement actions already taken; hence it should also have revoked the award decision. He stressed that at the relevant time the buyer had not yet acquired ownership of the property and therefore the revocation of the award decision would not have affected rights already acquired by the buyer. The applicant maintained that the summons for the auction had not been served on him.
37. On 25 May 2011 the Ljubljana Higher Court dismissed the applicant’s appeal. It held that under section 192 of the Enforcement Act (see paragraph 50 below) there were only two conditions to be fulfilled in order to allow the transfer of property to a buyer - a final award decision and the payment of the purchase price. Therefore, the law had been correctly applied. The court also rejected the allegation that the summons had not been served on the applicant, referring to the findings in the decision of 29 December 2010 (see paragraph 34 above). It also rejected the applicant’s assertion that the discontinuation of the enforcement proceedings should have resulted in the annulment of orders to carry out enforcement, including revocation of the award decision. The court further stated that the Constitutional Court, in its decisions nos. Up-35/98 and Up-77/04, had already expressed an opinion that the revocation of the award decision would have interfered with the rights of others (see paragraph 55 below).
38. On 17 June 2011 the Litija Local Court held a hearing on the distribution of the proceeds of the house sale and decided to distribute them as follows: the amounts of EUR 146 and EUR 5,895 would go to the applicant’s creditor, A.A., who had joined his claims to the enforcement proceedings after the house had already been sold; EUR 1,372 to the Tax Office for taxes due for the sale of the house; and EUR 58,888 to a bank on account of the outstanding mortgage on the house. The remainder of the proceeds from the sale in the amount of EUR 3,699 was transferred to the applicant. The decision was served on the applicant on 18 August 2011.
39. At the request of M.L., on 11 July 2011 the Litija Local Court issued a writ of execution against the applicant, ordering the eviction of the applicant’s family from the house. The applicant lodged an objection and a further appeal, which were both dismissed. He referred to his constitutional appeal (see the following paragraph) and essentially argued that the sale should be revoked in view of the fact that he had repaid the debt before the award decision had become final. In his submission, the transfer of the title to M.L. could not therefore be taken as a valid basis for his eviction.
40. In the meantime, on 28 July 2011 the applicant lodged a constitutional appeal against the decisions of 12 January and 25 May 2011 (see paragraphs 35 and 37 above). He argued that the decisions were unlawful and arbitrary and that the sale of his house resulting from a debt of EUR 124 amounted to a disproportionate interference with his property rights. In particular, he argued that the court had been under no obligation to attach immovable property to the enforcement order. He also submitted that an award decision could not become final if the enforcement proceedings had been discontinued, a point he had explicitly raised in his appeal (see paragraph 36 above).
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. Enforcement and Securing of Civil Claims Act
43. The Enforcement and Securing of Civil Claims Act, in force at the relevant time (Official Gazette no. 3/07 with amendments - “the Enforcement Act”), provides rules on enforcement proceedings. Section 16 states that the debtor and creditor act as parties to the proceedings. Section 44 regulates the content of the writ of execution as the grounds for any enforcement action and specifies the circumstances in which the debtor can challenge the veracity of the facts on which the enforcement request is based. The remedies are further regulated in section 9 (see paragraph 44 below).
44. Section 9 provides that all decisions issued during first-instance proceedings are amenable to appeal, unless the law provides otherwise. The debtor can object to a court decision granting an enforcement request and if his objection is dismissed he can appeal (to the second-instance court) against such decision. The deadline for lodging an objection or appeal is eight days from the service of the impugned decision. Section 55 sets out grounds for objection, which relate, inter alia, to questions of enforceability of a claim, including the possibility that the debt ceased to exist after the claim became enforceable. Section 56 provides that an objection can also be lodged after the enforcement decision has become final and until the conclusion of the enforcement proceedings, provided that it is based on facts concerning the debt which occurred after the claim became enforceable, and on condition that it could not have been mentioned in a regular objection to the enforcement decision.
“Only the following means of enforcement can be allowed by the court: sale of movable goods, sale of immovable property, transferral of a monetary claim, realisation of property or material rights and dematerialised securities, sale of shares and transferral of deposited funds ...”
“The court allows enforcement for the payment of a monetary claim by the means and by seizure of the objects which are indicated in the application for enforcement.
At the request of the debtor the court can limit the enforcement to only some of the means or objects to be seized if these suffice for the payment of the claim. ...
The court can ... at the request of the creditor allow enforcement by further means and by the seizure of further objects in addition to those already allowed.
At the request of the debtor the court can determine means of enforcement other than the ones suggested by the creditor if those means would suffice for the payment of the claim. ... “
46. As regards the seizure of movable property, section 79 of the Enforcement Act provides that certain objects, such as those for personal use and household objects and equipment, cannot be seized for enforcement purposes.
47. Sections 104 and 105 of the Enforcement Act provide for debt enforcement by means of the transfer of a monetary claim. This can be done either by the court ordering the debtor’s employer to pay a certain part of the debtor’s salary, either once or in periodic instalments, to the creditor (section 129), or by the court ordering the bank to transfer a certain amount of assets from the debtor’s bank account to the creditor (section 138).
48. Sections 71, 72, 74, 75 and 76 of the Enforcement Act concern the adjournment and discontinuation of enforcement proceedings. Section 71 provides that the court can adjourn, completely or in part, enforcement proceedings if a debtor makes such a request. The latter must demonstrate that as a result of the enforcement, he would sustain damage greater than any damage sustained by the creditor as a result of adjournment. The circumstances in which adjournment can be requested are further specified in section 71 and include a pending objection to an enforcement decision or proceedings aimed at establishing the impermissibility of the enforcement. They also include undefined particular circumstances justifying adjournment, but in such situation enforcement proceedings can be adjourned for a maximum of three months and only once. Under section 72 the proceedings can be adjourned also at the request of the creditor under certain conditions. Section 74 provides that if an adjournment is requested pending a decision on a remedy, it should last until such decision has been delivered. In other circumstances the court sets out the duration of the adjournment, depending on the circumstances. Thereafter, the proceedings continue automatically (section 75). Section 76 concerns discontinuation of the enforcement and reads, in so far as relevant, as follows:
“In the event that the court discontinues the enforcement, it also, unless otherwise provided for by law, annuls any enforcement orders, unless this would affect the rights acquired by third parties.”
49. As regards enforcement by attachment of immovable property, the following provisions of the Enforcement Act are relevant. Section 169 provides that a debtor can request, within eight days of the service of the enforcement decision, that enforcement be carried out by different means or by the attachment of different property. If the debtor applies to the court for attachment of his salary or other regular income, the court should grant the debtor’s application provided that he or she can demonstrate that the debt will thereby be paid within a year. Section 171 provides that if a creditor applies for attachment of an immovable property which has already been attached to other enforcement proceedings, his application should be joined to those proceedings (instead of instituting separate ones). Such an application can be made until the award decision becomes final.
50. Under section 181, immovable property can be sold after the enforcement decision and the decision setting out the estimated value of the property became final. Section 185 provides that only those bidders who have deposited 10% of the purchase price can participate in the auction, unless they are themselves also creditors who initiated the enforcement. If only one bidder appears at the sale, the court can postpone the auction if so requested by, inter alia, the parties to the proceedings (section 186). As regards the conduct of the sale, the following provisions of the Enforcement Act are also of relevance to the present case:
“Immovable property shall be sold by public auction.
“At the first public auction the immovable property should not be sold below its estimated value.
If it has not been possible to sell the property at the first public auction, the court shall schedule a second public auction at which the property can be sold below its estimated value, but not below half of that value.
At least 30 days should pass between the first and the second auction.”
Upon the conclusion of the public auction, the court shall determine the bidder offering the highest price and declare that the property is awarded to him.
The court issues an award decision, which is published on the court’s notice board and served on all the parties who were served the decision about the sale and to all those who participated in the auction.
“The buyer must pay the purchase price within the time-limit set out in the decision ordering the sale.
“Following the final award decision and the payment of the purchase price, the court shall issue a decision on transfer of the property to the buyer. After the decision becomes final, transfer of ownership shall be entered in the Land Register...”
“Once the decision on transfer of the property to the buyer has become final, an annulment or a modification of the writ of execution has no impact on the rights acquired by the buyer under section 192 of this Act.”
51. Under section 210 of the Enforcement Act, the debtor has a right to remain in his house or flat for three years following its judicial sale, provided that it is his residence and he pays the market rent for it. He must make a request to remain in the property within sixty days of service of the writ of execution or at the latest before the date of the auction.
B. Civil Procedure Act
52. The Civil Procedure Act (Official Gazette 73/07, with amendments) sets out the rules concerning the service of court documents on the parties. It provides that if the addressee cannot be found at his or her address, the documents may be served on him via any adult member of the household. The latter are obliged to accept them (section 140, paragraph 1). If it is impossible to serve the documents in the aforementioned way, they may be left in the mailbox with a warning that the documents are considered to have been served on the day they were left in the mailbox. The enforcement officer must note on the documents and on the return of service form the date and the reason for serving the documents by way of leaving them in the mailbox (section 141).
53. Among others, court decisions which are amenable to appeal, summons and other court documents in respect of which the court considers that special care should be taken, must be served personally on the addressee. That means that if the documents cannot be served directly or, inter alia, via another adult member of the household, they must be left at the local post office and a notice left in the mailbox or on the door informing the addressee that he has fifteen days to collect the documents at the local post office. The enforcement officer must note on the documents and on the aforementioned notice the date and the reason for leaving the notice. After the expiry of the fifteen-day deadline, the documents will be left in the mailbox and the service will be considered to have been completed. The addressee is warned of such consequences in the aforementioned notice (section 142).
C. Constitutional Court Act
“(2) A constitutional complaint shall be accepted for
- if there is a violation of human rights or fundamental freedoms which has serious consequences for the complainant;
- if it concerns an important constitutional question which exceeds the importance of the particular case in issue.”
D. Relevant Constitutional Court decisions
55. The parties referred to two decisions of the Constitutional Court in particular. In decisions nos. Up-35/98 and Up-77/04 of 2 April 1998 and 11 October 2006 respectively, the Constitutional Court examined constitutional complaints concerning an issue of a revocation of award decisions following the discontinuation of enforcement proceedings. Decision no. Up-35/98 concerned a debtor’s complaint against the Higher Court’s decision to dismiss her appeal against the award decision. The complainant argued that the award decision should not have been upheld because the creditors had withdrawn their application for enforcement before the award decision had become final. The Constitutional Court explained that the award decision was one of the legal facts leading to the ownership of the immovable property bought at public auction. It held that an award decision must be followed by a decision transferring title, the transfer itself and the entry of ownership in the Land Register, which measure is of a declaratory nature. While the Constitutional Court found that the final decision transferring title represented acquisition of a property right, the award decision created a protected expectation on the part of the buyer to acquire such a right. Therefore, the acquisition of property could only be halted if it was found that the auction had been unlawful or if the buyer had failed to pay the purchase price. It could not be stopped by any other circumstances arising subsequently, such as the discontinuation of the enforcement proceedings. Decision no. Up-77/04 concerned a complaint from an individual who had bought an immovable property at public auction, paid the purchase price and had already been issued with an award decision as well as transfer of title. After the withdrawal of the enforcement application, the local court revoked all the decisions issued in favour of the buyer. The Constitutional Court, referring to the Court’s case-law concerning “legitimate expectation”, found that the award decision had given rise to a legitimate expectation on the part of the buyer that once the award decision had become final, the only condition he had to meet was to pay the purchase price. The Constitutional Court concluded that the revocation of the enforcement decisions due to the payment of the debt after the award decision had become final had unjustifiably interfered with the complainant’s legitimate expectation to acquire the property in question.
E. Study prepared by the Supreme Court
56. The Government submitted a report prepared by the Supreme Court on 14 March 2013, which indicates that in the period between 1 January 2008 and 1 March 2012 enforcement by means of selling immovable property for a debt of up to EUR 100 was requested in 574 cases, but only in one case did it result in the sale of the property. In the same period, 6,663 requests were received for enforcement by means of selling immovable property for debts from EUR 100 to EUR 1,000, whereas a decision transferring title was issued in thirty-one cases.
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
57. The applicant complained that the sale of his house at public auction in order to enforce a claim of EUR 124 amounted to a violation of Article 1 of Protocol No. 1 to 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.”
58. The Government argued that the applicant had omitted to mention several relevant facts, such as other enforcement proceedings against him and the possibilities he had had to influence the proceedings. They suggested that the application be dismissed under Article 35 (3) (a) of the Convention on grounds of abuse of the right to petition.
59. The applicant disputed the Government’s allegation that he had omitted relevant facts from his application. In his submission, he had presented the facts relevant to his complaint, that is the facts relating to the proceedings instituted by company J. The Government, by contrast, were relying on facts, such as the proceedings instituted by company P. and by the creditor, A.A., which were not relevant to the applicant’s grievance. In particular, the proceedings instituted by company P. were finished in August 2010, which was more than two months before the second public auction. A.A. had asked for enforcement of his claim after the house had already been sold. The applicant’s debt to company J. was therefore the only reason for the sale of the house.
60. The Court notes that, except in extraordinary cases, an application will be rejected as an abuse of the right of application if it was knowingly based on untrue facts (see Gross v. Switzerland [GC], no. 67810/10, § 28, ECHR 2014). The Court considers that although the applicant’s submissions in his initial application concerning the course of the enforcement proceedings against him could have been more exhaustive, they do not give rise to circumstances justifying a decision to declare the application inadmissible as an abuse of the right of individual application.
61. The Court further notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
1. Arguments before the Court
(a) The applicant
62. The applicant argued that the means had been disproportionate to the aim pursued for several reasons. First, the house should not have been sold for a principal debt as small as EUR 124. There should be a statutory threshold below which enforcement by means of the sale of immovable property would not be possible. Although he was not without any accommodation, he had suffered grave financial and psychological damage as a result of the loss of his house.
63. Secondly, the courts had failed to act with diligence. In particular, under section 34 of the Enforcement Act (see paragraph 45 above), the courts were not obliged to accept any means of enforcement. In his case the enforcement could have been successfully completed by, for instance, the sale of movable property, which was certainly worth enough, or the attachment of his salary or bank account, since he was employed. As regards the latter, the applicant argued that the court had received company J.’s request for attachment of the applicant’s salary and bank account twenty-five days before the second auction, but had failed to act promptly. The court should have postponed the auction, asked the creditor whether he still wished to maintain his request for the attachment of immovable property, and decided on the requests without undue delay. The court’s failure to do so had resulted in the sale of the house, which was the most severe and yet unnecessary measure.
64. The applicant also argued that the dismissal of his appeal challenging the finality of the award decision lacked legal basis. The award decision should not have become final, because the enforcement proceedings had been discontinued twenty-six days earlier, following the repayment of the debt. The applicant referred to section 189 of the Enforcement Act (see paragraph 50 above) and argued that an award decision was amenable to appeal and that therefore it could have legal effect only after it had become final. The revocation of the award decision would have secured his property right and would not have interfered with the buyer’s acquired rights, as wrongly held by the courts. In this connection, the applicant argued that the Constitutional Court’s decisions had been wrongly interpreted. In particular, decision no. Up-77/04 concerned a final award decision and not an award decision that had merely been pronounced.
65. In the applicant’s submission, his case was similar to Rousk v. Sweden (no. 27183/04, 25 July 2013), because the applicant in that case too had not availed himself of all the possibilities to stop the enforcement, yet the Court had found the sale of his house to impose an individual and excessive burden.
66. Lastly, the applicant argued that the proceedings instituted by company P. and by A.A. had not affected the sale of the house (see paragraph 59 above). As regards the interest and the enforcement costs, the applicant maintained that they should not be given special weight when assessing the proportionality. However, even if they were taken into account, the measure was still disproportionate.
(b) The Government
67. The Government argued that enforcement proceedings were an integral part of a creditor’s right to access to court. The debt of EUR 124 had become due on 5 January 2008, and almost three years had passed before the house had been sold at public auction. The applicant could have repaid his debt at any time during the proceedings, but had done so only after the house had been sold. His debt to A.A., on the other hand, had never been voluntarily paid. Before the auction, enforcement by means of the seizure of the applicant’s movable property had been attempted but had been unsuccessful.
68. The applicant was properly served all the relevant correspondence and court decisions and had numerous opportunities to influence the course of the enforcement proceedings and to avoid the sale of his house. In particular, he could have requested an adjournment of the enforcement proceedings, as provided for under sections 71 and 74 of the Enforcement Act; and he could have requested that enforcement be carried out only by certain means and by means other than those proposed by the creditor, in accordance with section 34 of the Enforcement Act (see paragraph 45 above). He could also have taken advantage of section 169 of the Enforcement Act, which set out the special rights of debtors in terms of avoiding the attachment of immovable property (see paragraph 49 above). The applicant did not avail himself of any of those remedies except for the lodging of an objection to the writ of execution issued at the request of A.A. Having done so, however, the applicant did not subsequently appeal against the dismissal of the objection.
69. The Government submitted that, given all the available remedies, the applicant should have at least proposed the attachment of his salary or bank account. Had he done so within eight days of the service of the decision of 21 June 2010, he could have prevented the attachment of his immovable property. Had he been unable to do so by himself, he could have appointed a lawyer or asked for legal aid, which was available under the national legal aid scheme. The applicant not only failed to do so but also failed to explain why.
70. As regards company J.’s requests to attach the applicant’s salary and bank account, the Government argued that the creditor did not withdraw the request for the attachment of the applicant’s immovable property. That meant that even if the court had decided on the two requests before the second auction, it was unlikely that the debt would have been paid by the time that auction was held and the court would not have been in a position to cancel the auction based only on some abstract possibility of settling the debt via new means. In particular, the Government argued that the court had had no basis in law to cancel the judicial sale of the house after the requests had been made by company J. to attach the applicant’s bank account and salary. The Government further pointed out that the debt to company J. was higher than alleged by the applicant, amounting on 29 April 2010 to EUR 516 and that it had subsequently increased still further. Furthermore, the proceeds from the sale of the house had served to cover also the debt owed to A.A. The mere fact that the court decided on the requests for attachment of the applicant’s bank account and salary after the auction had taken place therefore could not lead to a finding of a violation of Article 1 Protocol No. 1 to the Convention.
71. As regards the impugned position of the courts that the award decision could not be quashed owing to the subsequent payment of the debt, the Government submitted that this was aimed at ensuring that auctions were conducted properly. It was also meant to protect buyers and creditors as well as debtors, as the sale price would have been affected by the risk of annulment due to the subsequent repayment of the debt. The applicant had been aware of all the steps in the enforcement proceedings and had been summoned to the auction, which he did not dispute in his appeal against the award decision.
72. Lastly, the Government argued that applicant had not been left without any accommodation and had in fact acquired a new house. As regards his situation and his conduct during the proceedings, he could not be compared to the applicants in the cases of Rousk v. Sweden (cited above) and Zehentner v. Austria (no. 20082/02, 16 July 2009), which involved a number of circumstances, including a degree of vulnerability on the part of the applicants, that were not present in the instant case.
2. The Court’s assessment
(a) Whether there has been an interference with the applicant’s right to peaceful enjoyment of his possessions
73. The Court notes that the ownership of the applicant’s house was transferred to another person in the context of judicial enforcement proceedings brought with a view to obtaining sums of money the applicant owed to his creditors. The Court has already examined under Article 1 of Protocol No. 1 various situations concerning the forced sale of applicants’ homes and concluded that such sale amounted to interference with the applicants’ right to peaceful enjoyment of their possessions (see, for example, Zehentner, § 71, and Rousk, § 109, both cited above). The Court sees no reason to depart from such a conclusion in the present case. It further considers that the judicial sale of the applicant’s property falls to be considered under the so-called third rule, contained in the second paragraph of Article 1 of Protocol No. 1, relating to the State’s right “to enforce such laws as it deems necessary to control the use of property in accordance with the general interest” (see, among the most recent authorities, Vrzić v. Croatia, no. 43777/13, §§ 93-96, 12 July 2016).
(b) Whether the interference was prescribed by law and pursued a legitimate aim
74. The Court reiterates that the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of someone’s possessions should be lawful (see Iatridis v. Greece [GC], no. 31107/96, § 58, ECHR 1999-II).
75. Moreover, any interference with a right of property, irrespective of the rule under which it falls, can be justified only if it serves a legitimate public (or general) interest. The Court reiterates that, because of their direct knowledge of their society and its needs, national authorities are in principle better placed than any international judge to decide what is “in the public interest” (see, among the most recent authorities, Matczyński v. Poland, no. 32794/07, § 99, 15 December 2015).
76. As regards the present case, the Court notes that the interference with the applicant’s right to peaceful enjoyment of his possessions was based on the relevant provisions of the Enforcement Act (see paragraphs 43 to 51 above) and served the legitimate aim of protecting the creditors and the purchaser of the house.
(c) Whether the interference was proportionate to the legitimate aim pursued
(i) The general principles
77. It remains to be determined whether the measure complained of was proportionate to the aim pursued. As the Court has consistently held, the right to peaceful enjoyment of possessions must strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see, among other authorities, Sporrong and Lönnroth v. Sweden, 23 September 1982, § 69, Series A no. 52, and Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, § 93, ECHR 2005-VI). In respect of interferences which fall under the second paragraph of Article 1 of Protocol No. 1, there must also be a reasonable relationship of proportionality between the means employed and the aim pursued (see J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 55, ECHR 2007-III). In each case involving an alleged violation of Article 1 of Protocol No. 1, the Court must ascertain whether by reason of the State’s interference, the person concerned had to bear a disproportionate and excessive burden. In determining whether this requirement has been met, the Court recognises that the State enjoys a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question (see Vrzić, cited above, § 100).
78. Moreover, the Court reiterates that although Article 1 of Protocol No. 1 contains no explicit procedural requirements, the proceedings at issue must afford the individual a reasonable opportunity of putting his or her case to the relevant authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by this provision. In ascertaining whether this condition has been satisfied, the Court takes a comprehensive view (see Zehentner, cited above, § 73).
(ii) Application of the principles to the present case
79. The Court notes at the outset that the sole purpose of the judicial sale of the applicant’s house was to repay the debt he owed to the public water-supply company J. Therefore, and regardless of how the proceeds of the sale were ultimately distributed (see paragraphs 8 and 38 above), the Court must examine whether the impugned judicial sale complied with the requirements of Article 1 of Protocol No. 1.
80. The Court notes, on the one hand, that the applicant failed to pay a debt to company J. which was due on 5 January 2008 (see paragraph 10 above). Moreover, he did not respond in any way to the writ of execution which was served on him on 24 June 2009 (see paragraph 11 above) or to the notes left at his home by an enforcement officer on 7 January 2010 and again on 29 April 2010 (see paragraphs 12 and 15 above). The Court further observes that the applicant continued to remain passive after the enforcement court granted company J.’s application for the judicial sale of his house and did not make use of the various procedural possibilities available to him with a view to avoiding the sale of his house, despite being served with all the relevant decisions and summoned to appear at the auctions (see, in particular, paragraphs 17, 22, 25,44, 48 and 49). Only after his house was sold did the applicant avail himself of the possibility of appealing, arguing that he had been having financial difficulties and that unless the sale was revoked, his family would risk becoming homeless (see paragraph 29 above). In this connection, the Court notes that the domestic court does not seem to have investigated those allegations in any detail (see paragraph 34 above). However, it also notes that the applicant did not substantiate, in the proceedings before it, his claim that he had in fact had such financial difficulties, which would have made him unable to pay the debt in question.
81. On the other hand, the Court notes that the debt which company J. was enforcing through the sale of the applicant’s house was EUR 124 and that, together with the interest and enforcement expenses, it amounted to around EUR 500, the precise final amount being unknown to the Court (see paragraphs 15 and 70 above). Company J. initially attempted to enforce the debt through the sale of the applicant’s movable property and when that proved unsuccessful, it directly requested that his house be sold at public auction (see paragraph 16 above). After company J. had applied for enforcement of the debt by sale of the house on 15 June 2010, the enforcement court granted the application within two days and, after a summons to attend the auction had been left in the applicant’s mailbox on 20 September 2010, held the first auction on 7 October 2010. It sold the house for half its market value at the next auction, held on 18 November 2010 (see paragraphs 16 to 25 above). During that time the enforcement court did not consider any alternative measures to the judicial sale of the house, despite the fact that the applicant appeared to have been employed and to have had a monthly income, and that company P. in the meantime successfully enforced a much higher debt through the seizure of assets from his bank account (see paragraphs 19, 27 and 63 above).
82. The Court observes that the relevant domestic legislation, that is the Enforcement Act (see paragraphs 43 to 51 above), does not explicitly place an onus on the enforcement court to opt for less intrusive enforcement measures of its own motion or to require it to reject a request by the creditor if disproportionality arises. Nor does the legislation set any minimum threshold in respect of the amount of debt owed, so in principle even a minor debt could be enforced by means of the judicial sale of an immovable property, such as a house. This has been confirmed also by the data submitted by the Government, which show that in the period between 1 January 2008 and 1 March 2012, a decision transferring title of property was issued following the judicial sale of immovable property in thirty-two cases concerning debts lower than EUR 1,000 (see paragraph 56 above). Moreover, the Court observes that pursuant to the Enforcement Act, property sold at auction was awarded to the buyer, and that the domestic courts in the present case interpreted the legislation to mean that in order to protect the legitimate interests of the buyer, the sale could at that point not be revoked for reasons such as the subsequent repayment of the debt (see paragraphs 34 and 37 above).
83. While acknowledging that the Contracting States have a wide margin of appreciation in this area (see paragraph 77 above) and that the aims pursued by the relevant legislation might concern also issues exceeding the mere payment of a particular debt, such as the improvement of repayment discipline in the country concerned, the Court is nevertheless of the view that, given the paramount importance of the enforcement measure taken against the applicant’s property, which was also his home, and the manifest disproportion between this measure and the amount of debt it aimed to enforce, the authorities were obliged to take careful and explicit account of other suitable but less intrusive alternatives (see, mutatis mutandis, OAO Neftyanaya Kompaniya Yukos v. Russia, no. 14902/04, § 651-54, 20 September 2011).
84. In this connection, the Court notes that the Enforcement Act provided for several means of enforcement, including seizure of assets from the debtor’s bank account or part of the debtor’s salary (see paragraphs 45 and 47 above). It further refers to its finding above that there was a clear indication that the measure in the form of seizure of assets from the applicant’s bank account was available as a potentially suitable and effective measure for the enforcement of his debt (see paragraph 81 above), especially if applied with some flexibility, such as repayment over a reasonable period of time. What is more, almost a month before the second auction company J. requested that the enforcement be carried out by seizing the applicant’s salary and bank account. However, although the requests were made on 18 and 25 October 2010 respectively, the court did not grant them until 22 November 2010, that is after the house had been sold at the second auction (see paragraphs 24 and 27 above). The Court finds it striking that the enforcement court, which had previously taken decisions rather swiftly (see paragraph 81 above), took a month to decide on company J.’s requests.
85. Indeed, in view of the irreparable consequences of the judicial sale for the applicant, the court should have taken a timely decision on company’s J. requests and taken steps to postpone or cancel the auction. The Court concedes that the latter, as well as the lack of initial consideration of proportionality when accepting the request for the impugned judicial sale, may have resulted, at least in part, from the court’s interpretation of the relevant requirements of the domestic law. Nevertheless, the Court finds that in the circumstances of the case this had a negative overall effect on the conduct of the enforcement proceedings against the applicant (see, mutatis mutandis, OAO Neftyanaya Kompaniya Yukos, cited above, § 656).
86. Lastly, the Court attaches great importance to securing effective enforcement proceedings for creditors (see, mutatis mutandis, Mindek v. Croatia, no. 6169/13, § 82, 30 August 2016). However, in the present case it has not been shown that the judicial sale of the applicant’s house was a necessary measure to ensure such enforcement.
87. Having regard to the above considerations, in particular the low value of the debt that was enforced through the judicial sale of the applicant’s house and the lack of consideration of other suitable and less onerous measures by the domestic authorities, the Court concludes that the State failed to strike a fair balance between the aim sought and the measure employed in the enforcement proceedings against the applicant. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.
88. In view of this finding, the Court does not find it necessary to address specifically the applicant’s complaint concerning his unsuccessful attempt to get the decision by which the house was awarded to the buyer revoked.
II. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
89. The applicant complained that he had not had an effective legal remedy at his disposal in respect of the complaint under Article 1 of Protocol No. 1 to the Convention. In particular, he complained that he had been unable to get the sale of the house revoked on the grounds that the debt to company J. had been repaid. He relied on Article 13 of the Convention, which reads as follows:
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
90. The Government contested that allegation.
91. The Court notes that this complaint is linked to the one examined above and must therefore likewise be declared admissible (see paragraph 61 above).
92. Having regard to its conclusion in respect of Article 1 of Protocol No. 1 to the Convention (see paragraph 87 above), the Court considers that there is no need to examine separately the complaint under Article 13 (see, for example, Zehentner, cited above, § 82).
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
93. 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.”
94. The applicant claimed 70,000 euros (EUR) in respect of pecuniary damage, corresponding to the difference between the assessed market value of the house and the price for which it was sold (half of that value). The applicant, referring to the domestic statutory rates, further claimed default interest from the date of the second public auction onwards, which, in his submission, amounted to EUR 27,244 by 12 May 2015, and approximately EUR 7,000 per annum thereafter.
95. The applicant also claimed EUR 15,000 in respect of non-pecuniary damage. He argued that the loss of his home and the media attention the case had received had caused him significant mental suffering.
96. The Government disputed the claim for pecuniary damage as unsubstantiated and argued that the applicant had provided no basis for his claim of EUR 7,000, which he had requested as a yearly award for default interest. They also disputed the claim with respect to non-pecuniary damage, arguing that it was unacceptable that the applicant claimed to have suffered distress as a result of the media attention when it was he who had sought it and shared the information with the media.
97. The Court reiterates that it has found a violation of Article 1 of Protocol No. 1 to the Convention in respect of the sale of the applicant’s property at public auction. The applicant is therefore entitled to compensation for pecuniary damage in so far as there is a causal link between the violation found and the damaged suffered. The applicant must also substantiate the value of the damage suffered and costs incurred. For its part, the respondent State is under a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach (see Rousk, cited above, § 150, and Iatridis v. Greece (just satisfaction) [GC], no. 31107/96, § 32, ECHR 2000-XI).
98. In cases where the interference in question has satisfied the condition of being prescribed by law and was not arbitrary, the Court has considered that compensation at the level of the market value of the property at the time of the interference was appropriate (see Rousk, cited above, § 151). It sees no reason to make a different assessment in the present case. It observes that the applicant’s property was inspected by a property valuer before the sale, at which point its market value was set at EUR 140,000 (see paragraph 14 above). The Government provided no arguments calling into question the accuracy of that evaluation. It follows that the applicant should be compensated for the difference between the market value, EUR 140,000, and the price at which the property was sold, EUR 70,000, that is EUR 70,000. The Court further considers that interest should be added to the above award in order to compensate for the loss of value of the award over time. The interest should reflect national economic conditions, such as levels of inflation and rates of interest (see Ghigo v. Malta (just satisfaction), no. 31122/05, § 20, 17 July 2008). In this connection, the Court notes that the applicant claimed interest based on the domestic statutory default interest rates. However, in the circumstances of the case and having regard to inflation during the relevant period (see Scordino v. Italy (no. 1) [GC], no. 36813/97, § 258, ECHR 2006-V), the Court considers that a one-off payment of 10% interest should be added to the amount of EUR 70,000.
99. In view of the foregoing, the Court considers it reasonable to award the applicant EUR 77,000 in total in respect of pecuniary damage, plus any tax that may be chargeable on that amount.
100. As regards the applicant’s claim for non-pecuniary damage, the Court considers that the applicant must have suffered non-pecuniary damage, in particular feelings of anxiety and distress, as a result of the sale of his home, and this notwithstanding that the applicant may be considered to have contributed in some measure to the situation. It therefore awards him EUR 3,000 in respect of non-pecuniary damage, plus any tax that may be chargeable on that amount.
B. Costs and expenses
101. The applicant also claimed EUR 3,680 for the costs and expenses incurred in the domestic proceedings. That amount consisted of the legal fees he had been charged for the appeal against the transfer of title and the application for revocation of the final award decision (see paragraph 36 above), the remedies against eviction and the constitutional appeal (see paragraphs 39 and 40 above). He also claimed EUR 1,500 for the proceedings before the Court. He based his claim on the official tariff for lawyers and requested that VAT be added to the amounts claimed.
102. The Government did not comment on this claim.
103. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 5,000, covering costs under all heads.
C. Default interest
104. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.
FOR THESE REASONS, THE COURT, UNANIMOUSLY,
1. Declares the application admissible;
2. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;
3. Holds that there is no need to examine separately the complaint under Article 13 of the Convention;
(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, the following amounts:
(i) EUR 77,000 (seventy-seven thousand euros), plus any tax that may be chargeable, in respect of pecuniary damage;
(ii) EUR 3,000 (three thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;
(iii) EUR 5,000 (five thousand euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
5. Dismisses the remainder of the applicant’s claim for just satisfaction.
Done in English, and notified in writing on 25 April 2017, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Marialena Tsirli András