European Court of Human Rights

THIRD SECTION

CASE OF HRISTOVA AND OTHERS v. BULGARIA

(Application no. 56681/15)

JUDGMENT
 

STRASBOURG

5 September 2023

This judgment is final but it may be subject to editorial revision.

In the case of Hristova and Others v. Bulgaria,

The European Court of Human Rights (Third Section), sitting as a Committee composed of:

 Ioannis Ktistakis, President,
 Yonko Grozev,
 Andreas Zünd, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 56681/15) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention") on 10 November 2015 by 7 Bulgarian nationals, whose relevant details are listed in the appended table ("the applicants"), and who were represented before the Court first by Ms S. Margaritova-Vuchkova and then by Ms N. Sedefova, lawyers practising in Sofia;

the decision to give notice of the application to the Bulgarian Government ("the Government"), represented by their Agent, Ms V. Hristova from the Ministry of Justice;

the parties' observations;

Having deliberated in private on 4 July 2023,

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

SUBJECT MATTER OF THE CASE

1.  The case is of the type examined in Kostov and Others v. Bulgaria (nos. 66581/12 and 25054/15, 14 May 2020) and concerns the adequacy of compensation for expropriation under the State Property Act. In 2013 the Council of Ministers expropriated a plot of land in the vicinity of Sofia owned by the applicants and measuring 987 square metres, for the construction of a road. The compensation initially allotted was modified in judicial-review proceedings before the Supreme Administrative Court, and eventually amounted to 2,112 Bulgarian levs (BGN), equivalent to 1,080 euros (EUR), or BGN 2.14 (EUR 1.1) per square metre.

2.  In its judgment dated 11 May 2015, which was final, the Supreme Administrative Court noted in particular that the applicants' plot, while being within the urban territory of Sofia, was being used as agricultural land; thus, the level of compensation for the owners was to be determined on the basis of the prices of similar plots of agricultural land which had been subject to transactions during the relevant period preceding the expropriation. Only two transactions concerning land meeting the criteria set were identified, where land had been sold for BGN 2.88 (EUR 1.47) and BGN 0.43 (EUR 0.22) per square metre respectively. On the basis of these values the Supreme Administrative Court determined the level of compensation indicated above.

3.  The applicants complained under Article 1 of Protocol No. 1, relying in addition on Article 6 § 1 and 13 of the Convention, that the compensation for their expropriated land was too low.

4.  They complained in addition under Article 6 § 1 of the Convention that in the judicial-review proceedings the Supreme Administrative Court had failed to examine an important argument raised by them (see paragraph 20 below).

THE COURT'S ASSESSMENT

5.  Applicants Ms Violeta Petrova Kostova and Ms Darinka Milusheva Hristova passed away in 2022 and 2023, respectively, and their heirs, indicated in the appended table, expressed their wish to pursue the application in their stead. The Government did not contest the heirs' standing to do so. The Court finds thus that the heirs of Ms Kostova and Ms Hristova have standing to pursue the proceedings. It will continue to refer to them below as applicants, for easy reference.

6.  The complaint concerning the adequacy of the compensation received by the applicants (see paragraph 3 above) falls to be examined under Article 1 of Protocol No. 1 (see Kostov and Others, cited above, §§ 94-96).

7.  This complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

8.  The relevant domestic law and practice and the criteria concerning the adequacy of compensation for expropriation under the State Property Act have been described in Kostov and Others (cited above). In particular, the Court reiterated that the taking of property without payment of an amount reasonably related to its value would normally constitute a disproportionate interference, and that the amount of compensation had to be calculated on the basis of the value of the property at the date on which ownership of it was lost (ibid., §§ 62-63).

9.  In the individual cases examined in Kostov and Others the Court found a violation of Article 1 of Protocol No. 1. In these cases there had not been at least two market comparators meeting the requirements of the State Property Act, as required, and the compensation to be awarded to the applicants had been determined on the basis of Government-adopted formulas. There were however serious indications that the market value of the applicants' land was likely to have been much higher than the compensation awarded. It had not therefore been shown that that compensation met the requirement of being reasonably related to the value of the applicants' land (ibid., §§ 81-87 and the conclusion reached in § 91).

10.  The Court therefore has to assess in the present case, on the basis of the facts submitted by the parties, whether there are sufficient indicators that the actual value of the applicants' land could have been significantly higher than the compensation awarded at the domestic level.

11.  As noted (see paragraph 1 above), the compensation granted to the applicants was equivalent to BGN 2.14 (EUR 1.1) per square metre.

12.  In order to justify such level of compensation, the Government pointed out that it had been set on the basis of two transactions with properties considered to be similar.

13.  The applicants, for their part, contested the Supreme Administrative Court's decision to treat their land as agricultural. They pointed out that legally the plot did not have the status of agricultural land, and had not been treated as such by the local authorities, who prior to the expropriation had demanded that the applicants pay land tax, which under the applicable law is not due for agricultural land. According to the local authorities in Sofia, the applicants' land at the time of expropriation was "urbanised", and it had been designated "for other types of construction".

14.  The applicants presented furthermore a valuation report prepared by an expert, calculating the value of their land on the basis of four transactions with similar urbanised land. Two of these transactions were known to the Supreme Administrative Court, which however considered them irrelevant. The value of the land on that basis is BGN 413 (EUR 211) per square metre.

15.  The applicants pointed out in addition that the value of their land for taxation purposes had at the time been BGN 19 (EUR 9.7) per square metre. Under domestic law, if there had not been at least two market comparators, the authorities should have used another method, namely they would have awarded double that value. In fact, in proceedings concerning plots adjacent to that of the applicants the Supreme Administrative Court awarded the owners compensation determined on such a basis, ranging between BGN 44 (EUR 22.5) and BGN 50 (EUR 25.5) per square metre.

16.  Lastly, the applicants contested the use of one of the two transactions relied on by the Supreme Administrative Court (see paragraph 2 above). It had been concluded between connected persons, for that reason it had been ignored in other judgments of the same court concerning land expropriated for the same infrastructure project, and had eventually been nullified in other proceedings brought by the tax authorities.

17.  The Court is of the view that the information submitted by the applicants is sufficient for it to conclude that the real market value of their expropriated land could have been markedly higher than the compensation awarded in the national procedure. It appears in particular that the local authorities consistently treated the applicants' land as "urbanised", and that the value of such land, even in similar cases decided upon by the Supreme Administrative Court, was considered to be considerably higher than the amount awarded to the applicants.

18.  Accordingly, the Court concludes that the compensation awarded to the applicants for their expropriated land has not been shown to be reasonably related to the land's value, which means that the requirements of Article 1 of Protocol No. 1 (see paragraph 8 above) have not been met, and the deprivation of the applicants of their property was a disproportionate measure.

19.  There has accordingly been a violation of Article 1 of Protocol No. 1.

20.  The applicants complained in addition that the Supreme Administrative Court had failed to respond to an argument raised by them in the proceedings discussed above (see paragraph 4 above), namely that the expropriation of their land had in itself been unlawful, because the Council of Ministers' decision to that effect had not been in compliance with the statutory requirements.

21.  Having regard to the facts of the case and its findings above under Article 1 of Protocol No. 1, the Court considers that it has examined the main legal question raised, and that there is thus no need to give a separate ruling on the additional complaint (see, mutatis mutandis, Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).

APPLICATION OF ARTICLE 41 OF THE CONVENTION

22.  The applicants claimed the value of their expropriated land, as calculated in the valuation report referred to in paragraph 14 above, minus the amount of compensation actually obtained at the domestic level, that is in total BGN 406,200, equivalent of EUR 207,690. They claimed another EUR 17,077 in interest.

23.  In respect of non-pecuniary damage, the compensation claimed was EUR 5,000 per applicant.

24.  The Government contested the claims. They noted that in Kostov and Others (cited above, § 105) the Court had dismissed the claim related to the value of one of the applicant's plots, noting that the applicant could apply for the reopening of the domestic proceedings.

25.  The Court reiterates that in a case such as the present one it is to make an award which is, as far as possible, "reasonably related" to the market value of the expropriated land at the time the applicant lost ownership thereof (see Vistiņš and Perepjolkins v. Latvia (just satisfaction) [GC], no. 71243/01, § 36, ECHR 2014, and Kostov and Others, cited above, § 102).

26.  However, the Court is unable in the case at hand to determine precisely such a value. While the applicants submitted a valuation (see paragraph 14 above), and the document was an important element casting doubt on the adequacy of the compensation awarded to the applicants at the domestic level, the Court is not satisfied that the value indicated therein is a definitely established market value. It is significant in that regard that in other cases, used by the applicants as examples, the Supreme Administrative Court made much lower awards (see paragraph 15 above).

27.  Consequently, as in Kostov and Others (cited above, § 105), the Court is of the view that the most appropriate means to remedy the violation found in the case would be to reopen the proceedings at the domestic level and re-examine the case in compliance with the requirements of Article 1 of Protocol No. 1. Domestic law provides clearly for such a possibility (ibid., § 104).

28.  The Court thus dismisses the applicants' claim for pecuniary damage, in so far as it concerns the value of the expropriated property. The Court also dismisses the additional claim related to interest, for the same reasons as in Kostov and Others (cited above, §§ 106-07).

29.  As to non-pecuniary damage, the Court finds it appropriate to award EUR 3,000 jointly to all applicants.

30.  As concerns costs and expenses, the applicants claimed EUR 3,170 paid by them to their legal representatives before the Court, BGN 600 (EUR 306) paid for the valuation report referred to in paragraph 14 above, and BGN 500 (EUR 256) paid for translation. In support of this claim they presented statements from their initial representative and their current one, from the expert and from a translator.

31.  The Government contested the claims.

32.  Having regard to the documents in its possession and the circumstances of the case, the Court considers it reasonable to award EUR 2,800 covering costs under all heads, plus any tax that may be chargeable to the applicants.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Holds that the heirs of Ms Violeta Petrova Kostova and Ms Darinka Milusheva Hristova have standing to pursue the proceedings;
2. Declares the complaint concerning the adequacy of the compensation awarded to the applicants admissible;
3. Holds that there has been a violation of Article 1 of Protocol No. 1 as regards such compensation;
4. Holds that it is not necessary to examine the admissibility and merits of the additional complaint under Article 6 § 1 of the Convention;
5. Holds

(a)  that the respondent State is to pay to the applicants, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i)  EUR 3,000 (three thousand euros) jointly to all applicants, plus any tax that may be chargeable, in respect of non-pecuniary damage;

(ii)  EUR 2,800 (two thousand eight hundred euros), plus any tax that may be chargeable to the applicants or their heirs, 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;

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

Done in English, and notified in writing on 5 September 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Olga Chernishova Ioannis Ktistakis
 Deputy Registrar President

APPENDIX

List of applicants: