FIFTH SECTION

CASE OF MANOVA AND OTHERS v. BULGARIA

(Application no. 32626/06)

JUDGMENT

STRASBOURG

3 February 2011

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

In the case of Manova and Others v. Bulgaria,
The European Court of Human Rights (Fifth Section), sitting as a committee composed of:
	Mark Villiger, President,
	Isabelle Berro-Lefèvre,
	Ganna Yudkivska, judges,
and Stephen Phillips, Deputy Section Registrar,
Having deliberated in private on 11 January 2011,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1.  The case originated in an application (no. 32626/06) 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”) by three Bulgarian nationals, Ms Velichka Aleksandrova Manova, Mr Dragomir Draganov Manov and Ms Neli Draganova Georgieva-Manova (“the applicants”). The first applicant lodged the present application on 24 July 2006. By letter of 10 April 2008 the second and third applicants expressed their wish to join the application.
2.  The applicants were represented by Mr Y. Grozev and Ms N. Dobreva, lawyers practising in Sofia. The Bulgarian Government (“the Government”) were represented by their Agents, Ms N. Nikolova and Ms R. Nikolova, of the Ministry of Justice.
3.  On 8 February 2010 the President of the Fifth Section decided to give notice of the application to the Government. In accordance with Protocol No. 14, the application was allocated to a Committee of three Judges.
THE FACTS
I.  THE CIRCUMSTANCES OF THE CASE
4.  The applicants were born in 1943, 1964 and 1953 respectively and live in Sofia.
5.  In 1966 the first applicant and her husband bought from the Sofia municipality a three-room flat of 78 square metres, situated in the centre of the city, which had become State property by virtue of the nationalisations carried out by the communist regime in Bulgaria after 1946.
6.  On an unspecified date in the beginning of 1993 the heirs of the former pre-nationalisation owner of the property brought proceedings against the first applicant and her husband under section 7 of the Restitution Law. They also sought a rei vindicatio order.
7.  In 2001 the first applicant’s husband died, leaving as heirs the three applicants (the second and third applicants were his children). Accordingly, after that the first applicant owned two-thirds of the flat and the second and third applicants one sixth each.
8.  The proceedings under section 7 of the Restitution Law ended by final judgment of the Supreme Court of Cassation of 26 January 2006. The courts found that the applicants’ title was null and void because the mayor’s decision in 1966 to sell the disputed flat to the first applicant and her husband had not been approved by the Minister of Finance, as required at the time, but by another official. The applicants disputed this conclusion in their appeals lodged in the framework of the proceedings.
9.  The courts also allowed the claimants’ rei vindicatio action and ordered the first applicant, who was at the time living alone in the flat, to vacate it. She did so in August 2006. In May 2008 she was provided with the tenancy of a small municipally-owned flat, where she moved in.
10.  On 19 April 2006 the applicants applied to receive compensation bonds. By an order of the Sofia regional governor of 25 September 2006 this was refused as the applicants had not complied with the statutory requirement to apply for such bonds within two months after the final judgment given in the proceedings under section 7 of the Restitution Law.
11.  The applicants appealed, pointing out that they had missed the relevant time-limit because the first applicant had been ill. Nevertheless, in a final judgment of 19 May 2008 the Supreme Administrative Court upheld the governor’s refusal.
II.  RELEVANT BACKGROUND FACTS, DOMESTIC LAW AND PRACTICE
12.  The relevant background facts and domestic law and practice have been summarised in the Court’s judgment in the case of Velikovi and Others v. Bulgaria (nos. 43278/98, 45437/99, 48014/99, 48380/99, 51362/99, 53367/99, 60036/00, 73465/01, and 194/02, §§ 110-41, 15 March 2007).
13.  Pursuant to section 9(4) of the Compensation Law persons who have lost property under section 7 of the Restitution Law can apply for compensation bonds within two months after the final judgment under section 7 given in their case. It is the constant practice of the domestic courts to apply strictly this time-limit, without regard to the reasons which might have led to the interested parties having missed it (see, for example, judgments of the Supreme Administrative Court no. 12745 of 25 November 2008, case no. 2988/2008, and no. 3413 of 16 March 2009, case no. 5928/2008).
THE LAW
I.  ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
14.  The applicants complained under Article 1 of Protocol No. 1 that they had been deprived of their property arbitrarily, through no fault of their own and without adequate compensation.
15.  Article 1 of Protocol No. 1 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.”
16.  The Government considered that the applicants’ deprivation of property had not been arbitrary, but governed by strict rules meant to balance the interests of pre-nationalisation and post-nationalisation owners. They argued that the applicants had had a possibility to receive adequate compensation through compensation bonds, but had failed to make due use of it. Furthermore, the applicants themselves bore responsibility for the outcome of the restitution proceedings, as they had failed to mount an effective defence in relation to the defect found in their title. In this regard, the Government submitted two judgments of the Supreme Court of Cassation where actions under section 7 of the Restitution Law, based on claims that the respective decisions of the municipal authorities to sell property to citizens had not been approved by the Minister of Finance, had been dismissed. Lastly, the Government pointed out that in 2008 the first applicant had been accommodated in municipally-owned dwelling and considered that the second and third applicant had not suffered “any special hardship” because at the time when the first applicant had been evicted they had not been living in the disputed flat.
17.  The applicants contested these arguments.
A.  Admissibility
1.  Exhaustion of domestic remedies
18.  The Government pointed out that the applicants had failed to apply for compensation bonds within the two-month statutory time-limit following the final judgment under section 7 of the Restitution Law (see paragraphs 10 and 16 above). The Court considers that this amounts to an objection for non-exhaustion of domestic remedies. However, it refers to its detailed reasoning in Velikovi and Others (cited above, §§ 226-27), where it found that at the relevant time the bonds compensation scheme did not secure adequate compensation with any degree of certainty. Furthermore, it has already examined identical objections for non-exhaustion of domestic remedies in similar cases and has rejected them (see Dimitar and Anka Dimitrovi v. Bulgaria, no. 56753/00, § 23, 12 February 2009, and Kayriakovi v. Bulgaria, no. 30945/04, § 23, 7 January 2010). The Court does not see a reason to reach a different conclusion in the present case.
19.  The Government also argued that the applicants had not convincingly challenged the national courts’ conclusion that the decision to sell the flat to the first applicant and her husband in 1966 had not been approved by the Minister of Finance (see paragraph 16 above). The applicants disputed this conclusion (see paragraph 17 above). The Court considers that the applicants cannot be held responsible for the fact that the Supreme Court of Cassation reached, on the basis of the evidence collected, conclusions differing from the ones in the cases referred to by the Government (see paragraph 16 above).
20.  Therefore, the Court dismisses the Government’s objections based on non-exhaustion of domestic remedies.
2.  The six-month rule
21.  In these circumstances, the question arises as to whether the complaint was submitted to the Court within six months of the final domestic decision, as required by Article 35 § 1 of the Convention.
22.  In cases similar to Velikovi and Others (cited above) the Court has held that the relevant events should be viewed as a continuing situation and that the six-month time-limit under Article 35 § 1 of the Convention started running when all compensation issues were settled (see, for example, Shoilekovi and Others v. Bulgaria (dec.), nos. 61330/00, 66840/01 and 69155/01, 18 September 2007). In the cases of Kayriakovi (cited above, §§ 25-29) and Yonkov v. Bulgaria (no. 17241/06, § 22, 2 September 2010) the Court specified that where the applicants had not duly sought compensation bonds, the six-month period started to run after the expiry of the two-month time-limit to do so, as provided for under domestic law, because after that there were no relevant developments which could lead to any form of compensation.
23.  The Court finds it appropriate to apply this approach to the case at hand. It notes that the two-month time-limit for the applicants to seek bonds expired on 26 March 2006, the final judgment under section 7 of the Restitution Law being given on 26 January 2006 (see paragraphs 8 and 10 above). Therefore, in the case the six-month period under Article 35 § 1 of the Convention started running on 26 March 2006.
24.  It is true that the applicants appealed before the courts against the regional governor’s refusal to grant their belated application for bonds and that those judicial proceedings ended on 19 May 2008 (see paragraph 11 above). However, the Court does not consider that the proceedings represented a relevant development concerning the applicants’ right to compensation, due to the constant practice of the domestic courts in applying strictly the two-month statutory time-limit and disallowing appeals such as the applicants’ (see paragraph 13 above), who had claimed that they had missed the time-limit because one of them had been ill (see paragraph 11 above).
25.  The first applicant introduced her application to the Court on 24 July 2006 (see paragraph 1 above). As the six-month time-limit started running on 26 March 2006, her complaints were introduced in due time.
26.  However, the second and third applicants only joined the application on 10 April 2008 (ibid.). Therefore, their complaints have been introduced out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.
3.  Other grounds for inadmissibility
27.  Lastly, the Court notes, in respect of the first applicant, that the present complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention, or inadmissible on any other ground. The first applicant’s complaint must therefore be declared admissible.
B.  Merits
28.  The Court notes that the present complaint concerns the same legislation and issues as in Velikovi and Others, cited above.
29.  The events complained of constituted an interference with the first applicant’s property rights.
30.  The interference was based on the relevant law and pursued an important aim in the public interest, namely to restore justice and respect for the rule of law.
31.  Applying the criteria set out in Velikovi and Others (cited above, §§ 183-192) the Court notes that the first applicant’s title was declared null and void and she was deprived of her property on the sole ground that the mayor’s decision in 1966 to sell to her and her husband the disputed flat had not been approved by the Minister of Finance, but by another official. This deficiency is attributable to the authorities, not the first applicant or her husband (see Velikovi and Others, cited above, §§ 218 and 229, and Peshevi v. Bulgaria, no. 29722/04, § 20, 2 July 2009).
32.  The Court considers therefore that the present case is similar to those of Bogdanovi, Tzilevi and Nikolovi, examined in Velikovi and Others (see §§ 220, 224 and 231 of that judgment, cited above), where it held that the fair balance required by Article 1 of Protocol No. 1 could not be achieved without adequate compensation. The question thus arises whether adequate compensation was provided to the first applicant. In making an assessment in that regard the Court must have regard to the particular circumstances of the case.
33.  The Court notes that in May 2008 the first applicant was provided with the tenancy of a municipally-owned dwelling (see paragraph 9 above). However, this is not sufficient to lead it to the conclusion that adequate compensation had been secured (see Georgievi v. Bulgaria, no. 10913/04, § 37, 7 January 2010).
34.  The Court observes that the first applicant failed to apply for compensation bonds following the final judgment in her case, in accordance with the requirements of domestic law. However, as already found above (see paragraph 18), it could not be considered that the bond scheme secured adequate compensation. This was the position at least until June 2006, when the Parliament adopted an amendment providing for the payment in cash of the bonds’ full value (see Velikovi and Others, cited above, § 139). As already mentioned (see paragraph 23 above), the first applicant’s entitlement to seek bonds became extinguished in March 2006. Therefore, her failure to use the bond compensation scheme cannot affect decisively the outcome of the Article 1 Protocol No. 1 complaint; it must, on the other hand, be taken in consideration under Article 41 (see Velikovi and Others, cited above, § 227, and Peshevi, cited above, § 23).
35.  In these circumstances, the Court finds that no clear, timely and foreseeable opportunity to obtain adequate compensation was available to the first applicant. It follows that the fair balance between the public interest and the need to protect her rights was not achieved.
36.  There has therefore been a violation of Article 1 of Protocol No. 1.
II.  APPLICATION OF ARTICLE 41 OF THE CONVENTION
37.  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
38.  In respect of her share in the flat, the first applicant claimed 49,600 euros (EUR) in pecuniary damage. She presented a valuation report of June 2006, by an expert commissioned by her, assessing the total value of the flat at EUR 74,400. The first applicant claimed another EUR 10,000 for non‑pecuniary damage, contending that she had suffered serious anguish and frustration.
39.  The Government urged the Court to dismiss the claim, considering that any finding of a violation would constitute sufficient just satisfaction. In any event, they considered that the first applicant’s claim for pecuniary damage was excessive, and the claim for non-pecuniary damage – “excessive and speculative”.
40.  Applying the approach set out in similar cases and in view of the nature of the violation found, the Court finds it appropriate to fix a lump sum in respect of pecuniary and non-pecuniary damage with reference to the value of the property taken away from the first applicant and all other relevant circumstances (see Todorova and Others v. Bulgaria (just satisfaction), nos. 48380/99, 51362/99, 60036/00 and 73465/01, §§ 10 and 47, 24 April 2008). The Court will also take into account the first applicant’s failure to make due use of the bond compensation scheme (see paragraph 34 above and Todorova and Others, cited above, §§ 44-46).
41.  Having regard to the above, to all the circumstances of the case and to information at its disposal about real property prices in Sofia, the Court awards the first applicant EUR 45,000 in respect of pecuniary and non‑pecuniary damage.
B.  Costs and expenses
42.  The three applicants claimed jointly EUR 3,750 for 37.5 hours of legal work by their lawyers, at an hourly rate of EUR 100. In support of this claim they presented a contract for legal representation and a time sheet. They requested that any sum awarded under this head be paid directly to their counsel, Mr Y. Grozev.
43.  The Government argued that the claim was excessive.
44.  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, the Court notes that it found a violation of Article 1 of Protocol No. 1 only in respect of the first applicant. Having regard to the above and to the circumstances of the case, it considers it reasonable to award EUR 2,000 for legal fees, to be transferred directly to Mr Y. Grozev’s bank account.
C.  Default interest
45.  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.  Declares admissible the complaints of the first applicant, Ms Velichka Aleksandrova Manova, and the remainder of the application inadmissible;

2.  Holds that in respect of Ms Velichka Aleksandrova Manova there has been a violation of Article 1 of Protocol No. 1;

3.  Holds
(a)  that the respondent State is to pay to Ms Velichka Aleksandrova Manova, within three months, the following amounts to be converted into Bulgarian levs at the rate applicable at the date of settlement:
(i)  EUR 45,000 (forty-five thousand euros), plus any tax that may be chargeable, in respect of pecuniary and non-pecuniary damage;
(ii)  EUR 2,000 (two thousand euros), plus any tax that may be chargeable to Ms Velichka Aleksandrova Manova, in respect of costs and expenses, to be transferred directly into Mr Y. Grozev’s bank account;
(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;

4.  Dismisses the remainder of the claims for just satisfaction.
Done in English, and notified in writing on 3 February 2011, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
	Stephen Phillips	Mark Villiger	
	Deputy Registrar	President