Right to Property: scope and case law

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 SCOPE AND STATUS OF THE RIGHT

The Right to Property under Article 21 of American Convention on Human Rights

Article 21 of the American Convention recognizes the right to private property. In this regard, it establishes: a) that "[e]veryone has the right to the use and enjoyment of his property"; b) that such use and enjoyment can be subordinate, according to a legal mandate, to "social interest"; c) that a person may be deprived of his or her property for reasons of "public utility or social interest, and in the cases and according to the forms established by law"; and d) that when so deprived, a just compensation must be paid.

The Commission stated that the right to property as embodied in Article 21 of the Convention, guarantees the free exercise of the attributes of this, understood to be the right to dispose of it in any legal way, possess it, use it and prevent any other person interfering in the enjoyment of that right. It held that the right to property includes all of a person's patrimonial rights, that is, those that affect both tangible and intangible property of any value. (see: Baruch Ivcher Bronstein vs. Peru)

According to the Court, "Property" can be defined as those material things which can be possessed, as well as any right which may be part of a person's patrimony; that concept includes all movables and immovables, corporeal and incorporeal elements and any other intangible object capable of having value.

During the study and consideration of the preparatory work for the American Convention on Human Rights, the phrase "[e]veryone has the right to the use and enjoyment of private property, but the law may subordinate its use and enjoyment to public interest" was replaced by "[e]veryone has the right to the use and enjoyment of his property. The law may subordinate such use and enjoyment to the social interest." In other words, it was decided to refer to the "use and enjoyment of his property" instead of "private property".

In Baruch Ivcher Bronstein vs. Peru the Court held that in order for a deprivation of property of a person to be compatible with the right to property embodied in the Convention, it should be based on reasons of public utility or social interest, subject to the payment of just compensation, and be restricted to the cases and according to the forms established by law.

The Right to Property under Article 1 of Protocol No 1 to the European Convention on Human Rights

Scope of "possessions":

The Article refers to peaceful enjoyment of possessions rather than a right of property. But the Court has held that this amounts to a right of property. In the Marckx case (Marckx v. Belgium, judgment of 13 June 1979, Series A, No. 31, (1979-80) 2 EHRR 330). the Court said:

By recognising that everyone has the right to the peaceful enjoyment of his possessions, Article 1 is in substance guaranteeing the right of property. This is the clear impression left by the words `possessions' and `use of property' (in French: `biens', `propriete, `usage des biens'); the `traveaux preparatoires', for their part, confirm this unequivocally: the drafters continually spoke of `right of property' or `right to property' to describe the subject matters of the successive drafts which were the forerunners of the present Article 1. (para. 63 of judgment)

Article 1 of Protocol No. 1 covers both natural and legal persons: corporate bodies fall within the scope of the right. Thus, companies may claim in respect of interferences with their property. But shareholders claims based on damage to a company, will only exceptionally be permitted, as when a company is unable to make a claim through its organs or liquidators. See Agrotexim v. Greece (A330-A (1995).

Further, the application of the right to property in Article 1 of Protocol No. 1 is not restricted to interferences with property which involve the transfer of some benefit to the State. This article is capable of applying to measures introduced by the State (or other public authority) which affect an individual's property rights by transferring them to, or otherwise benefiting, another individual or individuals, or which otherwise regulate the property of an individual. See, for example, James v. the United Kingdom, involving legislation which enabled tenants to acquire ownership of the properties in which they lived from their landlords. See also Applications Nos. 8588/1979, 8589/79, Bramelid and Malmström v. Sweden, concerning legislation governing the relationship between shareholders in a company.

The concept of "possessions" under Article 1 of Protocol No. 1 covers a wide range of economic interests such as movable or immovable property, tangible or intangible interests, such as shares, patents, an arbitration award, the entitlement to a pension, a landlord's entitlement to rent, the economic interests connected with the running of a business, the right to exercise a profession, a legitimate expectation that a certain state of affairs will apply, a legal claim, and the clientele of a cinema.

Further, in order for Article 1 of Protocol No. 1 to come into play, it is not necessary for domestic law to recognise the relevant interest as a property right: the concept of "possessions" is autonomous for Convention purposes. However in order to invoke the protection of Article 1, a person must enjoy some right as a matter of domestic law, which may be regarded as a property right from the Convention perspective (See Application No. 11716/85, S. v. the United Kingdom (1986), where the European Commission of Human Rights held that the occupation of property without a legal right was not protected under Article 1 of Protocol No. 1).

The concept of possessions, applies for instance to:

- The ownership of shares in a company (see the Commission's decision in Applications Nos. 8588/79 and 8589/79, Bramelid and Malmström v. Sweden (1982). See also Application 11189/84, Company S and T v. Sweden, 11 Dec. 1986, (1987) 50 DR 121 and application No 12633/87, Smith Kline and French Laboratories v. the Netherlands (1990)).

- A patent (See App. 12633/87, Smith Kline and French Laboratories Ltd v. The Netherlands, 4 Oct. 1990, (1990) 66 DR 70).

- Goodwill in a business (Van Marle and others v. The Netherlands, judgment of 26 June 1986, Series A, No. 101; (1986) 8 EHRR 483, para. 41 of judgment. But see also App. 10438/83, Batelaan & Huiges v. The Netherlands, 3 Oct. 1984, (1985) 41 DR 170)

- Arbitration awards (see Stran Greek Refineries and Stratis Andreadis v. Greece,(A301-B (1994) where the European Court of Human Rights held that an arbitration award was a "possession" for the purposes of Article 1 of Protocol No. 1).

- Fishing rights (App. 11763/85, Banir v. Sweden, 9 Mar. 1989, (1989) 60 DR 128).

- Ownership of a debt when it has crystallized (App. 12164/86, Agneessens v. Belgium, 12 Oct. 1988, (1988) 58 DR 63. See also Stran Greek Refineries and Slratis Andreadis v. Greece, Judgment of 9 Dec. 1994, Series A, No. 301-B; (1995) 19 EHRR 293, paras. 58-62 of the judgment).

- a contractual right to fee adjustments for general practitioners (App. 12947/87, Association of General Practitioners v. Denmark, 12 July 1989, (1989) 62 DR 226)

- Claims for compensation for torts. See Pressos Compania Naviera SA v. Belgium (A332 (1995) where the Court stated that such kind of claims constituted "an asset" and therefore amounted to a "possession", within the meaning of Article 1 of Protocol No. 1.

- A legitimate expectation that a certain state of affairs will apply. See Pine Valley Developments Ltd v. Ireland, (A 222 (1991) where, the Court held that the legitimate expectation that the applicant could carry out industrial development activities in his plot, had to be regarded for the purposes of Article 1 of Protocol No. 1 as a component of the property (i.e. the plot) in question.

- Professional clientele. See Van Marle v. the Netherlands, (A101 (1986) where the Court held that the right they relied on "may be likened to the right of property" embodied in Article 1. By dint of their own work, the Applicants had built up a clientele; this in many respects had the nature of a private right and constituted an asset and, hence, a "possession". (See also Iatridis v. Greece (25 March 1999)).

- The economic interests connected with the running of a business. See Tre Traktörer Aktiebolag v. Sweden (A159 (1989) where the Court considered that the "economic interests connected with" the running of a restaurant were "possessions" within the meaning of Article 1 of Protocol 1. The maintenance of the licence was one of the principal conditions for the carrying on of the applicant company's business, and its withdrawal had adverse effects on the goodwill and value of the restaurant. Such withdrawal constituted an interference with the peaceful enjoyment of possessions.

- Landlord's contractual entitlement to rent. See Mellacher v. Austria, (A169 (1989), (see also S. v. the UK).

- The economic value of a person's home. Article 1, Protocol 1 can be invoked if there is interference with the economic value of a person's home. However, Article 1, Protocol 1 does not guarantee a right to the peaceful enjoyment of property in a pleasant environment. Where there is an interference only with the aesthetic qualities of a person's home caused by, for example, environmental pollution, Article 1, Protocol 1 will not apply. In these circumstances Article 8 can be employed. Article 8 is a qualified right to respect for the home and has been used in cases of environmental pollution.

- rights of inheritance. In the Marckx case (Marckx v. Belgium, judgment of 13 June 1979, Series A, No. 31, (1979-80) 2 EHRR 330) the Court had to consider whether the rights of inheritance of an illegitimate child (which were less than those of a legitimate child under Belgian law at the time) constitute a possession. The Court concluded that the expectation of inheritance did not constitute a possession and so no claim in this regard could be sustained by the daughter (para. 50 of the judgment) though there was a violation of the Article when taken together with Article 14 because of the discriminatory application of the limitations on inheritance in favour of illegitimate children. In the Inze case (Inze v. Austria, judgment of 28 Oct. 1987, Series A, No. 126; (1988) 10 EHRR 394) the Court distinguished its decision in the Marckx case in holding that there will be a `possession' where the person providing the inheritance has died even though the distribution of the estate has not yet taken place.

- Pensions and social security benefits:

Generally a claim to a social security benefit is not a possession. However, the case law of the European Court of Human Rights distinguishes between claims based on the provision of a financial contribution by the claimant which can constitute a possession and claims based on State grants and concessions, reliant upon social or economic policy, which have not been held to be possessions. Thus, a contributory pension scheme may give the person a claim to a share of the pension fund and that claim can constitute a possession falling within the protection of Article 1 of Protocol No. 1. See Application No. 5849/72, Müller v. Austria (1975), where the Commission held that the right to an old-age pension is not included as such among the Convention rights. But it decided that the making of compulsory contributions to a pension fund might create a property right in a portion of such a fund and that such a right might be affected by the way the fund was distributed. The Commission was also prepared to assume, without deciding, that voluntary pension contributions could equally give rise to a right safeguarded by Article 1 of Protocol No. 1. However, the Commission also held that a person has no entitlement to receive a pension of a particular amount (although it might be argued that there is some protection against the amount of the pension being substantially reduced). On the other hand, in a case against the Netherlands, a non-contributory scheme of disability benefit was not treated as a possession. It was argued that because the claimant had made no financial contribution s/he had only an expectation of a benefit and not an identifiable share that could be claimed as a legal entitlement (See: App. 4130/69, X v. The Netherlands, 20 July 1971, (1972) 38 CD 9; see also App. 10094/82, G v. Austria, 14 May 1984, (1984) 38 DR 84).

In a case where the applicant complained that she did not receive a widow's pension to which she claimed she was entitled by virtue of her own and her late husband's contributions (App. 4288/69, X v. United Kingdom, 17 Mar. 1970, (1970) 13 Yearbook 892), the Commission recognized that a question might arise under Article 1 if contributions made many years before to a compulsory contributory pensions scheme, which had subsequently been replaced by a comprehensive National Insurance system, could be regarded as creating a vested interest in a pension which might be described as `possessions' within the meaning of Article 1. The Commission also left open the question whether even contributions to a general national insurance system might give rise to acquired rights capable of coming within Article 1. The better view probably is that while Article 1 may protect rights arising out of compulsory contributory pension schemes, where the amount of the pension is directly related to the amount of contributions, it has no application to general social security systems where there is no direct correlation of contribution and benefit.

It does not cover, however, the right to acquire property in the future: the protection of Article 1 of Protocol No. 1 only applies when it is possible to lay claim to the actual property. See Marckx v. Belgium where the Court held that Article 1 of Protocol No. 1 "applies only to a person's existing possessions and does not guarantee the right to acquire possessions whether on intestacy or through voluntary dispositions". (See also Application No. 8410/78, X v. the Federal Republic of Germany (1979)).

A driving licence is not a possession (see App. 9177/80, X v. Federal Republic of Germany, 6 Oct. 1981, (1982) 26 DR 255).

Interestingly, the Human Rights Chamber for Bosnia and Herzegovina, following the jurisdiction of the ECHR, has understood that 'possessions' in its wider sense in international law. Consequently, apart from rights in rem, various economic assets and other rights in personam have been considered as possessions falling within the scope of protection of Art. 1 of Prot. I. The Chamber found that the so-called "Occupancy Rights" constitute a possession within the meaning of Art. 1 Prot. I of the Convention. In M.J. v. Republika Srpska it held:

"32. As to the present case, the Chamber first notes that the applicant is not the owner of the apartment in question, but holds an occupancy right over it. To determine whether the Article 1 of Protocol No. 1 is applicable it is therefore necessary to consider whether the occupancy right was a "possession" within its meaning. … The Chamber has itself held that the concept extends to cover contractual rights under contracts for the purchase of property, even though such contracts did not of themselves give rise to real rights of property (Cases Nos. CH/96/3, 8 & 9 …). The Chamber notes that an occupancy right is a valuable asset giving the holder the right, subject to conditions prescribed by law, to occupy the property in question indefinitely. In certain circumstances at least it can be transferred. In the Chamber's opinion it is an asset which constitutes a "possession" within the meaning of Article 1 as interpreted by the European Commission and Court. Article 1 of the Protocol is therefore applicable."

The three rules:

Article 1 of Protocol No. 1 has been held to comprise three distinct rules (See analysis by the Court in its judgment in Sporrong and Lönnroth v. Sweden (A52 (1982)):

The first rule - the general guarantee - protects a person's right to the peaceful enjoyment of his or her possessions free from interference by the State.

The second rule - the deprivation rule - is a limitation upon the wide scope of the first rule. It provides for circumstances in which people may be deprived of their possessions by the State without invoking a breach of the first rule.

The third rule - the control of use rule - provides another qualification to the guarantee of property rights provided in the first rule. It defines when a State may interfere with a person's peaceful enjoyment of his or her possessions by means of controlling the use of the property.

When considering whether there has been a violation of Article 1 of Protocol No. 1, the first step is to consider whether the complainant has any property right, or possession, falling within the scope of Article 1. The second step is to consider whether there has been an interference with that possession, and then, thirdly, the nature of the interference (i.e. which of the three rules applies). However, the three rules are not `distinct' in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (See: AGOSI v. United Kingdom, judgment of 24 Oct. 1986, Series A, No. 108; (1987) 9 EHRR 1, para. 48 of judgment, see also Mellacher v. Austria, para. 42; see also Beyeler v. Italy, where the Court emphasised that the second sentence of Article 1 was only a particular instance of interference with the right to peaceful enjoyment of property as guaranteed by the general rule set forth in the first sentence).

- A. The second rule: Deprivation of property:

Under the terms of the second sentence of the first paragraph, three conditions must be satisfied before a person may be deprived of their possessions: the taking must be in the public interest; it must be subject to conditions provided by law; and it must be subject to the conditions provided by the general principles of international law. It states:

No persons shall be deprived of their possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

A deprivation of possessions normally involves the transfer of ownership in the property so that the rights of the original owner are extinguished (e.g. formal expropriations). However in some cases a de facto deprivation has been sufficient to invoke Article 1, Protocol 1. A de facto deprivation occurs where the owner retains the legal ownership of the property but effectively loses all ability to use or dispose of the property. Indeed, measures taken by a State can interfere with property rights to such an extent that these rights are rendered so useless that they must be deemed to have been expropriated, even though the State does not purport to have expropriated them and the legal title to the property formally remains with the original owner. A good example of measures which amounted to a de facto expropriation is provided by the cases of Papamichalopoulos v. Greece and Brumarescu v. Romania. In Sporrong and Lönnroth v. Sweden, the Court observed that:

In the absence of formal expropriation, that is to say a transfer of ownership, the Court considers that it must look behind the appearances and investigate the realities of the situation complained of … Since the Convention is intended to guarantee rights that are "practical and effective"…, it has to be ascertained whether that situation amounted to a de facto expropriation, as was argued by the applicants. (para. 63)

The State can deprive persons of their property provided that the interference can be justified by the State. If it can be justified (the burden of proof being on the State), there will be no violation of Article 1 of the Protocol. In order to be justified, any interference with the right to property must serve a legitimate objective in the public, or general, interest (James v. the UK, A98 (1986) para. 46). Further it is not sufficient that the interference serves a legitimate objective. It must also be proportionate. It is necessary to consider whether any interference with property strikes a fair balance between the protection of the right to property and the requirement of the general interest. Such a fair balance will not have been struck where the individual property owner is made to bear "an individual and excessive burden". (Sporrong and Lönnroth v. Sweden, A52 (1982), para. 73).

An interference with property is also subject to the requirement of legal certainty, or legality. This requirement is expressly stated in the second sentence of the first paragraph of Article 1 of Protocol No. 1, where it is provided that a deprivation of property must be "subject to the conditions provided for by law". But the principle of legal certainty is inherent in the Convention as a whole, and must be complied with whichever of the three rules of Article 1 applies. Legal certainty requires the existence of and compliance with adequately accessible and sufficiently precise domestic legal provisions, which satisfy the essential requirements of the concept of "law". In other words, the phrase "subject to the conditions provided for by law" is not restricted to domestic law alone. The Convention seeks to ensure that the domestic law itself complies with the essential requirements of "law". This involves a fair and proper procedure, namely, that the measure in question should issue from and be executed by an appropriate authority and should not be arbitrary. (Winterwerp v. the Netherlands, A33 (1979)). There must also be procedural safeguards against the misuse of powers of the State.

a) there are public interest reasons for making the deprivation

The public interest requirement relates to the State's justifications and reasons for depriving people of their property. The deprivation of possessions must be made in pursuance of a legitimate aim that justifies the taking, for example, a person's land may be compulsorily purchased for the construction of a new motorway. Normally where property is taken in pursuance of legitimate social or economic policies, the community at large will enjoy a direct benefit from the property taken, e.g., the use of the new motorway. However, it is not essential that the general community enjoy a direct benefit from the expropriated property. In James v. UK (1986) 8 EHRR 123, property was transferred from a private landlord to his tenants under the leasehold enfranchisement scheme. Even though the general community as a whole enjoyed no direct benefit from the expropriated property, the transfer was nevertheless found to be in the public interest because the deprivation was made in pursuance of a Government policy to enhance social justice within the community as a whole. The Court pointed out that the taking of property pursuant to a policy calculated to enhance social justice within the community could properly be described as being in the public interest. In considering what is a justified interference with property, it made an important statement of principle about the State's "margin of appreciation" reflecting further case law where the Strasbourg organs have been prepared to afford a wide margin of appreciation to the national authorities in assessing both whether an interference with the right to property serves a legitimate aim in the public interest, and whether it is proportionate to that aim. (See also Sporrong and Lönnroth v. Sweden at paras. 69 and 73).

Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is "in the public interest". Under the system of protection established by the Convention, it is thus for the national authorities to make the initial assessment both of the existence of a problem of public concern warranting measures of deprivation of property and of the remedial action to be taken… Here as in other fields to which the safeguards of the Convention extend, the national authorities accordingly enjoy a certain margin of appreciation.

Furthermore, the notion of "public interest" is necessarily extensive. In particular, as the Commission noted, the decision to enact laws expropriating property will commonly involve consideration of political, economic and social issues on which opinions within a democratic society may differ widely. The Court, finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature's judgment as to what is "in the public interest" unless that judgment is manifestly without reasonable foundation. In other words, although the Court cannot substitute its own assessment for that of the national authorities it is bound to review the contested measures under Article 1 of Protocol No. 1 and, in so doing, to make an inquiry into the facts with reference to which the national authorities acted. (para. 46) (emphasis added)

Another good example is the case Scollo v. Italy where the Court referred to the fact that the second paragraph of Article 1 reserves to the States the right to enact such laws as they deem necessary to control the use of property in accordance with the general interest. Such laws, it noted, are especially common in the field of housing, which in our modern societies is a central concern of social and economic policies. In order to implement such policies, the legislature must have a wide margin of appreciation both with regard to the existence of a problem of public concern warranting measures of control and as to the choice of the detailed rules for the implementation of such measures. The Court reiterated that it will respect the legislature's judgment as to what is in the general interest unless that judgment is manifestly without reasonable foundation.

In the Hentrich case (Hentrich v. France Judgment of 22 Sept. 1994, Series A, No. 296-A; (1994) 18 EHRR 440. See Judgment of 3 July 1995 on just satisfaction under Art. 50), the Court reiterated the wide margin of appreciation a State enjoys in determining the content of the notion of `public interest' which was certainly wide enough to encompass an objective of preventing tax evasion. But there must be procedural safeguards, and the requirement of proportionality of the interference with property rights required that there was a degree of protection from arbitrariness, and there must be a fair system of compensation under a procedure of pre-emption by the Revenue. In the instant case, the burden on the applicant was excessive and there was a violation of the Convention.

b) the property is expropriated in pursuance of legal rules that are sufficiently certain and accessible to the public and are not arbitrary.

The essence of the test is whether the deprivation is made in pursuance of legal rules that are sufficiently certain and accessible to the public, an interference with the right to property must also satisfy the requirement of legal certainty, or legality. For example, where, in James v. UK (1986) 8 EHRR 123, the landlord's freehold reversion was transferred to his tenants under the leasehold enfranchisement legislation, the deprivation was held to be in accordance with the law because the legislation was sufficiently precise and adequately accessible to the public. In Winterwerp v. the Netherlands the Court in assessing whether the applicant's detention was "in accordance with a procedure prescribed by law" stated that these words essentially refer back to domestic law; they state the need for compliance with the relevant procedure under that law. But the domestic law must itself be in conformity with the Convention, including the general principles expressed or implied therein. The notion underlying the term in question was one of fair and proper procedure, namely, that any measure depriving a person of his liberty should issue from and be executed by an appropriate authority and should not be arbitrary. It further observed that "In a democratic society subscribing to the rule of law, no determination that is arbitrary can ever be regarded as lawful." (para. 39). The same principle applies in relation to Article 1 of Protocol No. 1 as underlined in Iatridis v. Greece where the Court took the opportunity to make an emphatic statement abut the crucial need for States to comply with the principle of legality, or legal certainty. As the Court noted, if that requirement was not satisfied, there was no need to go further and consider the legitimacy of the State's objective or the question of proportionality. The Court observed 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 possessions should be lawful: the second sentence of the first paragraph authorises a deprivation of possessions only "subject to the conditions provided for by law" and the second paragraph recognises that the States have the right to control the use of property by enforcing "laws". Moreover, the rule of law, one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention…and entails a duty on the part of the State or other public authority to comply with judicial orders or decisions against it…It follows that the issue of whether a fair balance has been struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights … becomes relevant only once it has been established that the interference in question satisfied the requirement of lawfulness and was not arbitrary. (para. 58)

In order to satisfy the principle of legal certainty, the State (or public authority) must comply with adequately accessible and sufficiently precise domestic legal provisions, which satisfy the essential requirements of the concept of "law". This means not only that the interference in question must be based on some provision of domestic law, but that there must be a fair and proper procedure, and that the relevant measure must issue from and be executed by an appropriate authority, and should not be arbitrary. These requirements are illustrated by Hentrich v. France where the emphasis was put on the need for a fair procedure, and on the requirement that State must not act arbitrarily - both under the principle of legality, and under the heading of proportionality. The Court held that:

…the pre-emption operated arbitrarily and selectively and was scarcely foreseeable, and it was not attended by the basic procedural safeguards. In particular, Article 668 of the General Tax Code, as interpreted up to that time by the Court of Cassation and as applied to the applicant, did not sufficiently satisfy the requirements of precision and foreseeability implied by the concept of law within the meaning of the Convention. A pre-emption decision cannot be legitimate in the absence of adversarial proceedings that comply with the principle of equality of arms, enabling argument to be presented on the issue of the underestimation of the price and, consequently, on the Revenue's position - all elements which were lacking in the present case. (para. 42)

The Court then went on to look at proportionality, and stated that in order to assess this, it would look at the degree of protection from arbitrariness. The Court found that there had not been sufficient protection of this kind: it noted that Mrs Hentrich had been selected for this procedure, which was rarely used. There was no suggestion that she had acted in bad faith, and there would have been other means open to the State to discourage tax evasion (e.g. to take proceedings to recover unpaid tax). In these circumstances, the Court found that Mrs Hentrich had been made to "bear an individual and excessive burden".

c) the person receives appropriate compensation for their loss.

Although Article 1 of Protocol No. 1 does not expressly require the payment of compensation for a taking of property (deprivation), it is generally implicitly required. See, for example, James v. the United Kingdom, where the Court observed that Article 1, although it is silent on the point, generally requires compensation for a taking of property. The Court noted that in the legal systems of contracting States, the taking of property without any compensation would be justifiable only in exceptional circumstances: otherwise the right to property would be largely "illusory and ineffective". As to the standard of compensation, the Court said that a taking of property without an amount of compensation reasonably related to its value would normally be disproportionate. But Article 1 does not guarantee a right to full compensation in all circumstances.

Legitimate objectives of 'public interest', such as are pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value.

And linked compensation to proportionality:

Clearly, compensation terms are material to the assessment whether the contested legislation respects a fair balance between the various interests at stake and, notably, whether it does not impose a disproportionate burden on the applicant… (para. 54)

There are thus three basic points to note in respect of the payment of compensation for a deprivation of property:

- As a general rule an owner should be compensated for a deprivation of property by the State.
- No compensation need be paid where the deprivation occurs in 'exceptional circumstances' - there is no guidance by the European Court of Human Rights as to what will constitute 'exceptional circumstances'.
- There is no guarantee that an owner will receive the full market value for their property.

In the Lithgow case (Lithgow and others v. United Kingdom, Judgment of 8 July 1986, Series A, No. 102; (1986) 8 EHRR 329) the Court was called on to consider the compatibility of the British nationalization of the aircraft and shipbuilding industries with Article 1. The key issue in the case was that of the compensation afforded to the nationalized companies. The Court concluded that no requirement to pay compensation to a State's own nationals arose either from the reference to the `public interest' or from the reference to action provided by law or by general principles of international law. However, compensation is not irrelevant to the legitimacy of a deprivation of property:

In this connection, the Court recalls that not only must a measure depriving a person of his property pursue, on the facts as well as in principle, a legitimate aim `in the public interest', but there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. . . . The requisite balance will not be found if the person concerned has had to bear `an individual and excessive burden'. . . . Although the Court was speaking in [the Sporrong and Lonnroth] judgment in the context of the general rule of peaceful enjoyment of property enunciated in the first sentence of the first paragraph, it pointed out that `the search for this balance is ... reflected in the structure of Article 1' as a whole....

Clearly, compensation terms are material to the assessment whether a fair balance has been struck between the various interests at stake and, notably, whether or not a disproportionate burden has been imposed on the person who has been deprived of his possessions (para. 120 of judgment).

Further, although in most cases the amount of the compensation must reasonably relate to the value of the property taken, in some cases legitimate objectives of 'public interest', such as economic reform or measures designed to achieve greater social justice, may call for less than full compensation. Consequently, it seems that the greater the public gain to be achieved by the legitimate aim, the greater the financial burden that the individual property owner can be expected to bear. According to the Court jurisprudence, "the taking of property without an amount reasonably related to its value would normally constitute a disproportionate interference which could not be considered justifiable under Article 1. Article 1 does not, however, guarantee a right to full compensation in all circumstances, since legitimate objectives of "public interest", such as pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value." (Lithgow v. the United Kingdom para. 121).

d) Within the principle of proportionality:

Further, the principle of proportionality is very important in Article 1, Protocol 1 cases. It requires that there be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measures depriving persons of their possessions. This has been expressed by the European Court of Human Rights as the 'fair balance' test and embraces the notion of the fair balance that must be struck between the demands of the general interest of the community and the protection of the individual's rights. The fair balance test must ensure that the property owner does not suffer an excessive burden for the benefit of the community. The determination of the fair balance test will inevitably involve the court having to weigh a number of competing factors in the balance and to assess the differing weights to be allocated to them. One extremely important factor in relation to a deprivation of property is the payment of compensation.

e) General principles of international law?

Of the three conditions necessary for a lawful deprivation of possessions, the last, which requires that the taking be subject to the conditions provided for by the general principles of international law, has posed the most serious problem of interpretation.

The Commission held in 1965 that Article 1 of the First Protocol does not require a State which deprives its nationals of their possessions in the public interest and subject to the conditions provided for by law to pay compensation (App. 1870/63, X v. Federal Republic of Germany, 16 Dec. 1965, (1965) 8 Yearbook 218, 226). The Court's approach was set out in the Lithgow case discussed above. The general principles of international law referred to in Article 1 are the principles which have been established in general international law concerning the confiscation of the property of foreigners.' Measures taken by a State with respect to the property of its own nationals are therefore not subject to these general principles of international law in the absence of a particular treaty clause specifically so providing. Further, the preparatory work confirmed that the Contracting Parties had no intention of extending the application of these principles to the case of the taking of the property of nationals.

The curious consequence of this interpretation is that, in a system introduced to protect human rights independently of the individual's status, the national is in a different position from that of the alien; and this in a Convention which by Article 1 expressly extends to everyone within the jurisdiction of the Contracting Parties, and which expressly prohibits, in Article 14, discrimination on grounds of national origin. Moreover, it seems contrary to the whole object of a provision designed to protect property rights that it should permit expropriation without compensation. Of course, the general prohibition of discrimination between nationals and aliens in Article 14 does not preclude differential treatment where this is expressly provided for. Article 16, for example, expressly authorizes discrimination against aliens in their political activities. But this simply reinforces the argument that differential treatment must not be read into the Convention by implication.

It would be possible to construe Article 1 of the First Protocol in quite a different way, so as to extend to nationals the protection given to aliens by international law.44 For if the first paragraph affords only the protection already afforded by international law, it achieves nothing; and it can hardly be argued that the sole object of this provision was to give aliens an additional remedy, of proceedings on the European level, in addition to the classic remedy under international law of diplomatic protection.

The matter has now been settled by the Court:

The general principles of international law are not applicable to a taking by a State of the property of its own nationals. Lithgow and others v. United Kingdom, Judgment of 8 July 1986, Series A, No. 102; (1986) 8 EHRR 329, para. 119 of judgment; for the reasoning leading to this conclusion, see paras. 111-18 of judgment.

- B. The third rule: The control of use of property

The third rule (in the second paragraph of Article 1 of Protocol No. 1) applies when an interference with property is intended, or is part of a legislative scheme whose purpose is to control the use of property, that is situations where the State interferes with a person's right of property by controlling the use of that property.

Examples from the decisions of the Strasbourg institutions of measures that constitute a valid control of use include the following:

- The revocation of a licence to sell alcohol in a restaurant.

- The revocation of outline planning permission which permitted the owner to use the land for industrial purposes (Sporrong and Lönnroth v. Sweden).

- The seizure by customs and excise officers of illegally imported goods.

- The control of rented property (Mellacher v. Austria)

- Planing controls (Pine Valley Developments Ltd v. Ireland)

- Measures which secure the payment of taxes or other contributions or penalties (Gasus Dosier- und Fordertechnik v. the Netherlands)

There is a test that distinguishes between a control of use and a deprivation of property. The test relies upon the concept of 'ownership' as comprising a bundle of detachable rights. Where only one right in the bundle of rights is lost but the owner retains the remainder of the rights, a control of use will occur rather than a deprivation. For example, in a case against Sweden the landowner lost exclusive fishing rights on his estate as a result of legislation which gave the public a right to fish in privately owned waters. This loss of one right from the bundle of rights comprising his ownership of the land was held to constitute a control of use and not a deprivation.

The State needs to show that its control of the use of the property in question is in pursuance of a legitimate aim that benefits the community at large. Proportionality is assessed by deciding whether there is a fair balance between the demands of the general interest of the community and the protection of the individual's rights. The court will take into account competing factors and weigh them in the balance to assess proportionality in each case. The factors that are likely to play a significant part in assessing proportionality under the third rule are as follows:

- Has the property owner received any compensation?

- Are there procedural safeguards which give the property owner a reasonable opportunity of putting a case to the responsible authorities?

- What was the purpose for which the owner intended to use the property and in what ways can the property still be used?

Control of use is a less serious interference with property than deprivation and therefore the need to provide compensation is not as great under this rule (see as an example Chassagnou v. France). However, here, whether or not compensation is available is also relevant when assessing the proportionality of the interference with the property. However, when the payment of compensation is required in order to satisfy the requirement of proportionality, it does not necessarily have to be full compensation in all circumstances. Legitimate objectives of "public interest", such as are pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value. But the amount of compensation should at least be reasonably related to the value of the property (James v the UK, A98 (1986) para. 54).

There may be reasons to justify denying compensation altogether. For example, in a case against Ireland it was held that there was no breach of Article 1, Protocol 1 even though the applicant company did not receive any compensation for its loss. In this case the company's outline planning permission had been declared a nullity by the Irish courts. This meant that the company could not use its land for industrial purposes which resulted in a large reduction in the value of the land. The fact that the company was engaged on a commercial venture which involved an element of risk was a significant factor in counteracting the absence of any compensation.

- C. The first rule: right to the peaceful enjoyment of his or her possessions

The first rule of Article 1 of Protocol No. 1 may be described as a "catch-all" which may apply where none of the other rules does. It applies where a measure has the effect of interfering with the use or enjoyment of property, but falls short of being a taking, and is not intended to control the use of property. Thus, If an act does not constitute a deprivation of possessions nor a control of their use but it does, nevertheless, interfere with the owner's peaceful enjoyment of his or her possessions, it will be considered under the first rule. The first rule provides a ground for complaint that is separate from, and additional to, those in the second and third rules. If an interference with property falls within the ambit of the first rule, the court must consider the lawfulness of the interference and assess whether the measures taken are proportionate to the legitimate aim being pursued.

The first rule was held to apply in relation to the expropriation permits that had been imposed in respect of the applicants' properties in Sporrong and Lönnroth v. Sweden. Another example of the application of the first rule is Stran Greek Refineries and Stratis Andreadis v. Greece, where legislation which had the effect of rendering an arbitration award in the applicants' favour void and unenforceable fell to be considered under the first rule of Article 1.

In another case the Commission decided that Article I does not `guarantee the right to enjoy ... possessions in a pleasant environment', but that noise nuisance of particular severity in both intensity and frequency may seriously affect the value of the property and so constitute an interference with possessions (see App. 13728/88, S v. France, 17 May 1990, (1990) 65 DR 250).

Conclusion as to the requirements:

As has been mentioned above, any interference with property can only be justified if it is in the public, or general, interest. The requirement that a taking (or deprivation) of property should be in the "public" interest is expressly set out in the second sentence of Article 1 of Protocol No. 1. The third rule refers expressly to the "general" interest. But any interference with property, whichever rule it falls under, must satisfy the requirement of serving a legitimate public (or general) interest objective. Further, as to the the requirement of legal certainty, or legality that must be satisfied in interferences with the right to property, it is expressly stated in the second sentence of the first paragraph of Article 1, in relation to a deprivation of property: a taking must be "subject to the conditions provided for by law". But the principle of legal certainty is inherent in the Convention as a whole, and this requirement must be satisfied whichever of the three rules applies.

As indicated above, in order for an interference with property to be permissible, it must not only serve a legitimate aim in the public interest, but there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. A fair balance must be struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights, the search for such a balance being inherent in the whole of the Convention. This is likely to be the crucial question in most cases. Good examples of the application of the principle of proportionality and of the margin of appreciation, are the cases Mellacher v. Austria, Stran Greek Refineries, Stratis Andreadis v. Greece and Pressos Compania Naviera SA v. Belgium.

3) Taxing measures:

The power of the State to secure the payment of taxes or other contributions or penalties (within the third rule of Article 1 of Protocol No. 1) has been held to be particularly wide. But a taxing measure is nevertheless subject to the requirement of proportionality.

Article 1, Protocol 1 expressly recognises the power of States to raise taxes or to impose penalties and fines. Although the Government has considerable power to interfere with private property as a means of securing the payment of taxes, the court retains a power of review to ensure that the taxes or penalties are not abusive or disproportionate. In Gasus Dosier- und Fordertechnik v. the Netherlands the Court reminded itself that the drafters of the Convention had attached great importance to this aspect of the second paragraph of Article 1: in fact at a stage when this phrase was not yet included, it was already understood by all concerned, said the Court, that States could pass whatever fiscal laws they considered desirable, provided always that they did not amount to "arbitrary confiscation". Here, said the Court, there was no arbitrary confiscation, albeit that the law permitted the tax authorities to seize goods on the tax payer's premises that did not actually belong to it, but to a third party. The Court found support for its view in the fact that this kind of thing was permitted in several legal systems. This case illustrates that, although the Court applies the same test of fair balance to a taxing measure as to other interferences with property, the State is afforded a particularly wide margin of appreciation in cases of this kind.

4) Continuing violations:

The distinction between instantaneous acts, even if they have enduring effects and continuing violations of Convention rights has been addressed by the Strasbourg bodies (see application no. 7379/76, X v. the United Kingdom, 10 December 1976, DR 8, pp. 211-13, and no. 7317/75, Lynas v. Switzerland, 6 October 1976, DR 6, pp. 155-69). The Court has also found that the action by which a person is deprived of his property does not result in a continuing situation of absence of property (application no. 7379/76, supra cit.).

This said the European Court of Human Rights has recognised the concept of a continuing violation of the right to property. This approach may be relevant to takings of property in certain countries which, on the face of it, occurred before they accepted the jurisdiction of the European Court of Human Rights. Thus, an act of deprivation in the enjoyment of possessions occuring before acceptance of the Court jurisdiction can have effects on the time limits of the competence of the organs of the Convention. See, among other decisions: Papamichalopoulos and others v. Greece, June 24, 1993, Series A No.260-B, pp. 69-70, 40 and 46; Agrotexim and others v. Greece, October 24, 1995, Series A No.330, pp. 22, 58; Loizidou v. Turkey, December 18, 1996 and Vasilescu v. Romania (53/1997/837/1043), Decision of 22nd May 1998.

Thus in this respect the European Court in the Papamichalopoulos case hold that a de facto expropriation of land amounted to a continuing violation of Article 1 of Protocol No. 1 (P1-1). On this same point, it is pertinent to cite as well a precedent established by the European Commission of Human Rights when in the Agrotexim Hellas S.A. and others v. Greece Case, it established the following jurisprudence:

"As regards the Government's objection that part of the application has been introduced out of time, the Commission refers to its considerations under point i) above. It recalls that the applicants' complaints relate to a continuing situation and that in such circumstances the six months period runs from the termination of the situation concerned (No. 6852/74, Dec. 5.12.78 D.R. 15, p. 5). Having regard to the fact that the situation complained of is still continuing, the Commission finds that the Government's objection must be rejected".

In another expropriation case, the Loizidou case (Case of Loizidou v. Turkey (Merits), 18 December 1996), Turkey contended that the Application fell outside the jurisdiction of the Court ratione temporis. The Court observed again that its case-law recognised the concept of a continuing violation of the Convention. The Court dismissed the objection "ratione temporis". It found that the continuous denial of the applicant's access to her "property" and the ensuing loss of all control over the property was a matter which fell within the meaning of Article 1 of the Convention and was thus imputable to Turkey. It also found that there had been a breach of Article 1 of Protocol 1 in that the applicant had effectively lost all control over, as well as all jurisdiction to use and enjoy property.

The Right to Property under Article 1 of Protocol No 1 to the European Convention on Human Rights as applied by the Human Rights Chamber for Bosnia and Herzegovina:

Context:

Forced population movements have been a central aim of the war in former Yugoslavia. 'Ethnic cleansing', the practice of forcing people out of their homes to create ethnically homogenous areas, has uprooted more than half of the population of Bosnia and Herzegovina. Thus, one of the most important questions the Dayton peace agreement deals with is how to manage the return of the displaced to their homes. The right to return home is, indeed, the key principle in response to 'ethnic cleansing'. The General Framework Agreement for Peace in Bosnia and Herzegovina gives specific content to the right to return, enunciating a detailed set of obligations on the Parties in order that this right be promoted and respected. It also addresses the question of property rights the loss of which is the most lasting humanitarian consequence of the war, and the most widespread source of human rights abuses.

Set within the broader context of the return of refugees and internally displaces persons, the need to address illegal occupancy and the denial of property rights has been pursued by the international community through a vigorous campaign for the reform of laws regulating ownership and possession of abandoned property, which during and since the war have been adopted by Bosnian authorities to cement the results of ethnic 'cleansing'. However, re-establishing a fair and transparent legal framework for property rights is of little immediate help, as the obstacle to return is not, in reality, a dispute over property title. A major hindrance to return is, in fact, the lack of political will to implement the new property legislation and to enforce decisions on property rights.

The Human Rights Chamber as established by the Dayton Peace Agreement ("GFAP") is the highest tribunal in Bosnia and Herzegovina, it adjudicates alleged or apparent violations of human rights. The Chamber can consider violations of rights embedded in the European Convention on Human Rights (ECHR) as well as discriminations in the enjoyment of any of the rights enshrined in the human rights instruments annexed to the Dayton peace agreement (amongst others ICCPR and ICESC). By doing so it does not only provide the applicants to the respective cases with legally binding decisions, it also aides to practically implement the ECHR into the domestic legal system. The Chamber's decisions are final and binding. Since its establishment the Chamber handed down hundreds of decisions relating to property.

The Chamber had to deal with a very special form of possession: Approximately 70%-80% of the total urban residential property in the former Yugoslavia was socially owned property-apartments that governmental and municipalities bodies and large companies assigned to their employees and their families through an institution commonly referred to as "occupancy/tenancy rights" (stanarsko pravo). Occupancy rights were not equal to ownership rights, but had attributes of a private property right that distinguished them from classic tenancy rights that exist in Western Europe:

They had a permanent character as an occupancy right was granted for an indefinite period and could be terminated only under specified conditions;

A family member had the right to continue to live in the apartment on which occupancy right existed upon the death of the occupancy right holder;

An occupancy right holder could exchange the apartment with another occupancy right holder in the event that he moved to another location;

An occupancy right holder did not pay rent but a fee called "stanarina" that was used for the upkeep of common areas on the premises and maintenance of the building. The amount of the fee was related to the size of the apartment but was not calculated on the basis of the market value of the apartment;

In case of cancellation of an occupancy right, the provider of the occupancy right was supposed to ensure other accommodation (but usually of a lower standard) for the former occupancy right holder;

An occupancy right could not be lost due to the loss of employment with the company or governmental agency that had allocated the occupancy right;

Even though the law recognizes certain conditions for cancellation of occupancy rights, in practice this happened very seldom.

With regard to the interpretation of Art. 1 of Prot. I the Chamber followed the ECHR (see The Islamic Community in BiH vs. RS).

Interference

Following the jurisdiction of the ECHR, 'possessions' as protected by the provisions has been understood by the Chamber in its wider sense in international law. Consequently, apart from rights in rem various economic assets and other rights in personam may also be considered possessions falling within the scope of protection of Art. 1 of Prot. I. The concept of 'possessions' is autonomous and the essential characteristic is the acquired economic value of the individual interest (See M.J. v. Republica Srpska, no. CH/96/28, Decisions on Admissibility and Merits 1996-1997, p. 129 et seq.). In case No. CH/96/29, The Islamic Community against the Republika Srpska (11 June 1999), the Chamber held:

"192. In the present case, the Chamber finds it established that in the course of the nationalisation in the Socialist Federal Republic of Yugoslavia, the land on which the 15 mosques than stood was nationalised. The mosques, tombstones and domed burial sites remained, however, the property of the applicant. …The Chamber furthermore notes that under Article 40 (1) of the Law on Building Land as in force from 1986 onwards the applicant retained a right to use the land on the sites of the destroyed mosques as long as the building on them endured. 195. Be it based on Article 40 or 43 of the Law on Building Land, the Chamber finds that the applicant's right to use the land of the sites of destroyed mosques for construction purposes is an enforceable right with an economic value which is to be considered a "possession" of the applicant for the purposes of Article 1 of Protocol No. 1. Furthermore, it appears to the Chamber that the in respect of a majority of the sites the mosques enjoyed specific protection under the Law on Cultural Assets. Accordingly, the applicant enjoyed a further right under Article 111 of that law, if not to reconstruct the mosques then at least to renovate any object still remaining on the sites."

Justification

(a) Deprivation

As to the second rule in Article 1 of Prot. I of the Convention, following the Chamber, in principle, there will be a deprivation of property only where all the legal rights of the owner are extinguished by operation of law or by the exercise of a legal power to the same effect. However, not all such incidents are deprivations. For there to have been a deprivation of his property, the applicant must, of course, demonstrate that he had a title to it. For the deprivation of property to be consistent with Art. 1, it must be in the public interest. The Chamber followed the ECHR jurisprudence in Rifat Bejdic v. RS (Case No. CH/96/27, Decisions and Reports 1998, p. 57 et seq.) where it held:

"37. In the Chamber's opinion the aim of the legislation under which the administrative decision was taken, namely to provide temporary accommodation to refugees in houses where there is surplus accommodation, can in principle be regarded as a legitimate one. […] In allocating the property to him it endorsed his unlawful action. It also appears to have given no opportunity to the applicant to make representations about the matter. In these circumstances it cannot be said that a fair balance was struck between the general interest and the applicant's right to use his property for the accommodation of his family. The Chamber therefore finds that the decision in question violated Article 1 of Protocol 1 to the Convention."

 In case No. CH/96/29, The Islamic Community against the Republika Srpska (11 June 1999), the Chamber found that the destruction of the mosques and the removal of ruins and items of the graveyard constitute a deprivation of possessions of the applicant imputable to the respondent Party in the form of failure to fulfil its positive obligation under the Agreement. It held:

"199. The respondent Party has offered no argument to the effect that the deprivation found above was in the public interest and subject to the provided for by law. Nor can the Chamber, of its own motion, find any such justification."

(b) Control of use

Giving the narrow reading of the notion of deprivation of property, control is a corresponding wider notion, though not every interference short of deprivation will be an act of controlling the use of property. A state may effect control by requiring positive actions by individuals as well as by imposing restrictions upon their actions by, e.g. planning control, environmental orders or economic regulations. The state must indicate what general interest is being served by the intervention.

Thus, in the Islamic Community against the Republika Srpska case, the Chamber held: The Chamber found the Municipality's tacit refusal to permit the reconstruction of seven of the destroyed mosques based on the Municipal Assembly's decision of 27 March 1997 constituted a control of use of possessions without a general interest reasonably justifying the refusal.

"202. The Chamber notes that the 15 destroyed mosques and their surrounding graveyards were hundreds of years old and held important religious and cultural importance not just for the applicant and its members. They formed part of the cultural-historic heritage of Bosnia and Herzegovina as reflected in the general urban plan for Banja Luka adopted in 1975 and which affords ten of the mosques protection of the first degree. According to the expert evidence, the new regulatory plan cannot change this designation. Finally, the Chamber can not overlook the expert testimony suggesting that the designation of reserved areas in crowded urban areas is an exception to normal practice."

Balance of interests

Throughout cases involving Art. 1 Prot. I of the Convention, the ECHR has applied a general fair balance standard of protection against interference under Art. 1 Prot. I of the Convention. There must be also a reasonable relationship of proportionality between the means employed and the aims sought to be realized. The requisite balance will not be found if the person concerned has had to bear an individual and excessive burden. The Chamber did not see a basis to look for a fair balance in the present case.

"206. The Chamber has found above that the various acts and omissions resulting in a violation of the applicant's members' right to freedom of religion have been grounded on discriminatory considerations. With respect to the applicant's property rights the Chamber finds that particularly the tacit refusal to allow reconstruction of any mosques is clearly aimed at preventing the applicant from providing its members in the Banja Luka area with adequate premises for the manifestation of their religion and ethnic identity. In such circumstances it would be illusory to look for a fair balancing of interests."

(c) General Principle of Peaceful Enjoyment of Possessions

The general principle provides a ground for regulating interference with a person's possessions that is separate from and additional to those of the second and third rule provided for in paragraph 2. Where there has been an interference with the peaceful enjoyment of possessions, the ECHR considers whether there has been a fair balance between the demands of the general interest of the community and the requirement of the protection of the individual's fundamental rights. Thus in M.J. v. Republica Srpska, (no. CH/96/28, Decisions on Admissibility and Merits 1996-1997, p. 129 et seq.) the Chamber did not find any general interest demanding the interference in the present case (See also Blentic v. RS, Case No. CH/96/17, Decisions on Admissibility and Merits 1996-1997, p. 83 et seq.):

"33. The present case is not concerned with an expropriation by the public authorities of the Republika Srpska or with the application controlling the use of property. It relates to a failure by the authorities to protect the applicant against unlawful interference with his possessions by private individuals. In the Chambers opinion the case must therefore be considered under the first, general rule in Article 1. This general rule may, like other Convention guarantees, give rise to positive obligations on the authorities to provide effective protection for the individual's rights,….. The Chamber notes that it is implicit in the Court's judgement in the case of Scollo v. Italy that such positive obligations may include the provision of necessary assistance in the recovery of property by means of eviction. In the present case the Chamber considers, for essentially the same reasons as it has given in relation to Article 8 of the Convention, that the failure of the authorities to take the necessary measures to enforce the court order obtained by the applicant against Mr. K.V., and the failures of the court to proceed with sufficient urgency with the second civil action, involved failures effectively to secure his right to peaceful enjoyment if his possessions. There has therefore been a breach of his right under Article 1 Protocol No. 1 to the Convention."

Case Law of the Chamber

Non-Enforcement of Eviction Orders

The applicant is a citizen of Bosnia and Herzegovina of Bosniak decent. He has held an occupancy right over an apartment in Banja Luka since 1966 and occupied the apartment as his home together with his wife and daughter.

In 1995, three armed persons forcibly evicted the applicant and his family from their apartment in Banja Luka. A Serbian refugee, Mr. K.V., moved into the apartment on that night.

The applicant instituted proceedings before the Court of First Instance in Banja Luka on the basis of disturbance of possessions. The Court ordered the eviction of the occupant. When K.V. did not comply with the order the Court issued, first, a Decision on Execution, and finally, an Executory Conclusion stating that the execution would be carried out delivering the apartment into the applicant's possession free of all persons and objects. When the court official and the police came to the apartment on the respective date Mr. K.V. was in the apartment with ten to twenty other people who acted in a threatening manner and refused to leave. Several other attempts were made to execute the decision. Similar situations arose on each of these occasions, namely that a group of people assembled to oppose the eviction and that in the face of threats, insults and obstruction from these people and the inaction of the police, the eviction was not carried out.

On the last occasion, the court official and the police informed the applicant that the eviction could not be carried out, because the person in the apartment was not Mr. K.V., but a Mr. M.R. and it would be necessary to bring proceedings against the latter.

At the attempted eviction Mr. M.R. handed over to the court official a decision issued by the Commission for the Accommodation of Refugees and Administration of Abandoned Property for temporary use under Article 6 and 17 of the Law on Abandoned Property.

The applicant instituted proceedings against Mr. M.R. The proceedings have been pending for almost one year, but no decision on the merits has been taken so far.

The new aspect of the alternative case relates to the interference with the applicant's property rights resulting from the administrative decision to allocate the apartment to Mr. M.R. for temporary use. In Rifat Bejdic v. RS, the Chamber considered the allocation of the apartment to the occupant a control of use of the applicant's property, which must be examined under the second rule.(Rifat Bejdic v. RS, Case No. CH/96/27, Decisions and Reports 1998, p. 57 et seq.)

"35. As to the administrative decision allocating the property to Mr. Babic the Chamber first notes that the parties appeared to be in agreement that this decision did not affect the validity of the court order obtained by the applicant, …. However according to the respondent Party the position was that if the court order had been enforced …, he would then have been able to seek enforcement of the administrative decision against the applicant. The administrative decision cannot therefore be regarded as ineffective but constitutes a control of use of the applicant's property which must be examined under the second paragraph of Article 1 of the Protocol …."

JNA-Apartment Cases

The applicants are citizens of Bosnia and Herzegovina. They are retired officers of the Yugoslav National Army (JNA). Both applicants had an occupancy right in an apartment, which was social property over which the JNA exercised jurisdiction. Social property was property considered belonging to the society as a whole. An occupancy right was a right, subject to certain conditions, to occupy an apartment on a permanent basis.

At the beginning of February 1992, the applicants paid the JNA 320,000 Yugoslav dinars to purchase the apartment under the Law on Securing Housing for the Yugoslav National Army of 29 December 1990. This law gave the holders of occupancy rights in JNA apartments the right to purchase the apartment subject to certain conditions. Only the first applicant concluded a written contract with the JNA prior to the payment.

On 15 February 1992, a temporary prohibition on the sale of socially owned apartments was imposed by Decree with legal force of the Socialist Republic of Bosnia and Herzegovina. In March, the other applicant entered into a written contract for the purchase of the apartment.

On 15 July 1994, a Decree with legal force was issued by the Presidency of the Republic of Bosnia and Herzegovina amending the Law on Real Property Transactions which laid down the conditions for the validity of contracts for the purchase of real estate. Written contracts concluded before the Decree entered into force were to be valid either if the contracting parties had completely or predominantly fulfilled their obligations arising from the contract or if a competent court verified the parties' signatures within six month after the Decree came into force. In September, both applicants initiated civil proceedings in the Court of First Instance in Sarajevo, requesting the Court to declare that they were owners of the apartment and seeking entry in the land registry as such.

On 3 February 1995, the Presidency of the Republic of Bosnia and Herzegovina issued a Decree with legal force requiring courts and other organs of the state to adjourn all proceedings relating to purchase contracts for inter alia JNA apartments under the Law on Securing Housing for the JNA. One week later, the Court of First Instance issued a decision adjourning the applicants' cases. The court's decision stated that no appeal was allowed against them.

On 22 December 1995, the Presidency of the Republic of Bosnia and Herzegovina issued a Decree with legal force providing, inter alia, that contracts concluded on the basis of the Law on Securing Housing for JNA were invalid. The Assembly of the Republic of Bosnia and Herzegovina adopted this Decree as law.

On 6 December 1997, the Law on the Sale of Apartments with Occupancy Right came into force. This law was amended by a law of 23 March 1998. Neither law affected the annulment of the applicants' contracts.

The Chamber considered whether the retroactive annulment of the contracts for the purchase of the apartments violates rights of the applicants under Art. 1 Prot. I of the Convention.

The Chamber found that the contractual rights of the applicants constituted possessions.

"32. The Chamber will first consider whether, at the time when the Decree came into force, the applicants had any rights under their contracts which constituted "possessions" for the purposes of Article1. … Assuming that the applicants' contracts have been valid they conferred on the applicants rights to occupy the apartment as owners, and to have themselves registered as owners. Although the contracts did not of themselves transfer to the applicants real rights of property in the apartments they thus conferred on them valuable personal rights which in the Chamber's opinion constituted "assets" and were "possessions" for the purposes of Article 1 of the Protocol.

33. …[T]he validity of the contracts may be open to question in respect that… the written contracts were entered into after the Decree of 15 February 1992, which imposed a temporary prohibition on sales under the Law on Securing Housing for the JNA, came into force, …. The Chamber notes, however, that… the applicants had performed their obligations under the contracts by paying the price before the Decree of 15 February 1992 came into force …. In considering whether the contractual rights… were "possessions" the Chamber notes that the European Court of Human Rights has held that rights which may be subject to challenge in court proceedings, as well as claims for compensation requiring court proceedings to make them effective, may be "possessions" for the purposes of Article 1 of the Protocol. In particular in the case of Stran Greek Refineries v. Greece it held that an arbitral award which was the subject of challenge in the Court of Cassation was a "possession (… Series A No. 301, par. 62). In the case of Pressos Compania Naviera v. Belgium it held that claims to compensation under the law of tort were "possessions" (… Series A No. 332, par. 31). Similarly in the Chamber's opinion the contractual rights of the two applicants in question, although subject to some uncertainty as a result of the Decree in question, should nonetheless be regarded as 'possessions" for the purposes of Article 1 of the Protocol."

The Chamber found a deprivation of property in this case. (See also: Branko Medan, Stjepan Bastijanovic and Radoslav Markovic v. BiH and Fed BiH, Cases No. CH/96/3, 8 and 9, Decisions on Admissibility and Merits 1996 - 1997, p. 53 et seq).

"34. … The effect of the Decree of December 1995 (adopted as law) was to annul those rights and each applicant was therefore "deprived of his possessions" by the Decree. It is accordingly necessary for the Chamber to consider whether these deprivations were justified under Article 1 of the Protocol as being "in the public interest" and "subject to the conditions provided for by law." The third requirement by Article 1, that a taking of property should be in accordance with the "general principles of international law" is not applicable in the present case since all the applicants are citizens of Bosnia and Herzegovina and the principles in question "are not applicable to a taking by a State of the property of its own nationals,"(James and Others v. United Kingdom, … Series A No. 98, par. 66)."

For a deprivation of property to be consistent with Article 1, it must be in the public interest. The identification of the objective of a deprivation of property and its characterisation as being in the public interest is within the margin of appreciation of the State. It is difficult to imagine circumstances in which the ECHR would dispute the purpose alleged by the government or to contest its assertion that the measure was in the public interest. The Chamber followed this attitude.

"36. …Bearing this wide margin of appreciation in mind, the Chamber can accept that the aim of putting all holders of occupancy rights on an equal footing as regards their rights to purchase their apartments might in principle be regarded as a legitimate one. There is no evidence, however, that the applicants were placed in an especially privileged position."

As to the reasonable relationship of proportionality between the means employed and the aims sought to be realized the Chamber stated:

"37. It remains to be considered, however, whether there was a reasonable relationship of proportionality between the means employed and the end sought to be realised. In this respect the Chamber notes that the effect of the legislation was to annul retroactively, and without compensation, existing contractual rights which the applicants had held since 1992. In the Chamber's opinion such retroactive legislation must be regarded as a particularly serious form of interference with property rights. It involves an infringement of the principle of the rule of law referred to in the Preamble of the Convention and carries the danger of undermining legal security and certainty. In the Chamber's opinion it can therefore be justified only by cogent reasons. Even though the applicants may have been able to purchase their apartments on relatively favourable terms, the Chamber is not satisfied that there was any form of social injustice involved in the system established by the Law on Securing Housing for the JNA which was of such magnitude as to justify retroactive legislation of the kind adopted. It notes in particular that reductions from the price established by valuation of the apartment are based to a large degree on contributions which the applicants had made to the housing fund over the years. It notes furthermore that the value of the apartments must have been substantially affected by the existence of the applicants' occupancy rights over them. They were not apartment which the JNA could have disposed of on the open market with vacant possessions. In the circumstances the Chamber considers that the aim ofachieving equality between different classes of occupancy right holders "could warrant respective legislation" bringing their rights into line with each other but "could not justify legislating with retrospective effect with the aim and consequences of depriving the applicants" of their acquired contractual rights, (see mutatis mutandis Pressos Compania Naviera S.A. v. Belgium, sup. Cit., par. 43)."

Abandoned apartments cases:

The Chamber considered the decision, that the apartment was declared permanently abandoned and that the applicant had permanently lost his occupancy right over it and the subsequent eviction, to raise issues under Art. 1 Prot. I of the Convention.

With regard to the interpretation of Art. 1 of Prot. I, the Chamber followed the ECHR. The Chamber found that an occupancy right constitutes a possession within the meaning of Art. 1 Prot. I of the Convention.

"73. As to whether an occupancy right over an apartment would constitute a "possession" for the purposes of Article 1 of Protocol No. 1 to the Convention, the Chamber recalls that it has found that an occupancy right is a valuable asset giving the holder the right, subject to the conditions prescribed by the law, to occupy the apartment in question indefinitely (Case No. CH/96/28, M.J. v. The Republika Srpska …."

In this case, the Chamber found a de facto deprivation of the applicant's property. (D.M. vs. Fed BiH)

"75. The Camber finds that the Decision… and the subsequent eviction of the applicant and his family interfered with the applicant's right to peaceful enjoyment of his possessions in the sense of Article 1 of Protocol No. 1 to the Convention and recalls the reasons given in relation to the interference with the applicant's right to respect for his "home" (see paragraph 46 above)."

"77. The decision…declaring the applicant's apartment abandoned terminated the applicant's occupancy right. Although the applicant had the possibility to appeal this decision, which he in fact did, the appeal did not have an suspensive effect for the execution of the decision which then took place …. As a consequence, the applicant was not deprived of his legal status as the occupancy right holder over the apartment in a final and binding decision. However, as the Law on Abandoned Apartments did not suspend the execution of the decision the applicant was as a consequence evicted and in fact deprived of the possibility to use the apartment. The European Court of Human Rights has already found that the second rule under Article 1 of Protocol No. 1 to the Convention is applicable even if no formal expropriation had taken place but the situation complained of amounted nevertheless to a de facto expropriation (see inter alia: European Court of Human Rights, Papamichalopoulos and Others v. Greece,… Series A no. 260-B, paragraph 42.)."

In the absence of a formal extinction of the owner's rights, the ECHR had been very reluctant about accepting that a de facto deprivation of property qualifies as a deprivation for the purposes of Article 1 Prot. I of the Convention. De facto deprivations are generally understood to occur when the authorities interfere substantially with the enjoyment of possessions without formally divesting the owner of the title. De facto deprivations are in breach of the Convention since they are not "provided for by law". The Chamber followed the ECHR jurisdiction in Ivica Kevesevic v. Fed BiH:

"80. The Chamber has already found that the Law on Abandoned Apartments does not meet the standards of a "law" in a democratic society (see paragraph 50-57 above). This is in itself enough to find that there has also been a violation of Article 1 of Protocol No. 1 to the Convention."

The non-execution of the decision under the new Law could, furthermore, constitute an additional violation of the applicant's Right to Peaceful Enjoyment of Possessions. The Chamber finds a continuing violation of this provision. Thus, in Dusanka Onic v. Fed BiH it held:

"57. The applicant's grievance under this provision extends to the failure of the authorities to enforce the decision effectively entitling her to return to her apartment. The Chamber has already noted (in paragraph… 51 above) that this non-enforcement is not in compliance with the new Law. In addition to the violation stemming from the refusal to allow the applicant to return to her apartment for want of recognition of her occupancy right, there has thus been a continuing violation of her right to the peaceful enjoyment of her possessions within the meaning of Article 1 of Protocol No. 1 in so far as the procedure under the new Law has not been "subject to conditions provided for by law" either (cf. Eracovic decision, paragraph 60)."

Summary:

Article 1 of the First Protocol. This provides:

"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."

This Article in substance guarantees the right of property (Marckx v. Belgium 2 EHRR 330). However, the 'possessions' protected by this Article include economic interests arising from permissions and licences in respect of land and its use (Pine Valley Developments Ltd. v. Ireland The Times December 11, 1991, Tre Traktörer Aktiebolag v. Sweden 13 EHRR 309). However a bare possibility of future interference does not in itself interfere with the right (Application 10390/83 v. U.K. 8 EHRR 301).

The Article comprises three distinct rules (Mellacher v. Austria 12 EHRR 391) The first rule enounces the principle of peaceful enjoyment of property. The second covers deprivation of possessions and subjects this to conditions. The third recognises that States may control the use of property in accordance with the general interest and secure the payment of taxes, etc.. The three rules are connected, with the second and third rules being construed in the light of the general principle enunciated in the first rule (James v. U.K. 8 EHRR 123).

An interference should achieve a fair balance between "the general interest" and the protection of the person's rights with a reasonable relationship of proportionality between the means employed and the aim pursued (Air Canada v. U.K. 20 EHRR 150). If the person concerned has to bear 'an individual and excessive burden', there will not be such proportionality (Håkansson and Sturesson v. Sweden 13 EHRR 1). Thus, While approval of a development plan may constitute an interference with rights of ownership of land subject to it, such interference will usually be justified as being in the general interest (Katte Klitsche de la Grange v. Italy 19 EHRR 368). Indeed many applications under Article 1 of the First Protocol have been rejected because they were held to be justified by matters of general or public interest. These include economic, environmental and social considerations.

While a State may justify interference with property rights, it does not have an unrestricted right to do so. Rather, as mentioned above, there is a need to strike a fair balance, and to avoid individual and excessive burdens. Successful applicants under Article 1 of the First Protocol have included: the owners of property subject to long-term planning blight for which national law provided no compensation (Sporrong and Lönnroth v. Sweden 5 EHRR 35); the owners of property expropriated for a road without compensation because of an irrebutable presumption that the road would benefit their retained property (Katikaridis v. Greece, [1997] EHRLR 107)

It will be clear from the above that the payment of adequate compensation will usually provide the State with a defence to a claim under Article 1 of the First Protocol. However the Article does not guarantee a right to compensation equal to the full market value in every case.

"Property and the right to return"

The international community has correctly recognized housing restitution to be an essential element of the right to return to one’s home of refugees and displaced persons and as a necessary component of any lasting solution involving the voluntary, safe, dignified and durable repatriation of refugees and displaced persons. Indeed, housing restitution is an indispensable component of any strategy aimed at promoting, protecting and implementing the right to return. (U.N. Sub. Commission Doc.).

A good example of it is the ongoing process in former Yugoslavia, especially in Bosnia and Herzegovina where, set within the broader context of the return of refugees and internally displaces persons, the need to address illegal occupancy and the denial of property rights has been pursued by the international community through a vigorous campaign for the reform of laws regulating ownership and possession of abandoned property, which during and since the war have been adopted by Bosnian authorities to cement the results of ethnic 'cleansing'. Indeed, forced population movements have been a central aim of the war in former Yugoslavia. ‘Ethnic cleansing’, the practice of forcing people out of their homes to create ethnically homogenous areas, has uprooted more than half of the population of Bosnia and Herzegovina. Thus, one of the most important questions the General Framework Agreement for Peace in Bosnia and Herzegovina (the Dayton peace agreement) deals with is how to manage the return of the displaced to their homes.

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