Last Updated on April 24, 2019 by LawEuro
Communicated on 27 February 2019
FIFTH SECTION
Application no. 66581/12
Nedyalko Georgiev KOSTOV
against Bulgaria
lodged on 3 October 2012
STATEMENT OF FACTS
The applicant, Mr Nedyalko Georgiev Kostov, is a Bulgarian national, who was born in 1971 and lives in Sofia. He is represented before the Court by Ms N. Sedefova, a lawyer practising in Sofia.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
In 2007 the Council of Ministers (Government) expropriated privately‑owned land in the outskirts of Sofia for the construction of a crossroads on the Sofia-Varna motorway.
In August 2008 the applicant bought several plots of land in the area.
In August 2011 the Minister of Public Works proposed the expropriation of several more plots of land necessary for the construction of the crossroads, including the ones which had been acquired by the applicant. On 15 September 2011 the Council of Ministers took a decision to expropriate the land, awarding to the owners monetary compensation.
The land expropriated from the applicant measured 21,323 square metres. The compensation allocated to him in the decision of 15 September 2011 amounted to 1,748 Bulgarian levs (BGN), the equivalent of 894 euros (EUR), or about BGN 0.08 (EUR 0.04) per square metre.
The applicant applied for judicial review of the Council of Minister’s decision, arguing that such compensation was too low and contrary to section 32(2) of the State Property Act (see “Relevant domestic law and practice” below). He pointed out that when other persons whose land in the same area had been expropriated in 2007 for the construction of the same crossroads had applied for judicial review, the Supreme Administrative Court had awarded them compensation for their land varying from BGN 55 (EUR 28) to about BGN 101 (EUR 52) per square metre.
The Supreme Administrative Court appointed an expert with the task of calculating the market value of the land expropriated from the applicant. In his report submitted on 16 January 2012 the expert stated that he had discovered no comparables meeting the requirements of section 32(2) of the State Property Act, and that the amount of compensation had thus to be calculated in accordance with section 32(3) of the same Act, referring to a Government-adopted Regulation on the calculation of the value of agricultural land (see “Relevant domestic law and practice” below). Applying the rules contained in that Regulation, the expert assessed the value of the applicant’s land at BGN 4,779 (EUR 2,445) – the equivalent of BGN 0.22 (EUR 0.11) per square metre.
The applicant contested the expert’s report. He presented several notary deeds for the sale of plots of land in the area, as well as documents concerning the inclusion of one such plot in the capital of a company. The average value of the land concerned by these deeds and documents was about BGN 80 (EUR 41) per square metre.
Tasked with preparing a new report taking into account the documents presented by the applicant, the expert submitted such a report on 12 March 2012. He considered that most of the plots of land concerned by the documents at issue could not be considered valid comparables, since they were situated in other areas or were not deemed to be agricultural land, or because the respective contracts had not been concluded within the one-year period provided for under section 1a(2) of the supplementary provisions of the State Property Act (see “Relevant domestic law and practice” below). Only one plot of land qualified as a comparable, and it had been sold in August 2010 at a price of about BGN 225 (EUR 115) per square metre. If that was to be taken as the average market value of land in the area, the value of the applicant’s expropriated land was to be set at BGN 4,804,627 (EUR 2,457,609).
The Supreme Administrative Court gave a judgment on 5 April 2012. It considered that one comparable was not sufficient to establish the average market value of the expropriated land, and that the amount of compensation had thus to be calculated in accordance with the Regulation on the calculation of the value of agricultural land. Applying the method provided for therein, the expert had calculated the amount of compensation due to the applicant at BGN 4,779, and this was the amount to be awarded.
The judgment above was final.
B. Relevant domestic law and practice
Section 17 § 5 of the Constitution of Bulgaria provides that property may be expropriated for State or municipal needs only on the basis of a law, only if those needs cannot be satisfied otherwise, and following prior and adequate compensation.
Section 32(1) of the State Property Act 1996 (Закон за държавната собственост) reiterates that private property can be expropriated for State needs that cannot be satisfied otherwise, in exchange of adequate compensation.
By section 34a of the State Property Act, the Council of Ministers (Government) is the body competent to take decisions for the expropriation of private property where this is needed for projects of national significance. Its decisions are subject to judicial review, including with respect to the amount of compensation allocated to the expropriated owners.
The compensation to be provided can be monetary or through other property. Section 32(2) of the State Property Act defines adequate monetary compensation as one calculated on the basis of “the market value of comparable properties situated in proximity to the expropriated one”. Further instructions are contained in section 1a(2) of the supplementary provisions of the same Act. It defines the term “market value” as the average value indicated in all contracts for valuable consideration – sales of properties, exchanges, public auctions, mortgages securing the purchase of property and others – concluded in the year preceding the assessment for the purposes of expropriation, and where, in addition, at least one of the parties is a commercial entity.
Initially the domestic courts had conflicting views on the question whether it was permissible to calculate the market value defined above if only one comparable existed. Following a legislative amendment in 2014, section 1a(2) requires expressly at least two comparables.
Section 32(3) of the State Property Act provides that, where no sufficient number of comparables can be found, the adequate monetary compensation is to be calculated on the basis of Government-adopted formulas. As concerns land considered to be agricultural, such formulas, taking into account the category of land and its proximity to cities or infrastructure, are contained in the Regulation on the calculation of the value of agricultural land (Наредба за реда за определяне на цени на земеделските земи), adopted by the Council of Ministers in 1998.
In 2006 a group of members of Parliament challenged the constitutionality of section 32(3) of the State Property Act. In a judgment of 4 July 2006 (Решение на Конституционния съд № 6, 4 юли 2006 г., к.д. 5/2006 г.) the Constitutional Court found that the provision, aiming to introduce common criteria, did not contradict the Constitution. It noted nevertheless that the application of that provision had to remain exceptional and to be conditioned on the “undeniable lack” of valid comparables.
COMPLAINTS
The applicant complains under Article 1 of Protocol No. 1 and Article 6 § 1 of the Convention of the lack of adequate compensation for his expropriated property and about the manner in which the Supreme Administrative Court decided on the matter.
QUESTIONS TO THE PARTIES
1. Did the interference with the applicant’s possessions comply with the requirements of Article 1 of Protocol No. 1? In particular, was the compensation awarded to him reasonably related to his expropriated property’s value (see, for example, Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, §§ 108-127, 25 October 2012) and were there any exceptional circumstances justifying a departure from that standard (see, for example, Jahn and Others v. Germany [GC], nos. 46720/99 and 2 others, §§ 111-117, ECHR 2005‑VI).
2. Did the applicant have a fair hearing before the Supreme Administrative Court for the determination of his civil rights and obligations, in accordance with Article 6 § 1 of the Convention?
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