European Court of Human Rights

CASE OF KIPS DOO AND DREKALOVIĆ v. MONTENEGRO (European Court of Human Rights)

Last Updated on November 4, 2019 by LawEuro

SECOND SECTION
CASE OF KIPS DOO AND DREKALOVIĆ v. MONTENEGRO
(Application no. 28766/06)

JUDGMENT
(Merits)
STRASBOURG
26 June 2018

FINAL
26/09/2018

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of KIPS DOO and Drekalović v. Montenegro,

The European Court of Human Rights (Second Section), sitting as a Chamber composed of:

Robert Spano, President,
Paul Lemmens,
Ledi Bianku,
Nebojša Vučinić,
Valeriu Griţco,
Jon Fridrik Kjølbro,
Stéphanie Mourou-Vikström, judges,
and Stanley Naismith, Section Registrar,

Having deliberated in private on 5 June 2018,

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

PROCEDURE

1.  The case originated in an application (no. 28766/06) against Montenegro lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by KIPS DOO, a company registered in Montenegro (“the first applicant”), and Mr Risto Drekalović, a Montenegrin national, (“the second applicant”), on 16 July 2006.

2.  The applicants were represented by Mr P. Savić, a lawyer practising in Belgrade, Serbia. The Montenegrin Government (“the Government”) were represented by their Agent, Mrs V. Pavličić.

3.  The applicants complained, in particular, about the length of administrative and enforcement proceedings, lack of an effective domestic remedy in that regard, and a violation of their property rights.

4.  On 14 December 2016 those complaints were communicated to the Government. The remainder of the application was declared inadmissiblepursuant to Rule 54 § 3 of the Rules of Court.

THE FACTS

I.  THE CIRCUMSTANCES OF THE CASE

5.  The first applicant was founded in 1990 and has its seat in Podgorica. The second applicant was born in 1952 and lives in Podgorica. The second applicant is the first applicant’s founder, executive director, and the owner of 99.2698 % of its shares. The remaining 0.7302% is owned by the second applicant’s wife and son.

A. Background information

6.  On 3 August and 11 November 1998 respectively the first applicant concluded two contracts with the Development Land Social Fund (Društveni fond za građevinsko zemljište, poslovni prostor i puteve Podgorica). Under the first contract the first applicant obtained the right to use (pravo korišćenja) four plots of development land (građevinsko zemljište) with a total surface of 11,443 m2, on which it planned to build a shopping centre and an office building. The second contract concerned the communal charges for the necessary infrastructure on the land at issue (naknada za uređenje građevinskog zemljišta). On an unspecified date thereafter the four plots of land were joined into one, marked as no. 2090/1036.Pursuant to sections 419 and 420 of the Property Act 2009 (see paragraph 61 below) the first applicant became the owner of the land at issue on 9 December 2011.

7.  On 15 April 2005 the Property Administration (Uprava za nekretnine) issued a decision by which it divided the cadastral plot of land no. 2090/1036 into two, one of which kept the number 2090/1036 and had 11,365 m2, and another one which was registered as no. 2090/1220 and which had 77 m2.

8.  On 3 March 2016 the cadastral plot of land no. 2090/1036 was further split into two, the smaller part of 44 m2 becoming a cadastral plot of land no. 2090/1581. The bigger part kept the number 2090/1036 and measured 11,321 m2.

B. The Detailed Urbanistic Plan and its changes

9.  On an unspecified date in 2004 the first applicant’s plan for the shopping centre and the office building was registered in a Detailed Urbanistic Plan (Detaljni urbanistički plan, “DUP”).

10.  In December 2004 the DUP for the relevant area was changed, one of the changes being that the cadastral plot of land no. 2090/1036 and an adjacent plot of land of 1,557 m2, owned by the Municipality, were joined into one urban plot (urbanistička parcela).

11.  On 6 June 2005 the President of the Municipality decided to change the relevant DUP further, which decision entered into force on 7 July 2005. Construction in the area was prohibited thereby for the next 90 days except in case of those investors who had already obtained a building permit prior to this decision.

12.  On 6 October 2005 another decision was issued, providing that the DUP would be changed within 90 days and construction was further prohibited until the adoption of a new DUP but up to one year at most. The ban did not apply to the investors who had already obtained a building permit. This decision entered into force on 14 October 2005.

13.  On 20 January 2006 a new decision to change the DUP was issued, revoking the previous two decisions. As regards its contents it corresponded to the decision of 6 October 2005. It entered into force on 23 January 2006.

14.  On 21 July 2006 a new DUP was issued; it entered into force on 29 July 2006. Thereby the adjacent plot of land that had previously been added to plot no. 2090/1036 was apparently split into three: two parts became parts of two newly-formed urban plots of land and the third part remained attached to the applicant’s land and would appear to be part of a traffic route (saobraćajnica). It would also appear that in this urban plot of land the DUP planned the construction of two buildings instead of the shopping centre planned by the first applicant.

15.  On 28 July 2010 a new decision to change the DUP was issued.

16.  On 16 May 2013 the DUP was changed again, apparently providing for the construction of buildings similar to those initially planned to be built there by the applicants.

C. The “completion” of the urban plot

17.  Following the changes of the DUP in December 2004 (see paragraph 10 above), on 25 January 2005 the first applicant contacted the Property Secretariat (Direkcija za imovinu; “the Secretariat”) in the Podgorica Municipality. It sought to “complete” the urban plot, that is to buy the adjacent cadastral plot of land which had been added to its own land, thus forming one urban plot of land; having received no reply it renewed its request on 23 May 2005 and 2 August 2005.

18.  On 27 January 2005 the Spatial Planning Secretariat of Podgorica Municipality issued Urban Technical Conditions, which stated that the cadastral plot of land no. 2090/1036 was smaller than the relevant urban plot and that it needed to be “completed” (potrebno je izvršiti njeno dokompletiranje).

19.  On 23 February 2005 the Ministry of Environmental Protection and Spatial Planning (“the Ministry”) granted the first applicant a location for the construction of business premises on plot no. 2090/1036, in accordance with the 2004 DUP. The decision specified that the Urban Technical Conditions of 27 January 2005 were a constituent part of this decision.

20.  On 15 August 2005 the first applicant appealed, having received no reply from the Secretariat. The same day the Secretariat informed the first applicant that no completion of plots could be done given that the revision of the DUP was ongoing at the time, which meant “urbanistic re‑consideration of the area” at issue.

21.  By 6 April 2017 there had been at least seven remittals, either by the Municipality’s Chief Administrator (as the competent second-instance body) or the Administrative Court.

22.  In the course of these proceedings, on 2 September 2016 the Secretariat enquired at the Property Administration if the same urban plot of land, as it had existed at the time when the first applicant had first filed a request for completion, could be formed again. On 23 September 2016 the Property Administration replied that the size of the said plot of land had been changed in the meantime and that there was no basis for re-forming the urban plot as it once had been.

23.  On 6 April 2017 the Secretariat dismissed the first applicant’s request again.On 19 May 2017 the Chief Administrator upheld this decision, considering that due to the changes of the planning documents the completion of the said plot of land could not be done and that therefore the first applicant’s request had been correctly dismissed.On 23 June 2017 the first applicant instituted an administrative dispute before the Administrative Court, which would appear to be still pending.

D.  The calculation of the communal charges

1.  Administrative proceedings

24.  On 11 July 2005 the first applicant requested the Agency for Construction and Development of Podgorica (Agencija za izgradnju i razvoj Podgorice; “the Agency”), a legal successor of the Development Land Social Fund, to calculate the final communal charges for the urban plot no. 2090/1036.

25.  On 20 July 2005 the Agency replied that the calculation could not be made due to the construction ban.

26.  On 26 July and 6 September 2005 the first applicant urged the Agency to make the necessary calculation, submitting that the ban applied only to construction and not to the calculation of charges.

27.  On 13 September 2005 the first applicant made its own assessment of the communal charges in the amount of 131,324.65 euros (EUR) and made the payment. The payment was returned the next day as it had been made “without cause” (uplaćen bez osnova).

28.  In the course of the proceedings the applicant repeated its request to the Agency on several occasions, including between 5 and 14 October 2005, submitting that the construction ban as the basis for refusal was unlawful and/or the ban was not in force at the relevant time.

29.  By 1 December 2005 the applicant’s request had been refused by the Agency at least four times on the grounds that construction was banned pursuant to either the decision to change the DUP of 6 June 2005 or the decision of 6 October 2005. The Agency also held that the calculation could not be done as the first applicant had no building permit.

30.  On 1 December 2005 the second-instance body rejected the first applicant’s appeal on the grounds that this was not a matter for administrative proceedings. The first applicant initiated an administrative dispute before the Administrative Court in this regard but in view of the opinion of the second-instance body it withdrew that claim, and instead pursued the proceedings before the Commercial Court.

2   Judicial proceedings

31.  On 16 September 2005 the first applicant instituted proceedings before the Commercial Court (Privredni sud) in Podgorica against the Agency for refusing to calculate the communal charges.

32.  On 7 April 2006 the Commercial Court ruled in favour of the first applicant and ordered the Agency to calculate the charges. The court considered in particular that the first decision to change the DUP, which prohibited construction, had entered into force on 7 July and expired on 5 October 2005, while the next decision had entered into force on 14 October 2005. Therefore, there had been no construction ban before 7 July 2005 or between 5 and 14 October 2005, when the first applicant requested the communal charges to be calculated and when the Agency was bound to calculate them. The court also noted that the Agency’s reasoning for refusing the first applicant’s request, notably that “the calculation [could] not be done as the first applicant had no building permit” was illogical, since the calculation of charges was a pre-condition for getting a building permit.

33.  The Court of Appeals and the Supreme Court upheld the previous decision on 18 April and 29 December 2008 respectively. The Supreme Court held, inter alia, that the first applicant had been granted the location for construction by the competent Ministry before it was decided that the DUP would be changed and that a decision to change the DUP could not affect the investors who had already been granted a location.

34.  On 6 August 2008 the Agency calculated the charges. It provided for a new contract to be concluded with the first applicant, which specified that pursuant to the 1998 contract the applicant had already paid a certain amount and that the remaining amount to be paid was EUR 269,309.83.

35.  On 13 October 2008, upon the first applicant’s request, the Commercial Court issued an enforcement order, which provided that the Agency would calculate the charges within 30 days or it would face a penalty of EUR 550, and would have to calculate the charges within the following 15 days.

36.  On 20 October 2008 the first applicant received the above calculation from the Agency.On 22 October 2008 it requested that the contract specify in accordance with which DUP the construction would be undertaken.

37.  On 27 October 2008 the Agency replied that the first applicant’s request was outside the Agency’s competence and that the first applicant should address bodies in charge of urban planning in that respect. On 28 October 2008 the Agency notified the Commercial Court that it had complied with its judgment and the enforcement order.

38.  On 10 November 2008 the first applicant informed the Commercial Court that it did not consider the relevant judgment enforced as it had “serious objections” to the documents submitted by the Agency due to which it had not signed them.

39.  On 16 February 2009 the Agency informed the Commercial Court that the first applicant had no objections in respect of the calculation itself, and noted that no statute provided for an obligation or a possibility for the first applicant to sign the calculation.

E. Proceedings for a building permit

1.  The first proceedings

40.  On 8 July 2005 the first applicant requested a building permit for the shopping centre from the Ministry.

41.  On 26 July 2005 the first applicant notified the Ministry that the Agency was refusing to calculate the charges and asked the Ministry to urge that the Agency do so. On 12 August 2005 the Ministry responded that it had no competence as regards matters relating to the calculation of the charges.

42.  On 14 September 2005 the first applicant informed the Ministry that it had done the calculation itself and had made the payment (see paragraph 27 above).

43.  On 23 September 2005 the Ministry dismissed the first applicant’s request on the grounds that it had not paid the communal charges or completed the urban plot pursuant to the Urban Technical Conditions.

44.  On 18 November 2005 the first applicant instituted an administrative dispute before the Administrative Court. It submitted, inter alia, that the requirement to buy an adjacent plot of land had been introduced in addition and was unnecessary given that the shopping centre was planned entirely on the cadastral plot of land no. 2090/1036. It also maintained that the refusal to calculate the charges was groundless as the ban related to construction only and not to the calculation of the charges, and that it was a deliberate obstruction.

45.  On 29 December 2005 the Administrative Court dismissed the first applicant’s claim on the grounds that there was no contract between the first applicant and the Agency concerning the communal charges, that the first applicant had failed to submit all the evidence required by the relevant statutory provision in order to obtain a building permit, and it had failed to obtain an adjacent plot of land as required by the Urban Technical Conditions. The court did not deal with the first applicant’s explicit submission that the said requirements were unlawful and/or unnecessary.

46.  On an unspecified date thereafter the first applicant lodged a request for judicial review before the Supreme Court, maintaining that there was a contract between itself and the Agency concluded in 1998. It also submitted that the courts had blamed the first applicant for not paying the charges and completing the plot, even though it had done everything it could to comply with these requests, and had actually complained about the unlawfulness of the relevant State bodies’ refusal to cooperate in these matters.

47.  On 2 March 2006 the Supreme Court upheld the previous decision, considering that the first applicant had indeed failed to submit proof that it had paid the communal charges and completed the urban plot as requested.

2.  The second proceedings

48.  On 29 August 2014, following the change of the DUP in 2013, the first applicant requested a building permit for “central activities building” (za izgradnju objekta centralnih djelatnosti). On 27 July 2017, after five remittals, the proceedings were still pending.

F. The proceedings before the Constitutional Court

49.  Between 15 August 2005 and 20 September 2006 the first applicant filed three motions with the Constitutional Court for the assessment of the constitutionality and legality of the decisions to change the DUP issued on 6 June 2005, 20 January and 21 July 2006 respectively.

50.  On 30 January 2006 the Constitutional Court discontinued the proceedings (obustavlja se postupak) upon the first motion as the impugned decision of 6 June 2005 was no longer in force.

51.  On 6 December 2006 and 27 June 2007, respectively, the Constitutional Court rejected the other two motions.

G. Other relevant facts

52.  The DUP in the area at issue was subject to changes in 1990, 1996, 1997, 1999 (the changes in 1999 were done pursuant to the first applicant’s request to that effect), 2002 (entered into force in 2003), 2004 (entered into force in 2005), 2006, 2010 and 2013. The purpose of the land also changed over time, from “sports and recreation” to “central activities” (centralne djelatnosti).

53.  Between 8 February and 8 July 2005 the first applicant obtained a number of permits related to the planned construction of the shopping centre (electro-energetic, water supply, sanitation, geo-mechanic, urbanistic, as well as those related to fire safety, environmental protection, workplace safety, traffic, etc.).

54.  Between January and August 2005 there were at least four other requests relating to the land in respect of which the DUP was changed (three of which were also for completion of relevant plots of land). In all four cases the claimants were informed that their requests could not be met in view of the changes which the DUP was undergoing.

55.  On 14 August 2006 the Ministry sent a letter to the mayors of all Municipalities. The letter stated, in substance, that “certain local government units” interpreted section 33 of the Spatial Planning and Development Act (Zakon o planiranju i uređenju prostora) (see paragraph 69 below), which provided for a possibility of a construction ban where appropriate, in a way that was incompatible with its contents, essence and meaning. The Ministry further explained that a decision on ‘a construction ban’ related exclusively to a ban on issuing a decision granting a location, as a document on the basis of which a building permit was issued, and that in a case where the decision on location had been issued prior to the construction ban, the competent body had a duty to issue a building permit to an investor, provided that the conditions provided in section 34 of the Construction Act (Zakon o izgradnji objekata) were fulfilled, regardless of whether the construction ban in the relevant area was in force.

56.  Between 1 August and 8 December 2006 the first applicant was granted a location and was issued urban planning conditions for the construction of a warehouse in another part of Podgorica. It also obtained other relevant consents (concerning water supply, electricity, fire protection, traffic, ecology, sanitation, etc.) and the Ministry’s urbanistic consent to technical documentation. On 28 December 2006 it concluded a contract with the Agency concerning the charges, and on 10 January 2007 it obtained a building permit for that location. By 17 December 2007 it had built the warehouse and obtained a permit to use it (upotrebna dozvola).

57.  On 27 August 2015, following the first applicant’s proposal to that effect, a meeting was held between the representatives of the first applicant and the Agency. The Agency undertook to study the first applicant’s submissions in relation to the urban plot of land no. 2090/1036, including the one that it had not been allowed to honour all the obligations. It would appear, however, that the first applicant never received any response from the Agency.

II.  RELEVANT DOMESTIC LAW

A. Constitution of Montenegro 2007 (Ustav Crne Gore; published in the Official Gazette of Montenegro – OGM – no. 1/07)

58.  This Constitution entered into force on 22 October 2007. Article 149 thereof provides that the Constitutional Court shall rule on a constitutional appeal lodged in respect of an alleged violation of a human right or freedom guaranteed by the Constitution, after all other effective legal remedies have been exhausted.

B. Montenegro Constitutional Court Act 2008 (Zakon o Ustavnom sudu Crne Gore; published in OGM no. 64/08)

59.  This Act entered into force in November 2008. Sections 48-59 provided details as regards the processing of constitutional appeals.

C. Montenegro Constitutional Court Act 2015 (Zakon o Ustavnom sudu Crne Gore, published in the OGM no. 11/15)

60.  This Act entered into force on 20 March 2015, repealing the Constitutional Court Act 2008. Sections 38 and 68-78 provide details as regards the processing of constitutional appeals.

D. The Property Act 2009 (Zakon o svojinsko-pravnim odnosima; published in the OGM no. 019/09)

61.  Sections 419 and 420, taken together, provide, inter alia, that the users of socially-owned, later State-owned land shall become the owners thereof, and that the Real Estate Office shall accordingly make the changes in the Real Estate Registry.

62.  This Act entered into force on 21 March 2009.

E. The Development Land Act (Zakon o građevinskom zemljištu; published in the Official Gazette of the Republic of Montenegro – OG RM – no. 55/00)

63.  Section 10 provided, inter alia, that before building on land urban plots were to be formed.

64.  Section 17 provided that the communal charges for the development land (naknada za uređivanje građevinskog zemljišta) were to be paid by the investor who was building on it. A local government unit would draw up the criteria necessary to calculate the said charges.

65.  Section 18 provided that the local government and the investor building on the land would regulate their relations in respect of the infrastructure on the land and the communal charges therefor by a contract.

66.  Section 22 provided that the user of the development land was bound to tolerate (dužan je da trpi) changes of the boundaries of the urban plot.

F. The Construction Act (Zakon o izgradnji objekata; published in the OG RM no. 55/00 and OGM no. 40/08)

67.  Section 34 specified, inter alia, which documents needed to be submitted in order to have a building permit issued, one of them being proof that communal charges for the land at issue had been paid. The proof of completion of a plot of land is not among the documents required.

G. The Spatial Planning and Development Act (Zakon o planiranju i uređenju prostora; published in OG RM no. 28/05)

68.  Section 26 set out rules for a detailed urban plan and its contents.

69.  Section 33 provided that a decision on a detailed urban plan could, when needed, provide also for a construction ban, which could last up to one year at most.

70.  This Act entered into force on 13 May 2005.

H. The Spatial Planning and Construction Act (Zakon o uređenju prostora i izgradnji objekata; published in OGM nos. 51/08, 40/10, 34/11, 40/11, 47/11, 35/13, 39/13, and 33/14)

71.  Sections 58 and 59 provided that urban plots could consist of one or more cadastral plots of land or parts thereof and that the owners of cadastral plots were bound to tolerate changes of the boundaries of urban plots.

72.  Section 66 provided, inter alia, that the investor paid for the communal charges of the development land. The conditions, method, time‑limits and the procedure for the payment thereof were to be prescribed by the local government, with the Government’s prior consent.

73.  Section 93 specified the documents on the basis of which a building permit was issued, one of them being proof that the communal charges had been paid. The completion of a relevant plot of land is not mentioned amongst them.

74.  This Act entered into force on 30 August 2008, repealing the previous three Acts. It was in force until 14 October 2017, when it was repealed by the new Spatial Planning and Construction Act (Zakon o planiranju prostora i izgradnji objekata; published in OGM no. 64/17).

I. The Obligations Act 1978 (Zakon o obligacionim odnosima; published in the Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 29/78, 39/85, 45/89, 57/89 and the Official Gazette of the Federal Republic of Yugoslavia no. 31/93)

75.  Sections 154 and 155 set out different grounds for claiming civil compensation, including pecuniary and non-pecuniary damage.

76.  Section 172 (1) provided that a legal entity, which includes the State, was liable for any damage caused by one of “its bodies”.

J. The Obligations Act 2008 (Zakon o obligacionim odnosima; published in the OGM nos. 47/08 and 04/11)

77.  This Act entered into force on 15 August 2008, repealing the Obligations Act 1978. Sections 148, 149 and 166 (1), however, correspond to sections 154, 155, and 172 (1) of the previous Act.

K. Right to a Trial within a Reasonable Time Act (Zakon o zaštiti prava na suđenje u razumnom roku; published in the OGM no. 11/07)

78.  This Act entered into force on 21 December 2007. It provides, under certain circumstances, the possibility to have lengthy proceedings expedited by means of a request for review (kontrolni zahtjev), as well as an opportunity for claimants to be awarded compensation by means of an action for fair redress (tužba za pravično zadovoljenje).

L. Civil Procedure Act (Zakon o parničnom postupku; published in the OG RM nos. 22/04, 28/05 and 76/06, and the OGM no. 73/10, 47/15, 48/15, 51/17, and 75/17)

79.  Section 352 provides, inter alia, that a judgment becomes final when it can be no longer challenged by an appeal. Section 455 provides that the Civil Proceedings Act shall apply accordingly to commercial disputes.

THE LAW

I.  ALLEGED VIOLATION OF ARTICLES 6 AND 13 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL NO. 1 THERETO

80.  The applicants complained under Articles 6, 8 and 13 of the Convention and Article 1 of Protocol No. 1 about an interference with their property rights, notably about not having been issued with a building permit for a shopping centre in the first set of proceedings.They also complained about: (a) the length of the administrative proceedings related to the completion of the urban plot of land (see paragraphs 17-23 above) and lack of an effective domestic remedy in that regard, and (b) the length of the enforcement proceedings pursuant to the Commercial Court’s judgment of 7 April 2006 (see paragraph 31-39 above), and lack of an effective domestic remedy in that regard.

81.  The Court reiterates that a complaint consists of two elements: factual allegations and legal arguments. By virtue of the jura novit curia principle the Court is not bound by the legal grounds adduced by the applicant under the Convention and the Protocols thereto and has the power to decide on the characterisation to be given in law to the facts of a complaint by examining it under Articles or provisions of the Convention that are different from those relied upon by the applicant (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 126, ECHR 2018). The Court considers that the complaints in the present case fall to be examined under Articles 6 and 13 of the Convention, and Article 1 of Protocol No. 1 thereto.The relevant Articles read as follows:

Article 6

“In the determination of his civil rights and obligations … everyone is entitled to a … hearing within a reasonable time by [a] … tribunal …”

Article 13

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

Article 1 of Protocol No. 1

“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.”

82.  The Government contested the applicants’ complaints.

A.  Admissibility

1.  Compatibility ratione personae (relating to all the complaints)

83.  The Government submitted that the application was incompatible with the Convention ratione personae in respect of the second applicant and referred to Agrotexim and Others v. Greece, 24 October 1995, §§ 59-72, Series A no. 330‑A. In particular, the shareholders of a company could not claim to be victims of alleged violations of the company’s rights, except in exceptional circumstances, for example, where the company could not seek protection of its rights on its own. As in the present case that was not the case, there was no reason to depart from Agrotexim.

84.  The applicants contested the Government’s objections.

85.  The Court recalls that the relevant principles in this regard are set out in, for example, Ankarcrona v. Sweden (dec.), no. 35178/97, 27 June 2000.

86.  Turning to the present case, the Court notes that the second applicant owns more than 99 % of the first applicant. Consequently, and contrary to what was the situation in, for example, Agrotexim and Others (cited above, § 65, where the applicant companies owned only about half of the shares in the company in question), there is no risk of differences of opinion among shareholders or between shareholders and a board of directors as to the reality of infringements of the rights protected under the Convention and its Protocols or concerning the most appropriate way of reacting to such infringements (see Ankarcrona (dec.), cited above).

87.  Having regard to the absence of competing interests which could create difficulties, and in the light of the circumstances of the case as a whole, the Court considers that the applicants are so closely identified with each other that it would be artificial to distinguish between them in this context, and that even though the party to the domestic proceedings was the first applicant only, the second applicant can also reasonably claim to be a victim within the meaning of Article 34 of the Convention (see Vujović and Lipa D.O.O. v. Montenegro, no. 18912/15, §§ 29-30, 20 February 2018; Kin-Stib and Majkić v. Serbia, no. 12312/05, § 74, 20 April 2010; Eugenia Michaelidou Developments Ltd and Michael Tymvios v. Turkey,no. 16163/90, § 21, 31 July 2003; and Ankarcrona, cited above). The Government’s objection in this regard must therefore be dismissed.

2.  Compatibility ratione materiae (relating to the complaint under Article 1 of Protocol No. 1)

88.  The Government submitted that the first applicant had not paid the charges to the Agency, and had thus failed to meet all the statutory requirements for obtaining a building permit. Therefore, it could not have had a legitimate expectation to obtain it, which makes its complaint under Article 1 of Protocol No. 1 incompatible ratione materiae.

89.  The applicants submitted that they had a legitimate expectation to get a building permit as they were willing both to purchase the adjacent plot of land and to pay the relevant charges. However, it was due to the obstruction of the authorities that they could not.

90.  The Court notes that the applicants were the sole users and later the sole owners of the land that is the subject of the present case and which undoubtedly constitutes a possession for the purposes of the Convention. It also reiterates that the refusal to issue a building permit must be regarded as an interference with the applicants’ right to the peaceful enjoyment of their property, thus making Article 1 of Protocol No. 1 applicable (see Lay Lay Company Limitedv. Malta, no. 30633/11, §§ 81-82, 23 July 2013 and the authorities cited therein). In any event, until it was decided that the DUP would be changed the applicants had at least a legitimate expectation of being able to carry out their proposed development and this has to be regarded, for the purposes of Article 1 of Protocol No. 1, as a component of the property in question (see, mutatis mutandis, Pine Valley Developments Ltd and Others v. Ireland, 29 November 1991, § 51 in fine, Series A no. 222). The Government’s objection in this regard must therefore be dismissed.

3.  Exhaustion of domestic remedies (relating to all the complaints)

91.  The Government submitted that the first applicant had failed to exhaust all effective domestic remedies. In respect of the complaints related to the length of the administrative and enforcement proceedings it had not made use of a request for review and an action for fair redress provided by the Right to the Trial within a Reasonable Time Act (see paragraph 78 above). Even though a request for review is effective only as of 4 September 2013, the Government considered that the first applicant had been required to avail itself thereof, especially with regard to the proceedings for completion of an urban plot, which were still ongoing. Had it made use of it, it could also have made use of an action for fair redress and obtained compensation. In any event, it could have made use of a constitutional appeal.

92.  The applicants contested the Government’s objections, maintaining that the said remedies had not existed at the time when the application had been lodged with the Court.

93.  The relevant principles in this regard are set out in, for example, Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, §§ 69-75, 25 March 2014.

94.  Turning to the present case, the Court has already held that a request for review is an effective domestic remedy as of 4 September 2013 and only in respect of applications introduced against Montenegro after that date (see Vukelić v. Montenegro, no. 58258/09, § 85, 4 June 2013); the action for fair redress is an effective domestic remedy as of 18 October 2016 (see Vučeljić v. Montenegro (dec.), no. 59129/15, § 30, 18 October 2016); and a constitutional appeal as of 20 March 2015 (see Siništaj and Others v. Montenegro, nos. 1451/10 and 2 others, § 123, 24 November 2015). Even though it can be subject to exceptions which may be justified by the specific circumstances of each case, the Court reiterates that the effectiveness of a particular remedy is normally assessed with reference to the date on which the application was lodged (see, for example, Baumann v. France, no. 33592/96, § 47, ECHR 2001‑V (extracts)). As none of the said remedies was effective, or existed, for that matter, at the time when the present application was lodged with the Court, the applicants were not required to make use of them later. The Government’s objection in this regard must therefore be dismissed.

4.  The Court’s conclusion

a. The length of the enforcement proceedings and an effective domestic remedy in that regard

95.  The applicants complained under Article 6 § 1 that the length of the enforcement proceedings had been excessive. They also complained under Article 13 about the lack of an effective remedy in that regard.

96.  The Government contested the first applicant’s complaint. They submitted that the enforcement proceedings had lasted only for 15 days and that the Agency had complied fully with the Commercial Court’s judgment. The fact that the first applicant refused to sign the accompanying contract was irrelevant, and the additional changes requested by it had not been within the Agency’s competence. Therefore every further delay in that regard was the first applicant’s fault.

97.  The applicants replied that had the Agency acted in accordance with the law they would have had the building permit by 8 August 2005 at the latest and there would have been no need for the court proceedings which followed. They also maintained that the 2006 DUP no longer provided for construction of the initially planned shopping centre and that thereby the subsequent calculation of the charges, as well as their right to a final decision and its enforcement, became pointless, which was contrary to Article 6 of the Convention.

98.  The relevant criteria for the assessment of the reasonableness of the length of civil proceedings are set out, for example, in Satakunnan Markkinapörssi Oy and Satamedia Oy v. Finland [GC], no. 931/13, § 209, ECHR 2017 (extracts), and in the authorities cited therein.

99.  Turning to the present case, the Court notes that, following the proceedings instituted by the applicants, the Commercial Court ordered the Agency to calculate the relevant charges on 7 April 2006, which judgment became final on 18 April 2008. By the time the enforcement order was issued, on 13 October 2008, the Agency had already complied with the Commercial Court’s judgment and calculated the charges on 6 August 2008, that is within less than four months since the relevant judgment had become final.The Court therefore considers that the applicants’ complaint under Article 6 about the length of the enforcement proceedings is manifestly ill‑founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

100.  As regards the applicants’ complaint under Article 13 about the lack of an effective domestic remedy in this regard, the Court reiterates that the relevant Article has been consistently interpreted by the Court as requiring a remedy in domestic law only in respect of grievances which can be regarded as “arguable” in terms of the Convention (see, for example, Powell and Rayner v. the United Kingdom, 21 February 1990, § 31, Series A no. 172, and De Tommaso v. Italy [GC], no. 43395/09, § 180 in limine, ECHR 2017 (extracts)). The criteria for considering a claim as “arguable” cannot be construed differently from the criteria applied when declaring claims “manifestly ill-founded” (see Powell and Rayner, cited above, § 31, and Kienast v. Austria,no. 23379/94, § 54, 23 January 2003).

101.  Since the applicants’ complaint under Article 6 § 1 has been declared “manifestly ill-founded”, the Court considers that it cannot be regarded as “arguable” for the purposes of Article 13. The applicants’ complaint under Article 13 is thus likewise manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

b. The remaining complaints

102.  The Court notes that the remaining complaints, notably those about the length of the administrative proceedings for completion of the urban plot of land, lack of an effective domestic remedy in that regard, and the applicants’ property rights, are not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that they are not inadmissible on any other grounds. They must therefore be declared admissible.

B.  Merits

1.  Article 6 § 1 of the Convention

103.  The applicants complained about the length of the proceedings for completion of the urban plot of land no. 2009/1036 (see paragraphs 17-23 above). They denied that they had contributed to the length of the proceedings. Notably, they had done everything they could to expedite the proceedings, which had been lengthy due to delays in the State bodies’ work. While it was true that several administrative and judicial bodies were involved this was only because an unlawful action of one body was being justified by an unlawful action of another body, which complicated a matter that was, in essence, simple.

104.  The Government submitted that this issue should be joined to Article 1 of Protocol No. 1. Under Article 1 of Protocol No. 1 they submitted that in view of an ongoing urban planning re-examination of the area the first applicant’s request to complete the parcel could not be accepted before the adoption of a new DUP, and the DUP had been changed several times over the years.The new DUP redefined the urban plot at issue: part of the adjacent land that remained attached to the first applicant’s land was part of a traffic route, which was a common good and as such could not be privately owned. In view of that, and given that the former urban plot of land could not be formed again, the first applicant’s request for completion had had to be refused.

105.  They also maintained that the proceedings had been complex, that several State bodies had been involved, that the first applicant had contributed to the length, and that what was at stake was not a priority matter requiring urgent treatment.

106.  The relevant principles in this regard are set out in detail in, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000‑VII. In particular, the repeated re-examination of a single case following remittal may in itself disclose a serious deficiency in a State’s judicial system (see Pavlyulynets v. Ukraine, no. 70767/01, § 51, 6 September 2005).

107.  Turning to the present case, the Court notes that the proceedings at issue commenced on 15 August 2005, when the applicants lodged their administrative appeal (see, mutatis mutandis, Počuča v. Croatia, no. 38550/02, § 30, 29 June 2006) and that on 23 June 2017, when the first applicant instituted an administrative dispute, they were still pending (see paragraphs 20-23 above). They had therefore been ongoing for more than 11 years and 10 months, during which time the domestic bodies remitted the case seven times. By 29 September 2017, which is when the Court received the final observations in the case, there was no information that the proceedings had ended in the meantime.

108.  It is further observed that the proceedings related to the applicants’ request to buy a plot of land belonging to the Municipality, which the Court does not consider to be an issue of any exceptional complexity. Nor does it consider that the applicants’ conduct contributed to the length of the proceedings in any way. While the relevant DUP indeed changed several times over the years (see paragraph 52 above) and the proceedings as such were not a priority requiring urgent treatment, the Court does not consider that either of these two facts is a justification for such a procedural delay.

109.  In view of the criteria laid down in its jurisprudence and the relevant facts of the present case, the Court is of the opinion that the length of the proceedings complained of failed to satisfy the reasonable time requirement. There has accordingly been a violation of Article 6 § 1 of the Convention.

2.  Article 13 of the Convention

110.  The applicants complained about the lack of an effective domestic remedy with respect to the duration of the proceedings for the completion of the urban plot of land.

111.  The Government submitted that there had been effective domestic remedies at the first applicant’s disposal, which it had not exhausted (see paragraph 91 above).

112.  The relevant principles in this regard are set out in Sürmeli v. Germany [GC], no. 75529/01, §§ 99-100, ECHR 2006‑VII, and McFarlane v. Ireland [GC], no. 31333/06, § 107, 10 September 2010.

113.  Turning to the present case, the Court notes that the Government asserted in their objections that there were remedies available in respect of the applicants’ complaint under Article 6 § 1 regarding the length of the proceedings. These objections were rejected on the grounds set out in paragraph 94 above.

114.  For the same reasons, the Court concludes that there has been a violation of Article 13 of the Convention, taken together with Article 6 § 1, on account of the lack of an effective remedy under domestic law at the relevant time for the applicants’ complaints concerning the length of the proceedings (seeStevanović v. Serbia, no. 26642/05, §§ 67‑68, 9 October 2007;Stakić v. Montenegro, no. 49320/07, §§ 59-60, 2 October 2012; andStanka Mirković and Others v. Montenegro, nos. 33781/15 and 3 others, §§ 61-63, 7 March 2017).

3.  Article 1 of Protocol No. 1

a. The parties’ submissions

i. The applicants

115.  The applicants submitted that the State had created urban planning and legal chaos, and that a statutory provision providing for a construction ban was misused to their detriment. Notably, the construction ban applied only to those who did not possess a building permit, and had the applicants been issued with a building permit they could have proceeded with the construction. Under the veil of an alleged common interest the applicants’ rights under Article 1 of Protocol No. 1 had been violated.

116.  The applicants averred that the Government, when relying on the public interest, had failed to take into account the investors’ perspective and the need to comply with the DUP already in force. If one DUP gave the investors a founded and justified possibility to invest and then it was changed to the detriment of the investors, those who issued the DUP were responsible and had to compensate the investors for all the consequences thereof.In the present case, the State had changed the DUP without taking care of its obligations arising from the previous DUP and ignoring the acquired rights of the investors, thereby causing enormous damage to the applicants.

117.  In accordance with the DUP in force at the time, the applicants had acquired the land, and the Ministry had issued urban-technical conditions and granted a location for construction. In this way the State, on the basis of the DUP then in force, had guaranteed to the first applicant that it could proceed with the activities related to its investment. Accordingly, the first applicant had paid most of the charges, made the entire project documentation, and obtained the necessary permits.The only obstacle for the applicants to obtain the building permit was the unlawful actions of the respondent State bodies. Notably, the requirement to purchase the adjacent plot of land was neither lawful, given that it was not a statutory condition necessary for obtaining a building permit, nor was it the fault of the applicants that this requirement could not be fulfilled, given that they had been willing to comply with it. In addition, the State bodies had refused to calculate the charges, and then they had refused to issue a building permit, relying on the lack of calculation. The Ministry’s letter of 14 August 2006 confirmed that the Agency had been obliged to calculate the charges, and that the applicants therefore had a legitimate right to get a building permit (see paragraph 55 above). In other words, the unlawful action of one State body was justified by an unlawful action of another state body.

118.  The applicants maintained that there would have been a just balance (pravična ravnoteža) if the State, by its actions, had achieved any kind of benefit for itself or the people. However, there could be no legitimate aim, public interest and proportionality in urban planning if it resulted in weeds growing on the said plot of land instead of a business object from which the State could collect taxes, and a hundred workers would earn their living.

ii. The Government

119.  The Government submitted that the interference in the present case amounted to the usual and necessary measures of control of the use of property and that it was lawful, given that all the decisions, including those to change the DUP, were adopted in accordance with the law.

120.  The relevant DUP had indeed changed several times since 1990, thereby changing the shape, the size, and the purpose of the urban plot of land. However, this was in the public interest, and in matters of urban planning often changes of DUPs were no exception.The DUP needed to be changed due to the differences between the planned urban parcels and the real situation on the ground, which meant an urban planning re-examination of the area. Therefore, the first applicant’s request to complete the parcel could not be accepted before the adoption of a new DUP and the new DUP had defined the urban plot at issue differently (see paragraph 14 above). In particular, only one part of the adjacent land remained attached to the first applicant’s land, and it was part of a traffic route, which was a common good and as such could not be privately owned. Therefore, the applicant’s request for completion had had to be refused.

121.  The Government further submitted that at about the same time the first applicant had requested completion of some other plots, which had been impossible for the same reason. However, it had completed them later pursuant to the newly adopted DUPs, whereas in the case of this plot of land it had insisted that it be completed pursuant to the DUP which was in force at the time when it had first filed a request.

122.  The Government further submitted that the land at issue was in the suburbs, where illegal construction was a big problem, and where greater urbanisation and a planned expansion had begun after 2000. They maintained that suppression of illegal construction, urban planning, and defining traffic routes (definisanje granica javnih saobraćajnica), within the existing regulations and laws, were in the common interest of the community, which prevailed over individual interests, unless they were unreasonable. In order to achieve this everybody, including the first applicant, was bound to tolerate certain measures undertaken with that aim, such as the changes of the DUP. The construction ban also had a legitimate aim, notably to avoid potential “damage to local self-government” and those who intended to build in the area in respect of which the DUP was undergoing changes.However, the said measures were proportionate, that is there was a fair balance between them and the individual burden that the first applicant had to bear.

123.  As regards the calculation of charges the Commercial Court had not found it unlawful that it had been refused because of the construction ban. It rather considered that the Agency should have calculated them at the time when the construction ban had not been in force. However, even assuming that the Agency had calculated the charges at that time, the construction ban had been in force and the applicant could not have proceeded with the construction. In any event, after the Commercial Court issued its enforcement order the Agency acted promptly and calculated the charges. The fact that the applicant refused to accept the calculation was irrelevant given that it had not objected to the amount itself but rather to the fact that the Agency had not specified in accordance with which DUP the construction would be undertaken, which was outside the Agency’s competence. The Ministry’s letter, referred to by the applicants, was not legally binding and, in any event, it had been sent while the proceedings before the Court of Appeal were ongoing, and in which the first applicant had in any case been successful.

124.  The Government further submitted that the Ministry could not but dismiss the first applicant’s first request for a building permit, given that the first applicant, on its own admission, had failed to provide all the necessary documentation. Therefore, it had not had a legitimate expectation to obtain a building permit and had not had to bear an excessive burden. Given that no building permit had been issued, the first applicant had had no guarantees that it could begin with its investment, nor did the State have an obligation to compensate for any alleged damage in event that the DUP was changed.

125.  The applicants had neglected the principles of spatial development and insisted on their interests. If this were accepted, that would mean that from the moment a location was granted the State would be tied by interests of the investor, and that in each change of DUP private interest would have a priority over the public interest. However, when adopting planning documents the State had an “imperium position”, and individual and legal persons had to tolerate the decisions reached by the authorities, provided these were in accordance with principles of protection of human rights. The Government submitted that the States had a wide margin of appreciation in this regard and that the Court must respect the domestic legislature’s assessment as to what was in the general interest, unless that assessment was manifestly without reasonable foundation.

126.  The Government concluded that the State bodies had acted lawfully and within their competencies, and that there was no violation of Article 1 of Protocol No. 1.

b. The Court’s assessment

127.  The relevant principles in this regard are set out, for example, in Hutten-Czapska v. Poland [GC] (no. 35014/97, §§ 163-165 and §§ 167-168, ECHR 2006‑VIII).

128.  In particular, the Court reiterates that Article 1 of Protocol No. 1 comprises three distinct rules. The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property. The second rule, contained in the second sentence of the same paragraph, covers deprivation of possessions and makes it subject to certain conditions. The third rule, stated in the second paragraph, recognises that Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. 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 the peaceful enjoyment of property. They should therefore be construed in the light of the general principle enunciated in the first rule. They must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to the aim sought to be realised. The requisite balance will not be struck where the person concerned bears an individual and excessive burden. The Court also reiterates that in the area of land development and town planning, the Contracting States should enjoy a wide margin of appreciation in order to implement their town and country planning policies. Nevertheless, in the exercise of its power of review the Court must determine whether the requisite balance was maintained in a manner consonant with the applicant’s right of property (see Ayangil and Others v. Turkey, no. 33294/03, § 50, 6 December 2011, and Lay Lay Company Limited, cited above, § 83, and the authorities cited therein).

129.  Furthermore, uncertainty – be it legislative, administrative or arising from practices applied by the authorities – is a factor to be taken into account in assessing the State’s conduct. Indeed, where an issue in the general interest is at stake, it is incumbent on the public authorities to act in good time, in an appropriate and consistent manner (see Broniowski v. Poland [GC], no. 31443/96, § 151, ECHR 2004‑V, and Hutten-Czapska, cited above, § 168 in fine), and the margin of appreciation that the authorities have in no way dispenses them from that duty (see Öneryıldız v. Turkey [GC], no. 48939/99, § 128, ECHR 2004‑XII).

130.  Turning to the present case, the Court notes that the complaint at issue concerns the refusal to issue a building permit. Thus the impugned measure must be considered as a control of the use of property, to be considered under the third rule, i.e. under the second paragraph of Article 1 of Protocol No. 1. The Court must therefore consider whether the authorities’ refusal to issue a building permit was a lawful measure “necessary to control the use of property in accordance with the general interest”. The task of the Court in this context is to examine the lawfulness, purpose and proportionality of the decisions taken by the domestic authorities (see Lay Lay Company Limited, cited above, § 84, and the authorities cited therein).

131.  The Court reiterates, as noted above, that the refusal to issue a building permit must be regarded as an interference with the applicants’ right to the peaceful enjoyment of its property (see Lay Lay Company Limited, cited above, § 81). It further notes that the request was refused due to the applicants’ failure to meet two criteria: (a) to buy the adjacent plot of land which had been attached to the applicants’ land by means of a newly‑adopted DUP, and (b) to pay the communal charges.

132.  As regards the first condition, to buy the adjacent plot of land, the Court notes that no statute required a “completion” of the land (see paragraphs 67 and 73 above) for a building permit. In addition, this requirement was introduced by the Municipality only after the applicants had obtained their cadastral plot of land and had their plans registered in the existing DUP for that particular plot. The applicants then failed to meet that condition. As regards the second condition, to pay the communal charges, it is a statutory condition, and the applicants indeed failed to meet it too.

133.  The Court observes, however, that the failure to meet the conditions was not because the applicants failed to take the steps required in a timely manner, to safeguard their interests and conclude matters rapidly in this regard (see, a contrario, Lay Lay Company Limited, cited above, § 88).

134.  On the contrary, the applicants failed to meet the first condition because the relevant DUP was undergoing a number of changes over time and, pursuant to the Government’s own submission, the applicants could not complete the urban plot of land as long as the DUP changes were undergoing. In other words, the applicants were required to meet a condition additionally imposed by the Municipality, which the State itself made impossible for the applicants to fulfil.

135.  As regards the charges, it was the relevant State authorities that refused to calculate them despite the applicants’ numerous requests in that respect, and thus made it impossible for the applicants to fulfil that condition, too. In doing so, they relied on a construction ban even though the relevant request was re-submitted even at times when there was no construction ban (see paragraphs 11-12 and 28 above), and regardless of the Ministry’s interpretation of the relevant statutory provision that the construction ban related only to granting a location for construction (see paragraph 55 above), which interpretation was subsequently confirmed by the Supreme Court (see paragraph 33 above). It was only after the Commercial Court’s judgment became final that the Agency calculated the charges. However, by that time the relevant bodies had long rejected the request for the building permit on account of lack of payment, and, in addition, the DUP had been changed and no longer provided for the constructions initially planned there by the applicants.

136.  In view of the above, the Court has serious doubts as to whether the interference with the applicants’ right to the peaceful enjoyment of their property was in accordance with the law. However, even assuming that it was in accordance with the law, the Court considers, in any event, that it was disproportionate, given that the respondent State’s authorities failed to act in good time, in an appropriate manner and with utmost consistency (see Beyeler v. Italy [GC], no. 33202/96, § 120, ECHR 2000‑I, and Megadat.com SRL v. Moldova, no. 21151/04, § 72, ECHR 2008) thus making it impossible for the applicants to meet the said conditions and obtain the building permit. The Court considers that the applicants were faced with the uncertainty arising from the practices applied by the authorities, reflected in constantly changing the DUPs, introducing new conditions, such as buying an additional cadastral plot of land in order to “complete” the newly-created urban plot, and by unlawfully refusing to calculate the relevant charges.

137.  In view of the above, and notwithstanding the margin of appreciation afforded to the State, a fair balance was not preserved in the present case and the applicants were required to bear an individual and excessive burden, in violation of Article 1 of Protocol No. 1.

II.  OTHER ALLEGED VIOLATIONS OF THE CONVENTION

138.  The Court notes that, after the communication of the case to the respondent Government, the applicants repeated other complaints initially made under various Articles of the Convention and Article 1 of Protocol No. 1 thereto, notably about: (a) the length of the first set of proceedings in which they sought a building permit, (b) the length of the second set of proceedings in which they requested a building permit, lack of an effective domestic remedy in that regard, and a violation of their property rights relating to these proceedings, and (c) the outcome of the motions submitted to the Constitutional Court and that court’s alleged impartiality.

139.  The Court reiterates that on 14 December 2016 some of the applicants’ complaints (concerning the length of the administrative and enforcement proceedings, lack of an effective domestic remedy in that regard, and the applicants’ property rights) were communicated to the Government, whereas the remainder of the application, which included the complaints specified in paragraph 138, was declared inadmissible (see paragraph 4 above). That being so, the Court no longer has jurisdiction to examine them.

140.  The applicants also complained about the length of the civil proceedings related to the calculation of the communal charges. The Court notes that these proceedings lasted from 16 September 2005 until 29 December 2008, that is three years, three months and 13 days, during which time the domestic courts issued three decisions at three instances and brought the proceedings to a conclusion. The Court considers that this complaint is therefore manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

III.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

141.  Article 41 of the Convention provides:

“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”

A.  Damage

142.  The first applicant claimed EUR 30,764,542.22 in respect of pecuniary damage: EUR 30,000,000 on account of loss of profit (izmakla dobit) “since 2005 up to an indefinite period in the future”, and the rest on account of costs for a building permit, preparatory works for the construction, construction material, goods for the shopping centre, services of a public relations agency, the use of commercial space in daily newspapers and printing of brochures. The second applicant claimed EUR 1,500 in respect of non-pecuniary damage, which he intended to donate to charity.

143.  The Government contested the applicants’ claim as unfounded. Also, they had failed to seek compensation at the domestic level pursuant to the Obligations Act.

144.  As regards the Government objection that the applicants should have first sought compensation at the domestic level pursuant to the Obligations Act, the Court reiterates that if the victim, after exhausting in vain the domestic remedies before complaining in Strasbourg of a violation of his rights, were obliged to do so a second time before being able to obtain from the Court just satisfaction, the total length of the procedure instituted under the Convention would scarcely be in keeping with the idea of the effective protection of human rights. Such a requirement would lead to a situation incompatible with the aim and object of the Convention (see, for example, De Wilde, Ooms and Versyp v. Belgium (Article 50), 10 March 1972, § 16, Series A no. 14). The Government’s objection in this regard is therefore dismissed.

145.  The Court further notes that the relevant Ministry explicitly stated in its letter that in a case where the decision on location had been issued prior to the construction ban, the competent body had a duty to issue a building permit to an investor, provided that the conditions provided in section 34 of the Construction Act were fulfilled, regardless of whether the construction ban in the relevant area was in force (see paragraph 55 in fine above). It is further observed that in their observations the Government did not object to this Ministry’s submission. The Court therefore considers that had the first applicant been allowed to fulfil the two above remaining conditions it would have been issued with a building permit at the time. The Court therefore considers that there is a causal link between the violations found and the pecuniary damage alleged by the first applicant.

146.  However, in the circumstances of the case, the Court considers that the exact amount in respect of pecuniary damage is not ready for decision. It is therefore necessary to reserve the matter, due regard being had to the possibility of an agreement between the respondent State and the first applicant (Rule 75 §§ 1 and 4 of the Rules of Court). Accordingly, the Court reserves this question and invites the Government and the first applicant to submit, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, their written observations on the amount of pecuniary damages to be awarded to the first applicant and, in particular, to notify the Court of any agreement that they may reach.

147.  On the other hand, the Court awards the second applicant EUR 1,500 in respect of non-pecuniary damage.

B.  Costs and expenses

148.  The applicants also claimed EUR 19,681.75 for the costs and expenses incurred before the domestic courts, and EUR 66,278 for those incurred before the Court.

149.  The Government contested the applicants’ claim. In particular, the applicants had failed to prove that the expenses were reasonable as to quantum.

150.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the applicants jointly the sum of EUR 7,500 covering costs under all heads.

C.  Default interest

151.  The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1.  Declares the complaints concerning the length of the administrative proceedings for completion of the plot land, the alleged lack of an effective domestic remedy in that regard, and the applicants’ property rights admissible and the remainder of the application inadmissible;

2.  Holds that there has been a violation of Article 6 § 1 of the Convention;

3.  Holds that there has been a violation of Article 13 of the Convention;

4.  Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;

5.  Holds

(a)  that the respondent State is to pay the applicants, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts:

(i)  EUR 1,500 (one thousand five hundred euros) to the second applicant, plus any tax that may be chargeable, in respect of non‑pecuniary damage;

(ii)  EUR 7,500 (seven thousand five hundred euros) to the applicants jointly, plus any tax that may be chargeable to the applicants, in respect of costs and expenses;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

6.  Holds that the question of the application of Article 41 in so far as pecuniary damage is concerned is not ready for decision, and accordingly:

(a)  reserves the said question;

(b)  invites the Government and the first applicant to submit, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, their written observations on the matter and to notify the Court of any agreement that they may reach;

(c) reserves the further procedure and delegates to the President of the Chamber the power to fix the same if need be.

7.  Dismisses the remainder of the applicants’ claim for costs and expenses.

Done in English, and notified in writing on 26 June 2018, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Stanley Naismith                                                                    Robert Spano
Registrar                                                                              President

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