FOURTH SECTION
\nCASE OF VEROMEJ v. LITHUANIA
\n(Application no. 15121\/11)<\/p>\n
JUDGMENT
\nSTRASBOURG
\n19 March 2019<\/p>\n
This judgment is final but it may be subject to editorial revision.<\/p>\n
In the case of Veromej v. Lithuania,<\/p>\n
The European Court of Human Rights (Fourth Section), sitting as a Committee composed of:<\/p>\n
Paulo Pinto de Albuquerque, President,
\nEgidijus K\u016bris,
\nIulia Antoanella Motoc, judges,
\nand Andrea Tamietti, Deputy Section Registrar,<\/p>\n
Having deliberated in private on 26 February 2019,<\/p>\n
Delivers the following judgment, which was adopted on that date:<\/p>\n
PROCEDURE<\/strong><\/p>\n 1.\u00a0\u00a0The case originated in an application (no. 15121\/11) against the Republic of Lithuania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (\u201cthe Convention\u201d) by a Lithuanian national, Ms Veronika Veromej (\u201cthe applicant\u201d), on 24 February 2011.<\/p>\n 2.\u00a0\u00a0The applicant was represented by Ms E. Jankovska a lawyer practising in Vilnius. The Lithuanian Government (\u201cthe Government\u201d) were represented by their Agent, most recently Ms\u00a0K.\u00a0Bubnyt\u0117-\u0160irmen\u0117.<\/p>\n 3.\u00a0\u00a0On 6 December 2011 the application was communicated to the Government.<\/p>\n THE FACTS<\/strong><\/p>\n I.\u00a0\u00a0THE CIRCUMSTANCES OF THE CASE<\/p>\n 4.\u00a0\u00a0The applicant was born in 1938 and lives in Galgiai in the Vilnius Region.<\/p>\n 5.\u00a0\u00a0In 1991 the applicant applied for restoration of her property rights to land which had been nationalised by the Soviet regime.<\/p>\n 6.\u00a0\u00a0On 23 December 2002 the Vilnius County Administration (hereinafter \u201cthe VCA\u201d) restored the applicant\u2019s property rightsby giving her two plots of 2.44 hectares and 0.16 hectares in Galgiai, an area in the Vilnius city municipality. It appears that, even though the decision referred to 2.44\u00a0hectares, the applicant was in fact given a plot measuring 2.2859\u00a0hectares.<\/p>\n 7.\u00a0\u00a0On 22 May 2007 the applicant sold the plot of 2.2859 hectares to company S. for 2,500,000 Lithuanian litai (LTL- approximately 724,000\u00a0euros (EUR)). The sale agreement indicated that company S. was purchasing the plot with the aim of transferring it to company V. The agreement was certified by a notary. Company S. had previously concluded a lease agreement (i\u0161perkamosios nuomos sutartis) with company V., by which company S. undertook to buy a plot of land selected by company V. and to transfer it to the latter.<\/p>\n A.\u00a0\u00a0Annulment of property rights to 2.44 hectares<\/strong><\/p>\n 8.\u00a0\u00a0On 1 December 2008 the prosecutor of the Vilnius Region (hereinafter \u201cthe prosecutor\u201d) lodged a claim with the Vilnius Regional Court, seeking to have the applicant\u2019s property rights to 0.38 hectares of the land given to her annulled. The prosecutor submitted that, according to the data provided by the State Forest Management Service, 0.38 hectares of the plot of 2.2859 hectares was covered by forest. Since that forest was situated in a city, it was considered a forest of national importanceand could therefore only be owned by the State (see Beinarovi\u010d and Others v.\u00a0Lithuania, nos.\u00a070520\/10 and 2 others<\/a>, \u00a7\u00a7 86-89, 12\u00a0June 2018). In view of the circumstances, the VCA\u2019s decision had to be declared unlawful and its effects annulled.The prosecutor asked that after annulling the applicant\u2019s property rights, the sale agreement between her and company S. (see paragraph 7 above) be annulled in respect of that part of the land.<\/p>\n 9.\u00a0\u00a0The applicant, the VCA and company S. disputed the prosecutor\u2019s claim.However, on 14 April 2009 the Vilnius Regional Court allowed the claim. It observed that even though the area covered byforest was only 0.38\u00a0hectares, it formed part of a plot measuring 2.2859 hectares and had not been demarcated.The court stated that it had no way of determining the exact location of the forest andit therefore annulled the applicant\u2019s property rights to the entire plot. Since the VCA\u2019s decision had referred to 2.44\u00a0hectares, the court annulled the applicant\u2019s property rights to 2.44\u00a0hectares.<\/p>\n 10.\u00a0\u00a0The court also considered that the sale agreement between the applicant and company S. and the lease agreement between companies S. and V. (see paragraph 7 above) had been simulated (apsimestiniai sandoriai). In the court\u2019s view, it was evident that company V. did not plan to use the land for agricultural activity but intended to change the purpose of the land and to develop a construction project, and that company S. had purchased the land not seeking to become its owner but with the aim of gaining profit from financing company V.\u2019s acquisition of it. These and other related circumstances led the court to conclude that the applicant, company S. and company V. had in fact entered not into two separate agreements but into a single finance lease agreement (finansin\u0117s nuomos sutartis). The court emphasised that, under domestic law, land and natural resources could not be the object of a finance lease agreement. Accordingly, the agreements between the applicant, company S. and company V. were null and void ab initio.<\/p>\n 11.\u00a0\u00a0In accordance with the Civil Code, company S. was ordered to return the plot of land to the State, and the applicant was ordered to return LTL\u00a02,500,000 (approximately EUR 724,000) to company S. (see Beinarovi\u010d and Others, cited above, \u00a7 94).<\/p>\n 12.\u00a0\u00a0Following the Vilnius Regional Court\u2019s decision, company S. asked it to order interim measures and to seize property belonging to the applicantto the value of LTL 2,500,000. The court allowed the request for interim measures. On 24 April 2009 four plots of land and two apartments owned by the applicant were seized.<\/p>\n 13.\u00a0\u00a0The applicant lodged an appeal against the Vilnius Regional Court\u2019s decision of 14 April 2009 (see paragraphs 9-11 above). She paid LTL\u00a014,983 (approximately EUR 4,340) in court fees for the lodging of the appeal. The VCA and company S. appealed against that decision as well.However, on 8\u00a0June\u00a02010 the Court of Appeal dismissed the appeals and upheld the first\u2011instance court\u2019s decision in its entirety.The court held that the applicant and company S. \u201ccould not be considered bona fide acquirers merely because the land in question had become private property as a result of a decision adopted by a public authority\u201d. It stated that, in accordance with the law, any transaction which was contrary to mandatory statutory provisions had to be annulled and the parties had to return to each other everything which they had received, and that in the present case there were no exceptional circumstances which would justify applying a different rule.<\/p>\n 14.\u00a0\u00a0The court stated that, having found that the VCA\u2019s decision had to be annulled, it was not necessary to examine the agreements concluded between the applicant, company S. and company V. However, since the first-instance court had examined them (see paragraph 10 above), the Court of Appeal did so as well and upheld the findings made by the lower court. It considered that companies S. and V. had deliberately concluded a simulated agreement in order to hide their actual intentions. Furthermore, the applicant had to have been aware of company S.\u2019s intention to transfer the land to company V. because that had been explicitly included in the sale agreement which she had signed.The court stated that the applicant should have acted more diligently and should have carefully analysed the contents of the agreement before signing it, seeking professional advice if necessary.<\/p>\n 15.\u00a0\u00a0The applicant lodged an appeal on points of law, in which she argued that as her land was located in a rural area and the forest on that land was not a forest of national importance, there were no grounds to annul her property rights.However, on 24\u00a0August\u00a02010 the Supreme Court refused to accept it for examinationon the grounds that it raised no important legal issues.<\/p>\n 16.\u00a0\u00a0On 5 October 2010 company S. was issued a writ of execution against the applicant in the amount of LTL 2,500,000 (approximately EUR\u00a0724,000).<\/p>\n B.\u00a0\u00a0Subsequent restitution process<\/strong><\/p>\n 17.\u00a0\u00a0On 21 November 2011 the applicant sent a letter to the Vilnius land management authorities askingfor her property rights to be restored in kind. On 28\u00a0December 2011 the authorities informed her thatit might be possible to return to hersome of theland which had previously been given to her and that there were two other vacant plots in Galgiai, measuring 0.18\u00a0hectares in total, which could be given to her as well.<\/p>\n 18.\u00a0\u00a0On 23 February 2012 the applicant received a letter from the National Land Service (the institution which took over the relevant functions of the VCA after an administrative reform \u2013 hereinafter \u201cthe NLS\u201d) confirming that, after the courts had annulled her property rights to 2.44 hectares of land, she had retained the right to have those property rights restored. It stated that a plot of 0.14 hectares in Galgiai had already been assigned to her, which she would receive when the land plan for that area had been prepared. It also stated that there were two other vacant plots in Galgiai, measuring 0.18 hectares in total, which could be given to her. As for the remaining land, the applicant was informed of the forms of restitution provided for by domestic law (see Beinarovi\u010d and Others, cited above, \u00a7 92) and was asked to inform the authorities of her preferred form of restitution.<\/p>\n 19.\u00a0\u00a0On 7 March 2012 the applicant sent a letter to the NLS stating that she wished to receive a plot of 0.08 hectares in Galgiai and that she would inform them of her choice concerning the remaining plots later.<\/p>\n 20.\u00a0\u00a0On 24 July 2012 the applicant received another letter from the NLS which stated that there was a possibility for her to receive a plot of land for the construction of an individual home in the Vilnius city area but as there were 4,806 other candidates waiting to receive plots in the area, the restitution process would take a long time. The applicant was asked to consider alternative forms of restitution provided for by domestic law (ibid., \u00a7\u00a092).<\/p>\n 21.\u00a0\u00a0On 9 August 2012 the applicant sent a letter to the NLS. She stated that a forest of national importance had only occupied 0.38 hectares of the land which had been given to her (see paragraph 8 above) and thus there should have been no obstacles to returning the remaining 2.06 hectaresto her in natura. The applicant emphasised that she had financial obligations vis-\u00e0-vis company S. and therefore asked that her property rights be restored without undue delay. She also stated that she had been informed by the Vilnius land management authorities that two plots of 0.08 and 0.10\u00a0hectares would be allocated to her in Galgiai (see paragraphs 17 and 18 above). As for the remaining land, the applicant asked to be allocated a plot of land for the construction of an individual home in Vilnius as a matter of priority, taking into account the fact that she had applied for the restoration of her property rights in 1991(see paragraph 5 above) and that they had already been restored to her in 2002 (see paragraph 6 above). She stated that she was under an obligation to transfer the land to company S. and to inform itof any steps taken in the restitution proceedings. She therefore asked the NLS to reply to her as soon as possible.It is unclear if the applicant received any response to that letter.<\/p>\n 22.\u00a0\u00a0On 23 December 2013 the NLS adopted a decision to restore the applicant\u2019s property rights by giving her two plots of agricultural land, measuring a total of 2.0441 hectares. The decision stated that the rights to the remaining 0.3959 hectares would be restored later.<\/p>\n 23.\u00a0\u00a0On an unspecified date the applicant asked the NLS to allocate to her the 0.18\u00a0hectares of land in Galgiai (see paragraphs 17 and 18 above) but the NLS refused. The applicant lodged a complaint with a court but on 10\u00a0February 2015 the Vilnius Regional Administrative Court dismissed it. The court stated that there were several candidates waiting to have their property rights restored in that area and that the applicant could not claim to have priority over them. She therefore had to take part in the restitution process, during which her property rights would be restored in accordance with the applicable regulations.<\/p>\n 24.\u00a0\u00a0On 17 May 2017 the NLS adopted a decision to restore the applicant\u2019s property rights by giving her 0.08 hectares of agricultural land. The decision stated that the rights to the remaining 0.3159 hectares would be restored later.<\/p>\n 25.\u00a0\u00a0On 30 June 2017 the NLS adopted a decision to restore the applicant\u2019s property rights by giving her 0.3159 hectares of land for the construction of an individual home.<\/p>\n C.\u00a0\u00a0Subsequent agreements between the applicant and company S.<\/strong><\/p>\n 26.\u00a0\u00a0In October 2011 the applicant signed an agreement with company S. by which she undertook, in lieu of the monetary payment of LTL 2,500,000 (see paragraph 11 above), to transfer to the company any land which would be given to her during the subsequent restitution process. However, pursuant to that agreement, company S. retained the right to claim a monetary payment of LTL\u00a02,500,000 from the applicant without prior notice.<\/p>\n 27.\u00a0\u00a0After the applicant\u2019s property rights were restored in December 2013 and May and June 2017 (see paragraphs\u00a022, 24 and 25 above), she transferred those plots to company S. On 23 July 2018 company S. confirmed to the applicant that it did not have any outstanding claims against her and that it had asked domestic courts to lift the seizure previously imposed on her property (see paragraph 12 above).<\/p>\n 28.\u00a0\u00a0In her last letter to the Court (8 November 2018), the applicant stated that the seizure of her property had not yet been lifted and that the relevant court proceedings were ongoing. The Government did not comment on that point.<\/p>\n II.\u00a0\u00a0RELEVANT DOMESTIC LAW AND PRACTICE<\/p>\n