Paying less compensation for expropriation than the real value of the property violates the right to ownership
JUDGMENT
Volchkova and Mironov v. Russia 15.10.2019 (no. 45668/05 and 2292/06)
SUMMARY
Forced expropriation and non-payment of adequate compensation for the expropriated property. Violation of property right.
The applicants are co-owners of a property on which their residence is built. By a municipal decision, their property had to be expropriated for the construction of a building. They appealed before the domestic courts for the cause of the expropriation which served private and not public interest but also for the amount of compensation which did not correspond to the value of their property.
The Court has noted that the issue of effective protection of private property based on complaints under Article 1 of the First Protocol is not necessarily limited to the issue of compensation, but which is essential in assessing the expropriation, and in this case, the ECtHR is not convinced that the domestic courts properly assessed the evidence submitted to the domestic courts for the determination of the unit price, and therefore held that the compensation was based on objective evidence and consequently the applicants’ right to property was infringed.
PROVISION
Article 1 of the First Additional Protocol
PRINCIPAL FACTS
The case concerned the question of just satisfaction with regard to the expropriation of a property
located in the town of Lyubertsy, near Moscow, in order to allow for a construction project by a
private investor.
The applicants, who part-own a house and a plot of land in Lyubertsy, complained, in particular, that
they had been deprived of their property to the exclusive advantage of a private investment project
devoid of any social purpose, concerning the construction of a multi-storey building. They also
submitted that the sum which they had been awarded in compensation had been derisory.
In its main judgment of 28 March 2017 the Court found that there had been a violation of Article 1
du Protocol No. 1 (protection of property).
The Court held that Russia should pay each applicant 3,000 euros (EUR) in respect of non-pecuniary
damage and pay Ms Volchkova EUR 100 in respect of costs and expenses.
THE DECISION OF THE COURT…
The Court considers that the matters relating to the “public interest” and the proportionality assessment in the present case are closely intertwined. Thus, it will examine them together.
The applicants’ central argument was that the expropriation had not pursued a genuine and compelling public interest. They argued, in substance, that the private investor had been its only actual beneficiary, and that the expropriation procedure had been used as a legal means of conferring a disproportionate benefit. The Government submitted that the expropriation was aimed at providing the town population with facilities having social and cultural functions, which was “an important social consideration affecting interests of a large portion of economic actors”.
The Court notes that the matter of effective protection of private property underlying complaints under Article 1 of Protocol No. 1 to the Convention is not necessarily confined to the question of compensation, which is indeed material to the assessment of expropriation under Article 1 of Protocol No. 1 both in related domestic proceedings and before the Court . Nor should the above – undeniably stringent – criteria relating to the “public interest” be taken as a carte blanche for recourse to expropriation measures, irrespective of their contexts.
Turning to the present case, the Court notes that it concerns individual administrative decisions issued by a municipality rather than enactment and application of laws expropriating property with regard to special considerations of political, economic and social policies or contexts that could be present, for instance, in the cases cited in paragraph 110 above. The Court also observes that, even though it was related to a larger town planning scheme it cannot be said that the expropriation of the applicants’ land sought to address any important general problem. The relevant administrative decision referred to the aims of “improving the architectural appearance of the town and the resettlement of inhabitants from housing that no longer [met] sanitary requirements”. There is nothing to suggest that the applicants’ house was dilapidated so as to become unsuitable for living in it, in which case it might be subject to the demolition procedure for decrepit housing instead of the expropriation procedure used in this case. At least one of the available valuations clearly stated that the house was habitable, although it required some superficial repairs. As to the aesthetic element of the town planning scheme in question, there is nothing in the available material or the Government’s submissions to substantiate the preference in favour of replacing individual residential houses with blocks of flats or to address the precedence of this consideration over the legitimate interests that the owners’ of these houses had.
While bearing in mind the State’s wide margin of appreciation in the context of expropriation, the Court retains doubts as to whether in the particular circumstances of the present case the deprivation of possessions for the sake of collective housing construction sought to achieve a compelling public interest.
In any event, the Court has taken note of the Government’s arguments relating to the compensation matter, namely that the applicants dismissed more advantageous offers from the investor and did not apply to the court to exercise its discretion to order another expert assessment, if they were dissatisfied with the methodology and/or conclusions of the expert report issued in February 2005.
Undoubtedly, it was the applicants’ choice not to accept the offers made at the preliminary non-judicial stage of the proceedings. However, such conduct does not amount to a “waiver” of their entitlement to adequate compensation neither in terms of domestic law nor under Article 1 of Protocol No. 1 to the Convention. The expropriation procedure under Russian law provided that where parties failed to reach an agreement on the compulsory purchase price, the matter would be determined by the courts. It thus remained incumbent on the courts to determine the compensation that would be up to the actual market value of the properties.
The available material before the Court does not disclose that the applicants properly voiced any objections or counterarguments regarding the expert report in the course of the proceedings before the first-instance court. The Court accepts that by not using the opportunity of seeking another expert valuation, the applicants placed themselves in a disadvantageous position. However, it observes that Russian law did not prevent them from disputing the expert report by other means, which were not limited to another expert assessment. The applicants did make submissions in their statement of appeal and some calculations and related explanations, contesting the expert report and putting forward a different valuation of the property . In particular, the first applicant argued that the expert should have used the “method of prospective use” for determining the value of the house and land. Furthermore, she argued that the expert valuation was based on the premise that the land’s use was for a summer cottage use rather than for the use relating to multi-storey blocks of flat; this premise was inappropriate, given that the property was already surrounded by similar blocks of flats. Those submissions do not appear to be devoid of substance or substantiation. It was thus incumbent on the domestic court to assess the counterarguments and provide reasons for dismissing them in so far they were directly related to the subject matter of the case, namely the market value of the properties to be expropriated.
The Court is not satisfied that the judicial valuation of the land took due account of the elements mentioned above.
The above considerations have led the Court to conclude that there has therefore been a violation of Article 1 of Protocol No.1 to the Convention in the present case
Just satisfaction: The Court held that the Russia was to pay 16,700 United States dollars (USD) to Ms
Volchkova and USD 42,000 to Mr Mironov for pecuniary damage.
