The Greek state was asking much more in order to recover the property than it paid for the expropriation.
JUDGMENT
Kanaginis v. Greece 8.3.2018 (application no. 27662/09)
SUMMARY
Expropriation of property and subsequent recovery of property. No proportionality between the amount of compensation and the amount required by the State for the return of the property to the owner. Infringement of the right to property protection.
PROVISION
Article 1 of the First Additional Protocol
PRINCIPAL FACTS
The applicant, Themistoklis Kanaginis, is a Greek national who lives in Athens (Greece).
In April 1976 the State expropriated land belonging to Mr Kanaginis for the purposes of an archaeological excavation. Mr Kanaginis had been leasing the land as an open-air car park, providing him with a monthly income of 7,000 drachmae (approximately 20.5 euros [EUR]). On 31 October 1977 he received compensation totalling 7,727,500 drachmae (approximately EUR 22,678).
On 23 December 1992 and 7 January 1994 Mr Kanaginis requested the revocation of the impugned expropriation order, as no public-interest aim had been achieved. Following the dismissal of those requests, the applicant once again applied for the revocation of the expropriation, whereupon the Council of State acceded to the request and declared void the decision not to revoke the expropriation.
After the amount payable in compensation for the expropriation had been adjusted in line with the annual average consumer price index, the Directorate of Public Goods of the Ministry of the Economy and Finance informed Mr Kanaginis that he had to reimburse a sum of EUR 601,705.67 in order to recover his land.
On 23 December 2005 Mr Kanaginis applied to the Council of State to set aside that decision on the ground that it placed an excessive burden on him in breach of his rights under Article 17 of the Constitution and Article 1 of Protocol No. 1 (protection of property) to the European Convention on Human Rights. The Council of State dismissed that application on the ground that the revocation of an expropriation measure which had been implemented had to be construed as a fresh administrative decision.
Concurrently, on 12 June 2008 Mr Kanaginis once again applied to the competent authority to recalculate the amount due, which the authority had set at EUR 665,645. 42 on 24 July 2008.
THE DECISION OF THE COURT
Article 1 of Protocol No. 1
The interference with the right to respect for property lay in the fact that the expropriated piece of land could not be returned to Mr Kanaginis owing to the allegedly exorbitant price which he would have to pay the State for it. It is not contested that such interference was prescribed by law or that it pursued a legitimate aim, namely ensuring that the land in question would not be bought back to the detriment of State financial interests.
The Court reiterated that Mr Kanaginis had secured a judgment from the Conseil d’Etat revoking the expropriation of the land which he had owned, and that he had had at least a legitimate expectation of recovering his property. The Court agreed that the recovery of the land should not entail any infringement of public interests. It was not unreasonable for the State to have readjusted the value of the compensation awarded to Mr Kanaginis, on a legal basis, some thirty years later.
The Court accepted that the average annual consumer price index was a simple and objective criterion for readjusting the amount which Mr Kanaginis would have to reimburse to the State in order to recover his property. However, the Court notes that exclusively using the criterion of the average annual consumer price index was rather abstract, as submitted by the applicant. That index mainly concerned the general economic situation of the country, and provided no relevant information on the evolution of the property market over any given period or on changes in the value of a specific property. As the only facility available, this criterion was rigid and could vary in relevance when applied to individual cases.
In the present case, the application of the criterion in question had not been such as to permit the competent authority to take into account other relevant, indeed necessary factors in properly calculating the sum to be reimbursed to the State. It had taken no account, for instance, of the commercial value of the land at the material time or of the value of bordering plots of land or others located in the same district which had been expropriated.
The Court consequently held that there was an unreasonable difference between the sum demanded by the State (i.e. EUR 601,705.67 under an initial decision, and EUR 665,645.42 under the second one) and the actual value of the land (estimated in a notarial document provided by Mr Kanaginis at approximately EUR 255,000).
Furthermore, the Court observed that under the new wording of section 12 of the amended law, the Administrative Board or the independent expert now had to have regard to several relevant factors in assessing the price of a property, such as the adjacent plots of land or similar, as well as the potential income from exploiting the said property. In the event of a disagreement on the amount of compensation due, the competent courts now adjudicated on the dispute without any legal requirement to apply criteria such as the average annual consumer price index.
The Court considered it important to point out that both the administrative decisions in which the competent authority had set out the amount of compensation to be paid in order to recover the land were still valid. However, the current value of the land in question, as estimated by the competent tax authority, was EUR 254,853.03, which was far below the amount demanded of Mr Kanaginis by the authorities.
The Court held that the criteria applied to Mr Kanaginis’ case at the material time and the reasoning of the Conseil d’Etat upset the fair balance between the requirements of the public interest and the imperatives of protecting Mr Kanaginis’ right to respect for his property. There had therefore been a violation of Article 1 of Protocol No. 1.
Just satisfaction (Article 41)
The Court held that the question of the application of Article 41 was not ready for decision.
Consequently, it reserved the matter and would set out the subsequent procedure, having regard to the possibility that the Government and the applicant might reach an agreement, in the light of the new procedure implemented (echrcaselaw.com editing).
