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Property

1) Overview

2) Pension entitlements

3) Deposits in bank accounts

4) Expectations

 

1)  Overview

The term property is to be interpreted autonomously for purposes of the ECHR. It may embrace interests which do not fall within the scope of property in the legal systems of the states which have acceded to the European Convention on Human Rights. In particular, it is not limited to movable objects and real estate, but may also embrace immaterial rights such as welfare entitlements or the right to have a judgment in one’s favour enforced (Petrushko v Russia, para 27 – the Court frequently examines failures to enforce judgments by domestic Courts in light of article 6 and article 1 of protocol 1 ECHR).

The right to property may also extend to claims, if the applicant has a reasonable and legitimate expectation of obtaining effective enjoyment of a property right (Saghinadze v Georgia, para 103). An expectation is legitimate if it is based on either a legislative provision or a legal act bearing on the property interest in question (Kopecky v Slovakia).

 

2) Pension entitlements

Pension entitlements fall within the scope of the right to property. Article 1 of Protocol 1 to the European Convention on Human Rights does not entail a right to receive a pension or other benefits, nor does it enshrine that a pension has to reach a certain amount. Contracting states enjoy a wide margin of appreciation with regard to the granting of social benefits.  If, however, pension entitlements have been conferred, they constitute a possession (Valkov v Bulgaria, para 84). This holds true when the right to a pension is based on contributions which have been made (Gaygusuz v. Austria) as well as in cases in which employers have given a more general undertaking to  pay a pension on certain conditions (Azinas v. Cyprus ; the case was later on referred to the Grand Chamber, which declared the application inadmissible. However, the Court still quotes the considerations in the chamber judgment).  Consequently, pension entitlements have to be treated in accordance with the requirements of Article 1 of Protocol 1 ECHR (Lakicevic and others v. Montenegro and Serbia). Accordingly, interferences have to be based on a  law, they must pursue a legitimate aim and strike a fair balance between the interests of the individual and those of the public. They must not impose  a heavy and disproportionate burden on citizens.

The reduction or discontinuation of pension entitlements may constitute an interference with the right to peaceful enjoyment  of possessions (Wieczorek v. Poland, para 57). The Court usually does not consider such interferences as deprivation of property or the control of use of property, but scrutinizes them in light of the first sentence of Article 1 of Protocol 1 to the European Convention on Human Rights. When examining whether a fair balance has been struck between the interests of the public and the interests of the individual, the Court considers among other factors to what extent the interference diminishes the applicant’s entitlement.  It also attaches importance to the questions whether the forfeiture of pension entitlements was decided upon in a procedure, in which the affected person was heard or whether the loss of entitlements was an automatic consequence of a criminal conviction (Banfield v United Kingdom). Another consideration is whether the deprivation of pension rights leaves the affected person entirely without financial means (Azinas v Cyprus) and whether the applicant is obliged to pay money back (Wieczorek v Poland, para 72; Chroust v Czech Republic)

In Azinas v Cyprus, the applicant had held a high position in the public service. He had been convicted for the misappropriation of public funds and served 18 months of imprisonment. As stipulated by Cyprian law in force at the material time, he was stripped of his pension entitlements entirely. The European Court of Human Rights held that this amounted to a violation of the right to property. The Court pointed out that the applicant had already served a prison sentence of 18 months and that the decision to deprive him of his pension entitlements left him and his family bereft of any financial means. Due to these harsh consequences, the Court came to the conclusion that no fair balance had been struck between the interests of the applicant and the interests of the public (as pointed out above, the case was referred to the Grand Chamber, which declared the application inadmissible since the aspect of a violation of property rights had not been raised before domestic courts).

In Banfield v United Kingdom, the applicant was a former police officer who had been convicted to a prison term of 18 years for sexual offences against women, including rape.  Several of the offences had been committed while the applicant had been on duty and in part they had been carried out taking advantage of knowledge the applicant had acquired in the course of his duties as police officer.

Pension entitlements of police officers comprised of a portion which was based on their own contributions and additional payments by the state.

Following the applicant’s release from prison, judgment was brought to deprive him of his pension entitlements in the amount of the contribution by the state, leaving him with the 35 % of his pension which were based on his own payments. The application relying on Article 1 of Protocol 1 ECHR was rejected as manifestly ill-founded. The Court held that even a forfeiture of pension entitlements which were based on contributions by the applicant was permissible under the Convention. It pointed out that, other than in Azinas v Cyprus, the deprivation of the applicant’s entitlements had not been an automatism stipulated by law, but that it had been in the discretion of domestic courts, which had extensively considered the applicant’s arguments (p. 12 of the decision). It also underlined the extreme nature of transgression performed by the applicant, which was to be considered when striking the balance between the interest of the public and the interest of the applicant.

The distinction whether the loss of pension entitlements is stipulated by law as an automatic consequence of a criminal conviction or whether it is imposed in a separate procedure, which enables the affected person to make representations, also played an important role in the case Apostolakis v Greece. The applicant had been responsible for the payment of pensions at an insurance fund for members of liberal professions. He had embezzled significant amounts of money and been convicted to a prison sentence. After his release and upon reaching the retirement age, he requested his pension. The competent authorities granted the request, but decided to transfer a large portion of his entitlement to the applicant’s children and wife. The European Court of Human Rights ruled that this decision violated the applicant’s right to property under article 1 of protocol 1 to the ECHR. It underlined that the decision to forfeit parts of his entitlements in favor of his wife had been foreseen by law as an inevitable consequence of the criminal conviction (para 39). It also considered important that the applicant was, at the age of 69 and without possibility of gainful employment, had been almost entirely deprived of his means of subsistence by this decision.

In Klein v Austria, the applicant had practiced as a lawyer for some 30 years. As provided by Austrian law, he had paid regular contributions to the pension fund for lawyers. Following bankruptcy proceedings and a conviction for embezzlement, he had been disbarred. When he reached the retirement age, he applied for a pension. The relevant authorities (and courts) declined his request on the grounds that the law provided that only members of the bar who reached the retirement age were entitled to a pension. Since the applicant was not a member of the bar anymore, he did not fulfill this condition. The ECtHR found a violation of the right to property under article 1 of Protocol 1 to the ECHR. It stated that an expectation to receive a pension which was based on compulsory contributions to a pension scheme and the compulsory membership in the bar constituted a possession within the meaning of article 1 of protocol 1 to the Convention. The Court held that the forfeiture of the applicant’s pension rights had failed to strike a fair balance between the interests of the general public and the interest of the individual. The deprivation of pension rights had – in contrast to the cases Azinas v Cyprus and Banfield v UK – not had a punitive element. While the possibility that a lawyer might be disbarred and lose his pension rights could be inferred from Austrian law, this possibility had to seem rather remote to contributing lawyers. They could not be expected to make arrangements for this scenario. In the view of the Court, stripping him off his pension entitlements therefore imposed a disproportionate burden on the applicant.

In Lakicevik and others v Serbia and Montenegro, the applicants were lawyers who had retired. They received decisions by the Pensions and Disability Insurance Fund, which specified the amount of their entitlement. The decisions also stated that the applicants were entitled to continue working as lawyers on a part time basis. In 2004, a new law entered into force which provided that pension payments were to be suspended in case the retired person continued to work. On the basis of this new provision, the payments to the applicants were stalled and the pension fund requested a refund of benefits already paid. The European Court of Human Rights reiterated that states enjoyed a wide margin of appreciation regarding social benefits. Yet it pointed out that changes to social benefits must not impose a heavy and disproportionate burden on citizens. The Court stated that the applicants had acted in accordance with the decisions by the Pension Fund when resuming their work. It also pointed to the fact that pensions had accounted for a considerable portion of the applicants’ monthly income. Therefore, the state had imposed a disproportionate burden on the applicants by stalling their payments entirely and without any transitional period. Consequently the ECtHR found the respondent state in violation of the right to property pursuant to article 1 of protocol 1 to the ECHR.

 

3) Deposits in bank accounts

Monies deposited in bank accounts fall within the ambit of possessions as protected by article 1 of Protocol 1 ECHR. The obligation of the state to protect property rights does not, however, entail an obligation to ensure the purchasing power of the funds deposited in an account (Rudzinska v Poland; Gayduk v Ukraine). The European Court of Human Rights has on several occasions rejected applications by individuals contending that the loss in value their deposited had experienced infringed upon their right to property.

In Flores Cardoso v Portugal, the applicants were two Portuguese citizens who had been born in Mozambique and lived there until 1976. Following the outbreak of the civil war in Mozambique, they had been forced to leave the country. Before their departure they deposited 950000 Mozambiquen escudos in the consulate of Portugal in Maputo, the capital of Mozambique.  In 1994, the Portuguese government announced that it was going to reimburse persons who had deposited monies in Portuguese consulates during the civil war in Mozambique.   The applicants received 950.000 Portuguese escudos.  They demanded, however, a higher compensation, contending that the sum should be calculated taking into consideration the inflation and the decreased purchasing power which had occurred in the meantime. This claim was rejected by Portuguese courts.  The European  Court of Human Rights rule that this did not infringe on the applicants’ right to property. It reiterated that the state was not under an obligation to protect its citizens against the effects of inflation. This was, according to the Court, all the more the case with respect to sums which had not even been deposited with a financial institution.

In Appolonov v Russia, the applicant complained that savings he had deposited in an account with a Russian bank had deprecated in value significantly following economic reform. At the material time, the Russian government had adopted legislation which in principle foresaw compensation for losses in value of savings account; however, necessary sub-legislation to implement this act had not been passed yet. The European Court of Human Rights declared the application inadmissible. It reiterated that states are not under an obligation to compensate their citizens for inflation. While the Russian government had nevertheless undertaken to do so, the relevant laws had not entered into force yet when the applicant had litigated his case before domestic courts.

In Rudzinska v Poland, the applicant’s father had opened a special housing savings account in her name and performed regular payments in this account for about three years.  This type of account had been established by order by the President of the National Bank of Poland in order to safeguard citizens against the effects of inflation. The regulation governing these housing saving accounts foresaw inter alia that holders of such accounts were to be compensated for the loss in purchasing power in years in which the prices of houses and apartments increased at a higher rate than the interest rate. This guarantee applied was capped at the price for 70 square meters of a house.  Additional rules provided that only persons who actually had purchased a house or apartment were entitled to the compensation. 

The applicant requested information about the balance in her account.  When she learned that this sum was the equivalent of the price of 4 square meters of living space, she asked to be awarded compensation since it was her understanding that the balance should be sufficient to buy 70 square meters of living space. The European Court of Human Rights rejected the application as manifestly ill-founded. It pointed out that the applicant had not bought a house or apartment and thus did not fulfill all requirements for the compensation. The Court also pointed out that the applicant was still able to access the funds in her account and had thus not been deprived of property. Finally, the Court stated that, as far as the applicant had complained that her savings had lost their purchasing power due to inflation, that no general obligation of the state to maintain purchasing power can be derived from article 1 of Protocol 1 to the ECHR.

 

Restrictions on a person’s possibility to access monies deposited in a bank account constitute an interference with the right to property and therefore have to be lawful, serve a legitimate aim and strike a fair balance between the interests of the public and the interests of the individual affected. As regards the balance, temporary restrictions of access to an account or to make withdrawals are easier to justify than measures permanently barring the holder of the account from disposing of the funds.  

In Trajkovski v Macedonia, the applicant was a citizen of Macedonia, which had been part of Yugoslavia.  While Macedonia was still a part of Yugoslavia, the applicant had deposited US-dollars, Deutsche Mark and minor amounts of other currencies in a state owned bank.  In 1991, Yugoslav banks had been ordered not to permit any withdrawals of foreign currency for a certain period.  After Macedonia gained independence in 1991, the Macedonian government ordered that foreign currency accounts be frozen; withdrawals were only allowed for certain purposes such as buying business premises or purchase of property. In 2000, a law regarding foreign currency deposits was enacted. On the basis of this law, the applicant’s deposits in foreign currency were partly converted into Euros. For the remainder, he obtained Government bonds.

Considering that the legal regulation had enabled the applicant to access his accounts in certain circumstances and that the funds had not been removed from the account, the Court concluded that the freezing of the applicants account did not constitute a deprivation of property. It assessed the measure as control of use pursuant to article 1 sentence 2 of Protocol 1 to the ECHR. The Court held that the freezing of his account did not place a disproportionate burden on the applicant. It pointed out that the applicant had had the possibility to withdraw funds for certain purposes, that restrictions on withdrawing foreign currency had already been in place in Yugoslavia and that the applicant had accrued interest on his balance. In view of the difficult economic situation Macedonia had faced at the time, the freezing of foreign currency accounts had, according to the ECtHR, been reasonable.

In Zolotas v Greece, the Court scrutinized the statute of limitation on claims to funds deposited in an account. The applicant had opened an account in 1974. Starting from 1981, there was no activity on the account. When he inquired about the balance in the account some 22 year later, the bank informed him that all his claims with regard to the account were barred due to a statute of limitation established by the Greek civil code.  The applicant challenged bank’s refuting his claims before Greek courts, yet the stance taken by the bank was confirmed.

The European Court of Human Rights reiterated that interferences with the right to property must not impose an excessive burden on the affected person; it also pointed out that article 1 of Protocol 1 ECHR entails positive obligations for contracting states to ensure the effective enjoyment of the right to property. In view of the particular relationship of trust between a bank and the holder of a bank account, the ECtHR took the view that the bank should have notified the applicant beforehand that his claims were about to be barred by a statute of limitation. Since the state had failed to establish such an obligation, the Court found a violation of the right to property.

 

4) Expectations

Claims or expectancies/expectations, i.e. the prospects of a future gain, enjoy the protection of article 1 to protocol 1 ECHR if they are legitimate. Expectations are legitimate if they have a basis in national law (N.K.M v Hungary, para 35). In contrast, mere hopes or unfounded expectations without sufficient legal basis are not protected under article 1 of Protocol 1, nor are conditional claims which lapse, because the condition is not fulfilled or the hope of revival of property rights which could not be exercised for a long time (Hans Adam v Czech Republic). Expectations are usually legitimate if they accord with long-standing jurisdiction of national courts. If national courts have denied similar claims, they are usually not to be considered legitimate and to not constitute a possession.

By the same token, a right or entitlement to be freed from a debt may amount to a possession protected by article 1 of Protocol 1 ECHR, too. As is the case for other expectations, the right to be freed from the debt has to be well-established under domestic law. It also requires that the debt in question is well-established and that its amount is known (Optim et Industerre v Belgium).

On the other hand, even expectations which do not enjoy legal protection may be considered as possessions for purposes of article 1 of Protocol 1 ECHR if they are entertained n good faith (Oneryildiz v Turkey, para 123; Saghinadze v Georgia).

The European Court of Human Rights has dealt with the distinction between legitimate expectations and mere hopes or expectations without a sufficient legal basis in a number of rulings. In Kopecky v Slovakia, the applicant’s father had owned a number of gold coins. Since it was illegal to own such coins in communist times, the coins had been confiscated in 1959; the applicant’s father had been sentenced to a prison sentence. After the fall of the communist regime, legislation was introduced to rehabilitate victims of the communist regimes and to rectify judicial decisions which had affected them. The applicant, as his father’s heir, sought to recapture the coins which had been confiscated. He filed a law suit against the Ministry of Interior, for the legal framework governing the confiscations had provided that seized items be stored in the Ministry of Interior. His claim was dismissed on the grounds that the burden to prove that the Ministry had actually been in possession of the coins was on him and that he had not been able to proffer evidence to substantiate this.

The European Court of Human Rights held that this did not infringe upon the right to property. Since the confiscation had taken place before the European Convention on Human Rights had entered into force, the Court only scrutinized whether the judgment rejecting the applicant’s claim violated his rights under article 1 of Protocol 1 ECHR. It examined if the expectation that the coins would be returned amounted to possessions. The Court pointed out that member states have a wide margin of appreciation when determining if and to what extent they compensated citizens for losses they had suffered due to communist policies. It stated that expectations only enjoyed the protection of article 1 of Protocol 1 on the condition that they had a sufficient legal basis. The Court found that the domestic courts had established in due procedure that there was no such basis for the claim of the applicant. Consequently, there had been no legitimate expectation that the claim be satisfied.

The reasoning in Hans Adam II von Liechtenstein v Germany was similar. The applicant’s father had been the owner of a valuable painting. It had been confiscated in Czechoslovakia in 1946 on the basis of the so called Benes decrees which made provision for the attachment of items belonging to Germans. In 1991, the Czech museum in which the painting had been place in the meantime, loaned it to a museum in Cologne, Germany. The applicant tried to obtain a court order to the effect that the painting be returned to him instead of the Czech museum. He claimed that the confiscation of his father’s painting had been unlawful and void. His requests were refused by the competent German courts. 

The European Court of Human Rights did not find a violation of the right to property under article 1 to Protocol 1. It clarified that it was confined to examining the refusal of the German courts to return the painting to the applicant and could not scrutinize the expropriation, because it had been performed before Protocol 1 to the ECHR, which enshrines the right to property had entered into force. The Court stated that the applicant had not been able to exercise any property rights with respect to the painting in question since its attachment in 1946. The Court was of the opinion that due to this the applicant had not had a legitimate expectation to retain the property rights or ownership of the painting. Therefore, it held that the right to property had not been infringed upon.

An example of a case in which the European Court of Human Rights elaborated on the question, in which circumstances the expectation to be liberated from a dept may constitute a possession is Optimterre v Belgium. The applicant was a Belgium company which had been asked by the revenue office to pay a certain amount of taxes. They challenged the amount. While the dispute over the payable amount continued, a Belgium court handed down a judgment interpreting the relevant laws in a fashion that revenue offices had no possibility to interrupt the statute of limitation. The applicant therefore assumed that the taxes it had to pay would fall within a statute of limitation. However, the Belgium legislator modified relevant laws to the effect that the statute of limitation could be interrupted. The applicant complained that this infringed upon its right to property. It stated that the legitimate expectation to be liberated from the obligation to pay the taxes in question amounted to a possession protected by article 1 of Protocol 1 ECHR.

The European Court of Human Rights rejected this point of view. It stated that the expectation to be freed from a debt could be considered a possession if it was legitimate and if the debt in question was clear and well-defined. While the Court conceded that the expectation that to be liberated rom the tax obligation had been based on domestic law and therefore been legitimate, it stated that the debt had not been clearly defined, because tax payers could challenge the calculation of the tax by revenue offices. On the basis of these considerations, the Court concluded that there had been no possession as protected by article 1 of Protocol 1 ECHR.

 

As pointed out above, even expectations for which there is no legal basis may constitute assets enjoying the protection of article 1 to Protocol 1 ECHR.  This is subject to the condition that the person who claims the right acted in good faith or had reason to believe that his legal position would be maintained. For example, in Oneryildiz v Turkey (Grand Chamber), the applicant had built a house in a slum area of Istanbul; the building was adjacent to a rubbish tip. He had not obtained a permission to construct a building and did not own the land on which he built the house. Following complaints by residents of the area who expressed concern over health risks, a team of experts was commissioned to draw up a report on possible perils in relation to the rubbish tip. They stated that there was a danger of methane gas causing explosions. Yet, not action was taken by the authorities. Two years later, an explosion occurred which engulfed the house of the applicant as well as other dwellings and killed 39 persons. The applicant complained under article 1 of Protocol 1 to the ECHR that the failure of the authorities to take measures to avert an explosion and the resulting destruction of his house constituted a violation of his right to property.

When scrutinizing whether a possession had been interfered with, the ECtHR distinguished between the land the house had been built on and the house as such. The Court stated that the applicant had not had a title to the plot on which he had constructed the house nor had he taken any steps to acquire ownership. Therefore he had not even had a reasonable expectation to obtain the land, so that the plot did not constitute a possession.  Yet the Court took a different view with respect to the house the applicant had built. It pointed out that the authorities had been aware of the applicant’s illegal dwelling, but not taken any steps to remove him for year. Also, the applicant had been provided with public services and charged for them. These circumstances gave him, according to the Court, reason to believe that he could continue living in this house uninhibitedly. The Court held that this expectation constituted a possession as protected by article 1 of Protocol 1 ECHR and found a violation of the right to property.

 

 

 

In Saghinadze v Georgia, the applicants were internally displaced persons who had fled from Abkhazia to Georgia to escape from the armed conflict taking place on this site. One of the applicants was appointed to a high post in the Georgian Ministry of Internal Affairs; a house, which was property of the Ministry was assigned to him and his family as place of residence. About ten years after his appointment the applicant had a fall-out with the newly appointed Minister of Internal Affairs. He and his family were evicted from the house. The applicants filed a law suit seeking to obtain possession of the house again, but their claim was rejected on the grounds that due procedure had not been observed when the house had been assigned to the applicant.

The Court ruled that the eviction of the applicants was in breach of article 1 of Protocol 1 to the ECHR. It pointed out that the applicant had maintained possession of the house in good faith and that the authorities had tolerated his treating the dwelling as his own for almost ten years (para 110 ff of the judgment). The ECtHR also stated that the applicants could not be blamed for the procedural mistakes undertaken when they were placed in the house. For these reasons, the Court concluded that the possession of the house constituted a possession as protected by the right to property.

A crucial consideration of the judgments in Oneryildiz v Turkey and Saghanidze v Georgia is that the applicant was led to believe that he would be able to continue living in the house. This (well-founded) expectation was considered a possession which enjoyed the protection of article 1 of Protocol 1. By way of contrast, article 1 of Protocol 1 does not apply if the expectation that an unlawful or legally not protected status-quo will be upheld is unreasonable. In Depalle v France (Grand Chamber), the applicants had purchased a house which stood on a dyke. The dyke was on maritime land, which was by law public property. The applicants had been granted a special permission to use this public property when they had purchased the house; the permission had been renewed regularly. When a new law protecting coastal areas entered into force, the authorities refused to issue a  permission under the same conditions as before. They challenged this decision before French courts, but it was ultimately confirmed. The European Court of Human Rights did not find this to be in violation the right to property. It stated that the applicants could not have been unaware that a title to use maritime land in public property could be revoked and conferred only precarious rights. Therefore, the expectation that this title would be renewed did not constitute a possession protected by article 1 of Protocol 1 ECHR

1) Overview

2) Pension entitlements

3) Deposits in bank accounts

4) Expectations

 

1)  Overview

The term property is to be interpreted autonomously for purposes of the ECHR. It may embrace interests which do not fall within the scope of property in the legal systems of the states which have acceded to the European Convention on Human Rights. In particular, it is not limited to movable objects and real estate, but may also embrace immaterial rights such as welfare entitlements or the right to have a judgment in one’s favour enforced (Petrushko v Russia, para 27 – the Court frequently examines failures to enforce judgments by domestic Courts in light of article 6 and article 1 of protocol 1 ECHR).

The right to property may also extend to claims, if the applicant has a reasonable and legitimate expectation of obtaining effective enjoyment of a property right (Saghinadze v Georgia, para 103). An expectation is legitimate if it is based on either a legislative provision or a legal act bearing on the property interest in question (Kopecky v Slovakia).

 

2) Pension entitlements

Pension entitlements fall within the scope of the right to property. Article 1 of Protocol 1 to the European Convention on Human Rights does not entail a right to receive a pension or other benefits, nor does it enshrine that a pension has to reach a certain amount. Contracting states enjoy a wide margin of appreciation with regard to the granting of social benefits.  If, however, pension entitlements have been conferred, they constitute a possession (Valkov v Bulgaria, para 84). This holds true when the right to a pension is based on contributions which have been made (Gaygusuz v. Austria) as well as in cases in which employers have given a more general undertaking to  pay a pension on certain conditions (Azinas v. Cyprus ; the case was later on referred to the Grand Chamber, which declared the application inadmissible. However, the Court still quotes the considerations in the chamber judgment).  Consequently, pension entitlements have to be treated in accordance with the requirements of Article 1 of Protocol 1 ECHR (Lakicevic and others v. Montenegro and Serbia). Accordingly, interferences have to be based on a  law, they must pursue a legitimate aim and strike a fair balance between the interests of the individual and those of the public. They must not impose  a heavy and disproportionate burden on citizens.

The reduction or discontinuation of pension entitlements may constitute an interference with the right to peaceful enjoyment  of possessions (Wieczorek v. Poland, para 57). The Court usually does not consider such interferences as deprivation of property or the control of use of property, but scrutinizes them in light of the first sentence of Article 1 of Protocol 1 to the European Convention on Human Rights. When examining whether a fair balance has been struck between the interests of the public and the interests of the individual, the Court considers among other factors to what extent the interference diminishes the applicant’s entitlement.  It also attaches importance to the questions whether the forfeiture of pension entitlements was decided upon in a procedure, in which the affected person was heard or whether the loss of entitlements was an automatic consequence of a criminal conviction (Banfield v United Kingdom). Another consideration is whether the deprivation of pension rights leaves the affected person entirely without financial means (Azinas v Cyprus) and whether the applicant is obliged to pay money back (Wieczorek v Poland, para 72; Chroust v Czech Republic)

In Azinas v Cyprus, the applicant had held a high position in the public service. He had been convicted for the misappropriation of public funds and served 18 months of imprisonment. As stipulated by Cyprian law in force at the material time, he was stripped of his pension entitlements entirely. The European Court of Human Rights held that this amounted to a violation of the right to property. The Court pointed out that the applicant had already served a prison sentence of 18 months and that the decision to deprive him of his pension entitlements left him and his family bereft of any financial means. Due to these harsh consequences, the Court came to the conclusion that no fair balance had been struck between the interests of the applicant and the interests of the public (as pointed out above, the case was referred to the Grand Chamber, which declared the application inadmissible since the aspect of a violation of property rights had not been raised before domestic courts).

In Banfield v United Kingdom, the applicant was a former police officer who had been convicted to a prison term of 18 years for sexual offences against women, including rape.  Several of the offences had been committed while the applicant had been on duty and in part they had been carried out taking advantage of knowledge the applicant had acquired in the course of his duties as police officer.

Pension entitlements of police officers comprised of a portion which was based on their own contributions and additional payments by the state.

Following the applicant’s release from prison, judgment was brought to deprive him of his pension entitlements in the amount of the contribution by the state, leaving him with the 35 % of his pension which were based on his own payments. The application relying on Article 1 of Protocol 1 ECHR was rejected as manifestly ill-founded. The Court held that even a forfeiture of pension entitlements which were based on contributions by the applicant was permissible under the Convention. It pointed out that, other than in Azinas v Cyprus, the deprivation of the applicant’s entitlements had not been an automatism stipulated by law, but that it had been in the discretion of domestic courts, which had extensively considered the applicant’s arguments (p. 12 of the decision). It also underlined the extreme nature of transgression performed by the applicant, which was to be considered when striking the balance between the interest of the public and the interest of the applicant.

The distinction whether the loss of pension entitlements is stipulated by law as an automatic consequence of a criminal conviction or whether it is imposed in a separate procedure, which enables the affected person to make representations, also played an important role in the case Apostolakis v Greece. The applicant had been responsible for the payment of pensions at an insurance fund for members of liberal professions. He had embezzled significant amounts of money and been convicted to a prison sentence. After his release and upon reaching the retirement age, he requested his pension. The competent authorities granted the request, but decided to transfer a large portion of his entitlement to the applicant’s children and wife. The European Court of Human Rights ruled that this decision violated the applicant’s right to property under article 1 of protocol 1 to the ECHR. It underlined that the decision to forfeit parts of his entitlements in favor of his wife had been foreseen by law as an inevitable consequence of the criminal conviction (para 39). It also considered important that the applicant was, at the age of 69 and without possibility of gainful employment, had been almost entirely deprived of his means of subsistence by this decision.

In Klein v Austria, the applicant had practiced as a lawyer for some 30 years. As provided by Austrian law, he had paid regular contributions to the pension fund for lawyers. Following bankruptcy proceedings and a conviction for embezzlement, he had been disbarred. When he reached the retirement age, he applied for a pension. The relevant authorities (and courts) declined his request on the grounds that the law provided that only members of the bar who reached the retirement age were entitled to a pension. Since the applicant was not a member of the bar anymore, he did not fulfill this condition. The ECtHR found a violation of the right to property under article 1 of Protocol 1 to the ECHR. It stated that an expectation to receive a pension which was based on compulsory contributions to a pension scheme and the compulsory membership in the bar constituted a possession within the meaning of article 1 of protocol 1 to the Convention. The Court held that the forfeiture of the applicant’s pension rights had failed to strike a fair balance between the interests of the general public and the interest of the individual. The deprivation of pension rights had – in contrast to the cases Azinas v Cyprus and Banfield v UK – not had a punitive element. While the possibility that a lawyer might be disbarred and lose his pension rights could be inferred from Austrian law, this possibility had to seem rather remote to contributing lawyers. They could not be expected to make arrangements for this scenario. In the view of the Court, stripping him off his pension entitlements therefore imposed a disproportionate burden on the applicant.

In Lakicevik and others v Serbia and Montenegro, the applicants were lawyers who had retired. They received decisions by the Pensions and Disability Insurance Fund, which specified the amount of their entitlement. The decisions also stated that the applicants were entitled to continue working as lawyers on a part time basis. In 2004, a new law entered into force which provided that pension payments were to be suspended in case the retired person continued to work. On the basis of this new provision, the payments to the applicants were stalled and the pension fund requested a refund of benefits already paid. The European Court of Human Rights reiterated that states enjoyed a wide margin of appreciation regarding social benefits. Yet it pointed out that changes to social benefits must not impose a heavy and disproportionate burden on citizens. The Court stated that the applicants had acted in accordance with the decisions by the Pension Fund when resuming their work. It also pointed to the fact that pensions had accounted for a considerable portion of the applicants’ monthly income. Therefore, the state had imposed a disproportionate burden on the applicants by stalling their payments entirely and without any transitional period. Consequently the ECtHR found the respondent state in violation of the right to property pursuant to article 1 of protocol 1 to the ECHR.

 

3) Deposits in bank accounts

Monies deposited in bank accounts fall within the ambit of possessions as protected by article 1 of Protocol 1 ECHR. The obligation of the state to protect property rights does not, however, entail an obligation to ensure the purchasing power of the funds deposited in an account (Rudzinska v Poland; Gayduk v Ukraine). The European Court of Human Rights has on several occasions rejected applications by individuals contending that the loss in value their deposited had experienced infringed upon their right to property.

In Flores Cardoso v Portugal, the applicants were two Portuguese citizens who had been born in Mozambique and lived there until 1976. Following the outbreak of the civil war in Mozambique, they had been forced to leave the country. Before their departure they deposited 950000 Mozambiquen escudos in the consulate of Portugal in Maputo, the capital of Mozambique.  In 1994, the Portuguese government announced that it was going to reimburse persons who had deposited monies in Portuguese consulates during the civil war in Mozambique.   The applicants received 950.000 Portuguese escudos.  They demanded, however, a higher compensation, contending that the sum should be calculated taking into consideration the inflation and the decreased purchasing power which had occurred in the meantime. This claim was rejected by Portuguese courts.  The European  Court of Human Rights rule that this did not infringe on the applicants’ right to property. It reiterated that the state was not under an obligation to protect its citizens against the effects of inflation. This was, according to the Court, all the more the case with respect to sums which had not even been deposited with a financial institution.

In Appolonov v Russia, the applicant complained that savings he had deposited in an account with a Russian bank had deprecated in value significantly following economic reform. At the material time, the Russian government had adopted legislation which in principle foresaw compensation for losses in value of savings account; however, necessary sub-legislation to implement this act had not been passed yet. The European Court of Human Rights declared the application inadmissible. It reiterated that states are not under an obligation to compensate their citizens for inflation. While the Russian government had nevertheless undertaken to do so, the relevant laws had not entered into force yet when the applicant had litigated his case before domestic courts.

In Rudzinska v Poland, the applicant’s father had opened a special housing savings account in her name and performed regular payments in this account for about three years.  This type of account had been established by order by the President of the National Bank of Poland in order to safeguard citizens against the effects of inflation. The regulation governing these housing saving accounts foresaw inter alia that holders of such accounts were to be compensated for the loss in purchasing power in years in which the prices of houses and apartments increased at a higher rate than the interest rate. This guarantee applied was capped at the price for 70 square meters of a house.  Additional rules provided that only persons who actually had purchased a house or apartment were entitled to the compensation. 

The applicant requested information about the balance in her account.  When she learned that this sum was the equivalent of the price of 4 square meters of living space, she asked to be awarded compensation since it was her understanding that the balance should be sufficient to buy 70 square meters of living space. The European Court of Human Rights rejected the application as manifestly ill-founded. It pointed out that the applicant had not bought a house or apartment and thus did not fulfill all requirements for the compensation. The Court also pointed out that the applicant was still able to access the funds in her account and had thus not been deprived of property. Finally, the Court stated that, as far as the applicant had complained that her savings had lost their purchasing power due to inflation, that no general obligation of the state to maintain purchasing power can be derived from article 1 of Protocol 1 to the ECHR.

 

Restrictions on a person’s possibility to access monies deposited in a bank account constitute an interference with the right to property and therefore have to be lawful, serve a legitimate aim and strike a fair balance between the interests of the public and the interests of the individual affected. As regards the balance, temporary restrictions of access to an account or to make withdrawals are easier to justify than measures permanently barring the holder of the account from disposing of the funds.  

In Trajkovski v Macedonia, the applicant was a citizen of Macedonia, which had been part of Yugoslavia.  While Macedonia was still a part of Yugoslavia, the applicant had deposited US-dollars, Deutsche Mark and minor amounts of other currencies in a state owned bank.  In 1991, Yugoslav banks had been ordered not to permit any withdrawals of foreign currency for a certain period.  After Macedonia gained independence in 1991, the Macedonian government ordered that foreign currency accounts be frozen; withdrawals were only allowed for certain purposes such as buying business premises or purchase of property. In 2000, a law regarding foreign currency deposits was enacted. On the basis of this law, the applicant’s deposits in foreign currency were partly converted into Euros. For the remainder, he obtained Government bonds.

Considering that the legal regulation had enabled the applicant to access his accounts in certain circumstances and that the funds had not been removed from the account, the Court concluded that the freezing of the applicants account did not constitute a deprivation of property. It assessed the measure as control of use pursuant to article 1 sentence 2 of Protocol 1 to the ECHR. The Court held that the freezing of his account did not place a disproportionate burden on the applicant. It pointed out that the applicant had had the possibility to withdraw funds for certain purposes, that restrictions on withdrawing foreign currency had already been in place in Yugoslavia and that the applicant had accrued interest on his balance. In view of the difficult economic situation Macedonia had faced at the time, the freezing of foreign currency accounts had, according to the ECtHR, been reasonable.

In Zolotas v Greece, the Court scrutinized the statute of limitation on claims to funds deposited in an account. The applicant had opened an account in 1974. Starting from 1981, there was no activity on the account. When he inquired about the balance in the account some 22 year later, the bank informed him that all his claims with regard to the account were barred due to a statute of limitation established by the Greek civil code.  The applicant challenged bank’s refuting his claims before Greek courts, yet the stance taken by the bank was confirmed.

The European Court of Human Rights reiterated that interferences with the right to property must not impose an excessive burden on the affected person; it also pointed out that article 1 of Protocol 1 ECHR entails positive obligations for contracting states to ensure the effective enjoyment of the right to property. In view of the particular relationship of trust between a bank and the holder of a bank account, the ECtHR took the view that the bank should have notified the applicant beforehand that his claims were about to be barred by a statute of limitation. Since the state had failed to establish such an obligation, the Court found a violation of the right to property.

 

4) Expectations

Claims or expectancies/expectations, i.e. the prospects of a future gain, enjoy the protection of article 1 to protocol 1 ECHR if they are legitimate. Expectations are legitimate if they have a basis in national law (N.K.M v Hungary, para 35). In contrast, mere hopes or unfounded expectations without sufficient legal basis are not protected under article 1 of Protocol 1, nor are conditional claims which lapse, because the condition is not fulfilled or the hope of revival of property rights which could not be exercised for a long time (Hans Adam v Czech Republic). Expectations are usually legitimate if they accord with long-standing jurisdiction of national courts. If national courts have denied similar claims, they are usually not to be considered legitimate and to not constitute a possession.

By the same token, a right or entitlement to be freed from a debt may amount to a possession protected by article 1 of Protocol 1 ECHR, too. As is the case for other expectations, the right to be freed from the debt has to be well-established under domestic law. It also requires that the debt in question is well-established and that its amount is known (Optim et Industerre v Belgium).

On the other hand, even expectations which do not enjoy legal protection may be considered as possessions for purposes of article 1 of Protocol 1 ECHR if they are entertained n good faith (Oneryildiz v Turkey, para 123; Saghinadze v Georgia).

The European Court of Human Rights has dealt with the distinction between legitimate expectations and mere hopes or expectations without a sufficient legal basis in a number of rulings. In Kopecky v Slovakia, the applicant’s father had owned a number of gold coins. Since it was illegal to own such coins in communist times, the coins had been confiscated in 1959; the applicant’s father had been sentenced to a prison sentence. After the fall of the communist regime, legislation was introduced to rehabilitate victims of the communist regimes and to rectify judicial decisions which had affected them. The applicant, as his father’s heir, sought to recapture the coins which had been confiscated. He filed a law suit against the Ministry of Interior, for the legal framework governing the confiscations had provided that seized items be stored in the Ministry of Interior. His claim was dismissed on the grounds that the burden to prove that the Ministry had actually been in possession of the coins was on him and that he had not been able to proffer evidence to substantiate this.

The European Court of Human Rights held that this did not infringe upon the right to property. Since the confiscation had taken place before the European Convention on Human Rights had entered into force, the Court only scrutinized whether the judgment rejecting the applicant’s claim violated his rights under article 1 of Protocol 1 ECHR. It examined if the expectation that the coins would be returned amounted to possessions. The Court pointed out that member states have a wide margin of appreciation when determining if and to what extent they compensated citizens for losses they had suffered due to communist policies. It stated that expectations only enjoyed the protection of article 1 of Protocol 1 on the condition that they had a sufficient legal basis. The Court found that the domestic courts had established in due procedure that there was no such basis for the claim of the applicant. Consequently, there had been no legitimate expectation that the claim be satisfied.

The reasoning in Hans Adam II von Liechtenstein v Germany was similar. The applicant’s father had been the owner of a valuable painting. It had been confiscated in Czechoslovakia in 1946 on the basis of the so called Benes decrees which made provision for the attachment of items belonging to Germans. In 1991, the Czech museum in which the painting had been place in the meantime, loaned it to a museum in Cologne, Germany. The applicant tried to obtain a court order to the effect that the painting be returned to him instead of the Czech museum. He claimed that the confiscation of his father’s painting had been unlawful and void. His requests were refused by the competent German courts. 

The European Court of Human Rights did not find a violation of the right to property under article 1 to Protocol 1. It clarified that it was confined to examining the refusal of the German courts to return the painting to the applicant and could not scrutinize the expropriation, because it had been performed before Protocol 1 to the ECHR, which enshrines the right to property had entered into force. The Court stated that the applicant had not been able to exercise any property rights with respect to the painting in question since its attachment in 1946. The Court was of the opinion that due to this the applicant had not had a legitimate expectation to retain the property rights or ownership of the painting. Therefore, it held that the right to property had not been infringed upon.

An example of a case in which the European Court of Human Rights elaborated on the question, in which circumstances the expectation to be liberated from a dept may constitute a possession is Optimterre v Belgium. The applicant was a Belgium company which had been asked by the revenue office to pay a certain amount of taxes. They challenged the amount. While the dispute over the payable amount continued, a Belgium court handed down a judgment interpreting the relevant laws in a fashion that revenue offices had no possibility to interrupt the statute of limitation. The applicant therefore assumed that the taxes it had to pay would fall within a statute of limitation. However, the Belgium legislator modified relevant laws to the effect that the statute of limitation could be interrupted. The applicant complained that this infringed upon its right to property. It stated that the legitimate expectation to be liberated from the obligation to pay the taxes in question amounted to a possession protected by article 1 of Protocol 1 ECHR.

The European Court of Human Rights rejected this point of view. It stated that the expectation to be freed from a debt could be considered a possession if it was legitimate and if the debt in question was clear and well-defined. While the Court conceded that the expectation that to be liberated rom the tax obligation had been based on domestic law and therefore been legitimate, it stated that the debt had not been clearly defined, because tax payers could challenge the calculation of the tax by revenue offices. On the basis of these considerations, the Court concluded that there had been no possession as protected by article 1 of Protocol 1 ECHR.

 

As pointed out above, even expectations for which there is no legal basis may constitute assets enjoying the protection of article 1 to Protocol 1 ECHR.  This is subject to the condition that the person who claims the right acted in good faith or had reason to believe that his legal position would be maintained. For example, in Oneryildiz v Turkey (Grand Chamber), the applicant had built a house in a slum area of Istanbul; the building was adjacent to a rubbish tip. He had not obtained a permission to construct a building and did not own the land on which he built the house. Following complaints by residents of the area who expressed concern over health risks, a team of experts was commissioned to draw up a report on possible perils in relation to the rubbish tip. They stated that there was a danger of methane gas causing explosions. Yet, not action was taken by the authorities. Two years later, an explosion occurred which engulfed the house of the applicant as well as other dwellings and killed 39 persons. The applicant complained under article 1 of Protocol 1 to the ECHR that the failure of the authorities to take measures to avert an explosion and the resulting destruction of his house constituted a violation of his right to property.

When scrutinizing whether a possession had been interfered with, the ECtHR distinguished between the land the house had been built on and the house as such. The Court stated that the applicant had not had a title to the plot on which he had constructed the house nor had he taken any steps to acquire ownership. Therefore he had not even had a reasonable expectation to obtain the land, so that the plot did not constitute a possession.  Yet the Court took a different view with respect to the house the applicant had built. It pointed out that the authorities had been aware of the applicant’s illegal dwelling, but not taken any steps to remove him for year. Also, the applicant had been provided with public services and charged for them. These circumstances gave him, according to the Court, reason to believe that he could continue living in this house uninhibitedly. The Court held that this expectation constituted a possession as protected by article 1 of Protocol 1 ECHR and found a violation of the right to property.

 

 

 

In Saghinadze v Georgia, the applicants were internally displaced persons who had fled from Abkhazia to Georgia to escape from the armed conflict taking place on this site. One of the applicants was appointed to a high post in the Georgian Ministry of Internal Affairs; a house, which was property of the Ministry was assigned to him and his family as place of residence. About ten years after his appointment the applicant had a fall-out with the newly appointed Minister of Internal Affairs. He and his family were evicted from the house. The applicants filed a law suit seeking to obtain possession of the house again, but their claim was rejected on the grounds that due procedure had not been observed when the house had been assigned to the applicant.

The Court ruled that the eviction of the applicants was in breach of article 1 of Protocol 1 to the ECHR. It pointed out that the applicant had maintained possession of the house in good faith and that the authorities had tolerated his treating the dwelling as his own for almost ten years (para 110 ff of the judgment). The ECtHR also stated that the applicants could not be blamed for the procedural mistakes undertaken when they were placed in the house. For these reasons, the Court concluded that the possession of the house constituted a possession as protected by the right to property.

A crucial consideration of the judgments in Oneryildiz v Turkey and Saghanidze v Georgia is that the applicant was led to believe that he would be able to continue living in the house. This (well-founded) expectation was considered a possession which enjoyed the protection of article 1 of Protocol 1. By way of contrast, article 1 of Protocol 1 does not apply if the expectation that an unlawful or legally not protected status-quo will be upheld is unreasonable. In Depalle v France (Grand Chamber), the applicants had purchased a house which stood on a dyke. The dyke was on maritime land, which was by law public property. The applicants had been granted a special permission to use this public property when they had purchased the house; the permission had been renewed regularly. When a new law protecting coastal areas entered into force, the authorities refused to issue a  permission under the same conditions as before. They challenged this decision before French courts, but it was ultimately confirmed. The European Court of Human Rights did not find this to be in violation the right to property. It stated that the applicants could not have been unaware that a title to use maritime land in public property could be revoked and conferred only precarious rights. Therefore, the expectation that this title would be renewed did not constitute a possession protected by article 1 of Protocol 1 ECHR

1) Overview

2) Pension entitlements

3) Deposits in bank accounts

4) Expectations

 

1)  Overview

The term property is to be interpreted autonomously for purposes of the ECHR. It may embrace interests which do not fall within the scope of property in the legal systems of the states which have acceded to the European Convention on Human Rights. In particular, it is not limited to movable objects and real estate, but may also embrace immaterial rights such as welfare entitlements or the right to have a judgment in one’s favour enforced (Petrushko v Russia, para 27 – the Court frequently examines failures to enforce judgments by domestic Courts in light of article 6 and article 1 of protocol 1 ECHR).

The right to property may also extend to claims, if the applicant has a reasonable and legitimate expectation of obtaining effective enjoyment of a property right (Saghinadze v Georgia, para 103). An expectation is legitimate if it is based on either a legislative provision or a legal act bearing on the property interest in question (Kopecky v Slovakia).

 

2) Pension entitlements

Pension entitlements fall within the scope of the right to property. Article 1 of Protocol 1 to the European Convention on Human Rights does not entail a right to receive a pension or other benefits, nor does it enshrine that a pension has to reach a certain amount. Contracting states enjoy a wide margin of appreciation with regard to the granting of social benefits.  If, however, pension entitlements have been conferred, they constitute a possession (Valkov v Bulgaria, para 84). This holds true when the right to a pension is based on contributions which have been made (Gaygusuz v. Austria) as well as in cases in which employers have given a more general undertaking to  pay a pension on certain conditions (Azinas v. Cyprus ; the case was later on referred to the Grand Chamber, which declared the application inadmissible. However, the Court still quotes the considerations in the chamber judgment).  Consequently, pension entitlements have to be treated in accordance with the requirements of Article 1 of Protocol 1 ECHR (Lakicevic and others v. Montenegro and Serbia). Accordingly, interferences have to be based on a  law, they must pursue a legitimate aim and strike a fair balance between the interests of the individual and those of the public. They must not impose  a heavy and disproportionate burden on citizens.

The reduction or discontinuation of pension entitlements may constitute an interference with the right to peaceful enjoyment  of possessions (Wieczorek v. Poland, para 57). The Court usually does not consider such interferences as deprivation of property or the control of use of property, but scrutinizes them in light of the first sentence of Article 1 of Protocol 1 to the European Convention on Human Rights. When examining whether a fair balance has been struck between the interests of the public and the interests of the individual, the Court considers among other factors to what extent the interference diminishes the applicant’s entitlement.  It also attaches importance to the questions whether the forfeiture of pension entitlements was decided upon in a procedure, in which the affected person was heard or whether the loss of entitlements was an automatic consequence of a criminal conviction (Banfield v United Kingdom). Another consideration is whether the deprivation of pension rights leaves the affected person entirely without financial means (Azinas v Cyprus) and whether the applicant is obliged to pay money back (Wieczorek v Poland, para 72; Chroust v Czech Republic)

In Azinas v Cyprus, the applicant had held a high position in the public service. He had been convicted for the misappropriation of public funds and served 18 months of imprisonment. As stipulated by Cyprian law in force at the material time, he was stripped of his pension entitlements entirely. The European Court of Human Rights held that this amounted to a violation of the right to property. The Court pointed out that the applicant had already served a prison sentence of 18 months and that the decision to deprive him of his pension entitlements left him and his family bereft of any financial means. Due to these harsh consequences, the Court came to the conclusion that no fair balance had been struck between the interests of the applicant and the interests of the public (as pointed out above, the case was referred to the Grand Chamber, which declared the application inadmissible since the aspect of a violation of property rights had not been raised before domestic courts).

In Banfield v United Kingdom, the applicant was a former police officer who had been convicted to a prison term of 18 years for sexual offences against women, including rape.  Several of the offences had been committed while the applicant had been on duty and in part they had been carried out taking advantage of knowledge the applicant had acquired in the course of his duties as police officer.

Pension entitlements of police officers comprised of a portion which was based on their own contributions and additional payments by the state.

Following the applicant’s release from prison, judgment was brought to deprive him of his pension entitlements in the amount of the contribution by the state, leaving him with the 35 % of his pension which were based on his own payments. The application relying on Article 1 of Protocol 1 ECHR was rejected as manifestly ill-founded. The Court held that even a forfeiture of pension entitlements which were based on contributions by the applicant was permissible under the Convention. It pointed out that, other than in Azinas v Cyprus, the deprivation of the applicant’s entitlements had not been an automatism stipulated by law, but that it had been in the discretion of domestic courts, which had extensively considered the applicant’s arguments (p. 12 of the decision). It also underlined the extreme nature of transgression performed by the applicant, which was to be considered when striking the balance between the interest of the public and the interest of the applicant.

The distinction whether the loss of pension entitlements is stipulated by law as an automatic consequence of a criminal conviction or whether it is imposed in a separate procedure, which enables the affected person to make representations, also played an important role in the case Apostolakis v Greece. The applicant had been responsible for the payment of pensions at an insurance fund for members of liberal professions. He had embezzled significant amounts of money and been convicted to a prison sentence. After his release and upon reaching the retirement age, he requested his pension. The competent authorities granted the request, but decided to transfer a large portion of his entitlement to the applicant’s children and wife. The European Court of Human Rights ruled that this decision violated the applicant’s right to property under article 1 of protocol 1 to the ECHR. It underlined that the decision to forfeit parts of his entitlements in favor of his wife had been foreseen by law as an inevitable consequence of the criminal conviction (para 39). It also considered important that the applicant was, at the age of 69 and without possibility of gainful employment, had been almost entirely deprived of his means of subsistence by this decision.

In Klein v Austria, the applicant had practiced as a lawyer for some 30 years. As provided by Austrian law, he had paid regular contributions to the pension fund for lawyers. Following bankruptcy proceedings and a conviction for embezzlement, he had been disbarred. When he reached the retirement age, he applied for a pension. The relevant authorities (and courts) declined his request on the grounds that the law provided that only members of the bar who reached the retirement age were entitled to a pension. Since the applicant was not a member of the bar anymore, he did not fulfill this condition. The ECtHR found a violation of the right to property under article 1 of Protocol 1 to the ECHR. It stated that an expectation to receive a pension which was based on compulsory contributions to a pension scheme and the compulsory membership in the bar constituted a possession within the meaning of article 1 of protocol 1 to the Convention. The Court held that the forfeiture of the applicant’s pension rights had failed to strike a fair balance between the interests of the general public and the interest of the individual. The deprivation of pension rights had – in contrast to the cases Azinas v Cyprus and Banfield v UK – not had a punitive element. While the possibility that a lawyer might be disbarred and lose his pension rights could be inferred from Austrian law, this possibility had to seem rather remote to contributing lawyers. They could not be expected to make arrangements for this scenario. In the view of the Court, stripping him off his pension entitlements therefore imposed a disproportionate burden on the applicant.

In Lakicevik and others v Serbia and Montenegro, the applicants were lawyers who had retired. They received decisions by the Pensions and Disability Insurance Fund, which specified the amount of their entitlement. The decisions also stated that the applicants were entitled to continue working as lawyers on a part time basis. In 2004, a new law entered into force which provided that pension payments were to be suspended in case the retired person continued to work. On the basis of this new provision, the payments to the applicants were stalled and the pension fund requested a refund of benefits already paid. The European Court of Human Rights reiterated that states enjoyed a wide margin of appreciation regarding social benefits. Yet it pointed out that changes to social benefits must not impose a heavy and disproportionate burden on citizens. The Court stated that the applicants had acted in accordance with the decisions by the Pension Fund when resuming their work. It also pointed to the fact that pensions had accounted for a considerable portion of the applicants’ monthly income. Therefore, the state had imposed a disproportionate burden on the applicants by stalling their payments entirely and without any transitional period. Consequently the ECtHR found the respondent state in violation of the right to property pursuant to article 1 of protocol 1 to the ECHR.

 

3) Deposits in bank accounts

Monies deposited in bank accounts fall within the ambit of possessions as protected by article 1 of Protocol 1 ECHR. The obligation of the state to protect property rights does not, however, entail an obligation to ensure the purchasing power of the funds deposited in an account (Rudzinska v Poland; Gayduk v Ukraine). The European Court of Human Rights has on several occasions rejected applications by individuals contending that the loss in value their deposited had experienced infringed upon their right to property.

In Flores Cardoso v Portugal, the applicants were two Portuguese citizens who had been born in Mozambique and lived there until 1976. Following the outbreak of the civil war in Mozambique, they had been forced to leave the country. Before their departure they deposited 950000 Mozambiquen escudos in the consulate of Portugal in Maputo, the capital of Mozambique.  In 1994, the Portuguese government announced that it was going to reimburse persons who had deposited monies in Portuguese consulates during the civil war in Mozambique.   The applicants received 950.000 Portuguese escudos.  They demanded, however, a higher compensation, contending that the sum should be calculated taking into consideration the inflation and the decreased purchasing power which had occurred in the meantime. This claim was rejected by Portuguese courts.  The European  Court of Human Rights rule that this did not infringe on the applicants’ right to property. It reiterated that the state was not under an obligation to protect its citizens against the effects of inflation. This was, according to the Court, all the more the case with respect to sums which had not even been deposited with a financial institution.

In Appolonov v Russia, the applicant complained that savings he had deposited in an account with a Russian bank had deprecated in value significantly following economic reform. At the material time, the Russian government had adopted legislation which in principle foresaw compensation for losses in value of savings account; however, necessary sub-legislation to implement this act had not been passed yet. The European Court of Human Rights declared the application inadmissible. It reiterated that states are not under an obligation to compensate their citizens for inflation. While the Russian government had nevertheless undertaken to do so, the relevant laws had not entered into force yet when the applicant had litigated his case before domestic courts.

In Rudzinska v Poland, the applicant’s father had opened a special housing savings account in her name and performed regular payments in this account for about three years.  This type of account had been established by order by the President of the National Bank of Poland in order to safeguard citizens against the effects of inflation. The regulation governing these housing saving accounts foresaw inter alia that holders of such accounts were to be compensated for the loss in purchasing power in years in which the prices of houses and apartments increased at a higher rate than the interest rate. This guarantee applied was capped at the price for 70 square meters of a house.  Additional rules provided that only persons who actually had purchased a house or apartment were entitled to the compensation. 

The applicant requested information about the balance in her account.  When she learned that this sum was the equivalent of the price of 4 square meters of living space, she asked to be awarded compensation since it was her understanding that the balance should be sufficient to buy 70 square meters of living space. The European Court of Human Rights rejected the application as manifestly ill-founded. It pointed out that the applicant had not bought a house or apartment and thus did not fulfill all requirements for the compensation. The Court also pointed out that the applicant was still able to access the funds in her account and had thus not been deprived of property. Finally, the Court stated that, as far as the applicant had complained that her savings had lost their purchasing power due to inflation, that no general obligation of the state to maintain purchasing power can be derived from article 1 of Protocol 1 to the ECHR.

 

Restrictions on a person’s possibility to access monies deposited in a bank account constitute an interference with the right to property and therefore have to be lawful, serve a legitimate aim and strike a fair balance between the interests of the public and the interests of the individual affected. As regards the balance, temporary restrictions of access to an account or to make withdrawals are easier to justify than measures permanently barring the holder of the account from disposing of the funds.  

In Trajkovski v Macedonia, the applicant was a citizen of Macedonia, which had been part of Yugoslavia.  While Macedonia was still a part of Yugoslavia, the applicant had deposited US-dollars, Deutsche Mark and minor amounts of other currencies in a state owned bank.  In 1991, Yugoslav banks had been ordered not to permit any withdrawals of foreign currency for a certain period.  After Macedonia gained independence in 1991, the Macedonian government ordered that foreign currency accounts be frozen; withdrawals were only allowed for certain purposes such as buying business premises or purchase of property. In 2000, a law regarding foreign currency deposits was enacted. On the basis of this law, the applicant’s deposits in foreign currency were partly converted into Euros. For the remainder, he obtained Government bonds.

Considering that the legal regulation had enabled the applicant to access his accounts in certain circumstances and that the funds had not been removed from the account, the Court concluded that the freezing of the applicants account did not constitute a deprivation of property. It assessed the measure as control of use pursuant to article 1 sentence 2 of Protocol 1 to the ECHR. The Court held that the freezing of his account did not place a disproportionate burden on the applicant. It pointed out that the applicant had had the possibility to withdraw funds for certain purposes, that restrictions on withdrawing foreign currency had already been in place in Yugoslavia and that the applicant had accrued interest on his balance. In view of the difficult economic situation Macedonia had faced at the time, the freezing of foreign currency accounts had, according to the ECtHR, been reasonable.

In Zolotas v Greece, the Court scrutinized the statute of limitation on claims to funds deposited in an account. The applicant had opened an account in 1974. Starting from 1981, there was no activity on the account. When he inquired about the balance in the account some 22 year later, the bank informed him that all his claims with regard to the account were barred due to a statute of limitation established by the Greek civil code.  The applicant challenged bank’s refuting his claims before Greek courts, yet the stance taken by the bank was confirmed.

The European Court of Human Rights reiterated that interferences with the right to property must not impose an excessive burden on the affected person; it also pointed out that article 1 of Protocol 1 ECHR entails positive obligations for contracting states to ensure the effective enjoyment of the right to property. In view of the particular relationship of trust between a bank and the holder of a bank account, the ECtHR took the view that the bank should have notified the applicant beforehand that his claims were about to be barred by a statute of limitation. Since the state had failed to establish such an obligation, the Court found a violation of the right to property.

 

4) Expectations

Claims or expectancies/expectations, i.e. the prospects of a future gain, enjoy the protection of article 1 to protocol 1 ECHR if they are legitimate. Expectations are legitimate if they have a basis in national law (N.K.M v Hungary, para 35). In contrast, mere hopes or unfounded expectations without sufficient legal basis are not protected under article 1 of Protocol 1, nor are conditional claims which lapse, because the condition is not fulfilled or the hope of revival of property rights which could not be exercised for a long time (Hans Adam v Czech Republic). Expectations are usually legitimate if they accord with long-standing jurisdiction of national courts. If national courts have denied similar claims, they are usually not to be considered legitimate and to not constitute a possession.

By the same token, a right or entitlement to be freed from a debt may amount to a possession protected by article 1 of Protocol 1 ECHR, too. As is the case for other expectations, the right to be freed from the debt has to be well-established under domestic law. It also requires that the debt in question is well-established and that its amount is known (Optim et Industerre v Belgium).

On the other hand, even expectations which do not enjoy legal protection may be considered as possessions for purposes of article 1 of Protocol 1 ECHR if they are entertained n good faith (Oneryildiz v Turkey, para 123; Saghinadze v Georgia).

The European Court of Human Rights has dealt with the distinction between legitimate expectations and mere hopes or expectations without a sufficient legal basis in a number of rulings. In Kopecky v Slovakia, the applicant’s father had owned a number of gold coins. Since it was illegal to own such coins in communist times, the coins had been confiscated in 1959; the applicant’s father had been sentenced to a prison sentence. After the fall of the communist regime, legislation was introduced to rehabilitate victims of the communist regimes and to rectify judicial decisions which had affected them. The applicant, as his father’s heir, sought to recapture the coins which had been confiscated. He filed a law suit against the Ministry of Interior, for the legal framework governing the confiscations had provided that seized items be stored in the Ministry of Interior. His claim was dismissed on the grounds that the burden to prove that the Ministry had actually been in possession of the coins was on him and that he had not been able to proffer evidence to substantiate this.

The European Court of Human Rights held that this did not infringe upon the right to property. Since the confiscation had taken place before the European Convention on Human Rights had entered into force, the Court only scrutinized whether the judgment rejecting the applicant’s claim violated his rights under article 1 of Protocol 1 ECHR. It examined if the expectation that the coins would be returned amounted to possessions. The Court pointed out that member states have a wide margin of appreciation when determining if and to what extent they compensated citizens for losses they had suffered due to communist policies. It stated that expectations only enjoyed the protection of article 1 of Protocol 1 on the condition that they had a sufficient legal basis. The Court found that the domestic courts had established in due procedure that there was no such basis for the claim of the applicant. Consequently, there had been no legitimate expectation that the claim be satisfied.

The reasoning in Hans Adam II von Liechtenstein v Germany was similar. The applicant’s father had been the owner of a valuable painting. It had been confiscated in Czechoslovakia in 1946 on the basis of the so called Benes decrees which made provision for the attachment of items belonging to Germans. In 1991, the Czech museum in which the painting had been place in the meantime, loaned it to a museum in Cologne, Germany. The applicant tried to obtain a court order to the effect that the painting be returned to him instead of the Czech museum. He claimed that the confiscation of his father’s painting had been unlawful and void. His requests were refused by the competent German courts. 

The European Court of Human Rights did not find a violation of the right to property under article 1 to Protocol 1. It clarified that it was confined to examining the refusal of the German courts to return the painting to the applicant and could not scrutinize the expropriation, because it had been performed before Protocol 1 to the ECHR, which enshrines the right to property had entered into force. The Court stated that the applicant had not been able to exercise any property rights with respect to the painting in question since its attachment in 1946. The Court was of the opinion that due to this the applicant had not had a legitimate expectation to retain the property rights or ownership of the painting. Therefore, it held that the right to property had not been infringed upon.

An example of a case in which the European Court of Human Rights elaborated on the question, in which circumstances the expectation to be liberated from a dept may constitute a possession is Optimterre v Belgium. The applicant was a Belgium company which had been asked by the revenue office to pay a certain amount of taxes. They challenged the amount. While the dispute over the payable amount continued, a Belgium court handed down a judgment interpreting the relevant laws in a fashion that revenue offices had no possibility to interrupt the statute of limitation. The applicant therefore assumed that the taxes it had to pay would fall within a statute of limitation. However, the Belgium legislator modified relevant laws to the effect that the statute of limitation could be interrupted. The applicant complained that this infringed upon its right to property. It stated that the legitimate expectation to be liberated from the obligation to pay the taxes in question amounted to a possession protected by article 1 of Protocol 1 ECHR.

The European Court of Human Rights rejected this point of view. It stated that the expectation to be freed from a debt could be considered a possession if it was legitimate and if the debt in question was clear and well-defined. While the Court conceded that the expectation that to be liberated rom the tax obligation had been based on domestic law and therefore been legitimate, it stated that the debt had not been clearly defined, because tax payers could challenge the calculation of the tax by revenue offices. On the basis of these considerations, the Court concluded that there had been no possession as protected by article 1 of Protocol 1 ECHR.

 

As pointed out above, even expectations for which there is no legal basis may constitute assets enjoying the protection of article 1 to Protocol 1 ECHR.  This is subject to the condition that the person who claims the right acted in good faith or had reason to believe that his legal position would be maintained. For example, in Oneryildiz v Turkey (Grand Chamber), the applicant had built a house in a slum area of Istanbul; the building was adjacent to a rubbish tip. He had not obtained a permission to construct a building and did not own the land on which he built the house. Following complaints by residents of the area who expressed concern over health risks, a team of experts was commissioned to draw up a report on possible perils in relation to the rubbish tip. They stated that there was a danger of methane gas causing explosions. Yet, not action was taken by the authorities. Two years later, an explosion occurred which engulfed the house of the applicant as well as other dwellings and killed 39 persons. The applicant complained under article 1 of Protocol 1 to the ECHR that the failure of the authorities to take measures to avert an explosion and the resulting destruction of his house constituted a violation of his right to property.

When scrutinizing whether a possession had been interfered with, the ECtHR distinguished between the land the house had been built on and the house as such. The Court stated that the applicant had not had a title to the plot on which he had constructed the house nor had he taken any steps to acquire ownership. Therefore he had not even had a reasonable expectation to obtain the land, so that the plot did not constitute a possession.  Yet the Court took a different view with respect to the house the applicant had built. It pointed out that the authorities had been aware of the applicant’s illegal dwelling, but not taken any steps to remove him for year. Also, the applicant had been provided with public services and charged for them. These circumstances gave him, according to the Court, reason to believe that he could continue living in this house uninhibitedly. The Court held that this expectation constituted a possession as protected by article 1 of Protocol 1 ECHR and found a violation of the right to property.

 

 

 

In Saghinadze v Georgia, the applicants were internally displaced persons who had fled from Abkhazia to Georgia to escape from the armed conflict taking place on this site. One of the applicants was appointed to a high post in the Georgian Ministry of Internal Affairs; a house, which was property of the Ministry was assigned to him and his family as place of residence. About ten years after his appointment the applicant had a fall-out with the newly appointed Minister of Internal Affairs. He and his family were evicted from the house. The applicants filed a law suit seeking to obtain possession of the house again, but their claim was rejected on the grounds that due procedure had not been observed when the house had been assigned to the applicant.

The Court ruled that the eviction of the applicants was in breach of article 1 of Protocol 1 to the ECHR. It pointed out that the applicant had maintained possession of the house in good faith and that the authorities had tolerated his treating the dwelling as his own for almost ten years (para 110 ff of the judgment). The ECtHR also stated that the applicants could not be blamed for the procedural mistakes undertaken when they were placed in the house. For these reasons, the Court concluded that the possession of the house constituted a possession as protected by the right to property.

A crucial consideration of the judgments in Oneryildiz v Turkey and Saghanidze v Georgia is that the applicant was led to believe that he would be able to continue living in the house. This (well-founded) expectation was considered a possession which enjoyed the protection of article 1 of Protocol 1. By way of contrast, article 1 of Protocol 1 does not apply if the expectation that an unlawful or legally not protected status-quo will be upheld is unreasonable. In Depalle v France (Grand Chamber), the applicants had purchased a house which stood on a dyke. The dyke was on maritime land, which was by law public property. The applicants had been granted a special permission to use this public property when they had purchased the house; the permission had been renewed regularly. When a new law protecting coastal areas entered into force, the authorities refused to issue a  permission under the same conditions as before. They challenged this decision before French courts, but it was ultimately confirmed. The European Court of Human Rights did not find this to be in violation the right to property. It stated that the applicants could not have been unaware that a title to use maritime land in public property could be revoked and conferred only precarious rights. Therefore, the expectation that this title would be renewed did not constitute a possession protected by article 1 of Protocol 1 ECHR

1) Overview

2) Pension entitlements

3) Deposits in bank accounts

4) Expectations

 

1)  Overview

The term property is to be interpreted autonomously for purposes of the ECHR. It may embrace interests which do not fall within the scope of property in the legal systems of the states which have acceded to the European Convention on Human Rights. In particular, it is not limited to movable objects and real estate, but may also embrace immaterial rights such as welfare entitlements or the right to have a judgment in one’s favour enforced (Petrushko v Russia, para 27 – the Court frequently examines failures to enforce judgments by domestic Courts in light of article 6 and article 1 of protocol 1 ECHR).

The right to property may also extend to claims, if the applicant has a reasonable and legitimate expectation of obtaining effective enjoyment of a property right (Saghinadze v Georgia, para 103). An expectation is legitimate if it is based on either a legislative provision or a legal act bearing on the property interest in question (Kopecky v Slovakia).

 

2) Pension entitlements

Pension entitlements fall within the scope of the right to property. Article 1 of Protocol 1 to the European Convention on Human Rights does not entail a right to receive a pension or other benefits, nor does it enshrine that a pension has to reach a certain amount. Contracting states enjoy a wide margin of appreciation with regard to the granting of social benefits.  If, however, pension entitlements have been conferred, they constitute a possession (Valkov v Bulgaria, para 84). This holds true when the right to a pension is based on contributions which have been made (Gaygusuz v. Austria) as well as in cases in which employers have given a more general undertaking to  pay a pension on certain conditions (Azinas v. Cyprus ; the case was later on referred to the Grand Chamber, which declared the application inadmissible. However, the Court still quotes the considerations in the chamber judgment).  Consequently, pension entitlements have to be treated in accordance with the requirements of Article 1 of Protocol 1 ECHR (Lakicevic and others v. Montenegro and Serbia). Accordingly, interferences have to be based on a  law, they must pursue a legitimate aim and strike a fair balance between the interests of the individual and those of the public. They must not impose  a heavy and disproportionate burden on citizens.

The reduction or discontinuation of pension entitlements may constitute an interference with the right to peaceful enjoyment  of possessions (Wieczorek v. Poland, para 57). The Court usually does not consider such interferences as deprivation of property or the control of use of property, but scrutinizes them in light of the first sentence of Article 1 of Protocol 1 to the European Convention on Human Rights. When examining whether a fair balance has been struck between the interests of the public and the interests of the individual, the Court considers among other factors to what extent the interference diminishes the applicant’s entitlement.  It also attaches importance to the questions whether the forfeiture of pension entitlements was decided upon in a procedure, in which the affected person was heard or whether the loss of entitlements was an automatic consequence of a criminal conviction (Banfield v United Kingdom). Another consideration is whether the deprivation of pension rights leaves the affected person entirely without financial means (Azinas v Cyprus) and whether the applicant is obliged to pay money back (Wieczorek v Poland, para 72; Chroust v Czech Republic)

In Azinas v Cyprus, the applicant had held a high position in the public service. He had been convicted for the misappropriation of public funds and served 18 months of imprisonment. As stipulated by Cyprian law in force at the material time, he was stripped of his pension entitlements entirely. The European Court of Human Rights held that this amounted to a violation of the right to property. The Court pointed out that the applicant had already served a prison sentence of 18 months and that the decision to deprive him of his pension entitlements left him and his family bereft of any financial means. Due to these harsh consequences, the Court came to the conclusion that no fair balance had been struck between the interests of the applicant and the interests of the public (as pointed out above, the case was referred to the Grand Chamber, which declared the application inadmissible since the aspect of a violation of property rights had not been raised before domestic courts).

In Banfield v United Kingdom, the applicant was a former police officer who had been convicted to a prison term of 18 years for sexual offences against women, including rape.  Several of the offences had been committed while the applicant had been on duty and in part they had been carried out taking advantage of knowledge the applicant had acquired in the course of his duties as police officer.

Pension entitlements of police officers comprised of a portion which was based on their own contributions and additional payments by the state.

Following the applicant’s release from prison, judgment was brought to deprive him of his pension entitlements in the amount of the contribution by the state, leaving him with the 35 % of his pension which were based on his own payments. The application relying on Article 1 of Protocol 1 ECHR was rejected as manifestly ill-founded. The Court held that even a forfeiture of pension entitlements which were based on contributions by the applicant was permissible under the Convention. It pointed out that, other than in Azinas v Cyprus, the deprivation of the applicant’s entitlements had not been an automatism stipulated by law, but that it had been in the discretion of domestic courts, which had extensively considered the applicant’s arguments (p. 12 of the decision). It also underlined the extreme nature of transgression performed by the applicant, which was to be considered when striking the balance between the interest of the public and the interest of the applicant.

The distinction whether the loss of pension entitlements is stipulated by law as an automatic consequence of a criminal conviction or whether it is imposed in a separate procedure, which enables the affected person to make representations, also played an important role in the case Apostolakis v Greece. The applicant had been responsible for the payment of pensions at an insurance fund for members of liberal professions. He had embezzled significant amounts of money and been convicted to a prison sentence. After his release and upon reaching the retirement age, he requested his pension. The competent authorities granted the request, but decided to transfer a large portion of his entitlement to the applicant’s children and wife. The European Court of Human Rights ruled that this decision violated the applicant’s right to property under article 1 of protocol 1 to the ECHR. It underlined that the decision to forfeit parts of his entitlements in favor of his wife had been foreseen by law as an inevitable consequence of the criminal conviction (para 39). It also considered important that the applicant was, at the age of 69 and without possibility of gainful employment, had been almost entirely deprived of his means of subsistence by this decision.

In Klein v Austria, the applicant had practiced as a lawyer for some 30 years. As provided by Austrian law, he had paid regular contributions to the pension fund for lawyers. Following bankruptcy proceedings and a conviction for embezzlement, he had been disbarred. When he reached the retirement age, he applied for a pension. The relevant authorities (and courts) declined his request on the grounds that the law provided that only members of the bar who reached the retirement age were entitled to a pension. Since the applicant was not a member of the bar anymore, he did not fulfill this condition. The ECtHR found a violation of the right to property under article 1 of Protocol 1 to the ECHR. It stated that an expectation to receive a pension which was based on compulsory contributions to a pension scheme and the compulsory membership in the bar constituted a possession within the meaning of article 1 of protocol 1 to the Convention. The Court held that the forfeiture of the applicant’s pension rights had failed to strike a fair balance between the interests of the general public and the interest of the individual. The deprivation of pension rights had – in contrast to the cases Azinas v Cyprus and Banfield v UK – not had a punitive element. While the possibility that a lawyer might be disbarred and lose his pension rights could be inferred from Austrian law, this possibility had to seem rather remote to contributing lawyers. They could not be expected to make arrangements for this scenario. In the view of the Court, stripping him off his pension entitlements therefore imposed a disproportionate burden on the applicant.

In Lakicevik and others v Serbia and Montenegro, the applicants were lawyers who had retired. They received decisions by the Pensions and Disability Insurance Fund, which specified the amount of their entitlement. The decisions also stated that the applicants were entitled to continue working as lawyers on a part time basis. In 2004, a new law entered into force which provided that pension payments were to be suspended in case the retired person continued to work. On the basis of this new provision, the payments to the applicants were stalled and the pension fund requested a refund of benefits already paid. The European Court of Human Rights reiterated that states enjoyed a wide margin of appreciation regarding social benefits. Yet it pointed out that changes to social benefits must not impose a heavy and disproportionate burden on citizens. The Court stated that the applicants had acted in accordance with the decisions by the Pension Fund when resuming their work. It also pointed to the fact that pensions had accounted for a considerable portion of the applicants’ monthly income. Therefore, the state had imposed a disproportionate burden on the applicants by stalling their payments entirely and without any transitional period. Consequently the ECtHR found the respondent state in violation of the right to property pursuant to article 1 of protocol 1 to the ECHR.

 

3) Deposits in bank accounts

Monies deposited in bank accounts fall within the ambit of possessions as protected by article 1 of Protocol 1 ECHR. The obligation of the state to protect property rights does not, however, entail an obligation to ensure the purchasing power of the funds deposited in an account (Rudzinska v Poland; Gayduk v Ukraine). The European Court of Human Rights has on several occasions rejected applications by individuals contending that the loss in value their deposited had experienced infringed upon their right to property.

In Flores Cardoso v Portugal, the applicants were two Portuguese citizens who had been born in Mozambique and lived there until 1976. Following the outbreak of the civil war in Mozambique, they had been forced to leave the country. Before their departure they deposited 950000 Mozambiquen escudos in the consulate of Portugal in Maputo, the capital of Mozambique.  In 1994, the Portuguese government announced that it was going to reimburse persons who had deposited monies in Portuguese consulates during the civil war in Mozambique.   The applicants received 950.000 Portuguese escudos.  They demanded, however, a higher compensation, contending that the sum should be calculated taking into consideration the inflation and the decreased purchasing power which had occurred in the meantime. This claim was rejected by Portuguese courts.  The European  Court of Human Rights rule that this did not infringe on the applicants’ right to property. It reiterated that the state was not under an obligation to protect its citizens against the effects of inflation. This was, according to the Court, all the more the case with respect to sums which had not even been deposited with a financial institution.

In Appolonov v Russia, the applicant complained that savings he had deposited in an account with a Russian bank had deprecated in value significantly following economic reform. At the material time, the Russian government had adopted legislation which in principle foresaw compensation for losses in value of savings account; however, necessary sub-legislation to implement this act had not been passed yet. The European Court of Human Rights declared the application inadmissible. It reiterated that states are not under an obligation to compensate their citizens for inflation. While the Russian government had nevertheless undertaken to do so, the relevant laws had not entered into force yet when the applicant had litigated his case before domestic courts.

In Rudzinska v Poland, the applicant’s father had opened a special housing savings account in her name and performed regular payments in this account for about three years.  This type of account had been established by order by the President of the National Bank of Poland in order to safeguard citizens against the effects of inflation. The regulation governing these housing saving accounts foresaw inter alia that holders of such accounts were to be compensated for the loss in purchasing power in years in which the prices of houses and apartments increased at a higher rate than the interest rate. This guarantee applied was capped at the price for 70 square meters of a house.  Additional rules provided that only persons who actually had purchased a house or apartment were entitled to the compensation. 

The applicant requested information about the balance in her account.  When she learned that this sum was the equivalent of the price of 4 square meters of living space, she asked to be awarded compensation since it was her understanding that the balance should be sufficient to buy 70 square meters of living space. The European Court of Human Rights rejected the application as manifestly ill-founded. It pointed out that the applicant had not bought a house or apartment and thus did not fulfill all requirements for the compensation. The Court also pointed out that the applicant was still able to access the funds in her account and had thus not been deprived of property. Finally, the Court stated that, as far as the applicant had complained that her savings had lost their purchasing power due to inflation, that no general obligation of the state to maintain purchasing power can be derived from article 1 of Protocol 1 to the ECHR.

 

Restrictions on a person’s possibility to access monies deposited in a bank account constitute an interference with the right to property and therefore have to be lawful, serve a legitimate aim and strike a fair balance between the interests of the public and the interests of the individual affected. As regards the balance, temporary restrictions of access to an account or to make withdrawals are easier to justify than measures permanently barring the holder of the account from disposing of the funds.  

In Trajkovski v Macedonia, the applicant was a citizen of Macedonia, which had been part of Yugoslavia.  While Macedonia was still a part of Yugoslavia, the applicant had deposited US-dollars, Deutsche Mark and minor amounts of other currencies in a state owned bank.  In 1991, Yugoslav banks had been ordered not to permit any withdrawals of foreign currency for a certain period.  After Macedonia gained independence in 1991, the Macedonian government ordered that foreign currency accounts be frozen; withdrawals were only allowed for certain purposes such as buying business premises or purchase of property. In 2000, a law regarding foreign currency deposits was enacted. On the basis of this law, the applicant’s deposits in foreign currency were partly converted into Euros. For the remainder, he obtained Government bonds.

Considering that the legal regulation had enabled the applicant to access his accounts in certain circumstances and that the funds had not been removed from the account, the Court concluded that the freezing of the applicants account did not constitute a deprivation of property. It assessed the measure as control of use pursuant to article 1 sentence 2 of Protocol 1 to the ECHR. The Court held that the freezing of his account did not place a disproportionate burden on the applicant. It pointed out that the applicant had had the possibility to withdraw funds for certain purposes, that restrictions on withdrawing foreign currency had already been in place in Yugoslavia and that the applicant had accrued interest on his balance. In view of the difficult economic situation Macedonia had faced at the time, the freezing of foreign currency accounts had, according to the ECtHR, been reasonable.

In Zolotas v Greece, the Court scrutinized the statute of limitation on claims to funds deposited in an account. The applicant had opened an account in 1974. Starting from 1981, there was no activity on the account. When he inquired about the balance in the account some 22 year later, the bank informed him that all his claims with regard to the account were barred due to a statute of limitation established by the Greek civil code.  The applicant challenged bank’s refuting his claims before Greek courts, yet the stance taken by the bank was confirmed.

The European Court of Human Rights reiterated that interferences with the right to property must not impose an excessive burden on the affected person; it also pointed out that article 1 of Protocol 1 ECHR entails positive obligations for contracting states to ensure the effective enjoyment of the right to property. In view of the particular relationship of trust between a bank and the holder of a bank account, the ECtHR took the view that the bank should have notified the applicant beforehand that his claims were about to be barred by a statute of limitation. Since the state had failed to establish such an obligation, the Court found a violation of the right to property.

 

4) Expectations

Claims or expectancies/expectations, i.e. the prospects of a future gain, enjoy the protection of article 1 to protocol 1 ECHR if they are legitimate. Expectations are legitimate if they have a basis in national law (N.K.M v Hungary, para 35). In contrast, mere hopes or unfounded expectations without sufficient legal basis are not protected under article 1 of Protocol 1, nor are conditional claims which lapse, because the condition is not fulfilled or the hope of revival of property rights which could not be exercised for a long time (Hans Adam v Czech Republic). Expectations are usually legitimate if they accord with long-standing jurisdiction of national courts. If national courts have denied similar claims, they are usually not to be considered legitimate and to not constitute a possession.

By the same token, a right or entitlement to be freed from a debt may amount to a possession protected by article 1 of Protocol 1 ECHR, too. As is the case for other expectations, the right to be freed from the debt has to be well-established under domestic law. It also requires that the debt in question is well-established and that its amount is known (Optim et Industerre v Belgium).

On the other hand, even expectations which do not enjoy legal protection may be considered as possessions for purposes of article 1 of Protocol 1 ECHR if they are entertained n good faith (Oneryildiz v Turkey, para 123; Saghinadze v Georgia).

The European Court of Human Rights has dealt with the distinction between legitimate expectations and mere hopes or expectations without a sufficient legal basis in a number of rulings. In Kopecky v Slovakia, the applicant’s father had owned a number of gold coins. Since it was illegal to own such coins in communist times, the coins had been confiscated in 1959; the applicant’s father had been sentenced to a prison sentence. After the fall of the communist regime, legislation was introduced to rehabilitate victims of the communist regimes and to rectify judicial decisions which had affected them. The applicant, as his father’s heir, sought to recapture the coins which had been confiscated. He filed a law suit against the Ministry of Interior, for the legal framework governing the confiscations had provided that seized items be stored in the Ministry of Interior. His claim was dismissed on the grounds that the burden to prove that the Ministry had actually been in possession of the coins was on him and that he had not been able to proffer evidence to substantiate this.

The European Court of Human Rights held that this did not infringe upon the right to property. Since the confiscation had taken place before the European Convention on Human Rights had entered into force, the Court only scrutinized whether the judgment rejecting the applicant’s claim violated his rights under article 1 of Protocol 1 ECHR. It examined if the expectation that the coins would be returned amounted to possessions. The Court pointed out that member states have a wide margin of appreciation when determining if and to what extent they compensated citizens for losses they had suffered due to communist policies. It stated that expectations only enjoyed the protection of article 1 of Protocol 1 on the condition that they had a sufficient legal basis. The Court found that the domestic courts had established in due procedure that there was no such basis for the claim of the applicant. Consequently, there had been no legitimate expectation that the claim be satisfied.

The reasoning in Hans Adam II von Liechtenstein v Germany was similar. The applicant’s father had been the owner of a valuable painting. It had been confiscated in Czechoslovakia in 1946 on the basis of the so called Benes decrees which made provision for the attachment of items belonging to Germans. In 1991, the Czech museum in which the painting had been place in the meantime, loaned it to a museum in Cologne, Germany. The applicant tried to obtain a court order to the effect that the painting be returned to him instead of the Czech museum. He claimed that the confiscation of his father’s painting had been unlawful and void. His requests were refused by the competent German courts. 

The European Court of Human Rights did not find a violation of the right to property under article 1 to Protocol 1. It clarified that it was confined to examining the refusal of the German courts to return the painting to the applicant and could not scrutinize the expropriation, because it had been performed before Protocol 1 to the ECHR, which enshrines the right to property had entered into force. The Court stated that the applicant had not been able to exercise any property rights with respect to the painting in question since its attachment in 1946. The Court was of the opinion that due to this the applicant had not had a legitimate expectation to retain the property rights or ownership of the painting. Therefore, it held that the right to property had not been infringed upon.

An example of a case in which the European Court of Human Rights elaborated on the question, in which circumstances the expectation to be liberated from a dept may constitute a possession is Optimterre v Belgium. The applicant was a Belgium company which had been asked by the revenue office to pay a certain amount of taxes. They challenged the amount. While the dispute over the payable amount continued, a Belgium court handed down a judgment interpreting the relevant laws in a fashion that revenue offices had no possibility to interrupt the statute of limitation. The applicant therefore assumed that the taxes it had to pay would fall within a statute of limitation. However, the Belgium legislator modified relevant laws to the effect that the statute of limitation could be interrupted. The applicant complained that this infringed upon its right to property. It stated that the legitimate expectation to be liberated from the obligation to pay the taxes in question amounted to a possession protected by article 1 of Protocol 1 ECHR.

The European Court of Human Rights rejected this point of view. It stated that the expectation to be freed from a debt could be considered a possession if it was legitimate and if the debt in question was clear and well-defined. While the Court conceded that the expectation that to be liberated rom the tax obligation had been based on domestic law and therefore been legitimate, it stated that the debt had not been clearly defined, because tax payers could challenge the calculation of the tax by revenue offices. On the basis of these considerations, the Court concluded that there had been no possession as protected by article 1 of Protocol 1 ECHR.

 

As pointed out above, even expectations for which there is no legal basis may constitute assets enjoying the protection of article 1 to Protocol 1 ECHR.  This is subject to the condition that the person who claims the right acted in good faith or had reason to believe that his legal position would be maintained. For example, in Oneryildiz v Turkey (Grand Chamber), the applicant had built a house in a slum area of Istanbul; the building was adjacent to a rubbish tip. He had not obtained a permission to construct a building and did not own the land on which he built the house. Following complaints by residents of the area who expressed concern over health risks, a team of experts was commissioned to draw up a report on possible perils in relation to the rubbish tip. They stated that there was a danger of methane gas causing explosions. Yet, not action was taken by the authorities. Two years later, an explosion occurred which engulfed the house of the applicant as well as other dwellings and killed 39 persons. The applicant complained under article 1 of Protocol 1 to the ECHR that the failure of the authorities to take measures to avert an explosion and the resulting destruction of his house constituted a violation of his right to property.

When scrutinizing whether a possession had been interfered with, the ECtHR distinguished between the land the house had been built on and the house as such. The Court stated that the applicant had not had a title to the plot on which he had constructed the house nor had he taken any steps to acquire ownership. Therefore he had not even had a reasonable expectation to obtain the land, so that the plot did not constitute a possession.  Yet the Court took a different view with respect to the house the applicant had built. It pointed out that the authorities had been aware of the applicant’s illegal dwelling, but not taken any steps to remove him for year. Also, the applicant had been provided with public services and charged for them. These circumstances gave him, according to the Court, reason to believe that he could continue living in this house uninhibitedly. The Court held that this expectation constituted a possession as protected by article 1 of Protocol 1 ECHR and found a violation of the right to property.

 

 

 

In Saghinadze v Georgia, the applicants were internally displaced persons who had fled from Abkhazia to Georgia to escape from the armed conflict taking place on this site. One of the applicants was appointed to a high post in the Georgian Ministry of Internal Affairs; a house, which was property of the Ministry was assigned to him and his family as place of residence. About ten years after his appointment the applicant had a fall-out with the newly appointed Minister of Internal Affairs. He and his family were evicted from the house. The applicants filed a law suit seeking to obtain possession of the house again, but their claim was rejected on the grounds that due procedure had not been observed when the house had been assigned to the applicant.

The Court ruled that the eviction of the applicants was in breach of article 1 of Protocol 1 to the ECHR. It pointed out that the applicant had maintained possession of the house in good faith and that the authorities had tolerated his treating the dwelling as his own for almost ten years (para 110 ff of the judgment). The ECtHR also stated that the applicants could not be blamed for the procedural mistakes undertaken when they were placed in the house. For these reasons, the Court concluded that the possession of the house constituted a possession as protected by the right to property.

A crucial consideration of the judgments in Oneryildiz v Turkey and Saghanidze v Georgia is that the applicant was led to believe that he would be able to continue living in the house. This (well-founded) expectation was considered a possession which enjoyed the protection of article 1 of Protocol 1. By way of contrast, article 1 of Protocol 1 does not apply if the expectation that an unlawful or legally not protected status-quo will be upheld is unreasonable. In Depalle v France (Grand Chamber), the applicants had purchased a house which stood on a dyke. The dyke was on maritime land, which was by law public property. The applicants had been granted a special permission to use this public property when they had purchased the house; the permission had been renewed regularly. When a new law protecting coastal areas entered into force, the authorities refused to issue a  permission under the same conditions as before. They challenged this decision before French courts, but it was ultimately confirmed. The European Court of Human Rights did not find this to be in violation the right to property. It stated that the applicants could not have been unaware that a title to use maritime land in public property could be revoked and conferred only precarious rights. Therefore, the expectation that this title would be renewed did not constitute a possession protected by article 1 of Protocol 1 ECHR

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