Property Rights [ECHR]

Protection of  Possessions

The European Court of  Human Rights has held on numerous occasions that the Article has three elements.

• Everyone is entitled to the peaceful enjoyment of his possessions.
• Deprivation of possession is subject to certain conditions.
• Contracting parties are entitled to control the use of property where it is in the general interest.

In Marckx, the court stated that the guarantee applied only to a person’s existing possessions and gave no guarantee of a right to acquire possessions. It does cover a right of disposal of property.

Extent of Obligation

There is a positive obligation to protect property. There is a greater margin of appreciation in respect of destruction and damage to property. The court has observed that the obligations of a state in respect of economic rights may be less than those in respect of land and physical possession.

In Catov v. Russia, the applicant lost money when a bank went insolvent. There may be an obligation on the state of a preventative or remedial nature. There was no actual breach in the circumstances. The case related to the liquidator acting unlawfully. The applicant could have taken legal proceedings against him

The Oneryildiz case related to the loss and destruction of property due to unsafe conditions at a refuse tip. The Budayeva case relates to a natural disaster arising from a mudslide, causing loss of life and destruction of property.  In these cases, the court held that states had failed to comply with their obligations in respect of life but not in respect to damage to property.

Possessions Protected

Possessions are protected by the Convention. They are broadly defined to cover real property and physical goods as well as intangible rights and interests. They include shares, patents, internet domain name, intellectual properties, goodwill, telecommunication licences, other licences, many regulatory-type licenses allowing a business to be run, fishing rights and planning permission.

A driving license is not a possession. Wages are possessions.  It was decided that tips paid to waiters were not the possessions of other waiters. Possessions include certain types of legal claims and expectations. A judgement debt is a possession.

In the Oneryildiz case,  unlawfully unoccupied house near a tip was capable of being a possession, where the authorities knew the person lived in the house and did not take any steps to terminate the possession.

Possessions may include positions which arise by reason of a reasonable expectation, such as where a person is given a house with a job while working within a state job. However, the expectation is subject to criteria of reasonableness.

Claim to Monies

A judgement or arbitration award that was sufficiently established as to be an enforceable debt is a possession even though it might be revoked if the  judgement is annulled or overturned; Stran Greek Refineries.

In National & Provincial Building Society and others v. United Kingdom, a claim for a refund of tax paid under invalid legislation was negated by retrospective legislation. The claim to restitution against the government was assumed to be a possession as a vested right to restitution. There must be more than a mere hope of a claim. It must be a legitimate expectation.

The Court has held that in Pressos Compania Naviera that a claim in damages is a possession even though it has not yet been reduced to an award of damages. It  is clear, however, that a mere expectation of a claim is insufficient.

Tenancies & Leases

Rights under leases and licenses are possessions. In Mallacher v. Austria, reductions of contractual rents under rent control legislation potentially constituted an interference with the enjoyment of the rights of the landlord\’s rights as owners.

In Stretch v. United Kingdom, a local authority granted an option to renew a lease which was invalidated because of limitations in its powers. This was held to be a possession which could be protected, and the applicant had a legitimate expectation of exercising the right to renew as an incident of the property rights which he held under his lease. In Gasus v. Netherlands, possessions included a security interest or retained title in the case of the sale of goods.

In a case involving a soldier who had allocated housing for members of the military who lost possession after a change in the system, it was held that he did not have an agreement under a private law which was a possession under the Convention.

Welfare Benefits

Entitlements under social security and pension schemes may be possessions where they are based on contributions. However, they may be possessions, even where there is no requirement to pay taxes or contributions.

In Stec v. United Kingdom, the Grand Chamber included as a possession the right to assert a right to a welfare benefit. Article 1 of the Protocol applied. The applicant must satisfy the conditions for the particular benefit. Benefit schemes may be operated but must be compatible with the non-discrimination requirement in Article 15.

A right to a social tenancy may be a possession.

Legitimate Expectation

A legitimate expectation of obtaining an asset may also enjoy protection. Thus where a proprietary interest is in the nature of a claim, the person in whom it is vested may be regarded as having a legitimate expectation if there is a sufficient basis for the interest in national law, such as, for example, where there is settled case law of the domestic courts confirming its existence.

However, no legitimate expectation can be said to arise where there is a dispute as to the correct interpretation and application of domestic law and the applicant’s submissions are subsequently rejected by the national court.

In Pine Valley Developments v. Ireland, the invalidation of planning permission was held not to violate the Articles, as there was an element of commercial risk and State’s actions were proportionate in the circumstances, the area being zoned for agriculture/green belt.

Deprivation of Possession

Deprivation may be the extinction of the possession or claim. It need not be a technical or formal expropriation or dissolution.The destruction of property constitutes deprivation. This may occur with the physical destruction of buildings and properties by or through the agency of the State.

In Holy Monasteries, Greek State Law provided that monastery land would vest in the State unless the title was proved in a number of ways. In some cases, they were difficult in practice to meet. The  Court considered that the deprivation was substantive rather than procedural.

In a number of cases concerning Italy taking possession of land with a view to its expropriation and commencement of building works without formal procedures being taken, was a deprivation of property.

In Sporrong and Lonnroth,   zoning permits had placed a long-term planning blight on the property and reduced its selling price below market value. However, the Court held that there was no deprivation of property.

Nature of Deprivation

In a case involving Greece Capamachalapolos, the failure of the government to make amends  after restoration of democracy, where the military had taken over land, constituted a violation of the rights to peaceful enjoyment.

Deprivation may be permissible if it is in accordance with the conditions provided by national law, complies with general principles of international law, and the deprivation is in the public interest. The law must be precise and foreseeable in its application. There must be procedural safeguards.

The manner of application of national law may place an excessive burden on the applicant. In Allard, property was jointly owned by members of a family. Where a house was built without the permission of co-owners, it was required to be demolished.

The court held that deprivation could be in the public interest, even if public authorities did not benefit. A functioning system of ownership was itself a sufficient public interest.

Deprivation v Limitation

The line between deprivation and interference/limitation can be a question of degree. There may be effectively expropriation, where a state enters and takes possession of land.

In Hentrich, French law allowed revenue to purchase property sold, at below-market value. This was held to be expropriation.

In Handyside v UK, a temporary seizure was not a deprivation. Provisional prosecutions in criminal matters, provisional transfers as part of land consolidation and seizures by the customs, revenue and police authorities are deprivations for this purpose. They will,  of course,  be permissible subject to compliance with the Convention’s requirements.

Compensation

The Convention requires that persons are protected against arbitrary expropriation and are entitled to compensation for lawful expropriation. In most cases, the court has given a broad measure of appreciation to states in relation to framing legitimate goals. The public interest test is that which is most commonly invoked.

The legislation or action must be proportionate with reference to that goal. A fair balance must be struck between the interests of the community and the individual’s property rights.  Compensation plays a critical role in determining whether the state action is proportionate and justifiable.

Excessive delays in paying compensation for nationalised property may constitute an unlawful interference with the right of peaceful enjoyment of possessions.

Compensation Usually Required

Compensation must  be generally paid in order for the taking to constitute a fair balance between the individual interest and the general interest. Otherwise, it puts an excessive burden on the individual.  The total lack of compensation is justifiable only exceptionally.

Compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance and whether or not it is a disproportionate burden on the applicants. The taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference and a total lack of compensation would be considered justifiable only in exceptional circumstances.

In James v. United Kingdom in relation to leasehold enfranchisement, the court indicated that the margin of appreciation available to a legislature in implementing social and economic policy should be a wide one as to what is in the public interest unless that judgement is manifest without reasonable foundation. Although the Court cannot substitute its own assessment for that of the national authorities, it is bound to review the contested measure . . . and in so doing, to make an enquiry into the facts with reference to which the national authorities acted. The system of leasehold and franchisement was held compatible.

Extent of Compensation

Article 1 does not, however guarantee a right of full compensation in all circumstances since legitimate public interest may call for reimbursement of less than the full market value. In instance of one such objective is to protect protection of historical or cultural heritage.

Lithgow v. UK involved a major nationalisation program. The Convention was said not to necessarily require an individual calculation. Provided there was a fair balance, a wide margin of appreciation was allowed to the State in determining the calculation of compensation.

In a number of cases against Greece, the deemed presumption of benefit arising from the compulsory acquisition of land for the purchase of construction of a road thereby reducing compensation payable, was disproportionate as the owners were not entitled to argue that the works were of no or were of less value to them. A consideration of individual circumstances was required.

Long delays in payment of compensation, particularly at times of high inflation, may involve an excessive burden. In a series of cases involving Turkey, there was a deprivation; in a case where inflation was running at 70 percent and this was not taken into account in the ultimate payments made. Where a specific system is set up in national law for recovery or for compensation, a completed taking is not a continuing deprivation.

Where individual expropriation is involved, the state must establish the relevant factors on which compensation is payable on an individual basis. They must take into account the impact on the remaining land.