KARADŽA AND VASKOV v. NORTH MACEDONIA

 
 
 
 
FIRST SECTION
DECISION
Application no. 79037/12
Zoran KARADŽA and Zlatko VASKOV
against North Macedonia
 
The European Court of Human Rights (First Section), sitting on 23 April 2019 as a Committee composed of:
Aleš Pejchal, President,
Tim Eicke,
Gilberto Felici, judges,
and Renata Degener, Deputy Section Registrar,
Having regard to the above application lodged on 3 December 2012,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,
Having deliberated, decides as follows:
THE FACTS
1.  The applicants, Mr Zoran Karadža and Mr Zlatko Vaskov, are two Macedonians/citizens of the Republic of North Macedonia, who were born in 1963 and 1950 respectively and live in Skopje. They were represented before the Court by Mr D. Godžo and Mr A. Godžo, lawyers practising in Ohrid.
2.  The Government of North Macedonia (“the Government”) were represented by their former Agent, Mr K. Bogdanov, later succeeded by Ms D. Djonova.
A.  The circumstances of the case
3.  The facts of the case, as submitted by the parties, may be summarised as follows.
1.  Background information
4.  In 1948 a hotel located in the central area of Skopje was confiscated from the applicants’ predecessors. The hotel was transferred to a socially owned company (“the company”).
5.  In 1995 the company’s assets (including the hotel) were subject, on the basis of several decisions, to privatisation, as provided for under the relevant legislation for the transformation of socially owned companies (Закон за трансформација на претпријатијата со општествен капитал, Official Gazette no. 38/1993, with further amendments). The sale and purchase contract of 1995, concluded between the relevant State Agency and the buyer of the company, included an expert valuation report, which indicated the hotel’s value as being 1,323,000 German marks (DEM).
2.  Civil proceedings
6.  On 24 April 1997 the applicants, represented by a lawyer, brought a civil action against the company and the State, seeking an annulment of the decisions concerning the privatisation of the company’s assets, in so far as they concerned the hotel. They also requested that the court retain (резервира) the hotel for restitution and temporarily transfer it into the State’s possession. The applicants did not specify the value of the dispute in their statement of claim.
7.  On 11 December 2001 the Skopje Court of First Instance (Основен Суд Скопје – “the first-instance court”), sitting as a three-judge panel, ruled in favour of the applicants. The judgment specified that the value of the dispute was undetermined.
8.  In reply to an appeal by the defendants, the applicants specified the value of the dispute as 1,875,000 denars (MKD).
9.  On 13 February 2003 the Skopje Court of Appeal (Апелационен суд Скопје – “the Court of Appeal”) granted the defendants’ appeal and remitted the case for reconsideration. The decision indicated that the value of the dispute remained undetermined.
10.  Between 2004 and 2008 the first-instance court ruled in favour of the applicants on two occasions (each time sitting as a three-judge panel), delivering judgments that were subsequently set aside by the Court of Appeal. In all those judgments the value of the dispute remained undetermined. In submissions in reply to both appeals lodged by the defendants, the applicants specified the value of the dispute as MKD 1,875,000.
11.  On 5 February 2009 the first-instance court, sitting as a three-judge panel, again ruled in favour of the applicants. The value of the dispute remained undetermined in the judgment. When establishing the relevant facts, the first-instance court took note of the valuation report in respect of the hotel (see paragraph 5 above). It ruled that the hotel should have been retained and transferred to the competent State Agency for the purpose of restitution.
12.  The defendants appealed against that judgment and the applicants submitted comments in reply.
13.  By a judgment of 4 November 2009, the Court of Appeal overturned the first-instance judgment and dismissed the applicants’ claim. The value of the dispute remained undetermined in this judgment. The Court of Appeal held that the first-instance court had erred in its application of the relevant domestic law and held that the applicants’ property rights were to be determined in restitution proceedings. The applicants’ representative received a copy of that judgment on 10 December 2009.
14.  The applicants, through their representative, lodged an appeal on points of law in which the value of the dispute was indicated as “undetermined”.
15.  On 12 April 2012 the Supreme Court rejected the applicants’ appeal on points of law for being inadmissible ratione valoris. It held that the applicants had neither specified the value of the dispute in their claim, nor before the beginning of the main hearing. The Supreme Court relied on section 33(2) of the Civil Procedure Act 2005 (see paragraph 19 below) and held that the applicants had specified the value of the dispute only in their written reply to the defendants’ appeal, which had not been the appropriate stage of the proceedings.
3.  Other relevant information
16.  On 9 November 2001 the applicants, with other successors to the ownership of the hotel, claimed restitution in respect of the hotel and the land underneath it. By a decision of 24 November 2006 the restitution proceedings were stayed pending the outcome of the civil proceedings (see paragraphs 6-15 above).
17.  Subsequent to the determination of the civil proceedings, the restitution proceedings resumed and the applicants and the other successors were awarded compensation, to be paid in State bonds and company shares. The proceedings are pending on appeal before the Higher Administrative Court.
B.  Relevant domestic law
1.  Civil Procedure Act
18.  The Civil Procedure Act 2005 (Official Gazette no.79/2005 – “the 2005 Act”) entered into force on 29 September 2005, thereby repealing the Civil Procedure Act 1998 (Official Gazette no.33/1998), which had entered into force on 19 July 1998. The 2005 Act was applicable as of 29 December 2005.
19.  Section 33(2) of the 2005 Act provided that when an action did not concern a sum of money, the relevant value of the dispute was determined as that indicated by the claimant in the statement of claim (во тужбата). Section 33(3) provided that if the value of the dispute specified by the claimant was obviously set too high or too low, and as such could have an effect on the composition of the court or the availability of an appeal on points of law, then the court of first instance had to assess the accuracy of the specified value itself. That was to be done speedily and in an appropriate manner at the preliminary hearing (подготвително рочиште) at the latest, or, if a preliminary hearing was not held, at the main oral hearing (главна расправа) before the examination of the merits of the case. The text of this section was essentially the same as the relevant provisions contained within the Civil Procedure Act 1977 (section 40) and the Civil Procedure Act 1998 (section 34).
20.  Under section 35, disputes at first instance were to be decided by either a three-judge panel or a single judge. Section 36(1) provided that a single judge was to decide cases where the value of the dispute did not exceed MKD 600,000. Following amendments to the 2005 Act, which entered into force on 10 September 2008 (Official Gazette no. 110/2008), that threshold was increased to MKD 1,800,000.
21.  Under section 176(2), where the subject matter of the dispute was not pecuniary in nature, the claimant had an obligation to specify the value of the dispute, as the composition of the court and the right to lodge an appeal on points of law depended on the value of the dispute. The text of this section was essentially the same as the relevant provisions of the Civil Procedure Act 1977 (section 186) and the Civil Procedure Act 1998 (section 171).
22.  Under section 372(2), parties could lodge an appeal on points of law if the value of the dispute exceeded MKD 500,000.
2.  Amendments to the Civil Procedure Act in 2010 (“the 2010 amendments”)
23.  Section 87 of the Amendments Act, which became applicable as of 9 September 2011 (Official Gazette no. 116/2010), provides that an appeal on points of law is admissible if the value of the dispute exceeds MKD 1,000,000.
24.  Section 87 also provides that an appeal on points of law is always admissible in cases in which the second-instance court has overturned the first-instance judgment.
25.  Under the transitional provisions (section 99), proceedings pending at the time that the Amendments Act became applicable would be conducted in accordance with the previous legislation. Proceedings that had not begun before a first-instance court prior to 9 September 2011 were to continue in accordance with the Civil Procedure Act 2005 as amended by the Amendments Act.
3.  Court Fees Act
26.  Under section 25 of the Court Fees Act (Закон за судските такси, Official Gazette No. 114/2009), if the court determines, on the basis of previously conducted checks, that the party has set the value of the claim either too high or too low, it sets the value of the dispute, by the preliminary hearing at the latest, for the purpose of calculating the court fees. The court acts in the same manner if the opposing party objects that the indicated value of the dispute is inaccurate. An appeal against this decision is allowed only if the party has no right to appeal against the decision on the merits.
COMPLAINTS
27.  The applicants complained under Articles 6 and 13 of the Convention about the rejection of their appeal on points of law. They also relied on Article 1 of Protocol No. 1 to the Convention.
THE LAW
28.  The applicants complained that they had been deprived of access to the Supreme Court, contrary to the requirements of Article 6 § 1 and Article 13 of the Convention. The Court, being the master of the characterisation to be given in law to the facts of the case (see Radomilja and Others v. Croatia [GC], no. 37685/10, § 124, 20 March 2018), considers that this complaint, which essentially concerns the right of access to a court, falls to be examined under Article 6 § 1 of the Convention. The applicants further complained of a violation of their property rights under Article 1 of Protocol No. 1 to the Convention. These Articles, in so far as relevant, read as follows:
Article 6
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal ...”
Article 1 of Protocol No. 1
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
A.  Access to a court
1.  The parties’ submissions
(a)  The Government
29.  The Government argued that the applicants had failed to exhaust the available domestic remedies. Under domestic law, it was required of the applicants to specify the value of a claim at the appropriate stage of the proceedings. The applicants, who had been represented by a lawyer, had failed to do so and as a result the value of the claim had remained undetermined, as had been clearly indicated in each decision of the domestic courts. They should have been aware that specifying the value of the claim in their reply to their opponents’ appeals had not been appropriate. Moreover, in their appeal on points of law the applicants had still not specified the value of the claim. The domestic courts were required only to verify the accuracy of the indicated value, and not to establish it in the event that a claimant failed to give any indication thereof at the appropriate procedural stage. The Government also argued that the applicants’ claim had not been proprietary in nature. Consequently, the expert report on the hotel’s value should not have been regarded as an indication of the value of the dispute and the dispute could not have been decided by a single judge. Lastly, they contended that the 2010 amendments to the Civil Procedure Act 2005 were not applicable to the case at hand.
(b)  The applicants
30.  The applicants submitted that their claim had been proprietary in nature. The value of the hotel (see paragraph 5 above) had been well above any statutory threshold for an appeal on points of law, as specified under the applicable legislation. The domestic courts had failed to exercise their supervisory power regarding the determination of the value of the dispute and therefore the applicants had had no decision on this point to challenge. In this connection they relied on the Court Fees Act as lex specialis (see paragraph 26 above) and on legal commentaries, arguing that parties should not have to bear the adverse consequences of mistakes that were made by the relevant courts. Moreover, neither the domestic courts nor the defendants had objected to the applicants having only specified the claim’s value in their reply to the defendants’ appeals. Their claim had been examined by a three-judge panel, which was usually reserved for disputes of higher value. This was an indication that the first-instance court had implicitly determined the value of the claim to be at a threshold which would have exceeded the ratione valoris requirement (see paragraphs 20 and 22 above). They further argued that when their claim had been submitted in 1997, the Civil Procedure Act 1977 had been applicable, which had provided for a low statutory threshold, giving them an inherent right to lodge an appeal on points of law. Lastly, the applicants contended that their appeal on points of law had been admissible irrespective of the value of the dispute (see paragraph 24 above).
2.  The Court’s assessment
(a)  General principles
31.  The general principles relevant to the present case have been summarised in Zubac v. Croatia ([GC], no. 40160/12, §§ 76-99, 5 April 2018).
(b)  Application of these principles to the present case
32.  The Court considers that the Supreme Court’s decision to reject the applicants’ appeal on points of law as inadmissible ratione valoris amounted to an interference with the applicants’ right of access to a court.
33.  It remains to be ascertained whether, in the light of all the relevant circumstances of the case, there was a reasonable relationship of proportionality between the legitimate aim pursued (see Bulfracht Ltd v. Croatia, no. 53261/08, § 34, 21 June 2011, and Jovanović v. Serbia, no. 32299/08, § 48, 2 October 2012 ) and the means employed to attain it.
34.  With regard to the foreseeability of the procedure to be followed, the Court notes that several laws regulating civil procedure have applied and been modified in the course of the proceedings (namely the Civil Procedure Acts 1977, 1998 and 2005). However, all those laws specified essentially the same requirements concerning the manner in which the value of the dispute was to be indicated (see paragraphs 19 and 21 above). Thus, under domestic law, it was required of the claimant to indicate the value of the dispute in the statement of claim. If the value of the claim had been set at an unrealistic level, the first-instance court was able to check the accuracy thereof at the latest at the preliminary hearing, or, if one was not held, at the main oral hearing before the examination of the merits of the case. It has not been argued that the Supreme Court applied those procedural requirements in an inconsistent manner. Therefore the Court concludes that the procedure to be followed for an appeal on points of law was regulated in a coherent and consistent manner.
35.  Furthermore, the Court notes that the applicants were represented throughout the proceedings by a lawyer, who should have been aware of those procedural requirements and any implications that they might have for the right to lodge an appeal on points of law. The value of the hotel which was the subject of the applicants’ civil action had already been assessed in 1995 (see paragraph 5 above). There is nothing to indicate that the applicants were unfamiliar with this report when they brought their civil action in 1997 or that they could not have relied on it to specify the value of their claim at the level they found appropriate.
36.  As regards the applicants’ arguments that the relevant domestic law necessitated action by the domestic courts of their own motion in order to determine the value of the dispute, the Court finds that such an obligation does not arise from the relevant provisions of domestic law in cases where a claimant has failed to give an indication of the value of the dispute in his or her claim. In these circumstances, the Court does not find that any alleged omission in this respect can be solely and clearly attributed to the domestic courts as a procedural error (compare and contrast Egić v. Croatia, no. 32806/09, §§ 54-58, 5 June 2014). Even assuming that was the case, such an error should not be seen as a justification for the applicants’ error in failing to specify the value of the dispute (see Zubac, cited above, § 119). The applicants failed to use the necessary diligence when seeking to determine the value of the dispute in a manner not consistent with the requirements of domestic law. The procedural errors could have been avoided from the outset, and given that they are mainly and objectively imputable to the applicants, the adverse consequences of those errors rest on them (ibid., § 121).
37.  It is true that the first-instance court adjudicated the applicants’ case sitting in a three-judge panel, a formation which under the domestic law was reserved for disputes of higher value (see paragraph 20 above). The Court does not find that this fact alone sufficed, in the circumstances of the case, for the applicants to have a reasonable expectation that their appeal on points of law would be admissible under the ratione valoris requirements.
38.  The Court also rejects the applicants’ arguments that their appeal on points of law was to be regarded admissible in view of the 2010 amendments to the 2005 Act, given the fact that the Court of Appeal overturned the first-instance judgment (see paragraphs 13 and 24 above). No examples of domestic practice have been presented to the contrary.
39.  Lastly, considering that the applicants’ case was heard by two instances of national courts exercising full jurisdiction on the matter and that no discernible issue of lack of fairness arose in the case, it cannot be said that the Supreme Court’s decision amounted to a disproportionate hindrance impairing the very essence of the applicants’ right guaranteed under Article 6 § 1 of the Convention (see Zubac, cited above, § 125).
40.  It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
B.  Article 1 of Protocol No. 1
41.  On the basis of the same facts, the applicants also complained of a violation of their property rights under Article 1 of Protocol No. 1 to the Convention.
42.  The Court notes that the applicants’ complaint under Article 1 of Protocol No. 1 concerns the civil proceedings which ended with a final decision on the merits by the Court of Appeal on 4 November 2009, a copy of which was served on the applicants’ representative on 10 December 2009 (see paragraph 13 above). The applicants subsequently lodged an appeal on points of law that was rejected as inadmissible by the Supreme Court on 12 April 2012 (see paragraph 15 above). Having regard to its findings above, the Court considers that the time that elapsed for the proceedings before the Supreme Court should not be taken into consideration for the calculation of the six-month time-limit, as the appeal on points of law was not a remedy that had to be used for the purposes of Article 35 § 1 of the Convention in the circumstances of the case (see Kocarova v. the former Yugoslav Republic of Macedonia (dec.), no. 37018/03, 13 November 2006, and Rezgui v. France (dec.), no. 49859/99, ECHR 2000‑XI). As the application was lodged with the Court on 3 December 2012, it finds that the applicants failed to comply with the six-month rule under Article 35 of the Convention.
43.  It follows that this complaint has been lodged out of time and must be rejected pursuant to Article 35 §§ 1 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 16 May 2019.
Renata DegenerAleš Pejchal
Deputy RegistrarPresident

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