Decided on 1 July 2014
Relevant Articles: Article 1 of Protocol No. 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms
In 1994 the applicants’ father entered into a loan agreement with H.M.C., offering a mortgage on his immovable property, a building and the appurtenant land located in Osorhei as a guarantee. As the applicants’ father did not reimburse the loan on the appointed day, his immovable property was sold at auction to a family, T.T.T. and T.T.S., on 31 May 1996. On 1 July 1996 the applicants’ father challenged the forced sale, seeking the annulment of the order for the sale of his immovable property. The proceedings were registered with the land registry on 5 January 1998. Subsequently, on 30 December 1998 despite the pending proceedings regarding the annulment of the sale at auction, the buyers (T.T.T. and T.T.S.) sold the immovable property to another individual, S.R. On 26 April 2000 the Oradea Court of Appeal allowed the applicants’ father’s action and consequently annulled the forced sale of the immovable property on the ground that the loan had been reimbursed and the price was considerably lower than the real value of the property. However, he could not obtain possession of the immovable property as meanwhile it had been sold to S.R.
Invoking the principle quod nullum est, nullum producit effectum, he lodged an action with the Oradea District Court seeking the annulment of the two sale agreements: the agreement by which T.T.T. and T.T.S. had acquired the immovable property at auction and the subsequent agreement concluded between T.T.T. and T.T.S and S.R. The applicants complained that in spite of the annulment of the sale of their immovable property at auction they were not able to obtain the annulment of its subsequent sale to a third party owing to an arbitrary decision rendered by the Oradea Court of Appeal on 8 April 2004.
The applicants alleged that the sale of their immovable property to a third party who had acted in bad faith: Despite the fact that they had been aware of the proceedings by which the applicants’ father had contested the lawfulness of the sale of his property at public auction, they had sold the estate in order to make its return to its initial owners impossible in case of a favourable decision.
According to Article 1 of Protocol No. 1 to the Convention, “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.”
The Court decided on 26 April 2000, to allow the applicants’ father’s action and consequently annulled the forced sale of the immovable property at auction on the ground that the loan had been reimbursed and the price was considerably lower than the real value of the property. On the basis of the retroactive effect of the annulment, the applicants became the owners of the immovable property. They were entitled to the return of their property as a direct consequence of the annulment of the subsequent sale or to the value of their property. The Court hold that there had been a violation of Article 1 of Protocol No. 1 to the Convention and that the respondent State is to pay the applicants in respect of pecuniary damage and in respect of non-pecuniary damage.
Read the case 32185/04
