EHRM, 16-11-2010, nr. 24768/06

The applicants owned a piece of land measuring 128,619 m² in the region of Evora. By order of the Ministry of Public Works, published in the Official Gazette on 11 September 1995, the land was expropriated in favour of BRISA - Auto-Estradas de Portugal S.A. (‘BRISA’), a publicly owned company at the time, to build a motorway.

As no agreement was reached between the applicants and the authorities, the case was submitted, in accordance with the applicable legislation, to the President of the Evora Court of Appeal, who appointed an arbitration committee to value the land. The committee assessed its value at 177,987.17 euros (EUR)1..

On 3 March 1997 the Evora first-instance court issued an order notifying the applicants of the arbitration committee's decision.

On 21 March 1997 the applicants lodged an appeal against the arbitration decision with the Evora court. In their opinion the experts had underestimated the value of their farmland and omitted to place a value on a quarry located on the land. They argued that the potential profit from exploiting the quarry should be taken into account when calculating the amount to be paid in compensation for the expropriation. In their opinion they were entitled to EUR 20,864,292 in compensation.

BRISA also challenged the arbitration value, which they considered too high. They thought the value should not exceed EUR 72,643. Their appeal was initially rejected by the Evora court as being out of time, but it was later admitted after the Evora Court of Appeal had delivered a judgment on 11 December 1997 setting aside the initial decision.

On 7 April 1997 the Evora court registry calculated the total court fees due in the applicants' case to be EUR 158,381.

On 24 April 1998 the Evora court decided that no compensation should yet be paid to the applicants as the court fees might well be higher than the minimum sum that might be awarded to the applicants in compensation according to the appeals lodged by the parties, BRISA having requested that the sum be fixed at EUR 72,643. The court then appointed a new arbitration committee made up of three experts appointed by the court and two appointed by the parties (one each). On 11 March 1999, by a majority, the arbitrators set the compensation at EUR 191,116. The arbitrator appointed by the applicants expressed the view that they should be paid EUR 4,040,897.

By an order of 25 March 1999 the court, of its own motion, requested a new expert report, restricted this time to the question of the economic potential of the quarry located on the land. Three geologists from the University of Evora were accordingly appointed as experts. They submitted their report on 9 February 2000, concluding that the maximum amount the exploitation of the quarry could be expected to yield was EUR 9,704,113.

By a judgment of 30 June 2000 the court dismissed both parties' appeals. Considering that the potential gain from the quarry was not to be taken into account, it fixed the compensation for the expropriation at EUR 197,236.25.

On 14 July 2000 the applicants lodged an appeal against that judgment with the Evora Court of Appeal.

In a judgment of 10 July 2003 the Court of Appeal upheld the judgment in full.

On 11 November 2003 the applicants appealed to the Supreme Court but, in an order dated 30 September 2004, the judge rapporteur of the Supreme Court declared the appeal inadmissible.

On 26 October 2004 the applicants lodged a constitutional appeal, which the Constitutional Court declared inadmissible by a summary decision on 20 December 2004.

On 26 January 2005 the file was transmitted to the Evora court.

On 4 February 2005 the applicants received notice from the Evora court of the court fees owed for the expropriation proceedings. The sum they were expected to pay amounted to EUR 489,188.42.

On 22 February 2005 the applicants filed a complaint about the fees, alleging in particular that they violated the principles of fair compensation and the right of access to a court. They considered that the sum to be paid, if it was to be proportionate, should not exceed EUR 15,000. They also pointed out what they considered to be various inaccuracies and miscalculations in the court fees. They challenged the basis used before the Evora court to calculate the court tax (which they claimed should have been that stipulated in Article 18 § 2 of the Court Fees Code), as well as the legitimacy of being required to pay anything at all in respect of costs and expenses (custas de parte) to BRISA, which, as a State enterprise, was exempt from paying court fees.

On 1 April 2005, acting on information provided by the registry, the Evora court judge acknowledged the mistakes the applicants had pointed out and ordered their rectification. The amount owed was thus reduced to EUR 309,052.71 so, once the compensation awarded to the applicants had been deducted, they still owed the State EUR 111,816.46. The judge dismissed the applicants' complaint regarding the alleged violations of the principles of fair compensation and the right of access to a court.

The applicants appealed to the Evora Court of Appeal. In a judgment of 13 December 2005, of which they were notified on 19 December 2005, the court dismissed the appeal.

On 12 May 2006 the applicants lodged a constitutional appeal against that decision, alleging that the interpretation of the relevant provisions of the Court Fees Code, particularly Article 66 § 2, was contrary to the principles of fair compensation and the right of access to a court guaranteed in the Constitution. In their view, court fees should on no account exceed the sum awarded in compensation for an expropriation.

In a judgment of 28 March 2007 the Constitutional Court dismissed their appeal. After noting that it could only examine the constitutionality of Article 66 § 2 of the Court Fees Code, the only provision the courts below had applied, it went on to hold that the provision concerned was not contrary to Articles 20 (access to a court) and 62 § 2 (fair compensation) of the Constitution. Concerning access to a court, it pointed out that while excessively high court fees could in some circumstances be an obstacle to access to a court, this was not the case in this instance as the applicants had been required to pay only EUR 15,000, a sum it considered reasonable. On the subject of fair compensation, the Constitutional Court found that compensation for the loss suffered as a result of expropriation was quite unrelated to the matter of court fees, and that there was accordingly no reason why court fees should not exceed the sum awarded in compensation.

On 20 April 2007 the applicants filed a request to have that judgment rectified, claiming that the Constitutional Court had made a factual mistake, in so far as it had considered in its reasoning that the applicants owed EUR 15,000 in court fees when they were in fact expected to pay EUR 111,816.46.

In a judgment of 25 September 2007 the Constitutional Court acknowledged its mistake and the need to rectify the judgment in respect of Article 20 of the Constitution. It found that EUR 111,816.46 was a large enough sum to have affected the right of access to a court. It accordingly declared Article 66 § 2 of the Court Fees Code, as interpreted by the lower courts, contrary to Article 20 of the Constitution. In respect of Article 62 § 2 of the Constitution concerning fair compensation, however, it held that its earlier decision needed no rectification.

On 6 November 2007 the applicants, wishing to know the exact sum they owed in court fees, filed a request for clarification of the judgment of 25 September 2007.

In a judgment of 13 November 2007 the Constitutional Court rejected that request, considering that it was for the lower court to determine the sum to be paid.

In an order of 4 January 2008, the Evora court, to which the case had been referred back, decided, without giving reasons, that the fees should not exceed the compensation awarded by more than EUR 15,000.

On 20 February 2008 the applicants paid the outstanding sum of EUR 15,000.

On 7 April 2005 the applicants lodged an application (no. 12849/05) with the Court complaining about the lack of compensation in respect of the quarry. The application was rejected by a committee on 30 August 2005, as being out of time.

Article 20 of the Constitution guarantees the right of access to a court. Article 62 of the Constitution guarantees the right of property and the right to fair compensation in the event of expropriation.

The general rule governing court fees is set forth in Article 446 of the Code of Civil Procedure, under the terms of which it is in principle for the unsuccessful party to pay the court fees.

At the time of the expropriation in issue, the applicable Expropriations Code was that introduced by Legislative Decree no. 438/91 of 9 November 1991.

The expropriation procedure at the time took the following form: if no agreement could be reached between the expropriating authority and the expropriated owner, the President of the Court of Appeal with jurisdiction over the area in which the property to be expropriated was located appointed an arbitration committee to value the property. The owner could appeal against the arbitration decision before the court of first instance, and a new valuation would be ordered if necessary. The decision of the first-instance court was open to appeal before the Court of Appeal, whose decision was final (legislative precedent (assento) of the Supreme Court of 30 May 1995, binding on all courts and published in the Official Gazette of 15 May 1997).

In Portugal court fees are likened to taxes. The Supreme Court considers that the obligation for litigants to pay court fees is the same as the obligation for taxpayers to pay taxes. The State, as the ‘active subject’ of the fiscal obligation concerned, thus has the right to collect the fees; in exchange, it must give people (the ‘passive subjects’) access to judicial services (judgment of the Supreme Court of 5 February 2004, in case no. 03B3809).

At the material time court fees were regulated by the Court Fees Code, as embodied in Legislative Decree no. 224-A/96, of 26 November 1996, before it was amended by Legislative Decree no. 324/2003, of 27 December 2003.

The relevant provisions of the Code read as follows:

The custas de parte (costs and expenses) are sums payable to the successful party at the end of the proceedings. Under Article 33 of the Court Fees Code as applicable at the material time, they included the sums the successful party had been obliged to spend in connection with the proceedings.

On 24 February 2008 a new Court Fees Code was introduced (Legislative Decree no. 34/2008). The explanatory memorandum includes the following passage:

Under the new system there is therefore an upper limit on the amount that can be charged in court fees. At present, for proceedings at first instance, that amount equals 60 units of account2. for ordinary proceedings or 90 units of account if the proceedings are particularly complex. The charge for appeals is 20 units of account. Applications made during the proceedings continue to be taxed, of course, at a rate of up to 20 units of account, depending on the type of application (see tables appended to Legislative Decree no. 34/2008 and Articles 6, 7, 8, 11, 12, 13 and 17 of that text).

In its judgment the Chamber noted that the lack of compensation the applicants complained of was caused by the application of the rules governing court fees, which were ‘contributions’ within the meaning of the second paragraph of Article 1 of Protocol No. 1, and that this provision concerned particular instances of interference with the right to peaceful enjoyment of property. In this case, however, the Chamber considered it more appropriate to examine the situation complained of in the light of the rule set forth in the first sentence of paragraph 1 of Article 1 of Protocol No. 1, which was a general rule guaranteeing the right to peaceful enjoyment of property. It noted that the applicants disputed neither the lawfulness of the expropriation as such nor that of the regulations governing court fees as applied to them. Nor was there anything to indicate that the impugned interference was at all arbitrary, the applicants having had the opportunity, inter alia, to put their arguments to the domestic courts. Unlike the Government, the Chamber considered that the applicants could not be blamed for trying, by the procedural means available to them, to persuade the court to include in the compensation figure elements they considered essential. It considered that it was not the Chamber's role to examine, generally, Portugal's method of calculating and fixing court fees, but noted that in the instant case the concrete application of that method had led to a complete lack of compensation for the expropriation of the applicants' property. It found that, in the circumstances, the compensation conditions — or more precisely the lack of compensation — had placed an excessive burden on the applicants, upsetting the fair balance which must be struck between the general interest of the community and the fundamental rights of the individual.

Concerning the subject of the application, the Government pointed out that it was not the expropriation as such that the Court was required to examine. The applicants had lodged an application in that respect, but the Court had rejected it as being out of time. The only issue here was the compatibility with Article 1 of Protocol No. 1 of the sum the applicants had been expected to pay in court fees.

Next, turning to the Portuguese method of calculating court fees applicable at the time and that in place since 2008, the Government pointed out that the Convention did not require judicial services to be provided free of charge. It did, on the other hand, provide for the States to exercise their margin of appreciation in introducing legislation to secure the payment of ‘taxes’ or other ‘contributions’ within the meaning of Article 1 of Protocol No. 1 and, according to the well-established case-law of the European Commission of Human Rights, court fees were just such ‘contributions’ (Agis Antoniades v. the United Kingdom, no. 15434/89, Commission decision of 15 February 1990, Decisions and Reports (DR) 64, p. 237).

The Government criticised the Chamber judgment, considering it methodologically inappropriate and legally incorrect to confuse compensation for an expropriation and the court fees to be paid. Referring to the dissenting opinion attached to the judgment (see paragraph 5 above), the Government considered that the Chamber's conclusions confused two legally different things: ‘the credit and the debt, [which were] two completely separate things’. The Government gave the example of a situation where a creditor lodged a claim to recover a certain sum, and the debtor filed a counter claim for a sum higher than that claimed by the creditor; if the court allowed the counterclaim, the creditor would receive nothing and, in addition, would have to pay the costs, without there being, the Government argued, any interference with the peaceful enjoyment of possessions.

According to the Government, the alleged violation of the applicants' rights related only to the court fees they were ordered to pay. However, those fees had been fixed in accordance with the applicable provisions of the Code of Civil Procedure and the Court Fees Code, on the one hand, and with the principle of proportionality on the other. The total amount the applicants had paid — amounting to 1.02% of the amount they had claimed — had been calculated, the Government argued, taking into account the considerable procedural activity in which they had engaged and the actual amount claimed, which had clearly been unrealistic.

As the applicants made no claim for costs and expenses, the Court makes no award under this head.

The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.