Judgment Pl. ÚS 20/22
The Plenum of the Constitutional Court (Justice Rapporteur Jaromír Jirsa) annulled the judgments of the Supreme Court ref. No 28 Cdo 691/2010-103 of 9 November 2011, the High Court in Prague ref. No 11 Cmo 41/2009-76 of 3 September 2009 and the Municipal Court in Prague ref. No 66 C 17/2008-59 of 3 November 2008. The decisions infringed the complainants’ right to peaceful enjoyment of their possessions and to fair compensation for the forced deprivation of their right to property.
The Constitutional Court decided in renewed proceedings on the constitutional complaint after the decision of the European Court of Human Rights (ECHR). The subject-matter of the dispute before the general courts was the amount of financial compensation for the expropriation of the complainants’ agricultural land, determined by the administrative authorities in 2005 in accordance with the legislation in force at the time. The expropriation itself was carried out for the purpose of building the R55 expressway. The complainants argued that at the time of the decision of the general courts, new legislation was already in effect, allowing the usual (market) price of the land to be awarded as compensation. Therefore, the complainants sought to replace the decision of the administrative authorities with a judicial decision and to determine fair (adequate) compensation for the expropriation of their land in the amount of CZK 5 991 760 with ancillaries. Instead, the general courts upheld the administrative authorities’ decision to award compensation in the amount of the “official price”, i.e. CZK 778 150 (CZK 50 per square metre). In the past, the Constitutional Court rejected the complainants’ constitutional complaint against the decisions of the general courts as manifestly unfounded. However, the ECHR subsequently concluded that the procedure of the national authorities violated Article 1 of the Additional Protocol to the Convention, as the applicants were compensated for the expropriated land according to the price regulations (official price) without the national authorities assessing its adequacy in relation to the market value of the land. Therefore, the applicants sought in the renewed proceedings (based on the judgment of the ECHR) the annulment of the previous decisions.
The Constitutional Court annulled the decisions of the general courts because they violated the complainants’ right to peaceful enjoyment of their possessions and the right to adequate compensation for the forced deprivation of their right to property. It will now be up to the general courts to reconsider, in accordance with the decisions of the Constitutional Court and the ECHR, what financial compensation for the complainants’ expropriated land can be considered adequate and reasonable in relation to the market price.
The Additional Protocol to the Convention does not guarantee the right to full compensation for expropriated property under all circumstances. However, there must always be a procedure to ensure an overall assessment of the consequences of the expropriation, including the award of compensation in proportion to the value of the expropriated property. Only in this way will the requirement of establishing a fair balance in accordance with the individual’s right to peaceful use of possessions be fulfilled. A rigid compensation system that ignores factors other than officially set prices risks distorting the required fair balance.
Since 1 July 2006, the rule that the price usual at the time and place (market price) is paid as compensation to the expropriated person has been enshrined in the legal system. The complainants’ land was expropriated before 1 July 2006. It follows from international obligations and the case law of the ECHR and the Constitutional Court interpreting these obligations that it is not in accordance with the Convention to apply the strict legislation previously in force without taking into account whether the (official) price set by the legislation is adequate given the current economic reality.
Therefore, the Constitutional Court summarised that if the parties to the proceedings do not find an agreement before the general courts in the framework of an out-of-court settlement of this long-standing case, the general courts will have to find a fair balance between the public interest in the use of the expropriated land and the protection of the complainants’ right to peaceful enjoyment of their possessions. The amount of compensation for the deprivation of this right must not be determined in the context of the past (i.e. when the administrative authorities decided on the expropriation), but rather take into account the current reality (i.e. when the general courts will decide).