TrustHLT/LaCour huggingface dataset:
GR1 (Government): Hence, using the loophole contained in the law, former owners and their heirs, who have not made a single broken cent of investment in the harbor, have restored their property rights to the now very valuable and strategically important land.
GR1 (Government): But for whatever reason, those former owners obviously did not have the intention of keeping or using these plots of land, as depending on the plot of land at issue, between a couple of days and a couple of months, after registering their title in the land books, they have donated these plots of land to the applicants.
GR1 (Government): I invite the court to reflect for a second, who in his or her right mind, after having such a good luck of restoring property rights over strategically important plots of land, having an endless potential of bringing profit, would want to give them away.
GR1 (Government): Moreover, by means of donation, what kind of service one would need to render in return?
GR1 (Government): We may only guess.
GR1 (Government): Perhaps the applicants had very far reaching business plans to develop the harbor that convinced the owners of the need to providing a solid platform for the just developing private sector.
GR1 (Government): Well, let's see.
GR1 (Government): I should have mentioned that by the time the applicant concluded the contracts of donation, the national authorities had already realized that there had been a great loophole in the law.
GR1 (Government): The situation with the harbor land could have been fixed had the original owners or their heirs wished to sell the land.
GR1 (Government): As in case of commercial transaction, such as purchase, the state or municipality would have the right of the first hand.
GR1 (Government): But this rule did not extend to the contracts of donation.
GR1 (Government): Therefore, the hands of the national authorities were tied.
GR1 (Government): They could only watch from a distance.
GR1 (Government): Another important aspect of the contract of donation is that the parties had to indicate provisional value of the land plot for the purpose of calculating the transaction fee.
GR1 (Government): The applicants valued four plots of land at around 700 euros each, and the fifth plot of land at around 1,400 euros.
GR1 (Government): Therefore, the total investment of the first applicant for acquiring one plot of land, having total surface area of 17,998 square meters, was 119 euros.
GR1 (Government): The second applicant invested 164 euros and 87 cents for acquiring four plots of land, having total surface area of 47,740 square meters.
GR1 (Government): Those investments were composed of fees for registering the deal in the land books.
GR1 (Government): Not a single broken penny was invested by the applicant into the contested plots of land before or after the donation agreements were concluded.
GR1 (Government): In fact, it is crystal clear from the facts of the present case, as has just been confirmed by the applicant, that development of the harbor has never been the applicant's purpose.
GR1 (Government): So it is reasonable to ask, what was the applicant's goal?
GR1 (Government): They expected that the national authorities will sooner or later buy back their plots of land.
GR1 (Government): Meanwhile, the applicants, by means of rather ultimate language, demanded rent payments, going as far as giving notice to the Freeport management to vacate the territory.
GR1 (Government): The applicants' appetite grew so big that their demand in rent payments varied between 37% of the Freeport's annual profit in 1994, 46% of the Freeport profit in 1995, and almost four times more than the Freeport's annual profit in 1996.
GR1 (Government): In addition to the rent payments, Freeport had to pay land tax for the land plots belonging to the applicants.
GR1 (Government): What options were available to the national authorities to deal with this situation?
GR1 (Government): To move the harbor to another place?
GR1 (Government): To satisfy the applicant's appetite in rent?
GR1 (Government): Or to acquire back the property?
GR1 (Government): Judge Casadevall, in his dissenting opinion, annexed to the chamber's judgment, makes specific emphasis on the need to reach a friendly settlement between the parties.
GR1 (Government): What obviously skipped the respective judge's attention is that the national authorities, in fact, offered the applicants a friendly agreement to purchase back the plots of land.
GR1 (Government): But the applicants expressly refused to enter into any negotiations.
GR1 (Government): Therefore, all options offered by the national law at the time concerned were exhausted.
GR1 (Government): The national authorities had to set the legislative framework that would allow to deal with this situation and other similar situations to achieve social justice.
GR1 (Government): I must know that the real politic of lawmaking not always follows the rule that the law comes before the concrete situation arises.
GR1 (Government): Sometimes the real situation drives the lawmaker to create a legal rule.
GR1 (Government): Both approaches are equally constitutional.
GR1 (Government): As to the issue of legal certainty, one would need to define legal certainty in the present case.
GR1 (Government): National authorities were confronted by a situation which was not yet governed by the law.
GR1 (Government): Therefore, it was rather a situation of legal uncertainty for which a legal rule had to be created.
GR1 (Government): In the present case, the legislator was driven by the need to fix several legislative loopholes that were uncovered in the course of the land reform process.
GR1 (Government): First, it had to prevent further restoration of property rights to former owners and their heirs to strategically important objects.
GR1 (Government): Second, it had to establish a procedure whereby a state could restore a title over a strategically important object for which property title had been erroneously restored.
GR1 (Government): Thirdly, it had to review the compensation rules to ensure that compensation paid in the mentioned cases achieves the aim of social justice.
GR1 (Government): Therefore, both processes should be viewed together as a part of the ongoing land reform, as correctly noted by the chamber in its judgment.
GR1 (Government): Another important aspect to be kept in mind is that no legal rule is permanent.
GR1 (Government): Any law may be changed at any point of time, even with retroactive effect.
GR1 (Government): What is important is whether the adoption of legal rule followed the constitutional procedure and whether it was driven by an objective need in the public interest.
GR1 (Government): In this respect, it is important to keep in mind that the applicants never had any legal expectation that they would remain proprietors of the disputed land.
GR1 (Government): Their legal expectation referred to the amount of compensation that they could expect in case of expropriation.
GR1 (Government): The 19 December 1996 amendments to the Supreme Council's decision of 15 September 1992 on the conditions of the entry into force of the Expropriation Act, which in other words, were adopted more than six months before the applicant's property was expropriated, established a very clear rule that if an owner acquired from the original owner or his or her by means of donation agreement a plot of land that is subject to expropriation for public needs, the amount of compensation to be paid to the owner shall not exceed the property's value as existed in 1940.
GR1 (Government): At the same time, the amendments established an additional mechanism whereby owners could be compensated for any investments made in developing of the land at issue.
GR1 (Government): Therefore, as of the date the amendments were adopted, the applicants could no longer rely on their previous legitimate expectation.
GR1 (Government): In their submissions to the court, the applicants are explicitly clear.
GR1 (Government): They are not concerned about the procedure whereby the law on expropriating their land plots was adopted.
GR1 (Government): The substance of the applicant's complaint refers to the amount of compensation they received.
GR1 (Government): Or to be more precise, the wish to receive an exorbitant amount in compensation.
GR1 (Government): I would invite the court to think how far these expectations meet the conditions of legitimacy.
GR1 (Government): I will now turn to the issue of excessive burden put on the applicants.
GR1 (Government): In this context, I would like to reiterate the well-established principle that the right to receive compensation proportional to the real value of the expropriated property is subject to many exceptions.
GR1 (Government): Moreover, and referring specifically to the Yarn case, given its specific relevance to the present case, I would like to recall the court's conclusion that in case of objective necessity and in the context of transitional economy, the state's margin of appreciation goes as far as allowing expropriation for public needs without any compensation at all.
GR1 (Government): To sum up what has been said above, the government would strongly invite the court to keep in mind the following issues when re-examining the present case.
GR1 (Government): May individuals as the applicants in the present case assume that they enjoy true legitimate property rights and claim protection provided by Article 1 of Protocol Number 1 to the Convention.
GR1 (Government): How far goals that they pursue comply with the requirement of Article 17 of the Convention that prohibits abuse of rights?
GR1 (Government): Looking back at events that took place almost 15 years ago, what added value may the future court's judgment bring in respect of the situation that largely took place before ratification of the Convention and in respect of the quality of the law that is no longer in force if the situation as such did not create a significant disadvantage to the applicants?
GR1 (Government): I remind that amendments of 19 December, 96 to the Supreme Council decision of 15 September, 92, as well as preceding amendments to the law reform laws were adopted and entered into force before Latvia ratified the Convention.
GR1 (Government): The only act directly pertaining to the present case that was adopted less than two months following the entry into force of the Convention with respect to Latvia was the regulation of 5 August, 97, and the subsequent law adopted by the SIEMA.
GR1 (Government): Given the lapse of time that have passed between the examination of the case by the national authorities and today's hearing, I may only urge the court to follow the principle established in the case SH and others versus Austria, that is to put itself in the shoes of the national authorities as they were back in 1997.
GR1 (Government): When examining whether the applicants bore an excessive burden, one needs to carefully choose the point of departure.
GR1 (Government): It would not be fair or reasonable to choose as a point of departure the commercial or cadastral value of the land if the applicants have never contributed a single cent to raising its value.
GR1 (Government): In situations as the present one, the departing point should rather be the applicant's contribution to the development of the property in question, both in terms of time and in terms of financial investment.
GR1 (Government): In the present case, the first applicant invested 119 euros for which he received 780 euros and 10 cents in compensation and 75,500 euros in rent payments.
GR1 (Government): In other words, his investment brought 641% profit over the period of three years.
GR1 (Government): The second applicant invested 164 euros 87 cents for which he received 12,260 euros 77 cents in compensation and 524,000 euros in rent payments.
GR1 (Government): In other words, his investment brought 3,253% of profit over the period of three years.
GR1 (Government): The national authorities may not have acted perfectly by the books.
GR1 (Government): As the proverbs say, no one is perfect.
GR1 (Government): Still, the legal perfectionism should not be exaggerated to the extent that would not allow the national authorities to take a swift action in response to an emerging situation that endangers important public interests.
GR1 (Government): Speaking of the alleged violation of Article 14 of the Convention, the government fully aligns itself with the conclusions made by the chamber in its judgment that the applicant's situation may not be considered comparable to that of other property owners.
GR1 (Government): Therefore, there is no basis to speak of a different treatment of the applicants.
GR1 (Government): Finally, when commenting the outcome of the impugned measures for the applicant, another famous proverb comes into mind, look not a gift horse in the mouth.
GR1 (Government): For the reasons given above, the government believes that the chamber's judgment is well-founded and well-balanced.
GR1 (Government): Not only it confirms the assessment made by the national authorities, but also fully complies with the well-established case law of the court.
GR1 (Government): The government believes that the applicants have not suffered a significant disadvantage meriting examination of the present case by the court.
GR1 (Government): In any event, the government believes that there is no reason for the grand chamber to depart from conclusions made by the chamber in its judgment.
GR1 (Government): Thank you.
Nicolas Bratza (JudgeP): Thank you very much Mrs Reine.
Nicolas Bratza (JudgeP): That then concludes the first round of addresses.
Nicolas Bratza (JudgeP): I would like now to ask if any of the judges wish to put questions to the parties.
Nicolas Bratza (JudgeP): First Judge Fura and then Judge Garlicki.
Elisabet Fura (Judge): Thank you, Mr. President.
Elisabet Fura (Judge): I have a couple or three questions to both parties.
Elisabet Fura (Judge): If I read the case file correctly, no VAT was levied on the transaction.
Elisabet Fura (Judge): And I guess this was because it was a donation.
Elisabet Fura (Judge): But I would like you to confirm that it would have been different if it had been a commercial transaction and not a donation.
Elisabet Fura (Judge): My second question is rather a hypothetical one.
Elisabet Fura (Judge): But I'd like to put it to you all the same.
Elisabet Fura (Judge): In the hypothetical event of a sale of the property by the applicants at a higher price than the original acquisition price, since it was a donation, the acquisition price was zero, or the initial valuation, would there be a tax levied on the benefit that they made in selling these properties?
Elisabet Fura (Judge): And the third question, and this is rather a technical detail, I'm afraid, but just for me to understand completely, there is a notarial fee paid.
Elisabet Fura (Judge): And as far as I understand, the fee was zero or equal to 0.35
Elisabet Fura (Judge): euros.
Elisabet Fura (Judge): This is referred to in the government submissions.
Elisabet Fura (Judge): Is this the global fee paid, or is it for each donation contract?
Elisabet Fura (Judge): And that were all my questions.
Elisabet Fura (Judge): Thank you.
Nicolas Bratza (JudgeP): Thank you very much, Judge Garlicki.
Lech Garlicki (Judge): Thank you. I have two questions which may be addressed to both parties.
Lech Garlicki (Judge): The first is whether we could be given a more detailed description of the plots in question as in 1994, namely as in the moment of acquisition by the applicants.
Lech Garlicki (Judge): In particular, have there been already any hardware installation, any technical infrastructure like cranes, embankments? The government observations mention warehouse containers,
Lech Garlicki (Judge): stack uncovered cargo sites. But what I would like to have is a clear information
Lech Garlicki (Judge): of what already was on this land in the moment of acquisition.
Lech Garlicki (Judge): And then my second question is we know that the market value of the plots in January 1996 was respectively 9,000 euros and 5 millions. Do we have any estimate what was approximately
Lech Garlicki (Judge): the market value of these plots when acquired in 1994? In other words, have there been some
Lech Garlicki (Judge): dramatic jump in the market value within these two years or the market value already in 1994 was at least significant? Thank you.
Nicolas Bratza (JudgeP): Thank you very much.
Nicolas Bratza (JudgeP): Judge Šikuta.
Ján Šikuta (Judge): Thank you. I have a question to the government and the question relates to tax reassessment
Ján Šikuta (Judge): proceedings. In spite of the fact that at the end the courts rejected the claims of
Ján Šikuta (Judge): the finance department of the Municipal Council of Riga, but my question is that the finance department asked the applicant to pay for one year, 1997, tax in sum of 18,891 and 78,382 Latvian. Now I don't know what it is in Latvian. So my question is from which value or how
Ján Šikuta (Judge): come the finance department to this very high tax for one year? Thank you.
Nicolas Bratza (JudgeP): Thank you very much, Judge Sajó.
András Sajó (Judge): Thank you Mr. President. My question is a follow-up to the question raised by Judge
András Sajó (Judge): Garlicki and it is going to both parties. If you could elaborate on the use of these
András Sajó (Judge): plots specifically in 1997 and today. What are these plots good for the operation of
András Sajó (Judge): the harbor and whether they were considered in Soviet times to be part of the harbor because in the statement of facts there are allegations that only when the decision concerning the establishment of the free port of Riga was taken, it was at that point that these plots were prospectively, and I emphasize prospectively, taken into consideration. So I just have difficulties
András Sajó (Judge): understanding how these plots were in the Soviet times, in 1994 and today, related to harbor operations physically and legally. Thank you.
Nicolas Bratza (JudgeP): Thank you very much, Judge Potocki.
André Potocki (Judge): Merci, Monsieur le Président.
André Potocki (Judge): J'ai une question pour le gouvernement.
André Potocki (Judge): L'article 2, tel que modifié par la loi du 19 décembre 1996, comporte un dernier alinéa qui vise les bénéficiaires de donations.
André Potocki (Judge): Est-ce que le gouvernement peut indiquer à la Cour si ce dernier alinéa a été appliqué à d'autres personnes que aux requérants?
Nicolas Bratza (JudgeP): Thank you very much, Judge Sicilianos.
Linos-Alexandre Sicilianos (Judge): Merci, M. le Président.
Linos-Alexandre Sicilianos (Judge): C'est une question pour les requérants.
Linos-Alexandre Sicilianos (Judge): Selon les faits tels qu'ils sont rapportés dans le dossier de l'affaire, la valeur indicative des biens mentionnés dans les contrats de donation au fin du calcul de la taxe foncière s'élevait à 500 ou 1 000 latis par terrain, soit environ 705 et 1410 euros.
Linos-Alexandre Sicilianos (Judge): Apparemment, il s'agissait là de la valeur qui a été déclarée et acceptée par les requérants comme la valeur foncière à l'époque de la donation.
Linos-Alexandre Sicilianos (Judge): Est-ce que vous pouvez élaborer un tout petit peu sur ces données?
Linos-Alexandre Sicilianos (Judge): Merci.
Nicolas Bratza (JudgeP): Thank you very much. Are there any other questions from the judges?
Nicolas Bratza (JudgeP): That doesn't seem to be the case. That being so, I propose that we
Nicolas Bratza (JudgeP): have a break of twenty minutes and with a view to allowing the parties to consider their answers to the questions.
Nicolas Bratza (JudgeP): So the hearing is suspended for twenty minutes.
Nicolas Bratza (JudgeP): The hearing is resumed and I give the floor to the applicants' representatives.
Nicolas Bratza (JudgeP): Mr. Radziņš, is it you who will speak?
AP1 (Applicant): Please.
AP1 (Applicant): Dear Mr. President, Honorable Judges, I will try to answer to questions asked by the Court.
AP1 (Applicant): At first, regarding taxes, nor VAT, nor income tax was applied to agreements, nor donation agreements, nor purchase agreements on real estate between physical persons in 1994 or in 1996 either.
AP1 (Applicant): These taxes started to apply only about three years ago when we were in deep economic crisis and it was connected with real estate market and only then state provides the law, adopted the law, which stated that income tax will be applied to the deals with real estate between physical persons.
AP1 (Applicant): What about VAT?
AP1 (Applicant): Also, VAT today is not applied to all agreements with real estate.
AP1 (Applicant): It applied only to agreements between legal entities.
AP1 (Applicant): What about notary fees which were paid?
AP1 (Applicant): Then yes, 0.35 euros as state fee for notary approval was paid for each of the agreements
AP1 (Applicant): because this fee in such amount was stated by legal law regulations and this fee didn't depend on the amount of the deal.
AP1 (Applicant): Such the sum connected with the donation agreement also was not necessary to show in the agreements.
AP1 (Applicant): The sum was necessary to show the sum of the purchase agreement, the amount of purchase agreement, but in donations agreement according to civil law such request didn't exist and only at the end of 90s it was stated that if there is not a fixed donation price in the agreement, the amount of donation in the agreement, then it corresponds to the cadastral value.
AP1 (Applicant): And so it is still today.
AP1 (Applicant): What about market price?
AP1 (Applicant): In 1994, land market was at the same beginning and there were no even cadastral values.
AP1 (Applicant): So that cadastral value which was stated in 1996, for our understanding, more or less corresponded to the market value because there were law and regulations of government how cadastral value is estimated.
AP1 (Applicant): And this estimation was and it is connected with market price.
AP1 (Applicant): It's usually estimated according to the market price taking into account the deals during the previous two years.
AP1 (Applicant): So that if we are speaking about market price, then in 1994, for our understanding, it was mainly the same as it was in 1996.
AP1 (Applicant): About investments, as it is mentioned in our memorial on the merits, and also in our application, when at all there were five plots of land expropriated, and on the moment of expropriation, only three of them were covered with concrete.
AP1 (Applicant): There were no any buildings, no any technical equipments on it.
AP1 (Applicant): As we know, this concrete were put on the land somewhere in the middle of 80s, we can say, during Soviet period.
AP1 (Applicant): But at the same time, we presented to the court inventorization plans where is mentioned the price of this concrete.
AP1 (Applicant): It is 5.28 lats per square meter.
AP1 (Applicant): And if we are multiplying square meters with this amount of one square meter, then it corresponds to 214,315 lats, or approximately the price, the amount of this concrete was 305,000 euros.
AP1 (Applicant): But I want to mention that if we are speaking about denationalization in Latvia, then it was provided on very liberal, very simplified and very liberally, because nationalization took place in 1940.
AP1 (Applicant): In that time in Latvia, there were free market, free real estate market, normal society, and many of, very many of real estate, especially in the center of the city, were mortgaged.
AP1 (Applicant): When denationalization took place in 1990s, then properties were returned to the former owners without any mortgages.
AP1 (Applicant): So it happens that someone bought in 1940 with a loan from the bank property and his heirs received this property back as a gift from the state.
AP1 (Applicant): Such was denationalization process in Latvia.
AP1 (Applicant): So it was.
AP1 (Applicant): And also it happened regarding the land in the territories of harbor.
AP1 (Applicant): This is why in harbors, state adopted the law where stated that yes, it's possible that private persons owns the land in harbor.
AP1 (Applicant): But in such cases, the rent received by these persons can't exceed 5% from cadastral value.