5.  The applicant was born in 1961 and lives in Kaunas.
6.  In 1994 the applicant obtained a loan of 30,100 Lithuanian litai (LTL – approximately 8,718 euros (EUR)) from the State. The purpose of the loan was to build or buy an apartment. In 2000 the applicant became the owner of an apartment built by a public association, and in exchange she took over the association’s loan of LTL 90,036 (EUR 26,076) from the State. The apartment was pledged to the bank as collateral. Both loans were given under preferential conditions – the annual interest rate was lower than the average annual interest rate for loans given by private banks at that time. Both loans were administered by a State bank, the State Commercial Bank of Lithuania (hereinafter “the bank”). In 1998 that bank transferred the claims to some of its loans, including both of the applicant’s loans, to another State bank, the Savings Bank of Lithuania. In 2001 the latter bank was privatised and became the private bank AB Hansabankas.
7.  On 13 August 2001 the applicant concluded an agreement with a third party, A.E., under which the applicant paid LTL 30,870 (EUR 8,940) and bought from A.E. the right to restoration of title in respect of 1.47 hectares of land in Kaunas. That land had belonged to A.E.’s grandfather, S.F., who had died in 1949. It had been determined by a ruling of the Kaunas District Court of 23 May 2001 that S.F. had owned a total of 68.26 hectares of land in Kaunas. Following that ruling, A.E. sold the right to restoration of title in respect of different parts of that land to over a hundred individuals, including the applicant.
8.  On 23 October 2001 the Kaunas County Administration (hereinafter “the KCA”) restored the applicant’s title in respect of 1.47 hectares of land. At the applicant’s request, her property rights were restored by cancelling her outstanding debt to the State (see paragraphs 31-33 below). The KCA estimated that the value of that plot of land was LTL 70,560 (EUR 20,435.60), and its indexed value was LTL 112,896 (EUR 32,697), an amount equal to the applicant’s outstanding debt under the two loan agreements of 1994 and 2000 (see paragraph 6 above).
9.  On 10 November 2001 the KCA forwarded to the Ministry of Finance a list of individuals, including the applicant, whose property rights it had decided to restore by cancelling their debts to the State.
10.  On 16 November 2001 the KCA ordered an internal audit into the restoration of property rights in respect of the land which had belonged to S.F. (see paragraph 7 above). The audit report, delivered on 7 December 2001, found that the documents in the possession of the KCA showed that from 1927 to 1940 S.F. had sold parts of his land to numerous individuals, and that, as a result, at the time of his death he had owned no more than 15.58 hectares. Accordingly, the audit report considered that the size of S.F.’s land, as established by the Kaunas District Court (see paragraph 7 above), had been incorrect, and recommended that the KCA suspend the restoration of property rights in respect of any land which had previously been considered as belonging to S.F.
11.  Following the internal audit, on 14 December 2001 the KCA suspended the restoration of property rights in respect of S.F.’s land. It informed the Ministry of Finance about the suspension, and asked it to suspend the cancellation of debt for all the individuals on the previously submitted list, including the applicant (see paragraph 9 above).
12.  Subsequently the Kaunas Regional Prosecutor (hereinafter “the prosecutor”), at the request of the KCA and relying on the findings of the audit report, asked the domestic courts to reopen the civil proceedings concerning the size of S.F.’s land, and to suspend the enforcement of all the KCA’s decisions concerning the restoration of property rights in respect of that land. On 21 March 2002 the Kaunas Regional Administrative Court suspended the enforcement of the KCA’s decisions. The applicant participated in the court proceedings as a third party and appealed against the suspension, but on 25 April 2002 the Supreme Administrative Court dismissed her appeal. On 23 October 2002 the Supreme Court reopened the civil proceedings concerning the size of S.F.’s land, on the grounds that the audit report had revealed relevant information which had not been known at the time of the adoption of the Kaunas District Court’s ruling of 23 May 2001.
13.  In the reopened proceedings, on 30 April 2003 the Kaunas District Court determined that S.F. had owned 48.40 hectares of land. On 30 June 2004 the Kaunas Regional Court partly amended that judgment and determined that S.F. had owned 47.91 hectares of land. The latter judgment became final. The KCA and the applicant participated in the reopened proceedings as third parties.
14.  On 25 October 2004 the prosecutor asked the Kaunas Regional Administrative Court to revoke the order suspending the enforcement of the KCA’s decisions concerning the restoration of property rights in respect of S.F.’s land. The prosecutor submitted that the total amount of land affected by those decisions was less than 47.91 hectares, so there was no risk of restoring property rights in respect of land which had not belonged to S.F. On 26 October 2004 the Kaunas Regional Administrative Court granted the prosecutor’s application.
15.  On 9 November 2004 the KCA asked the Ministry of Finance to resume the cancellation of debt with regard to the applicant and other individuals (see paragraph 9 above).
16.  On 6 December 2004 the Ministry of Finance issued a certificate confirming the cancellation of the applicant’s outstanding debt to the State, amounting to LTL 112,896 (EUR 32,697). On that same day the bank received the certificate from the Ministry and cancelled the applicant’s debt.
17.  It appears that from 23 October 2001 to 6 December 2004 the applicant did not make any loan repayments to the bank and the bank did not request any such payments. However, until September 2002 she was paying interest and late payment fines under the two loan agreements, and paid a total of LTL 5,222.26 (EUR 1,512.47).
18.  On 26 January 2005 the bank informed the applicant that she owed it LTL 13,140.56 (EUR 3,805.77) in interest and late payment fines under the two loan agreements.
19.  On 3 February 2005 the bank lodged a civil claim against the applicant concerning the unpaid interest and late payment fines under the loan agreement of 1994, amounting to LTL 2,909.33 (EUR 842.60). It asked the Kaunas District Court to order interim measures – seizing the applicant’s apartment. On the same day the bank unilaterally terminated the loan agreement of 2000 and asked the court to begin the forced recovery of the debt under that agreement, amounting to LTL 10,231.23 (EUR 2,963.17), by seizing the applicant’s apartment, which had been pledged to the bank as collateral.
20.  On 7 February 2005 the Kaunas District Court seized the applicant’s apartment and informed her that, following her failure to repay the debt under the loan agreement of 2000 within one month, the apartment would be sold at auction. The following day the court also granted the bank’s application for interim measures concerning the loan agreement of 1994, but having found that the applicant’s apartment had already been seized, the court ordered the seizure of the applicant’s movable property, financial assets and property rights, amounting to the sum of LTL 2,909.33.
21.  On 24 February 2005 the applicant submitted a counterclaim against the bank. She stated that on 23 October 2001 the KCA had restored her property rights by cancelling her debt to the State, but due to circumstances beyond the applicant’s control the Ministry of Finance had only informed the bank about the cancellation on 6 December 2004. The applicant submitted that from 23 October 2001 until 6 December 2004 she had repeatedly contacted the bank and asked it to not count the interest and late payment fines. Thus, she considered that the bank had known about the cancellation of her debt, and it was therefore unjust and unfair for it to ask her for any payments for that period, or to unilaterally terminate the loan agreement of 2000. The applicant further asserted that in the period of 2001‑2002 she had paid the bank a total of LTL 5,222.26 (EUR 1,512.47) in interest and late payment fines under the two loan agreements; she claimed that there had been no grounds for the bank to accept those payments, and asked the court to order the bank to return them to her.
22.  On 22 March 2005, at the applicant’s request, the Kaunas District Court suspended the forced recovery of the debt by means of seizing the applicant’s apartment, pending the examination of the claim and counterclaim in the civil case. On 18 October 2005 the court lifted the order for seizure of the applicant’s apartment because the bank had not requested its sale at auction within the time-limit prescribed by law.
23.  On 22 February 2006 the Kaunas District Court granted the bank’s civil claim in part. The court found that the applicant’s debt had only been cancelled on 6 December 2004, so there were no grounds to find that her obligation to honour the loan agreement with the bank had ended before that date. The court held that the applicant had been using the loan during the period of 2001-2004, and thus she was obliged to pay interest to the bank. Accordingly, it ordered the applicant to pay the bank LTL 2,705.52 (EUR 783.57).
However, the Kaunas District Court also noted that the loan had been given to the applicant by the State and not by the bank, so the latter could not claim to have suffered any losses due to late payments. The court found no bad faith on the part of the applicant – it considered that she had had legitimate grounds to expect that the cancellation of her debt, ordered on 23 October 2001, would be implemented promptly. Accordingly, the court decided that the bank had no grounds to claim late payment fines, and ordered it to return to the applicant LTL 72.25 (EUR 20.93) which she had already paid.
The applicant’s counterclaim was dismissed.
24.  The applicant appealed against that judgment, but on 1 June 2006 the Kaunas Regional Court dismissed her appeal and upheld the first-instance judgment in its entirety. The court considered that the applicant had to assume the risks resulting from her agreement with A.E., which had enabled her to seek the cancellation of her outstanding debt after paying a sum that was several times lower than that debt (see paragraphs 7-8 above), especially as the bank had not been a party to that agreement. The court also noted that the delay in the cancellation of the applicant’s debt had been caused not by the actions of the bank but by those of the KCA and the prosecutor, so the bank had had the right to receive interest payments during the period in question.
25.  In those proceedings, the courts did not examine whether the applicant had been under an obligation to pay interest and late payment fines under the loan agreement of 2000, because she had not made such a claim. As submitted by the applicant and not disputed by the Government, on an unspecified date in 2006 the applicant paid LTL 10,231.23 (EUR 2,963.17) in interest and late payment fines requested by the bank under that agreement.
26.  On 3 July 2006 the applicant submitted to the Kaunas Regional Administrative Court a civil claim for damages against the KCA, the Prosecutor General’s Office and the Ministry of Finance. She claimed that because of the unnecessary and unjustified delay in the cancellation of her debt from 23 October 2001 until 6 December 2004, caused jointly by those three institutions, she had suffered financial losses of LTL 20,926.73 (EUR 6,060.80), consisting of interest and late payment fines paid under the two loan agreements, as well as legal expenses incurred in the civil proceedings instituted by the bank. She also claimed non-pecuniary damages of LTL 15,000 (EUR 4,344.30) for the stress and frustration caused during that delay.
27.  On 13 July 2006 the Kaunas Regional Administrative Court refused to accept the applicant’s claim, on the grounds that complaints against the Prosecutor General’s Office and the Ministry of Finance – and, as a result, the entire claim – had to be examined by the Vilnius Regional Administrative Court (see paragraph 38 below).
28.  On 26 April 2007 the applicant submitted to the Kaunas Regional Administrative Court a civil claim for damages against the KCA only. She again claimed pecuniary damages of LTL 20,926.73 and non-pecuniary damages of LTL 15,000 in respect of damage allegedly caused by the unjustified delay in the cancellation of her debt. The applicant argued that the KCA had acted unlawfully by suspending the restoration of her property rights and asking the prosecutor to apply for the reopening of the civil proceedings concerning the size of S.F.’s land. The Prosecutor General’s Office and the Ministry of Finance participated in the proceedings as third parties.
29.  On 11 June 2007 the Kaunas Regional Administrative Court dismissed the applicant’s claim. It held that the principle of the rule of law obliged the KCA to ensure that the restoration of property rights was conducted in accordance with the applicable laws. The court considered that, in the presence of well-founded doubts about the actual size of the land owned by S.F., the KCA had acted lawfully and diligently by suspending the restoration of the property rights and initiating the reopening of the proceedings. The fact that the courts dealing with the reopened proceedings had found that S.F. had owned less land than initially determined (48.40 hectares and 47.91 hectares, as opposed to the initial estimate of 68.26 hectares) showed that the suspension had had a proper basis. Accordingly, the court concluded that the KCA had acted lawfully and there were no grounds to award damages to the applicant.
30.  The applicant appealed against that judgment, but on 12 March 2008 the Supreme Administrative Court dismissed her appeal and concluded that the KCA’s actions in initiating the suspension of its decisions concerning the restoration of property rights had been in accordance with domestic law. In addition, the Supreme Administrative Court distinguished between the KCA’s competence and that of the Ministry of Finance: while the KCA was responsible for the restoration of property rights, it was the Ministry of Finance which had the authority to cancel the applicant’s debt and issue the bank with a certificate confirming such cancellation. The KCA’s request of the Ministry of Finance to suspend the cancellation of the applicant’s debt (see paragraph 11 above) had not been legally binding on the Ministry, and had had no legal effect on the cancellation of the debt. The court further held that the suspension of restoration of the applicant’s property rights had been ordered not by the KCA but by the ruling of the Kaunas Regional Administrative Court of 21 March 2002, and the ruling had been revoked by that same court only on 26 October 2004 (see paragraphs 12 and 14 above). Accordingly, the Supreme Administrative Court concluded that the KCA could not be held responsible for the suspension of the restoration of the applicant’s property rights and the cancellation of her debt, and thus there were no grounds to award her damages.