European Court of Human Rights

FIRST SECTION

CASE OF NAGY v. HUNGARY

(Application no. 6215/18)

JUDGMENT
 

STRASBOURG

19 October 2023

This judgment is final but it may be subject to editorial revision.

In the case of Nagy v. Hungary,

The European Court of Human Rights (First Section), sitting as a Committee composed of:

 Alena Poláčková, President,
 Péter Paczolay,
 Gilberto Felici, judges,
and Liv Tigerstedt, Deputy Section Registrar,

Having regard to:

the application (no. 6215/18) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention") on 23 January 2018 by a Hungarian national, Mr Mihály Nagy, born in 1993 and living in Vác ("the applicant") who was represented by Mr L. Szegedi D., a lawyer practising in Budapest;

the decision to give notice of the complaint concerning Article 1 of Protocol No. 1 to the Convention to the Hungarian Government ("the Government"), represented by their Agent, Mr Z. Tallódi, of the Ministry of Justice and to declare inadmissible the remainder of the application;

the parties' observations;

Having deliberated in private on 26 September 2023,

Delivers the following judgment, which was adopted on that date:

SUBJECT MATTER OF THE CASE

1.  The case concerns the seizure of the applicant's motorbikes in enforcement proceedings directed against the previous owner, limited liability company S. (hereafter "company S.").

2.  In 2007 the National Tax and Customs Office, seeking to enforce its own claims against company S., issued a seizure order and applied to enter a notation concerning a prohibition on the disposition of the motorbikes of company S. in the register of vehicles (first set of proceedings). The claims became time-barred, and the enforcement proceedings were discontinued at some point in 2012, however, the seizure order was not lifted.

3.  On 10 March 2014 the applicant bought two of the motorbikes from company S. On 10 April 2014 company S. requested the notation concerning prohibition of disposal to be deleted from the register of vehicles, since the applicant's ownership could not be registered otherwise. An application to that end was lodged by the National Tax and Customs Office on 12 June 2014 and the notation was deleted on 1 August 2014 by the Registry of the Vác Governmental Office.

4.  On 11 August 2014 bailiff V.Z. attached one of the motorbikes and the restraint on alienation and encumbrance was registered by the Pest Country Governmental Office on 7 October 2014 (second set of proceedings).

5.  On 8 August 2014, in separate enforcement proceedings, V.Z. attached the other motorbike as well. The notation concerning prohibition on disposition was registered on 3 September 2014 and the vehicle was withdrawn from traffic on 10 October 2014 (third set of proceedings).

6.  In 2014 the Mayor's Office of Érd instituted enforcement proceedings against company S. The bailiff conducting the proceedings, S. Gy., issued an attachment order in respect of the motorbikes on 22 May 2014. Company S. complained about the enforcement measure to the creditor and on the latter's request S. Gy. lifted the attachment of the motorbikes on 16 July 2015 (fourth set of proceedings).

7.  On 22 May 2015 the National Tax and Customs Office, seeking to enforce its own claims, issued a further seizure order on the motorbikes (fifth set of proceedings).

8.  In 2015 S. Gy. initiated enforcement proceedings against company S. On 14 January 2016, M.D., the bailiff conducting the proceedings, issued an attachment order on the motorbikes (sixth set of proceedings). In March 2016 the applicant filed an action under section 115 (2) of Act no. LIII of 1994 (hereinafter the Enforcement Act) to release the motorbikes from seizure as they were his property. On 29 June 2017 the Dunakeszi District Court upheld the applicant's action, finding that the motorbikes had been at the applicant's property at the time the attachment order had been issued. The attachment was terminated by the Pest County Governmental Office on 27 September 2017 (sixth set of proceedings).

9.  As it appears from the casefile, the motorbikes are still attached in respect of the second and third set of proceedings. The applicant filed a new action to release the motorbikes from seizure. As it appears from the case file, these proceedings are still pending.

10.  The applicant complained under Article 1 of Protocol No. 1 to the Convention that the attachment of his motorbikes for the benefit of the creditors of the previous owner were due to the errors of the domestic authorities and constituted a disproportionate interference with his right to property.

THE COURT'S ASSESSMENT

ALLEGED VIOLATION OF ARTICLE 1 of protocol no. 1 TO THE CONVENTION

1. Admissibility

11.  The Government submitted that the applicant had failed to exhaust the available domestic remedies. They claimed that he should have initiated a further action under section 115 (2) of the Enforcement Act for the release of the motorbikes from attachment and should have sought compensation for all pecuniary and non-pecuniary damage which was the result of the bailiffs' conduct under section 236 of the Enforcement Act. The Government also considered that the applicant could have initiated a property action under the Civil Code.

12.  The Court observes that the action to release an asset from seizure under the Enforcement Act can be lodged by a person who claims to have a right of ownership regarding an object of compulsory enforcement. These proceedings have the objective of determining the ownership of the asset under seizure. The applicant availed himself of this legal avenue and in 2017 the Dunakeszi District Court found that the motorbikes constituted his property. As regards the property action invoked by the Government, the Court considers that the applicant was not required to pursue another remedy under the Civil Code, with essentially the same objective of determining the ownership of the assets, in order to meet the requirements of Article 35 § 1 of the Convention.

13.  Moreover, company S. as the previous owner of the motorbikes complained on several occasions about the attachment orders. While these proceedings resulted in the lifting of certain attachment orders, they did not bring about the prompt return of the applicant's motorbikes which were repeatedly attached in parallel proceedings. As a consequence, the applicant has in fact been unable to make use of his property since 2014.

14.  The Court considers that, in view of the numerous proceedings already instituted by the applicant himself and company S. for the release of the motorbikes and their outcome, an additional action either with the purpose of seeking the lifting of the attachment or seeking compensation for damages caused by the bailiffs' conduct would not have been an effective remedy in order to contest the proportionality and duration of the attachments.

15.  The Government's objection as to the non-exhaustion of domestic remedies must therefore be dismissed. The Court notes that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

2. Merits

16.  In reiterating its case-law that the seizure of property for legal proceedings relates to the control of the use of property, the Court finds that this complaint falls within the ambit of the second paragraph of Article 1 of Protocol No. 1 to the Convention (see Raimondo v. Italy, judgment of 22 February 1994, Series A no. 281-A, § 27).

17.  It was not disputed between the parties that the interference was prescribed by law and in the general interest of the community. The Court sees no reason to hold otherwise. For the Court, the essential question must be whether, as a consequence of the bailiffs' actions to attach the applicant's motorbikes, the applicant has had to bear "an individual and excessive burden".

18.  The Court notes that the applicant bought the motorbikes in 2014 when the claims sought to be enforced in respect of company S. had been nullified. The registration of the applicant's ownership could not take place as the motorbikes had not been released from attachment in due time and the prohibition on disposition had been lifted only some months after the purchase. As a consequence of this situation a series of other seizure orders were registered in respect of the motorbikes for the benefit of the creditors of company S.

19.  The Court has regard to the Government's argument that these seizure orders could not be considered arbitrary, as throughout this time company S. remained the registered owner of the motorbikes. Nevertheless, it has neither been argued nor disputed that the applicant acted other than in good faith, the defects in registering his ownership being attributable to the delay of the administrative authorities in releasing the motorbikes from attachment and lifting the prohibition of disposal. It was precisely the ensuing series of attachment orders that prevented the applicant from registering his ownership. In other words, since the purchase of the motorbikes in 2014, the applicant's situation remained that his property was retained to secure the debts of a third party to its creditors.

20.  The Court also notes that discontinuation of the seizure was already ordered in 2017 by the Dunakeszi District Court, finding that the motorbikes were the applicant's property.

21.  While it is true that this ruling was issued in the context of one set of enforcement proceedings, the Court takes note of the applicant's argument that he could not have been fully aware of the legal status of the motorbikes as the seizure orders were registered with considerable delays and in parallel to the proceedings aimed at the release of the motorbikes. The Court considers that the applicant's inability to fully apprehend the restrictions attached to his property emanated, at least partly, from flaws attributable to the domestic authorities.

22.  Finally, the Court further finds it relevant that some of the seizure orders were issued by a bailiff who, due to his participation in previous proceedings initiated by either the applicant or company S., had been made aware of the change of ownership.

23.  These circumstances are sufficient to enable the Court to conclude that the continued retention of the applicant's motorbikes, even after they had been found by the Dunakeszi District Court to be the applicant's property, constituted an individual and excessive burden on the applicant, upsetting the "fair balance" which should be struck between the protection of the right of property and the requirements of the general interest.

24.  There has therefore been a violation of Article 1 of Protocol No. 
1.

APPLICATION OF ARTICLE 41 OF THE CONVENTION

25.  The applicant claimed 500 euros (EUR) in respect of pecuniary damage, as well as EUR 4,000 in respect of non-pecuniary damage. The applicant also claimed EUR 500 for the costs and expenses incurred before the Court.

26.  The Government found these claims excessive.

27.  The Court awards the applicant EUR 4,500 in respect of pecuniary and non-pecuniary damage combined, plus any tax that may be chargeable.

28.  Having regard to the documents in its possession, the Court considers it reasonable to award EUR 500 in respect of costs in the proceedings before the Court, plus any tax that may be chargeable to the applicant.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares the application admissible;
2. Holds that there has been a violation of Article 1 of Protocol No. 1 of the Convention;
3. Holds

(a)  that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i)  EUR 4,500 (four thousand five hundred euros), plus any tax that may be chargeable, in respect of pecuniary and non-pecuniary damage;

(ii)  EUR 500 (five hundred euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;

(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points.

Done in English, and notified in writing on 19 October 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Liv Tigerstedt Alena Poláčková
 Deputy Registrar President