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On 21 December 2017, the Plenary of
the Constitutional Court found a violation of the right to property safeguarded by
Article 35 of the Constitution in the individual application lodged by ANO İnşaat ve
Ticaret Ltd. Şti. (no. 2014/2267).
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THE FACTS
[9-43]
The applicant is a company, established in 1970 in Ankara, and engages in
construction works.
On
9 May 1977, the applicant company signed a contract with the General Directorate
for State Hydraulic Works for the construction of a hydroelectric power plant,
namely the Karacaören Dam and Hydroelectric Power Plant.
While
the construction works were continuing, on 14 March 1980 a second contract was
signed. However, upon the applicant’s request and administration’s approval, the
said construction works were ended and liquidated. Afterwards, the
administration calculated the expenses. The applicant company objected to the
expenses calculated by the administration.
The
applicant brought an action before the Ankara Civil Court. After a series of
subsequent proceedings before the Civil Chambers of the Court of Cassation, the
applicant was paid a certain amount of money on 23 September 2002.
The
applicant lodged an application with the European Court of Human Rights (“the
ECHR”) on 4 December 2002, alleging that both his right to a trial within a
reasonable time and the right to property due to the delay in the payment of
the amount stated in the contract with a low interest rate, which resulted in
his financial loss.
The
ECHR, found a violation of the applicant’s right to a trial within a reasonable
time; however, it found inadmissible the alleged violation of his right to
property for non-exhaustion of domestic remedies.
The
action brought by the applicant on 16 March 1995 to redress the further loss it
had sustained due to the delayed payment of its receivables by the General Directorate
for State Hydraulic Works was separated on 16 March 1995. The proceedings were
continued before the same court (Ankara Civil Court).
During
the proceedings, expert reports were issued. According to one of these reports,
the files
pertaining to the enforcement proceedings constituting a basis for the
applicant’s further loss claims had been sent to a paper mill, and it was not
possible to have access to the relevant documents.
Hence,
the applicant’s case was dismissed. The applicant’s subsequent appeal was also
dismissed. The final judgment was served on the applicant’s lawyer on 27 January
2014.
The
applicant lodged an individual application with the Constitutional Court on 20
February 2014.
V.
EXAMINATION
AND GROUNDS
44.
The
Constitutional Court, at its session of 21 December 2017, examined the
application and decided as follows:
A. Alleged Violation of the
Right to Property
1.
The
Applicant’s Allegations and the Ministry’s Observations
45.
The
applicant firstly underlined the finding that some of the files pertaining to
the enforcement proceedings constituting a basis for its further loss (munzam
zarar) claims had been sent to a paper mill while others had been lost and
could not be found again due to a flood. According to the applicant, the public
authorities displayed negligence with regard to the protection of evidence and
it suffered damage due to that negligence. The applicant further asserted that
the proceedings were lengthy in the action it had brought for its claim and
that the payment it had received late had fallen into depreciation due to the
high inflation rate in the country during that time period. The applicant
stated that it had lodged an application with the European Court of Human
Rights (“the ECtHR”) concerning an alleged violation of the right to property
and that the ECtHR had explicitly held in its decision that inflation rates
must be taken into account to prevent any loss of value in the money owed. The
applicant complains that its case was rejected by the inferior courts despite
the decision of the ECtHR on the ground that the further loss had not been
proven. On those accounts, the applicant alleges that there have been
violations of the right to a fair trial and the right to property.
46.
In its
observations, the Ministry pointed out that the Court of Cassation follows two
different practices on matters of further loss. Accordingly, the Court of
Cassation has required the further loss to be tangibly proven in some of its
decisions while in others it held that it must be presumptively acknowledged
that creditors are to maintain the value of their money in an inflationary
environment. The Ministry noted that, in the present case, the inferior courts
arrived at a resolution of the dispute in line with their first observations.
After referring to the ECtHR’s judgment on the case of Aka v. Turkey, in
which the Strasbourg Court held that the difference between the expropriation
price plus default interest paid to Mr Aka and the value of the amounts due
adjusted for higher inflation rates had to be paid to the applicant, the
Ministry declared that it is within the Court’s discretion to take account of
these points in reaching a conclusion.
47. In its counter-statements
against the Ministry’s observations, the applicant reiterated its arguments in
the application form.
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2.
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The Court’s Assessment
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48.
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Article 35 of the
Constitution provides as follows:
“Everyone has the right to own and inherit property.
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These rights may be limited by law only in view of public
interest.
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The exercise of the right to property shall not contravene public
interest.”
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49.
The
Court is not bound by the legal qualification of the facts by the applicant and
it makes such assessment itself (see Tahir Canan, no. 2012/969, 18
September 2013, § 16). In addition to the alleged violation of the right to
property, the applicant contends that there has also been a breach of the right
to a fair trial on account of the disappearance of the files pertaining to the
enforcement proceedings constituting a basis for its claim for compensation of
the further loss. On the other hand, the applicant’s primary complaint concerns
the allegation that the money it was owed was paid after falling into loss of
value. For this reason, the Court has found that all the complaints, except for
the allegedly unreasonable length of trial, should be examined within the scope
of the right to property.
a.
Admissibility
50.
The
alleged violation of the right to property must be declared admissible for not
being manifestly ill-founded and there being no other grounds for its
inadmissibility.
Mr. M. Emin KUZ and Mr. Kadir
ÖZKAYA did
not agree with this conclusion.
b.
Merits
i.
Existence
of Property
51.
A
person complaining that his/her right to property was violated must prove in
the first place that such a right existed (see Mustafa Ateşoğlu and Others,
no. 2013/1178, 5 November 2015, § 54).
52.
The
right to property safeguarded by Article 35 of the Constitution encompasses the
rights over any kind of assets which has an economic and monetary value (see
the Court’s judgment no. E.2015/39, K.2015/62, 1 July 2015, § 20). In this
framework, along with movable and immovable properties, which undoubtedly have
to be considered as property, the limited real rights and non-material rights
established over those properties as well as any enforceable claims fall within
the scope of the right to property (see Mahmut Duran and Others, no.
2014/11441, 1 February 2017, § 60).
53.
In the
present case, on 9 May 1977 the applicant company contracted with the National
Water Board (Devlet Su İşleri) to construct a dam and began construction
as per this contract. However, on 9 June 1988 the applicant and the National
Water Board decided to liquidate the contract. As a result of liquidation, the
National Water Board issued a final account for the works completed by the
applicant by that date but the applicant challenged this final account by
bringing an action on 10 October 1990 to claim payment of receivables. At the
end of the proceedings, the trial court held on 19 April 2002 that the
applicant was to receive 62,969.69 Turkish liras (TRY) and this judgment became
final on 6 June 2002 once it was rectified and upheld by the Court of
Cassation. This amount was paid to the applicant on 23 September 2002.
54.
In the
instant case, the applicant claimed that the receivable ruled by the said court
constituted a possession and that it had lost value due to the high inflation
rates experienced over the period between 1990 (when the action was brought
before a court) and 2002 (when the payment was made); therefore, the applicant
alleged that its right to property had been violated. The action for
compensation of further loss, which was brought at a later date by the
applicant, concerned reparation of the damage caused by the loss of value in
the amount of the receivable in question, which the applicant considered as
falling within its right to property. Therefore, the existence of property
should be determined on the basis of the applicant’s original receivable,
regardless of whether there was any further loss. In this scope, there is no
doubt that the receivable in question established by a final court decision is
encompassed, by virtue of its definite and enforceable nature, by the right to
property. Accordingly, the process regarding the compensation of further loss,
on the other hand, should be examined from the standpoint of proportionality in
connection with the question of whether the receivable considered within the
scope of the right to property was subjected to a loss of value.
55.
Hence,
as regards the impugned receivable ruled by a court, it is beyond doubt that
the applicant enjoys the right to property within the meaning of Article 35 of
the Constitution.
ii.
Existence
of an Interference and its Type
56.
In
view of Article 35 of the Constitution read together with other articles that
touch upon the right to property, the Constitution lays down three rules in
regard to interference with the right to property. In this respect, the first
paragraph of Article 35 of the Constitution provides that everyone has the right
to property, setting out the “right to peaceful enjoyment of possessions”, and
the second paragraph draws the framework of interference with the right to
peaceful enjoyment of possessions. Article 35 § 2 of the Constitution lays down
the circumstances under which the right to property may be restricted in
general and also draws out the general framework of conditions of “deprivation
of property”. The last paragraph of Article 35 of the Constitution forbids any
exercise of the right to property in contravention to the interest of the
public; thus, it enables the State to control and regulate the enjoyment of
property. Certain other articles of the Constitution also contain special
provisions that enable the State to have control over property. It should further
be pointed out that deprivation of property and regulation/control of property
are specific forms of interference with the right to property (see Recep
Tarhan and Afife Tarhan, no. 2014/1546, 2 February 2017, §§ 55-58).
57.
In the
case giving rise to the present application, the fact that the applicant’s
receivable was paid after a loss of value has constituted, without any doubt,
an interference with the right to property. It is understood that the late
reception of the amount receivable by the applicant did not have the nature of
deprivation of property, neither did it pursue the aim of controlling or
regulating property. In this case, the interference with the applicant’s right
to property must be examined within the framework of the first rule concerning
the principle of “peaceful enjoyment of possessions”.
iii.
Whether
the Interference Caused a Violation
58. Article 35 of the
Constitution does not envisage the right to property as an unlimited right;
accordingly, this right may be limited by law and in the interest of the
public. In interfering with the right to property, Article 13 of the
Constitution must also be taken into consideration as it governs the general
principles concerning the restriction of fundamental rights and freedoms.
Pursuant to the article cited above, fundamental rights and freedoms may only
be restricted by law, on the basis of the reasons laid down in relevant
articles of the Constitution, and in conformity with the requirements of a
democratic order of the society and the principle of proportionality. In order
for the interference with the right to property to be in compliance with the Constitution,
the interference must have a legal basis, pursue the public interest, and be
carried out in accordance with the principle of proportionality (see Recep
Tarhan and Afife Tarhan, cited above, § 62).
(1)
Whether
the Interference was Prescribed by Law
59.
Article
35 § 2 of the Constitution stipulates that any interference with the right to
property must be prescribed by law as it provides that the right to property
may be limited by law and in the interest of the public. Similarly, governing
the general principles surrounding the restriction of fundamental rights and
freedoms, Article 13 of the Constitution adopts the basic principle that
“rights and freedoms may only be restricted by law” (see Mehmet Arif Madenci,
no. 2014/13916, 12 January 2017, § 69). Therefore, pursuant to Articles 13 and
35 of the Constitution, the first criterion to be sought in the interference
with the right to property is whether it had a legal basis.
60.
Equally
important as the existence of the law is the necessity that the text and
application of the law has legal certainty to a degree that individuals may
foresee the consequences of their actions. In other words, the quality of the
law plays an important role in the determination of whether the requirement of
legality has been satisfied (see Necmiye Çiftçi and Others, no.
2013/1301, 30 December 2014, § 56).
61.
In the
present case, the inferior courts applied rediscount interest at varying rates
to the receivable ruled to be paid to the applicant by the National Water
Board, a public institution. This practice was based on Article 2 of the Law
no. 3095. Nonetheless, the applicant raised an allegation of damage that exceeded
the interest to be paid on the receivable ruled in its favour. The action for
compensation of further loss filed by the applicant within the scope of Article
105 of the now-repealed Law no. 818 (Article 122 of the Law no. 6098) in this
regard was dismissed by the first-instance court. The Court of Cassation upheld
the court’s decision and rejected the applicant’s subsequent request for
rectification, thereby rendering the decision final (see §§ 22-29 above).
62. The question of further
loss (munzam zarar) was described by Article 105 of the now-repealed Law
no. 818 and Article 122 of the Law no. 6098. Accordingly, where the creditor
has incurred a loss that is greater than the default interest, i.e. if the
damage suffered by the creditor exceeds the amount of interest accrued in the
days of non-payment of the debt, the debtor shall be liable to compensate for
that loss unless he/she is proven to be faultless.
63.
However,
as observed by the Ministry, the Court of Cassation has adopted two different
practices with regard to the matters of further loss. In some cases, the Court
of Cassation held that, pursuant to Article 122 of the Law no. 6098 (Article
105 of the now-repealed Law no. 818), the creditor had to prove with concrete
evidence that he/she had suffered a loss beyond the default interest due to
late payment of the amount receivable. According to those decisions, the
increase in the foreign exchange rate or the high rate of inflation in the
market will not relieve the creditor from the burden of proving that a further
loss had been incurred. On the other hand, according to the second approach
adopted in the practices of the Court of Cassation, the fault that would cause
a liability of compensation stemming from further loss is the debtor’s very
fault in going into default. No link of fault causing the loss will be sought
or deliberated upon. According to these decisions, it should be presumptively
acknowledged that an individual’s efforts and attempts to maintain the value of
his/her money and to return a profit in an inflationary environment, at least
by investing in term deposit accounts or foreign exchange accounts with
continually rising rates, conforms to the ordinary flow and experiences of
life. It was concluded that the debtor has the onus of proving this presumption
otherwise, i.e. the absence of fault or liability on his/her own part (see §§
37 and 38 above).
64. The Court’s duty is
limited by virtue of the subsidiary nature of the individual application
mechanism; in this context, the Court cannot intervene in the discretion of the
inferior courts with regard to interpretation of provisions of law and
examination of evidence unless there is a manifest arbitrariness or a manifest
error of discretion. In this scope, it is not for the Court to interpret the
rules of law regarding further loss or to examine the allegations and evidence
submitted by the applicant in that respect.
65.
Notwithstanding,
the question that is important for the purposes of the individual application
is that whether the interference with the right to property satisfied the
criteria laid down in Articles 13 and 35 of the Constitution. Accordingly, the
interference must be prescribed by law, pursue a legitimate aim, and also be
proportionate to that aim. Having further regard to the nature of the
interference, the Court will reach a conclusion as to whether the public
authorities’ approach regarding the practice of law met the requirements in
Article 35 of the Constitution after examining whether the interference was
successful in achieving the legitimate aim pursued (for a similar approach, see
Arif Güven, no. 2014/13966, 15 February 2017, § 52).
(2)
Whether
the Interference Pursued a Legitimate Aim
66.
According
to Articles 13 and 35 of the Constitution, the right to property may only be
restricted in the interest of the public. The notion of public interest serves
both a restrictive instrument, which allows for imposition of restrictions on
the right to property where the public interest requires it, and an effective
protection mechanism, which sets out limits to restrictions by preventing the
imposition of any restrictions on the right to property outside public interest
aims (see Nusrat Külah, no. 2013/6151, 21 April 2016, § 53).
67.
The
notion of public interest is considerably broad by its very nature. Taking into
account the needs of the public, the legislative and executive organs have
broad discretionary powers in the determination of what is in the public
interest. If there is a dispute on the public interest, it is clear that the
specialised first-instance courts and the courts of appeal are in a better
position to resolve such disputes. The Constitutional Court cannot intervene in
the discretion of the authorised public organs with regard to the determination
of public interest, unless their decisions are understood to be manifestly
ill-founded or arbitrary, in the individual application examination. The onus
of proving that the interference is not in line with the public interest rests
with the party raising such an allegation (see Mehmet Akdoğan and Others,
no. 2013/817, 19 December 2013, §§ 34-36).
68. The fact that statutory
and default interest rates to be applied unless it was decided otherwise has a
significant role for the proper functioning of economic life. In this
connection, the Court considers in the present case that the application of
interest to the applicant’s receivable in accordance with the legal provisions
regulating default interest pursued a legitimate aim based on public interest.
(3)
Proportionality
(a) General Principles
69.
Pursuant
to the principle of proportionality, a fair balance must be struck between the
public interest sought in restricting the right to property and the
individual’s rights. This fair balance will have been upset where it is found
out that the applicant has personally borne an excessive burden (see Arif
Güven, cited above, § 58). In the assessment of proportionality of the
interference, the Court will take account of the burden imposed on the
applicant from two perspectives: on the one hand, it will examine the importance
of the legitimate aim sought to be achieved; and, on the other, it will have
regard to the nature of the interference along with the behaviour of the
applicant and the public authorities (see Arif Güven, cited above, §
60).
70.
Being
an instrument of exchange in economies, money represents an economic value
which provides benefits for its owner such as profit, rent and interest when
used in various commercial, industrial, agricultural activities and so on. The
utilisation of money by persons and entities other than its owner results in
the owner’s deprivation of this economic value and, in economies under the
effect inflation, causes it to lose its value (i.e. its purchasing power) based
on the inflation rate.
71. Where the inflation rate
and, by extension, foreign exchange rates, term deposit, Treasury bill and
State bond interest rates are much higher than the fixed statutory and default
interest rates, the consequence turns in favour of the debtor but to the
detriment of the creditor. For this reason, the debtor does not pay the debt
when it is due and makes an effort to extend the length of proceedings when a
legal action is filed. Thus, the number of actions and proceedings before the
judiciary accumulates, the public confidence in the judiciary diminishes, the
idea of obtaining claims on one’s own spreads, thereby disturbing the public
order and undermining the personal and public safety (see the Court’s judgment
no. E.1997/34, K.1998/79, 15 December 1998).
72.
In
cases where an amount receivable under the right to property is paid late, not
only does the real value of the property decrease with a considerable
depreciation in value of the money due to inflation during the default period,
but also the creditor cannot have an opportunity to yield a return from the
amount as a savings or investment tool. In this way, persons are subjected to
unfairness through deprivation of their right to property (see the Court’s
judgment no. E.2008/58, K.2011/37, 10 February 2011).
73.
In
previous applications concerning alleged suffering because of late payment of
the amounts due that are prescribed by the legislature as a right or have
become public debt, the Court found breaches of the right to property if the
depreciations of the receivable or the amount guaranteed under a right had
imposed a disproportionate burden on applicants (see Mehmet Akdoğan and
Others, cited above; and Akel Gıda San. ve Tic. A.Ş., no. 2013/28,
25 February 2015). Likewise, the Court found a violation of the right to
property under the proportionality aspect in an application where it was
concluded that the amount of compensation awarded by courts had lost value
against inflation due to the time spent over the course of legal proceedings (see
Abdulhalim Bozboğa, no. 2013/6880, 23 March 2016). Furthermore, the
Court held that there had been a violation of the right to property on the
ground that an applicant’s retirement bonus -established by a court decision
within the framework of social security payments- had been paid after
depreciation and it had imposed an excessive and extraordinary burden on the
applicant (see Ferda Yeşiltepe [Plenary], no. 2014/7621, 25 July 2017).
(b)
Application
of the Principles to the Present Case
74. The action brought by the
applicant for the collection of its receivable under the dam construction
contract was accepted in part by the first-instance court on 19 April 2002 and
upheld by the 15th Civil Chamber of the Court of Cassation on 6 June
2002 upon an appeal. Accordingly, the inferior courts ruled that the National
Water Board was to pay the applicant TRY 62,969.69 for the works completed by
the applicant within the scope of the contract for dam construction. However,
the mere ruling on a payment in favour of the applicant has not removed the
applicant’s victim status by itself. In order for the applicant’s victim status
to be remedied, it is necessary to offer reparation in view of both the time of
the alleged violation and the period of time during which the victim was unable
to use this right.
75.
In the
present case, the applicant received the original due amount of TRY 62,969.69
as well as the interest payment of TRY 348,027.70. Nonetheless, the applicant
complaints that its receivable lost value due to late payment and the
inflationary environment witnessed in the country during the default period.
76. As mentioned above, in
various judgments held on both constitutionality review and individual
application, the Court has underlined that the amounts receivable fall within
the right to property and that, in case of late payment of amounts due by the
State, it is important to pay such an interest that is not below the inflation
rates not only for the protection of individual rights but also for the
purposes of public order. In this context, the Court has already acknowledged
that the loss of value of receivables that are regarded to be falling within
the individuals’ right to property caused by a late payment made by public
authorities due to unreasonable reasons constitutes a breach of the right to
property.
77. In the present case, the
inferior courts established four different dates from which default interest
would run in respect of the applicant’s receivables. Accordingly, the amount of
TRY 486.69 became payable to the applicant on 10 October 1990; the amount of
TRY 2,870.82 on 9 June 1988; the amount of TRY 55,569.36 on 16 March 1995; and
the VAT-excluded amount of TRY 4,041.82 also became payable on 16 March 1995.
The total amount of these receivables (TRY 62,968.91), together with the
interest accrued (TRY 348,027.70), was paid to the applicant on 23 September
2002.
78.
According
to the Central Bank data, the rises in the inflation rates observed in the
relevant periods were as follows:
- June 1988 - September 2002: 203,613% (TRY 100 in June 1988 corresponded
to TRY 203,512.50 in September 2002 in real value).
- October 1990 - September 2002: 60,427% (TRY 100 in October 1990
corresponded to TRY 60,326.70 in September 2002 in real value).
- March 1995 - September 2002: 4,392% (TRY 100 in March 1995 corresponded
to TRY 4,291.59 in September 2002 in real value).
79.
However,
for its total receivable of TRY 62,968.91 falling within the right to property,
the applicant was paid TRY 348,027.70 as interest at the same period of time.
It has been observed on the basis of these data that, despite the amount of
interest paid, the cumulative inflation rate in the same period had been
13,254%; in other words, the applicant’s receivable was paid after having
fallen into a severe depreciation against inflation, consequently amounting to
less than 1% of its value. Indeed, the expert report submitted to the trial
court clearly indicated that the applicant’s receivable had undergone a loss of
value against inflation.
80.
As a
rule, public authorities are expected to pay the amounts owed to persons
without a need arising for a judicial process or enforcement proceedings. In
the present case, there was no reasonable justification for the late payment of
the applicant’s receivable. Besides, it has been understood that the public
authorities were only able to pay the receivable -ruled retrospectively by
inferior courts in favour of the applicant- after the end of the proceedings
and that the public authorities gained a benefit because of the length of the
proceedings.
81. In conclusion, regard
being had to the fact that the applicant’s receivable protected by the right to
property was paid after having fallen into depreciation to a large extent
against inflation, it has been found that a personally excessive and
extraordinary burden was imposed on the applicant. Therefore, the Court has observed
that the fair balance which needed to be struck between public interest and the
applicant’s right to property was upset to the detriment of the applicant in
the instant case because of the inferior courts’ strict interpretation
requiring the applicant to separately prove having incurred losses.
82.
Consequently,
the Constitutional Court has found a violation of the right to property safeguarded
by Article 35 of the Constitution.
Mr. M. Emin KUZ and Mr. Kadir
ÖZKAYA did
not agree with this conclusion.
B.
Alleged
Violation of the Right to a Trial within a Reasonable Time
83.
The
applicant alleged that there had been a violation of its right to a trial
within a reasonable time on account of the lengthiness of the proceedings it had
brought to claim compensation for its further loss.
1. Admissibility
84. The alleged violation of the right to a trial within a reasonable
time must be declared admissible for not being manifestly ill-founded and there
being no other grounds for its inadmissibility.
2. Merits
85.
In the
determination of the length of the proceedings on disputes concerning civil
rights and liabilities, the period shall run from the date on which the case
was filed and it shall be deemed to end when the proceedings have been
completed -including, most of the time, the execution stage- or, as regards the
proceedings that are still on-going, when the Court has ruled on the complaint
concerning a breach of the right to a trial within a reasonable time (see Güher
Ergun and Others, no. 2012/13, 2 July 2013, §§ 50 and 52).
86. Matters such as the
complexity of the proceedings, the number of their levels, the attitude of the
parties and the relevant authorities during the trial and the quality of the
applicant’s interest in the speedy conclusion of the case are the criteria
which are taken into consideration in the determination of whether or not the
length of the proceedings on disputes concerning civil rights and liabilities
is reasonable (see Güher Ergun and Others, cited above, §§ 41-45).
87.
It is
observed that the applicant filed the action for compensation of further loss
on 16 March 1995 and the proceedings came to an end once the Court of Cassation
dismissed the request for rectification on 26 December 2013.
88.
In
view of the above-mentioned principles and the Court’s previous judgments in
similar applications, the length of the proceedings in the present case that
lasted for nearly 18 years and 9 months must be considered unreasonable.
89.
For
these reasons, it must be held that there has been a violation of the right to
a trial within a reasonable time protected under Article 36 of the
Constitution.
C. Application of Article 50
of Code no. 6216
90.
Article
50 §§ 1 and 2 of the Code no. 6216 on Establishment and Rules of Procedures of
the Constitutional Court, dated 30 March 2011, reads as follows:
“(1) At the end of the
examination of the merits it is decided either the right of the applicant has
been violated or not. In cases where a decision of violation has been made what
is required for the resolution of the violation and the consequences thereof
shall be ruled...
(2) If the determined violation
arises out of a court decision, the file shall be sent to the relevant court
for holding the retrial in order for the violation and the consequences thereof
to be removed. In cases where there is no legal interest in holding the
retrial, the compensation may be adjudged in favour of the applicant or the
remedy of filing a case before the general courts may be shown. The court which
is responsible for holding the retrial shall deliver a decision over the file,
if possible, in a way that will remove the violation and the consequences
thereof that the Constitutional Court has explained in its decision of
violation.”
91.
The
applicant requested pecuniary compensation and retrial.
92.
In the
present application, the Court has concluded that there have been violations of
the right to property and the right to a trial within a reasonable time.
93. Since there is legal
interest in holding a retrial to redress the consequences of the violation of the
right to property, a copy of the judgment must be sent to the 7th
Chamber of the Ankara Civil Court of General Jurisdiction for retrial.
94. While the Court has found
a violation of the applicant’s right to a trial within a reasonable time, the
applicant did not request any non-pecuniary compensation. The applicant’s
request for pecuniary compensation, on the other hand, concerns the alleged
violation of the right to property. The finding of a violation and the ruling
in favour of a retrial on the basis of that violation offers the applicant
sufficient redress.
95.
The
total court expense of TRY 2,006.10 including the court fee of TRY 206.10 and
the counsel fee of TRY 1,800, which is calculated over the documents in the
case file, must be reimbursed to the applicant.
VI. JUDGMENT
For these reasons, the Constitutional Court held on 21 December 2017:
A.
1. By
MAJORITY and by dissenting opinion of Mr. M. Emin KUZ and Mr. Kadir ÖZKAYA, that
the alleged violation of the right to property be DECLARED ADMISSIBLE;
2. UNANIMOUSLY that the alleged violation of the right to a trial within
a reasonable time be declared ADMISSIBLE;
B.
1. By
MAJORITY and by dissenting opinion of Mr. M. Emin KUZ and Mr. Kadir ÖZKAYA, that
the right to property safeguarded by Article 35 of the Constitution was
VIOLATED;
2. UNANIMOUSLY that the right to a trial within a reasonable time
safeguarded by Article 36 of the Constitution was VIOLATED;
C.
UNANIMOUSLY
that a copy of the judgment be SENT to the 7th Chamber of the Ankara
Civil Court of General Jurisdiction (no. E.2008/145, K.2011/544) for a retrial
to redress the consequences of the violation of the right to property;
D.
UNANIMOUSLY
that the total
court expense of TRY 2,006.90 including the court fee of TRY 206.90 and the
counsel fee of TRY 1,800 be REIMBURSED TO THE APPLICANT;
E.
UNANIMOUSLY
that the payment be made within four months as from the date when the
applicants apply to the Ministry of Finance following the notification of the
judgment; In case of any default in payment, legal INTEREST ACCRUE for the
period elapsing from the expiry of four-month time limit to the payment date;
and
F.
That a
copy of the judgment be SENT to the Ministry of Justice.
DISSENTING
OPINION OF JUSTICES M. EMİN KUZ AND KADİR ÖZKAYA
In the individual application lodged by the applicant upon dismissal of
the action it had brought to claim compensation for further loss, the Court has
declared admissible the alleged violation of the right to property and found a
violation of the said right.
The reasoning of the judgment indicates that the action brought by the
applicant for the collection of its receivable under the dam construction
contract was partly accepted by the first-instance court and subsequently
upheld by the Court of Cassation; however, considering that the victim status
could have only been removed if the payment of receivable plus its interest had
been coupled with a compensation for the loss of value experienced in an
inflationary environment, the Court has concluded that there has been a breach
of the right to property on account of the fact that the applicant’s receivable
was paid after having fallen into a severe depreciation against inflation (see
§§ 74-82).
In this context, even though the judgment summarises the subject matter
of the application as a violation of the right to property due to the fact that
the receivable ruled on by a court was paid after the amount had undergone
depreciation, the present case differs from the previous judgments cited
therein in which we had found violations. From this standpoint, the present
case does not concern a depreciated payment of a receivable due to a delay in
the execution phase of the judgment which was rendered by an inferior court and
which became final, neither does it involve an alleged violation of the right
to property due to the calculation of the amount subject to a case accepted by
inferior courts (see, for instance, Ferda Yeşiltepe [Plenary], no.
2014/7621, 25 July 2017).
As indicated in the Court’s judgment, the application concerns the
dismissal of the applicant’s “action for compensation of further loss” filed on
the basis of the Code of Obligations as even the interest accruing on the
amount awarded to the applicant by the first-instance court would not cover its
losses (see § 61).
Article 105 § 1 on “Further loss” of the Code of Obligations (Law no.
818), which was in force when the applicant filed the claim for compensation of
further loss giving rise to the present application, and Article 122 § 1 of the
Turkish Code of Obligations (Law no. 6098), which repealed the Law no. 818 and
was in force when the first-instance court dismissed the compensation claim at
issue, stipulate that, if the damage suffered by the creditor exceeds the
amount of interest accrued in the days of non-payment of the debt, the debtor
shall be liable to compensate for that loss unless he/she is proven to be
faultless.
It is understood that, prior to the case concerning a claim for
compensation of further loss at issue in the present application, the applicant
company had signed a contract to construct a dam and a hydroelectric power
plant but the work had been stopped via liquidation upon the applicant’s
request. Subsequently, the applicant company filed an action to challenge the
final account calculated for the costs of the works completed thus far. The
trial court partly accepted the applicant’s case and awarded payment of
interest in addition to the main amount owed to the applicant. Furthermore, the
applicant did not consider the payments made in 2002 sufficient and filed
another action for compensation in 2005, which was joined with the preceding
action for compensation. In 2011 the trial court dismissed the action on the
grounds that “... the report dated 9 June 1988 drawn up with respect to the
liquidation of dam construction indicated that no payment of costs or
compensation would be made to the claimant (applicant) company due to
liquidation” and there had been no further loss incurred according to expert
reports except for the interest applied to the applicant’s receivable which had
been established within the main set of proceedings (and paid along with the
receivable 9 years before the delivery of the judgment). That judgment became
final when the Court of Cassation upheld it and dismissed the request for
rectification.
In other words, although the applicant company, having failed to fulfil
its commitment, requested and reached an agreement with the administration, in
which it agreed not to receive any payment of compensation or costs with a view
to being relieved from its contractual obligations and responsibilities, it
seemingly claimed compensation for further loss as it did not find the interest
accruing on the amount awarded by the trial court at the end of the action it
had filed to receive payment for the costs related to the works completed by
then.
In arriving at the conclusion of admissibility and violation, the
majority has apparently regarded the claim for compensation of further loss as
a continuation of the judgment rendered in the proceedings concerning the
applicant’s partly-accepted claim for payment of receivables. Nonetheless,
given that the case in question was not a claim for receivables (alacak
davası) but for compensation of damages (tazminat davası), we
consider that it was not appropriate to disregard the fact that, when
requesting termination of the construction by way of liquidation, the applicant
-as explained above- had agreed not to claim compensation in return for being
relieved of its contractual commitment and the legal liability arising from its
inability to fulfil it, as well as the applicant’s declaration of intent
regarding its waiver of compensation claims which had been relied on by the
inferior courts.
It is observed that the first-instance court initially rejected the
action for compensation giving rise to the application as it found the
respondent administration’s defence sufficient on the grounds that the
applicant had agreed not to claim compensation and that the further loss claim
fell within this scope.
As is well-established, the Court’s duty is limited on account of the
subsidiary nature of the individual application mechanism; thus, the Court
cannot intervene in the discretion of the inferior courts with regard to the
interpretation of rules of law and examination of evidence so long as there is
no manifest arbitrariness or manifest error of discretion in this respect.
While this principle has been reiterated in this judgment (see § 64), the
applicant’s complaints have been declared admissible without indicating any
findings as to whether there had been a manifest arbitrariness or error of
discretion in the rejection of the compensation claim by the inferior courts
through interpretation of the relevant provisions of the Code of Obligations
and examination of evidence.
In other words, the inferior courts rejected the action for compensation
on the grounds that, although the Code of Obligations stipulated the filing of
an action for compensation for reparation of further loss, the applicant
company had waived this claim in exchange for the administration’s agreement to
liquidate the construction work. Nevertheless, the majority of our Court
considers the alleged violation of the applicant’s right to property admissible
without establishing whether there has been any manifest arbitrariness or error
of discretion in such interpretation of rules of law or regarding the
assessment of the report signed between the applicant company and the
administration.
On the other hand, while the judgment reads that the first-instance court
held in 2004 that “the expert report submitted to the trial court clearly
indicated that the applicant’s receivable had undergone a loss of value against
inflation”, it is also noted that another expert report obtained by the same
court in 2010 did not find any substantiated further loss incurred by the
claimant (i.e. the applicant company) that had exceeded the default interest
already paid on its receivables calculated for the works it had completed. The
discretionary power with respect to which of the two expert reports would be
used as a basis for a ruling rests with the inferior courts of instance, which
have indeed been acknowledged within the Court’s judgment as having the authority
over examination of evidence.
In sum, it is not possible for us to agree with the said conclusions as
they are incompatible with our general principle which has been mentioned above
and also reiterated in the judgment. For these reasons, while sharing the
opinion on the declaration of admissibility and finding of a violation in
respect of the allegation concerning the right to a trial within a reasonable
time, we disagree with the majority’s decision to declare admissible the
complaint concerning an alleged violation of the right to property.
Understanding that the inferior court rulings did not contain a manifest error
of discretion or arbitrariness and that the applicant’s assertions regarding an
alleged violation of the right to property are manifestly ill-founded, we opine
that this part of the application should be declared inadmissible.
Furthermore, on the basis of the reasons explained above, we cannot agree
with the finding of a violation of the right to property or with the grounds
relied on for this finding; namely, (i) the consideration that first-instance
court’s judgment that “required the applicant to separately prove having
incurred losses” was a “strict interpretation”, and (ii) the conclusion that
“the fair balance which needed to be struck between public interest and the
applicant’s right to property was upset to the detriment of the applicant” that
has been reached without having regard to the conditions in the liquidation
agreement allowing for the termination of the construction work undertaken by
the applicant company or which legal liabilities did the applicant wished to be
relieved of in exchange for waiving any claims for compensation (see § 81).
In this scope, we observe in the present application that the applicant
company agreed not to claim any compensation with a view to being relieved of
the obligations it had undertaken under a construction contract and any
liabilities that might have arisen from its failure to fulfil those
obligations. We further understand that the applicant company was not entitled
to any receivables other than the default interest accruing due to late payment
of the amounts due for the works it had completed until liquidation. Therefore,
considering that a fair balance was struck between the applicant’s right to
property and public interest and that the applicant was not subjected to an
excessive an extraordinary burden, we disagree with the majority’s judgment
finding a violation.
