Violation Of The Right To Effective Application And Right To Property Due To Failure To Examine Complaints Regarding Urban Transformation Implementation
Events
The building in which the applicants had five independent sections, four workplaces and one flat, was identified as a risky building and demolished in accordance with the Law No. 6306 on the Transformation of Areas under Disaster Risk. The condominium on the immovable property was converted into joint ownership after the demolition. In the meeting held by the stakeholders, it was decided to accept the construction contract and the project for the renovation of the demolished apartment block. According to the new allocation, the applicants were given two flats at the level of the elevation. Although the applicants attended this meeting, they did not participate in this decision.
Thereupon, the other shareholders applied to the Provincial Directorate of Environment and Urbanisation (Administration) for the ex officio sale of the applicants’ shares pursuant to Article 6 of Law No. 6306. The Administration determined the estimated square metre unit value of the immovable as 39.000 TL and the total value of the applicants’ shares as 6.396.000 TL. Administration decided to sell the applicants’ shares through an auction.
The applicants filed a lawsuit at the Civil Court of First Instance for the cancellation of the decision of the Board of Owners and the rectification of the contract. The Civil Court of First Instance decided to suspend the implementation of the decisions taken at the Board of Owners meeting and the construction contract. Upon the aforementioned interim injunction, the Administration cancelled the transaction regarding the sale. Upon the request of the defendants, the Civil Court of First Instance ruled to lift the interim injunction on the condition that TL 840.000 collateral is deposited. Thereupon, the Administration proceeded with the sale. As a result of the tender, the applicants’ shares were sold for a total price of 6.400.000 TL and the sale price was paid to the applicants.
The lawsuit filed by the applicants for the cancellation of the transaction regarding the sale of their shares was rejected by the Administrative Court on the grounds that there was no violation of the law in the sale of the shares of the applicants who did not participate in the decision taken by the Board of Owners.
In the lawsuit filed by the applicants for the cancellation of the tender and the valuation made by the Administration for the shares, the Administrative Court decided to reject the lawsuit on the grounds of jurisdiction in terms of the transaction regarding the determination of the share value, and to reject the lawsuit on the merits in terms of the tender transaction. In the justification of the decision, it was stated that the lawsuit filed against the sale decision, which was the basis of the tender, was rejected, and therefore, there was no violation of law in the tender procedure.
Allegations
The applicants claimed that the right to effective remedy in connection with the right to property was violated due to the failure to examine the legality of the decision of the Board of Owners regarding the determination of the new sharing method of the immovable demolished due to being within the scope of the risky building, and the right to property was violated due to the sale of the shares of the shareholder who did not consent to the decision of the Board of Owners by the public authorities and the low sale price.
The Court’s Assessment
A. Regarding the Alleged Violation of the Right to Effective Application in Connection with the Right to Property
Article 35 of the Constitution does not, as a rule, require the issuance of an interim injunction in favour of the owner who files a lawsuit before the judicial authorities in order to protect the right to property. However, in some cases, the real protection of the right to property may depend on the court’s decision on certain measures before the final judgement. Especially in cases where there is a risk that a possible final judgment in favour of the owner may be inconclusive, it may become necessary for the court to take measures to prevent the final judgment from losing its ability to be implemented while the proceedings are still in progress.
The owner must be able to benefit from the consequences of a judgment rendered in his favour by the courts in relation to the protection of his property right. It is clear that a favourable judgement will not have much meaning for the owner if it is not enforceable. In addition, this situation also eliminates the effectiveness of the judicial application.
In the case, it is understood that the control of the legality of the decision of the Board of Owners could not be carried out before the sale transaction. İn this context, it is necessary to take into account that the Administration’s continuation of the sale procedures is possible after the Civil Court of First Instance lifts the interim injunction. Since the existence of the decision of the Board of Owners is a prerequisite for the authority of the Administration to sell, the interim injunction prevented the continuation of the sale procedures and the inconclusiveness of the possible decision to be made in favour of the applicants.
Although the lifting of the interim injunction is within the competence of the courts – considering the purpose of the interim injunction to prevent the final decision from being inconclusive – it must be shown with a relevant and sufficient justification that there are facts justifying the lifting decision.
The Civil Court of First Instance relied on the fact that the building was demolished while changing the nature of the interim injunction. However, the building was demolished both before the meeting of the Board of Owners and before the lawsuit was filed to the Civil Court of First Instance for the cancellation of the decision taken in this meeting. Therefore, the building was already demolished at the time of the interim injunction. On the other hand, the fact that the building was demolished does not eliminate the risk of the sale of the applicants’ shares by the Administration within the scope of Law No. 6306.
The conditions observed by the Civil Court of First Instance when deciding on the injunction to suspend the implementation of the decision of the Board of Owners have not changed. In fact, the applicants have no complaint regarding the demolition of the building. The applicants complained that the method of division was not equitable. Whether the new method of division of the immovable property is equitable is a matter independent of the demolition of the building.
For this reason, it has been assessed that it is not a reasonable interpretation within the framework of the circumstances of the concrete case for the Civil Court of First Instance to accept that the precautionary measure ceases to be a necessary measure based on the fact that the building has been demolished, which does not affect the legality of the decision of the Board of Owners, and that it would be sufficient to request a guarantee from the defendants.
As a result, since the Civil Court of First Instance lifted the interim injunction to stop the implementation of the decision of the Board of Owners, the applicants were deprived of the opportunity to have their complaints regarding the legality of the decision of the Board of Owners examined before they lost their property rights. Thus, a legal mechanism that was found to be effective at the theoretical level lost its capacity to offer a chance of success in the concrete case due to this practice of the Civil Court of First Instance.
For the reasons explained above, the Constitutional Court decided that the right to effective remedy was violated.
B. Regarding the Allegation of Violation of the Right to Property
Although it is within the discretionary power of the public authorities to make arrangements for the sale of the shares of the shareholders who do not consent to the decision of the two-thirds majority of the Board of Owners regarding the new division of the immovable, this does not mean that the Administration can use this authority arbitrarily. In this context, the shareholders should have reached a decision as a result of an adequate negotiation and this decision should not clearly harm the interests of the minority shareholders.
The fact that the minority shareholders did not participate in the decision forcing them to accept a project which is clearly contrary to their interests and which contains clear imbalances compared to the previous state of the immovable property does not justify a severe intervention such as the sale of the shares. In the event that the shares of the minority shareholders are put up for sale before their objections to the new division method decided by the majority of the Board of Owners are heard by a judicial authority and met with relevant and sufficient justification, it cannot be said that the least damaging tool has been applied.
The review of the legality of the sale decision also requires an examination of whether the applicants’ refusal to consent to the new division method is justified. A review of the legality of the sale decision without examining whether the new sharing method is balanced and fair cannot be said to be a judicial review in the real sense. Otherwise, the administrative court would have conducted a purely formal judicial review. Therefore, the approach of the Regional Administrative Court, which excluded the applicants’ objections to the new way of sharing the immovable property from the examination, resulted in the failure to carry out a control in accordance with the requirements imposed on the state by Article 35 of the Constitution.
On the other hand, it cannot be said that the Administrative Court’s review limiting the review to whether the share ratio in the new division method is in accordance with the old division method is also in compliance with the guarantees of Article 35 of the Constitution. An audit in the sense required by Article 35 of the Constitution requires an examination of whether the new sharing method is economically balanced. This is a matter that can be understood by conducting an expert examination, if necessary. The fact that the Administrative Court was contented with a purely formal audit without examining whether the new distribution method was fair and balanced -if necessary, by taking the opinion of an expert- resulted in the applicants not being able to show that the sale of their shares was a last resort.
In balancing the burden imposed on the applicants by selling their shares against their will, it is important to pay the real value of the immovable property. In this context, the first point to be emphasised is that the shareholder whose shares were sold was not deprived of his property free of charge. The sale of the share of the shareholder who does not consent to the valuation method imposes a heavy burden on him. However, this burden is compensated by paying the fair value of the share to the shareholder. In this context, it is an important assurance that the valuation and sale process is carried out by the Directorate of Environment and Urbanisation, not by the stakeholders requesting the sale.
The Administrative Court assumed that the lawfulness of the sale transaction automatically implies that the tender is also lawful. This approach of the Administrative Court creates the risk of not subjecting the tender procedure to a full legal review. This is because, although a sale decision must be taken by the Administration in order to conduct the tender, the existence of a sale decision and its compliance with the law is not the only condition for the legality of the tender.
One of the conditions of the auction is that the value of the shares to be put up for sale must be duly determined by the Administration. Irregularities in the determination of the value of the shares also affect the legality of the tender procedure. Therefore, the interpretation of the Administrative Court that reduces the control of the legality of the tender transaction to the examination of the legality of the sale decision has rendered the judicial review ineffective.
Considering all these issues, the fact that the case filed for the cancellation of the tender was concluded without resolving the most important issue of the case, which is whether the value of the shares was duly determined, and without examining the applicants’ objections to the appraisal of the value and the sale price, has led to the result that the guarantees introduced in order to balance the burden imposed on the applicants with the interference to the right to property by selling their shares against their will have not been provided in the concrete case. In this case, it was concluded that the interference with the applicants’ right to property was also not proportionate.
The Constitutional Court decided that the right to property was violated for the reasons explained.
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