THE KARIBU FOUNDATION v. NORWAY

• Judgment Date: 10 November 2022
• ECLI: ECLI:CE:ECHR:2022:1110JUD000231720
• Counsel: BJØRGE E.
• Date: 10 November 2022
• Application Number: 2317/20
• Court: Fifth Section (European Court of Human Rights)
• Respondent State: Noruega
• Applied Rules: P1-1;P1-1-2

FIFTH SECTION

CASE OF THE KARIBU FOUNDATION v. NORWAY

(Application no. 2317/20)

JUDGMENT

Art 1 P1 • Control of the use of property • Inability of applicant organisation to increase ground lease rent for residents of apartments on its property to the desired level due to statutory “rent ceiling” • Applicable legislation enacted after exacting and pertinent review of Art 1 P1 requirements and aimed at remedying shortcomings in domestic legislation identified in Lindheim and Others v. Norway • Detailed review and proportionality assessment by the Supreme Court • Fair balance struck between competing interests at stake • Margin of appreciation not overstepped

STRASBOURG

10 November 2022

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of The Karibu Foundation v. Norway,

The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:

Síofra O’Leary, President,

Mārtiņš Mits,

Lətif Hüseynov,

Lado Chanturia,

Arnfinn Bårdsen,

Kateřina Šimáčková,

Mykola Gnatovskyy, judges,

and Martina Keller, Deputy Section Registrar,

Having regard to:

the application (no. 2317/20) against the Kingdom of Norway lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Norwegian organisation, the Karibu Foundation (“the applicant organisation”), on 27 December 2019;

the decision to give notice to the Norwegian Government (“the Government”) of the application;

the parties’ observations;

Having deliberated in private on 11 October 2022,

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

INTRODUCTION

1. The application concerns a complaint under Article 1 of Protocol No. 1 to the Convention from a lessor that was not permitted to increase ground rents as it had proposed.

THE FACTS

2. The applicant organisation is a foundation that was established in 1985 and has its main office in Oslo. The income from its assets is used for international development work, including support for ecclesiastical organisations and projects in southern Africa. The applicant organisation was represented before the Court by Mr E. Bjørge.

3. The Government were represented by their Agent, Mr M. Emberland, of the Attorney General’s Office (Civil Matters), assisted by O.S. Rathore, an advocate at the same office.

4. The facts of the case, as submitted by the parties, may be summarised as follows.

1. Background

5. The case concerns a property in Oslo, which the parties referred to by the name “Øvre Ullern terrasse”.

6. The property was purchased by a residential contracting company (Olav Selvaag I/S (Mr Olav Selvaag and his children)) in 1956. The same year the company leased it to another company (Selvaaghus AS) and in 1958 the latter company subleased it to a third company (I/S Øvre Ullern Terrasser).

7. In the early 1960s the municipality allowed apartments to be built on the land. Six blocks with a total of fifty-four terraced apartments were built and the apartments were sold to private buyers who had all entered into identical ground lease contracts with the company I/S Øvre Ullern Terrasser.

8. The ground lease contracts had a duration of fifty years beginning on 22 December 1956. The ground rent was set at 1,600 Norwegian kroner (NOK) for forty-nine of the lessees, and at NOK 1,200 for the remaining five lessees, amounting to an annual total of NOK 84,400. It was agreed that upon the expiry of the lease agreements the lessor could choose to either extend the lease by another fifty years or let the lessees redeem the plot at the value applicable at the time of redemption. The lessor was also entitled, under the lease agreements, to adjust the rent every five years in accordance with the wholesale price index.

9. In 1982 ownership of the property was transferred to Ms Cecilie Nustad, daughter of Mr Selvaag.

10. In 1985 Ms Nustad established the applicant organisation.

11. In 1994 the primary ground lease agreement relating to Øvre Ullern Terrasse was transferred from Selvaaghus A/S to Ms Nustad’s investment company Mallin Eiendom AS.

12. On 10 June 2004 Mallin Eiendom AS sent a letter to the lessees informing them that the contracts would not be renewed upon their expiry on 22 December 2006 (see paragraph 8 above). The lessees, however, claimed an extension pursuant to the 1996 Ground Lease Act, which had entered into force in 2002, according to which lessees were given the right to extend lease contracts for an unlimited time on the same conditions as previously. The parties did not reach an agreement and Ms Nustad and Mallin Eiendom AS brought the matter before the domestic courts. The proceedings ended with a judgment given by the Supreme Court on 21 September 2007 (Rt-2007-1281), finding in favour of the lessees.

2. The Lindheim and Others case

13. On the same day, 21 September 2007, the Supreme Court gave judgment in a similar dispute where another lessor had lost a case against lessees under the provisions of the 1996 Ground Lease Act which gave lessees the right to extend lease contracts (see paragraph 12 above). Thereafter, that lessor, Ms B. Lindheim, and a group of other lessors lodged applications with the Court claiming that they had been victims of violations of Article 1 of Protocol No. 1 to the Convention. In its judgment in Lindheim and Others v. Norway (nos. 13221/08 and 2139/10, 12 June 2012), the Court held that there had been a violation of Article 1 of Protocol No. 1 to the Convention.

14. Having scrutinised the application of the 1996 Ground Lease Act to the facts of that case, the Court found that it did not appear that there was a fair distribution of the social and financial burden involved but, rather, that the burden was placed solely on the applicant lessors (see Lindheim and Others, cited above, § 134). The Court also noted that the problem underlying...