Key facts of the case:
References for a preliminary ruling — Article 63 TFEU — Free movement of capital — Rights of usufruct over agricultural land — National legislation permitting such rights to be acquired in the future only by close family members of the owner of the land and cancelling, without providing for compensation, the rights previously acquired by legal persons or by natural persons who cannot demonstrate a close family tie with the owner of the land.
Outcome of the case:
On those grounds, the Court (Grand Chamber) hereby rules:
Article 63 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which rights of usufruct which have previously been created over agricultural land and the holders of which do not have the status of close relation of the owner of that land are extinguished by operation of law and are, consequently, deleted from the property registers.
1) These requests for a preliminary ruling concern the interpretation of Articles 49 and 63 TFEU and of Articles 17 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
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27) In particular, according to the referring court, the legal presumption which, although not expressly set out in the legislation concerned, is at its base, that all the private contracts which created rights of usufruct and rights of use were entered into in order to avoid the previous prohibitions relating to the acquisition of ownership, is intended to bring alleged old infringements of the law to an end. The Hungarian legislature thus prescribed, by legislative measures, the effects of the alleged invalidity of those contracts, without however showing that that legislation was in the public interest; it also denied the persons concerned the possibility of proving that their contracts were valid in an administrative procedure and compromised their right, laid down in Article 47 of the Charter, to a fair hearing.
28) Furthermore, according to the referring court, the national provisions at issue in the main proceedings also undermined the right to property enshrined in Article 17 of the Charter, in particular by failing to ensure appropriate compensation for the dispossessed usufructuaries and by failing to comply with the principle of the protection of legitimate expectations, in the light of the fact that investment in a usufruct constitutes, in principle, a long-term legal transaction.
29) It was in those circumstances that the Szombathelyi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Szombathely) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) Must Articles 49 and 63 TFEU and Articles 17 and 47 of the [Charter] be interpreted as precluding national legislation such as that at issue in the main proceedings, which — without considering other criteria — imposes the obligation to cancel the registration of the rights of usufruct and rights of use burdening agricultural land which have been registered in the name of companies or natural persons who are not close family relatives of the owner of the land, without at the same time prescribing, in favour of the holders of the extinguished rights of usufruct and rights of use, compensation for the financial loss which, although it arises from valid contracts, cannot be claimed in the context of the settlement of accounts between the parties?
(2) Must Articles 49 and 63 TFEU and Articles 17 and 47 of the [Charter] be interpreted as precluding national legislation which — without considering other criteria — imposes the obligation to cancel the registration of the rights of usufruct and rights of use burdening agricultural land which have been registered, pursuant to contracts concluded before 30 April 2014, in the name of companies or natural persons who are not close family relatives of the owner of the land, and at the same time prescribes, in favour of the holders of the extinguished rights of usufruct and rights of use, compensation for the financial loss which, although it arises from valid contracts, cannot be claimed in the context of the settlement of accounts between the parties?’
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37) By its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Articles 49 and 63 TFEU and Articles 17 and 47 of the Charter must be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which rights of usufruct which have previously been created over agricultural land and the holders of which do not have the status of close relation of the owner of that land are extinguished by operation of law and are, consequently, deleted from the property registers.
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128) Accordingly, it is not necessary to examine the aforesaid national legislation in the light of Articles 17 and 47 of the Charter in order to resolve the disputes in the main proceedings.