Veikko Puolakainen, attorney at law and partner of NOVE, together with his team including attorney at law Heili Püümann and counsel Indrek Niklus, successfully represented the Land Board in Supreme Court in a fundamental legal dispute which focused on whether it is possible to form an independent cadastral unit in a public water body (the Baltic Sea). The boundaries of the registered immovable had been determined already in the course of the land reform in such manner that they partially covered some land under the Baltic Sea. The subsequent owner of the registered immovable, AS Pro Kapital Eesti, intended to divide the registered immovable into independent cadastral units in such manner that a single cadastral unit would be formed only from the area of water (the Baltic Sea). The formation of such an independent cadastral unit was also prescribed by the detailed plan. The Land Board refused to register the cadastral unit, as the formation of a cadastral unit from a water body is not possible under valid law. The applicant disputed the refusal of the Land Board in administrative court. Tallinn Administrative Court refused to grant the action by its judgment of 28.08.2019, and found the refusal from registration to be lawful. Tallinn District Court annulled the judgment of the Administrative Court by its judgment of 27.03.2020 and concluded that the refusing administrative act of the Land Board was unlawful. By its judgment of 24.03.2021, the Supreme Court annulled the judgment of the District Court on the basis of the appeal in cassation of the Land Board, and upheld the judgment of the Administrative Court, replacing the reasons for the judgment of the Administrative Court with the reasons of the judgment of the Supreme Court.
The Supreme Court concluded that the Land Board lawfully refused to grant the applicant’s petition for registration regarding the formation of a cadastral unit in a public water body, although pursuant to the land register information the applicant had ownership title to the area of water (a part of the Baltic Sea) and the Land Board itself had previously registered the cadastral unit together with the area of water. The Chamber explained that pursuant to the previous wording of § 5 of the Water Act (clause 23 (1) 2) of the current Water Act), the territorial sea (i.e. the Baltic Sea) is a public water body that belongs to the state. Public water bodies are not in commercial use (subsection 5 (2) of the previous wording of the Water Act and subsection 23 (2) of the current Water Act). Pursuant to § 133 of the Law of Property Act, immovable property ownership extends to the shore-line of a public water body, i.e. the ordinary boundary of water of the water body. These provisions as the fundamental norms defining the commercial use and extent of the ownership title are of primal importance for the purposes of resolving the dispute. The Chamber did not agree with the position of the District Court that the Land Board had to issue the administrative act solely on the basis of the land register information and the decision on establishment of the detailed plan which constituted the legal grounds for the requested entry in the register. The Land Board has the competence to verify whether a land unit could be entered in the cadastre pursuant to the applicable law (including the boundaries of dividing the immovable). Pursuant to § 6 of the Administrative Procedure Act, the Land Board was required to establish the facts relevant to the matter in order to assess the lawfulness of the requested registration concerning the cadastral unit. Subsection 8 (2) of the previous version of the Land Cadastre Act is not the only norm which is to be observed while making an entry in the land cadastre. The Land Board also had to adhere to § 5 of the previous version of the Water Act and § 133 of the Law of Property Act. The Chamber did not agree with the statement of the applicant that the Land Board surpassed its competence and while verifying the legal grounds for the cadastral entry, it started to resolve the ownership issues (trying to establish the actual owner of land beyond the given administrative proceeding) and carry out supervision proceedings. As the register entry requested by the applicant was unlawful, it was mandatory to refuse to make this entry (subsection 3 (1) of the Constitution).
The Supreme Court concluded regarding the initial entry in the land register and acquisition of the immovable that it contained incorrect data, inter alia due to the inclusion of a part of the public water body. A thing being in commercial use or not does not depend on the validity of the transactions or administrative acts concerning the thing. The decision on the initial registration of the cadastral unit of the Land Board made in 1999, the decision on privatisation made in 1999 and the detailed plan of 2015 partially concerned a thing that did not exist within the meaning of the Law of Property Act. For the same reasons, the validity of the civil law contracts was not relevant for the purposes of the current dispute. A public water body belongs to the state which is also not the owner of the water bodies as immovables/things within the meaning of the Law of Property Act (a public water body is a public good) and cannot dispose of them by any civil law declarations of intention or administrative acts, irrespective of the validity of such declarations or acts. Pursuant to law, the applicant has never been the owner of the disputed area of water and has never had any other subjective right with regard to this area of water.
The issues resolved in this case were specific and connected with various fields of law. The dispute which was finally resolved by the judgment of the Supreme Court did not concern just the issues relating to the registration of the cadastral unit, but also public law construction and planning law issues (mainly the meaning of a detailed plan), as well as private law and property law issues (creation of ownership title by privatisation under the right of pre-emption, the extent thereof, potential prescription, meaning of transactions in private law, etc.). Among other things, the complexity of the case is indicated also by the fact that the reasons provided by the Administrative Court and District Court were exactly the opposite, and the case was finally resolved by the reasons of the Supreme Court. The intricacy of the court case is also underlined by the fact that for the resolution of the matter in the Supreme Court, the Administrative Chamber of the Supreme Court included also a member of the Civil Chamber of the Supreme Court. The positions of the Supreme Court can be applied in several other similar situations in the future. The judgment of the Supreme Court can be examined in further detail here: https://www.riigikohus.ee/et/lahendid?asjaNr=3-18-687/61