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SECOND
SECTION
CASE OF WASSDAHL v. SWEDEN
(Application
no. 36619/03)
JUDGMENT
STRASBOURG
6
February 2007
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 Wassdahl v. Sweden,
The
European Court of Human Rights (Second Section), sitting as a Chamber
composed of:
Mr A.B. Baka, President,
Mr I.
Cabral Barreto,
Mr M. Ugrekhelidze,
Mrs A. Mularoni,
Mrs E.
Fura-Sandström,
Ms D. Jočienė,
Mr D. Popović,
judges,
and Mrs S. Dollé, Section Registrar,
Having
deliberated in private on 16 January 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application
(no. 36619/03) against the
Kingdom of Sweden lodged with the Court
under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”)
by a Swedish national, Mr Lars
Wassdahl (“the applicant”), on 8 November 2003.
- The
Swedish Government (“the Government”) were represented by
their Agent, Mr M. Falk, Ministry for Foreign Affairs.
- On
29 November 2005 the
Court declared the application partly inadmissible and decided to
communicate the complaint concerning the length of the administrative
proceedings to the Government. Applying Article 29 § 3 of the
Convention, it decided to rule on the admissibility and merits of the
application at the same time.
THE FACTS
THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1947 and lives in Orsa.
- On
28 May 1996 the Tax Authority (skattemyndigheten) of the
County of Kopparberg sent a preliminary consideration (övervägande)
to the applicant informing him that it was considering disallowing
the deduction he had made for the interest he had paid on debts in
the amount of 2,000,000 Swedish kronor (SEK), as well as his declared
capital gains for the sale of stocks in the amount of SEK 775,000,
that he had made in his tax return for 1995. Further, it was
considering imposing tax surcharges (skattetillägg)
amounting to SEK 147,000 (approximately 15,800 euros [EUR]), i.e. 40%
of the increased tax liability on the sum of SEK 1,225,000.
- The
preliminary consideration was based on an investigation of a company
which had done business with a substantial number of private persons.
As concerned the applicant, it appeared that he had borrowed SEK
40,000,000 from the company and commissioned it to buy stocks for the
same amount on his behalf. The applicant then sold the stocks back to
the company at a fixed date, upon which he had made a capital gain.
At the same time, he repaid the loan together with interest to the
company. As the capital gain corresponded to the interest, they were
set off against each other. In the Tax Authority’s view, the
transactions had in reality never taken place and the applicant had
simply received two statements of account and a promissory note in
order to use them to obtain tax advantages.
- The
applicant was requested to submit any comments he might have to the
Tax Authority by 22 July 1996, which he did. He claimed that the
transactions had taken place and that his tax return should be
approved.
- On
27 September 1996 the Tax Authority decided to follow its preliminary
consideration. With regard to the imposition of tax surcharges, it
found that the applicant had submitted incorrect information about
the purported transactions.
- On
3 January 1997 the applicant appealed against the decision, disputing
the Tax Authority’s findings. He maintained that there were no
grounds for disallowing the deductions or imposing tax surcharges on
him.
- On
30 April 1997 the Tax Authority made its obligatory re-assessment of
its decision of 27 September 1996 but upheld it. It then forwarded
the appeal to the County Administrative Court (länsrätten)
of the County of Dalarna.
- On
29 May 2000 the County Administrative Court rejected the applicant’s
appeal after having held an oral hearing. It agreed with the Tax
Authority’s conclusion that no transactions had in reality
taken place between the applicant and the company, for which reason
they could not be included in his tax return. Moreover, the court
found that the applicant had submitted incorrect information to the
Tax Authority and that there were no grounds on which to remit the
tax surcharges.
- On
30 June 2000 the applicant appealed to the Administrative Court of
Appeal (kammarrätten) in Sundsvall, maintaining his
claims. On 30 January 2002 he made further submissions to the court,
stating inter alia that his rights under Article 6 of the
Convention had been violated as he had not had access to the same
material as the Tax Authority, and since the tax surcharges had been
incorrectly imposed on him.
- By
judgment of 15 April 2002 the Administrative Court of Appeal upheld
the lower court’s judgment in full, without giving any new
reasons of its own.
- On
27 May 2002 the applicant appealed to the Supreme Administrative
Court (Regeringsrätten), relying on the same grounds as
before the lower courts and expanding them further.
- On
11 September 2003 the Supreme Administrative Court refused leave to
appeal.
- On
25 November 2003 the applicant sued the Swedish State, through the
Chancellor of Justice, before the District Court (tingsrätten)
in Stockholm. He sought SEK 6,850,000 (approximately EUR 736,000) in
damages on the grounds that the Tax Authority and the administrative
courts had not afforded him a fair procedure, having withheld certain
information from him, and that the proceedings had been of excessive
length. He invoked national legislation as well as the Convention and
its case-law.
- The
State contested the suit, claiming that it had not caused the
applicant any injury, either by fault or neglect, for which he could
claim damages.
- In
a judgment of 21 December 2004, the District Court rejected the
applicant’s claims. As concerned the length of the proceedings,
the court considered that the administrative courts’
examination of his tax case had not taken so long as to incur the
State’s liability for damages.
- On
27 December 2004 the applicant appealed to the Svea Court of Appeal
(hovrätten), maintaining his claims.
- On
2 November 2005 the Court of Appeal upheld the lower court’s
judgment in full. With regard to the complaint about the length of
the proceedings, the court, without giving any reasons, found that
the tax proceedings could not be considered to have been of excessive
duration.
- On
12 October 2005 the applicant appealed to the Supreme Court (Högsta
domstolen) where the case is still pending, awaiting a decision
on leave to appeal.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the length of the administrative
proceedings had been incompatible with the “reasonable time”
requirement, laid down in Article 6 § 1 of the Convention, which
reads as follows:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a ... hearing within a
reasonable time by [a] ... tribunal...”
- The
period to be taken into consideration began on 28 May 1996 and ended
on 11 September 2003. It thus lasted over seven years and three
months for one administrative and three judicial levels of
jurisdiction.
A. Admissibility
- The
Government submitted that the applicant had failed to exhaust the
domestic remedies available to him since he had not awaited the final
outcome of the national compensation proceedings against the Swedish
State before introducing the complaint before the Court. They relied
on a judgment of the Supreme Court, pronounced on 9 June 2005, where
the plaintiff had been granted compensation for both pecuniary and
non-pecuniary damage because of a breach of the “reasonable
time” requirement of Article 6 § 1 of the Convention in a
criminal case. Thus, according to the Government, there was an
effective remedy available to the applicant which he should have been
obliged to exhaust before complaining to the Court. In any event,
they claimed that he should now be required to await the final
outcome of the national compensation proceedings before his
application was dealt with by the Court.
- The
Court first observes that the judgment of the Supreme Court referred
to by the Government was pronounced on 9 June 2005, i.e. almost one
year and seven months after the applicant lodged the present
application with the Court. Thus, at the time of introduction of the
present application to the Court, there were no indications that
there existed an effective remedy in Sweden for complaints relating
to the length of proceedings. The Court therefore considers that the
applicant had exhausted the domestic remedies available to him at the
time when he complained to the Court.
26.
However, since the applicant in any event instituted compensation
proceedings against the State and these are still pending before the
Supreme Court, the question arises whether the outcome of these
proceedings should be awaited before the Court deals with the
applicant’s complaint.
- In
this respect, the Court notes that the case referred to by the
Government concerned criminal proceedings, where the complainant had
been acquitted of the charges against him, whereas the present case
relates to administrative proceedings, involving tax surcharges, for
which there does not yet exist any guiding judgment from the Supreme
Court. Moreover, both the District Court and the Court of Appeal
rejected the complaint about the length of the proceedings before the
administrative courts without giving any reasons, but simply stating
that they did not find the proceedings to have been of excessive
length. Here, the Court observes that the Court of Appeal’s
judgment was adopted in November 2005, i.e. after the Supreme Court’s
judgment referred to by the Government, but without making any
reference to it. Lastly, the Court notes that the compensation
proceedings have already been pending for more than a year before the
Supreme Court, awaiting its decision on whether to grant leave to
appeal.
- Having
regard to the above, the Court considers that, for the purposes of
the present case, the Government have not shown that the pending
compensation proceedings in Sweden can be considered to be an
effective remedy for the applicant, and it would thus be unreasonable
to prolong the proceedings before the Court even further. It follows
that the Government’s objection must be dismissed.
29. The
Court further notes that this complaint is not manifestly ill-founded
within the meaning of Article 35 § 3 of the Convention. It also
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
- The
Government left it to the Court to decide whether, on the merits, the
complaint revealed a violation of the Convention.
- The
Court reiterates that the reasonableness of the length of proceedings
must be assessed in the light of the circumstances of the case and
with reference to the following criteria: the complexity of the case,
the conduct of the applicant and the relevant authorities and what
was at stake for the applicant in the dispute (see, among many other
authorities, Frydlender v. France [GC], no. 30979/96, §
43, ECHR 2000-VII).
- The
Court considers that the present case did not concern matters of
particular complexity and that the applicant was not responsible for
any significant delays. On the contrary, it is of the opinion that
there were prolonged periods of inactivity, in particular before the
County Administrative Court, which were attributable to the national
courts, and that their handling of the case did not promote its
timely completion. In this respect, the Court observes that a
significant amount of money (approximately SEK 147,000 in tax
surcharges) was at stake for the applicant.
- Thus,
in the light of the criteria laid down in its case-law and having
regard to all the circumstances of the case, the Court considers that
the length of the proceedings of which complaint is made was,
overall, excessive and failed to meet the “reasonable time”
requirement.
There
has accordingly been a breach of Article 6 § 1.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article
41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- The
applicant claimed SEK 1,900,276 (approximately EUR 210,000) in
respect of pecuniary damage and SEK 4,500,000 (approximately
EUR 497,000) in respect of non-pecuniary damage.
- The
Government contested these claims.
- The
Court does not discern any causal link between the violation found
and the pecuniary damage alleged; it therefore rejects this claim.
However, it considers that the applicant must have sustained some
non-pecuniary damage because of the excessive length of the national
proceedings. Ruling on an equitable basis, it awards him EUR 1,500
under that head.
B. Costs and expenses
- The
applicant also claimed SEK 35,000 (approximately EUR 3,900) for the
costs and expenses incurred before the domestic courts and left it
for the Court to assess a fair reimbursement for his costs incurred
before the Court, stressing that he had spent many hours of his own
time preparing his case since he had not been represented by a
lawyer.
- The
Government contested the claim.
- According
to the Court’s case-law, an applicant is entitled to
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and were
reasonable as to quantum. In the present case, regard being had to
the information in its possession and the above criteria, the Court
rejects the claim for costs and expenses in the domestic proceedings
and finds it reasonable to award the applicant, who was not
represented by a lawyer, the sum of EUR 500 for costs and expenses
incurred before the Court.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the remainder of the application
admissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention;
- Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following
amounts, to be converted into Swedish kronor at the rate applicable
at the date of settlement:
(i)
EUR 1,500 (one thousand five hundred euros) in respect of
non-pecuniary damage;
(ii)
EUR 500 (five hundred euros) in respect of costs and expenses;
(iii)
any tax that may be chargeable on the above amounts;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 6 February 2007, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
S. Dollé A.B. Baka
Registrar President
