SECOND SECTION

CASE OF LILJA v. SWEDEN

(Application no. 36689/02)

JUDGMENT

STRASBOURG

23 January 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 Lilja v. Sweden,
The European Court of Human Rights (Second Section), sitting as a Chamber composed of:
	Mr	 , President,
	Mr	 ,
	Mr	 ,
	Mr	 ,
	Mrs	 ,
	Mrs	 	Mr	  judges,
and Mrs  , Section Registrar,
Having deliberated in private on 4 January 2007,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1.  The case originated in  against  lodged with the  of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by .
2.  The Swedish Government (“the Government”) were represented by their Agent, Mr M. Falk, Ministry for Foreign Affairs.
3.  On  the Court declared the application partly inadmissible and decided to communicate the complaint concerning the length of the 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
4.  The applicant was born in 1948 and lives in Norsborg.
A.  Criminal proceedings
5.  On 21 October 1996 the applicant was arrested on suspicion of aggravated tax fraud and an aggravated bookkeeping offence in relation to the declaration of value-added tax and employers’ contributions for the period July 1994 – September 1996 by Latem AB, a building company wholly owned by him. He was detained by a decision of the District Court (tingsrätten) of Stockholm on 23 October 1996 and released from detention on 3 December 1996.
6.  The applicant was interrogated on several occasions in 1996 and 1997. The preliminary investigation, which concerned 20 companies, was concluded on 25 April 1998. The applicant was notified of the investigation report which covered 7,000 pages. Following submissions by the various suspects, the public prosecutor declared in June 1999 that he expected to bring indictments in the autumn of 1999.
7.  On 51 occasions thereafter, the public prosecutor requested and the District Court granted extensions of the time-limit for bringing indictments. Eventually, on 28 October 2002 the applicant, together with 16 other suspects, was indicted for aggravated tax fraud and an aggravated bookkeeping offence. The trial commenced on 2 September 2003.
8.  By a partial judgment of 4 December 2003, the District Court acquitted the applicant of certain charges. By a further judgment of 27 February 2004 the District Court acquitted him of the remaining charges. In the absence of an appeal from the prosecutor, the latter judgment acquired legal force on 19 March 2004.
B.  Tax proceedings
9.  On 22 October 1996 the Tax Authority (skattemyndigheten) of the County of Stockholm initiated an audit of Latem AB’s liability for value-added tax and employers’ contributions concerning the above-mentioned period. On 24 June 1997 the County Administrative Court (länsrätten) of the County of Stockholm, at the request of the Tax Authority, issued an order that assets belonging to the company could be claimed in security for unpaid value-added tax (but not for any tax surcharges that might be imposed on the company). On 5 December 1997 the Tax Authority completed its audit report. By its communication to the company the same day, the company was informed that the Tax Authority was considering, inter alia, imposing tax surcharges on it.
10.  On the basis of the findings of the audit, the Tax Authority, by decisions of 18 December 1997 and 26 March and 1 April 1998, revised upwards the taxation bases for calculating the relevant taxes by a total of approximately 3 million Swedish kronor (SEK) (value-added tax) and approximately SEK 14.6 million (employers’ contributions). In addition, Latem AB was considered responsible for employees’ taxes based on a total salary amount of approximately SEK 10.6 million. Moreover, as the information supplied by the company in its tax returns was found to be incorrect, the Tax Authority ordered it to pay tax surcharges (skattetillägg, avgiftstillägg) amounting to 20% of the increased tax liability for value-added tax and employers’ contributions.
11.  The company appealed to the County Administrative Court. Following an oral hearing on 11 November 1999, the court, by six judgments of 29 November 1999, upheld the Tax Authority’s decisions, save for a minor reduction of the taxation base for employers’ contributions for one year.
12.  On 4 February 2000 the company appealed to the Administrative Court of Appeal (kammarrätten) in Stockholm. On 12 February 2003, the appellate court held an oral hearing and, by a judgment of 10 March 2003, it upheld the County Administrative Court’s judgments.
13.  On 2 October 2003 the Supreme Administrative Court (Regerings-rätten) refused leave to appeal.
C.  Other proceedings
14.  On 15 February 2002 the applicant complained to the Parliamentary Ombudsman (Justitieombudsmannen) about the preliminary investigation against him. The matter was referred to the Director General of the National Economic Crimes Bureau.
15.  In a decision of 22 November 2002, the Director General criticised the responsible prosecutor for the delays in the preliminary investigation. He found that the prosecutor should have decided whether to bring an indictment at the latest during the autumn of 1999 and thus disagreed with the prosecutor’s opinion that he had to await the outcome of the tax proceedings. The Director General further stated that, whatever reasons there might have been for the delay, it was unacceptable for a suspect to have to wait more than four years after a completed preliminary investigation for a decision whether he would be indicted for offences dating back even further. The Director General was also astonished that the District Court had repeatedly extended the time-limit set for bringing an indictment. Noting that the prosecutor had not given any information on the state of the investigation when requesting extensions and that the court had not asked for such information, he pointed out that the court’s task when examining such requests was to determine whether the seizure of property should remain, to keep itself informed of the state of the investigation and to see to it that the investigation proceeded with appropriate speed.
16.  The applicant further requested compensation for suffering caused by his detention in 1996. On 2 June 2004 the Chancellor of Justice, pursuant to the Act on Compensation for Deprivations of Liberty (Lagen om ersättning vid frihetsinskränkning, 1974:515), awarded him SEK 35,000 for suffering and SEK 2,500 for legal costs.
17.  Upon application by the Enforcement Office (kronofogde-myndigheten) representing the State, the District Court, on 18 December 2003, declared Latem AB bankrupt on the basis of unpaid taxes and surcharges totalling approximately SEK 10.7 million which were due as a consequence of the above tax decisions.
THE LAW
I.  ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION
18.  The applicant complained that the length of the 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 ... any criminal charge against him, everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...”
19.  The Government left it to the Court to decide whether the relevant proceedings had been concluded within a reasonable time.
20.  The period to be taken into consideration in respect of the criminal proceedings began on 21 October 1996 and ended on 19 March 2004. It thus lasted seven years and five months for one level of jurisdiction. The corresponding period concerning the tax proceedings began on 5 December 1997 and ended on 2 October 2003 and thus lasted five years and ten months for three levels of jurisdiction.
A.  Admissibility
21.  The Government questioned whether the applicant could be considered a victim in so far as his complaint concerned the tax proceedings. They referred to the fact that the relevant taxes, contributions and surcharges had been levied not on the applicant himself but on his company and that, similarly, the company had been the party to the proceedings.
22.  The Government further submitted that the applicant had failed to exhaust the domestic remedies available to him since he had not sued the Swedish State for damages on account of the length of the proceedings. They relied on a judgment of the Supreme Court (Högsta domstolen), pronounced on 9 June 2005, where a 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, the applicant could have tried this avenue before complaining to the Court or, in any event, should now do so.
23.  The Court first observes that the company Latem AB was wholly owned by the applicant and that the criminal and tax proceedings were related, as they were both based on the submission of incorrect tax declarations. In these circumstances, the Court finds that the applicant may claim to be a victim of the length of the tax proceedings and that, in the examination of his complaint, the two sets of proceedings are to be considered together. In this connection, it reiterates that Article 6 § 1, under its criminal head, is applicable to the tax proceedings, in so far as they concerned tax surcharges (see, among other authorities, Janosevic v. Sweden, no. 34619/97, § 71, ECHR 2002-VII).
The Court further notes that the judgment of the Supreme Court referred to by the Government was pronounced on 9 June 2005, i.e. almost three years after the applicant lodged the present application with the Court and about one year and three months after his acquittal by the District Court acquired legal force. Thus, the Court considers that the applicant cannot now be required to lodge a compensation claim before the national courts, nor could he have been expected to have done so in March 2004 since, at that time, there were no indications that it would have been an effective remedy. In this respect, the Court notes that the applicant, during the proceedings before the District Court, did complain to the Chancellor of Justice that the proceedings were taking too long.
24.  The Government’s objections must accordingly be dismissed. The Court further notes that the applicant’s complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. It also finds that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B.  Merits
25.  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 that of the relevant authorities (see, among many other authorities, Pélissier and Sassi v. France [GC], no. 25444/94, § 67, ECHR 1999-II).
26.  The Court has frequently found violations of Article 6 § 1 of the Convention in cases raising issues similar to the one in the present case (see Pélissier and Sassi, cited above).
27.  The Government claimed that both the criminal and the tax proceedings had concerned matters of some complexity and had involved extensive investigations regarding many different suspects and companies. In regard to the criminal case, they emphasised that the applicant had on most occasions consented to the prosecutor’s requests for extensions of the time-limits for bringing an indictment. As far as the tax case was concerned, they pointed out that the applicant had made several requests for extensions of time-limits, which had been granted by the courts.
28.  While the Court acknowledges that the two related sets of proceedings at issue were of a complex nature, both as regards the subject matter and the number of suspects and companies involved, it notes that the Director General of the National Economic Crimes Bureau, in his decision of 22 November 2002, found that there had been no reason for the public prosecutor in the criminal case to await the outcome of the tax proceedings and that it had been unacceptable for the applicant to have to wait more than four years from the completion of the preliminary investigation to the bringing of the indictment. The Court fully agrees with that opinion; whether or not the applicant consented to many of the prosecutor’s requests for extensions of time-limits, it was for the District Court to ensure that the case proceeded with appropriate speed. Having regard to the aforementioned four-year period as well as the total length of more than seven years, involving only one judicial instance, it is clear that the criminal proceedings were not conducted with the promptness required by Article 6 § 1. In regard to the tax proceedings, the Court notes that the appeal of the applicant’s company against the County Administrative Court’s judgment was pending before the Administrative Court of Appeal for more than three years. This period must also be considered unreasonable.
29.  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 overall length of the proceedings at issue in the present case was 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
30.  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
31.  The applicant claimed 15,500 euros (EUR) in respect of non-pecuniary damage and a total of SEK 10,819,934 (approximately EUR 1,200,000) in respect of pecuniary damage.
32.  The Government considered that compensation for non-pecuniary damage should not exceed EUR 9,000. They contested the claim for pecuniary damage.
33.  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 domestic proceedings. Ruling on an equitable basis, it awards him EUR 10,000 under that head.
B.  Costs and expenses
34.  The applicant also claimed more than SEK 850,000 for costs and expenses, of which he specified that SEK 183,933 (approximately EUR 20,000) had been incurred before the Court.
35.  The Government contested the claim in so far as it concerned the domestic proceedings.
36.  According to the Court’s case-law, an applicant is entitled to reimbursement of his 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 considers it reasonable to award the sum of EUR 2,000 for the proceedings before the Court.
C.  Default interest
37.  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
1.  Declares the remainder of the application admissible;

2.  Holds that there has been a violation of Article 6 § 1 of the Convention;

3.  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 10,000 (ten thousand euros) in respect of non-pecuniary damage;
	(ii)  EUR 2,000 (two thousand 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;

4.  Dismisses the remainder of the applicant’s claim for just satisfaction.
Done in English, and notified in writing on 23 January 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
	S. 	J.-P. 
	Registrar	President