Marija GRUSOVNIK v Slovenia - 75201/01 [2009] ECHR 1046 (09 June 2009)

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The European Court of Human Rights (Third Section), sitting on 9 June 2009 as a Chamber composed of:

Josep Casadevall, President,
Elisabet Fura-Sandström,
Boštjan M. Zupančič,
Alvina Gyulumyan,
Egbert Myjer,
Ineta Ziemele,
Ann Power, judges,
and Stanley Naismith, Deputy Section Registrar,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having regard to the additional observations submitted by the respondent Government and the observations in reply submitted by the applicant, both requested by the President of the Chamber,

The applicant, Ms Marija Grušovnik, is a Slovenian national who was born in 1943 and lives in Šempeter. She was represented before the Court by Mr D. TerZan, a lawyer practising in Celje. The Slovenian Government (“the Government”) were represented by their Agent, Mr L. Bembič, State Attorney-General.

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

1. On 30 November 1993 the applicant was injured in a car accident caused by a third person. The perpetrator had taken out liability insurance with an insurance company Z.T. (“the insurance company”).

2. On 20 October 1995 the applicant, represented by a lawyer, instituted compensation proceedings against the insurance company at the Celje Local Court (Okrajno sodišče v Celju), claiming a total amount of 2,933,487 Slovenian tolars (SIT – approximately 28,600 euros (EUR)) for pecuniary and non-pecuniary damage, together with default interest. Out of the total amount, she sought SIT 2,900,000 (approximately EUR 28,300) for the non-pecuniary damage sustained, with default interest from the date on which the compensation proceedings had been instituted.

3. On 27 December 1995 the Celje Local Court decided that it did not have jurisdiction to hear the case and submitted the case file to the Celje District Court (OkroZno sodišče v Celju).

4. On 25 February 1997 the applicant requested the court to decide promptly on the case.

5. On 12 May 1997 the first-instance court held a hearing, at which it partly upheld the applicant’s claim for compensation in the amount of SIT 1,933,487 (approximately EUR 18,900) and dismissed the remainder of the claim. Out of the total, the court awarded the applicant SIT 1,900,000 (approximately EUR 18,500) for non-pecuniary damage, together with default interest with effect from the date of the court judgment. It dismissed, however, her claim for default interest with effect from the institution of the compensation proceedings on 20 October 1995 until the delivery of the judgment on 12 May 1997. Both parties appealed.

6. On 9 April 1998 the Celje Higher Court (Višje sodišče v Celju) dismissed the applicant’s appeal and partly upheld the defendant’s appeal, by lowering the amount of compensation awarded to SIT 1,633,487 (approximately EUR 15,943), together with default interest for non-pecuniary damage with effect from 12 May 1997.

7. On 24 June 1998 the applicant lodged an appeal on points of law with the Supreme Court (Vrhovno sodišče), alleging that the amount of compensation for non-pecuniary damage had not been correctly established in view of all the non-pecuniary damage she had suffered. In addition, the applicant maintained that default interest on compensation for non-pecuniary damage should have been awarded with effect from the date on which the compensation proceedings had been instituted, as allegedly required by the Obligations Act, and not only with effect from the date on which the first-instance court judgment had been delivered.

8. On 3 March 1999 the Supreme Court dismissed the appeal as a whole, holding that the second-instance court had correctly assessed the amount of compensation for non-pecuniary damage and correctly awarded default interest from the day the first-instance court judgment had been issued. In particular, it held that the amount of compensation appeared to be just also with regard to the relatively short period of time the applicant had had to wait for the first-instance court judgment; the first-instance court judgment had been delivered one year and seven months after the applicant had instituted compensation proceedings.

In this connection, the Supreme Court referred to the well-established jurisprudence to the effect that persons claiming compensation for non-pecuniary damage were not to be indemnified by an award of default interest for the period from the day the damage occurred until the day the first-instance court delivered judgment. Instead, this factor should be taken into account when determining a just amount of compensation (the principal). The Supreme Court stated that this approach had been adopted since 1987 owing to the unstable economic situation in the country and the high rate of inflation and monetary depreciation in particular. In order to preserve the real value of a compensation claim for non-pecuniary damage, the amount due was therefore determined only on the date of delivery of the judgment. Default interest was thus awarded only from that day onwards, while the time that had elapsed since the damage had occurred was taken into account when determining a just amount of compensation, if this was justified by the length of time the injured party had to wait for the court award, or by other circumstances of the case (see also “Relevant domestic law and practice” below). The applicant lodged a constitutional complaint with the Constitutional Court (Ustavno sodišče).

9. On 11 June 2001 the Constitutional Court declared the complaint inadmissible. It held that the Supreme Court had reached its decision in accordance with well-established jurisprudence, valid since 1987, according to which default interest on compensation for non-pecuniary damage was to be awarded only from the day the first-instance court rendered the judgment. Such approach had been adopted because of the high rate of inflation, in order to calculate the due amount of compensation in accordance with the prices valid on the day the decision was adopted, and not on the day the court proceedings had been instituted. In the Constitutional Court’s view it was therefore obvious why such manner of calculating the amount of compensation did not also allow an award of default interest for the period until the day the first-instance court judgment was delivered. The time that elapsed until the first-instance court judgment was delivered was, on the other hand, taken into account when establishing the amount of compensation, if the length of time and other circumstances of the case so required. Such an approach, in the Constitutional Court’s opinion, was generally adopted and was applicable to all disputes concerning non-pecuniary damage. Since the Constitutional Court did not find any violation of human rights, it dismissed the complaint.

10. On 4 July 2001 the Constitutional Court’s decision was served on the applicant.

11. The relevant sections of the Constitution of the Republic of Slovenia (Ustava Republike Slovenije, Official Gazette of the Republic of Slovenia, No. 33/91 and 42/97) provided at the material time:

“In Slovenia everyone shall be guaranteed equal human rights and fundamental freedoms irrespective of national origin, race, sex, language, religion, political or other conviction, material standing, birth, education, social status or any other personal circumstance.

“Everyone shall be guaranteed equal protection of rights in any proceedings before a court and before any State or local authority and bearer of public authority which determines his or her rights, duties or legal interests.”

“Everyone shall have the right to have his or her rights, duties and any charges brought against him or her determined without undue delay by an independent and impartial tribunal established by law.

Only a judge duly appointed pursuant to rules previously established by law and by judicial regulations may try such an individual.”

2. The 1991 Constitutional Act implementing the Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia

12. The following section of the Constitutional Act implementing the Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia of 25 June 1991 (Ustavni zakon za izvedbo Temeljne ustavne listine o samostojnosti in neodvisnosti Republike Slovenije, Official Gazette of the Republic of Slovenia, Nos. 1/91 and 42/97) is relevant to the present case:

“Until the relevant legislation of the Republic of Slovenia is enacted, the federal legislation in force in the Republic of Slovenia at the time of entry into force of this law shall be applied as legislation of the Republic of Slovenia unless it is contrary to the legal order of the Republic of Slovenia, and except as otherwise provided by this law.

13. This Act served as a legal basis for the incorporation, with the necessary amendments, of legislation previously enacted under the SFRY into the legal order of the independent Republic of Slovenia, for example the 1978 Obligations Act (see below).

14. The original text of the 1978 Obligations Act (Zakon o obligacijskih razmerjih, Official Gazette of the Socialist Federal Republic of Yugoslavia, Nos. 29/78, 38/85) provided in section 401 that default interest ceased to accrue once the amount of overdue interest reached the value of the principal debt (prohibition ultra alterum tantum). In 1989 this section was abrogated (Official Gazette of the Socialist Federal Republic of Yugoslavia No. 57/89).

“An obligation arising from a tort shall be deemed to be payable at the moment when the damage occurs.”

(2) Compensation for damage shall be determined according to the prices applicable at the time of the delivery of the court judgment, unless otherwise provided by law.

“(1) In respect of physical pain or mental anguish suffered on account of reduced physical capacity, ... and in respect of fear, the court shall award, if it considers this justified by the circumstances of the case and in particular the degree of pain or fear suffered, a just amount of pecuniary compensation, independent of the award made for pecuniary damage, and even if pecuniary damage has not been sustained.

(2) When considering a claim for non-pecuniary damage and determining the compensation to be awarded, the court shall consider the value of the damaged personal property and the purpose of such compensation, and shall also ensure that it does not serve interests which would be inappropriate to its nature and social significance.”

“(1) A debtor who fails to perform a pecuniary obligation shall owe, in addition to the principal, default interest at a rate prescribed by federal law.

“(1) A debtor shall be in default of his pecuniary obligation if he fails to perform it within the period stipulated for its performance.

(2) If no period is stipulated for performance, the debtor shall be in default where the creditor, by means of an oral or written reminder or by instituting judicial proceedings intended to secure the fulfilment of the obligation, requests the debtor to perform his obligation.”

“If the object of an obligation is a sum of money, the debtor shall owe the sum of money specified at the time the obligation was entered into, unless otherwise provided by law.”

16. The Code of Obligations (Obligacijski zakonik, Official Gazette of the Republic of Slovenia, No. 83/2001) reintroduced in section 376 a provision to the effect that default interest ceased to accrue once the amount of overdue interest reached the value of the principal (prohibition ultra alterum tantum, see paragraph 14 above). It also repealed former section 277 and provided instead in section 378 that default interest was to be regulated as follows:

“If a debtor is in default as regards the performance of a pecuniary obligation, he shall owe default interest in addition to the principal.

The rate of default interest shall be 8% per annum, unless a special law provides otherwise.”

17. In its transitional and final provisions the new Code stated that the provisions were not to apply to obligations that arose prior to its entry into force. It also provided that the special law referred to in section 378(2) was the Statutory Default and Basic Interest Rate Act (see below).

18. Other provisions of the new Code of Obligations relevant to the present case follow the wording of the former Obligations Act.

19. The Default Interest Rate Act (Zakon o obrestni meri zamudnih obresti, Official Gazette of the Republic of Slovenia, Nos. 14/92 and 13/93) prescribed the interest rate as the retail price growth rate in the preceding month, recalculated on an annual level, and increased by a 30% real annual default interest rate. In the subsequent year the real annual default interest rate was reduced to 25%. The default interest was composed of the real index and the retail price index (adjustment index), the latter having the function of increasing the amount of the principal according to the monetary depreciation in the country. Default interest thus had a function of preserving the real value of a pecuniary obligation and hence ensuring that the purchasing power of the claim remained unchanged.

20. The Statutory Default and Basic Interest Rate Act (Zakon o predpisani obrestni meri zamudnih obresti in temeljni obrestni meri, Official Gazette of the Republic of Slovenia, No. 45/95) determined the statutory default interest rate as being equal to the basic interest rate increased by 1.8 times the general discount rate of the Bank of Slovenia (section 2), the basic interest rate being the annual interest rate for domestic-currency pecuniary obligations ensuring the preservation of their real value (adjustment) (section 3). Default interest thus formally assumed three distinctive functions: a function of adjustment of pecuniary obligations in accordance with inflation in the country, a function of payment for the use of another person’s capital, and a punitive function for a debtor in default as regards the performance of his obligation.

7. The 2002 Amendments and Supplements to the Statutory Default and Basic Interest Rate Act

21. The Amendments and Supplements to the Statutory Default and Basic Interest Rate Act (Zakon o spremembah in dopolnitvah zakona o predpisani obrestni meri zamudnih obresti in temeljni obrestni meri, Official Gazette of the Republic of Slovenia, No. 109/2001) determined the statutory default interest rate as the basic interest rate increased by 13.5 percentage points (section 2), the basic interest rate being the annual interest rate for domestic-currency pecuniary obligations ensuring the preservation of their real value (adjustment) (section 3).

22. The Civil Procedure Act (Zakon o pravdnem postopku, Official Gazette of the Republic of Slovenia, No. 26/99) provided in section 2 that in civil proceedings, the court should decide only within the boundaries of the claims filed (ne eat iudex ultra et extra petita partium). A case in which the court nevertheless decided extra petitum and made an award that was higher than or did not correspond to what was claimed would, pursuant to sections 350, 375 and 381, amount to a major violation of procedural law and constitute a ground for a higher-instance court to quash the judgment in question.

9. The practice of the SFRY Federal Court, the Supreme Courts of the Republics and Regions of the SFRY and the Federal Military Court

23. On 29 May 1987 the SFRY Federal Court, the Supreme Courts of the Republics and Regions of the SFRY and the Federal Military Court, sitting in Bugojno (present-day Bosnia and Herzegovina), adopted a new interpretation of the provisions of the 1978 Obligations Act, which dealt with default interest on compensation for non-pecuniary damage, by issuing the following opinion:

“Default interest on a pecuniary claim for non-pecuniary damage shall be payable with effect from the date of delivery of the first-instance court judgment in which the compensation was determined.

When determining the amount of just pecuniary compensation, the court shall also take into account the period from the date of the occurrence of the damage until the date of the judgment, if this is justified by the time that has elapsed since the damage occurred or by other circumstances of the case.”

24. With the incorporation of the 1978 Obligations Act, enacted under the former SFRY, into the legal system of the newly established Republic of Slovenia, the Supreme Court of the Republic of Slovenia also adopted the interpretation of the relevant provisions of that Act as developed by the former SFRY Federal Court, the Supreme Courts of the Republics and Regions of the SFRY and the Federal Military Court (see paragraph 23 above). The Supreme Court of the Republic of Slovenia consistently confirmed that interpretation as legally correct, and required on several occasions that “when deciding on the amount of just compensation, the court shall also take into account the period that has elapsed since the damage occurred, if the length of this period and other circumstances of the case justify this” (see, for example, the reasoning of the Supreme Court in cases II Ips 221/2001, II Ips 282/2000, II Ips 351/2003 and II Ips 664/2003).

25. The Supreme Court observed that, under the legislation in force since 1978, default interest also included interest for adjustment of a pecuniary obligation in accordance with the level of inflation. On certain occasions in the past, the default interest for pecuniary obligations therefore amounted to over 1000% of the main claim. However, in the case of claims for compensation for non-pecuniary damage, the preservation of the real value of a debt was ensured by determining its amount only on the date of delivery of the first-instance court judgment. By that date, a claim in respect of a non-pecuniary obligation therefore remained unaffected by inflation. Thus, if default interest was awarded with effect from the date on which non-pecuniary damage had occurred, this would result in a double adjustment of the compensation claim from that date until the delivery of the judgment: once by determining its amount only on the day of delivery of the judgment, and then also with the award of default interest from the day the damage occurred. In the Supreme Court’s view, this was unacceptable.

26. Furthermore, the Supreme Court consistently held that a higher amount of compensation was not to be awarded solely on the basis of the fact that the case had been decided after a longer period of time. Thus, a claimant could only claim a higher amount of compensation under that head if the length of the court proceedings was excessive, for example on account of delays caused by one of the parties to the proceedings or perhaps even abuses of his or her procedural rights (see, for example, the reasoning of the Supreme Court in II Ips 221/2001, II Ips 282/2000, II Ips 351/2003 and II Ips 664/2003).

27. Finally, the Supreme Court emphasised on several occasions that despite the fact that in recent years inflation had no longer been so high and default interest had therefore no longer included such a high adjustment index, the jurisprudence could not be changed in an isolated case where a claimant had sought default interest from the day he had sustained the damage. Such a change in jurisprudence could only be carried out in a general manner, so that it took effect with respect to a non-identifiable circle of claimants and for all claimants at the same time (see in particular II Ips 351/2003).

28. After the new Code of Obligations had been enacted in 2001, replacing the 1978 Obligations Act, the Supreme Court adopted a new legal opinion on 26 June 2002 concerning the issue of default interest, which read:

“(1) From the date on which the Code of Obligations came into force (1 January 2002), the victim is entitled to default interest on a pecuniary claim for non-pecuniary damage (sections 179 to 183 of the Code of Obligations and sections 200 to 203 of the former Obligations Act), unless the default occurred at a later stage (section 299 of the Code of Obligations and section 324 of the former Obligations Act), after the entry into force of the Amendments and Supplements to the Statutory Default and Basic Interest Rate Act, as a result of which default interest is awarded:

– until the date of delivery of the first-instance court judgment at the prescribed interest rate, reduced by the basic interest rate (currently 13.5%);

– from the date of the first-instance court judgment onwards at the prescribed default-interest rate (section 2 of the Amendments and Supplements to the Statutory Default and Basic Interest Rate Act ).

(3) Payments of compensation are subject to adjustment at the basic interest rate (section 3 of the Statutory Default and Basic Interest Rate Act) or at the rate agreed between the parties (section 372 of the Code of Obligations).”

29. In its reasoning on its newly adopted legal opinion, the Supreme Court observed, inter alia, that the economic situation in the country had stabilised, and the new legislation, namely the new Code of Obligations and the Amendments and Supplements to the Statutory Default and Basic Interest Rate Act, now distinguished between default interest and the interest intended for adjustment of a pecuniary obligation. In the Supreme Court’s view, these developments allowed a change in the jurisprudence concerning the awards of default interest in the case of claims for non-pecuniary damage. Thus, default interest may now be payable with effect from the date on which the damage occurred, regardless of whether it was of a pecuniary or a non-pecuniary nature.

30. The above-mentioned Supreme Court’s jurisprudence was upheld also by the Constitutional Court (see, for example, the decision of the Constitutional Court in the present case, para. 9 above). Therefore, the following provisions of the Constitutional Court Act (Zakon o Ustavnem sodišču, Official Gazette of the Republic of Slovenia, Nos. 15/94, 51/07 and 64/07) concerning legal effects of the Constitutional Court’s decisions are of particular relevance in the present case:

31. The applicant complained under Article 6 § 1 of the Convention about the jurisprudence of the domestic courts, as a result of which she had been awarded default interest on compensation for non-pecuniary damage only from the date on which the judgment had been delivered. She argued that such jurisprudence was contrary to the applicable legislative provisions, according to which default interest should have been payable with effect from the date on which the damage had occurred. The applicant also relied on Article 6 § 1 in conjunction with Article 14 of the Convention, alleging that since before the change of jurisprudence in 2002 persons claiming compensation for non-pecuniary damage had not been indemnified for the time they had had to wait for the court award, discrimination had been established between those who had to wait longer for a court judgment and those who succeeded with their claim in a shorter period of time.

32. In substance, the applicant also relied also on Article 1 of Protocol No. 1, complaining that she had sustained a loss since she had not been awarded default interest at least for the period between the date on which she had instituted proceedings and the date on which the judgment had been delivered.

I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION, READ SEPARATELY AND IN CONJUNCTION WITH ARTICLE 14

33. The applicant complained under Article 6 § 1 of the Convention that the compensation proceedings before the domestic courts had been unfair, in that the default interest on compensation for non-pecuniary damage had been arbitrarily awarded only from the date on which the first-instance court judgment had been delivered. The applicant also complained under Article 6 § 1, in conjunction with Article 14, that by not indemnifying persons claiming compensation for non-pecuniary damage for the time they had to wait for the court award, the impugned jurisprudence discriminated against those who had to wait longer for such an award than others.

“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by [a] ... tribunal...”

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

34. The Government maintained that the applicant had not exhausted all the domestic legal remedies, without specifying in any way what further legal remedies she had at her disposal which could have remedied the alleged breach of her rights.

35. The Government also argued that the applicant had had a fair hearing and that all relevant procedural guarantees had been observed throughout the proceedings. Both parties had been given the possibility of equal treatment in the proceedings, the main hearing had been conducted in open court before the first-instance court, the applicant had been represented by a lawyer, she had also been given the opportunity to present her arguments orally and in writing, and she had been able to adduce evidence and rebut the evidence submitted by the opposing party. In this context, the Government stated in particular that all the applicant’s proposals for evidence-taking had been accepted and all the evidence had been heard and taken into consideration in the judgment. Last but not least, the Government emphasised that the proceedings had clearly not lasted an unreasonably long time, since they had ended within three years and five months, after having been dealt with by four levels of jurisdiction.

36. The Government further argued that in any event the domestic legislation applicable at the time at which the impugned court decisions had been delivered – that is, before the legislative reform in 2002 – was profoundly different from the legislation applicable at present. In relation to the 1992 Default Interest Rate Act and the 1995 Statutory Default and Basic Interest Rate Act, which had governed default interest until 2002, the main difference was that default interest had not only served as payment for the use of capital (money) and as a penalty for an overdue debt, but had also had a function of adjustment of the main claim (the principal) in accordance with inflation at the material time. Such regulation had been necessary in order to preserve the real value of pecuniary obligations in unstable economic circumstances in the country and periods of high inflation in particular. For instance, in 1992 the default interest rate had amounted to up to 345% per year until it had dropped to 24% in 1995, therefore exceeding by far the default interest rate prescribed after 2002, by which time the economic situation had stabilised.

37. However, with respect to claims for compensation for non-pecuniary damage before 2002, such adjustment of a debt in accordance with inflation had not been needed. Since the damage sustained and the sum owed as compensation had only been established on the day the first-instance court judgment had been delivered, taking into account the circumstances prevailing at that particular time, claims for compensation for non-pecuniary damage had not been affected by inflation. Moreover, when determining just compensation, the courts were also required to take into account the time that had elapsed since the damage had occurred.

38. In their additional observations, the Government maintained that a higher amount of compensation was not to be awarded solely on the basis of the fact that it was decided upon a case after a longer period of time, but that the courts could award a higher amount only if the length of the proceedings was excessive, for example on account of delays caused by one of the parties to the proceedings, or perhaps even abuses of a party’s procedural rights.

39. The Government also indicated that a higher amount of compensation on account of the length of time elapsed since the damage had occurred could have been awarded only at the request of a claimant. They referred to section 2 of the Civil Procedure Act, which provided that the court could only decide within the boundaries of the claims filed (see “Relevant domestic law and practice” above).

40. Lastly, the Government stated that even if in the present case the applicant had claimed a higher amount of compensation on account of the length of time that had elapsed since the damage had occurred, she would not succeed with her claim, since she had been awarded compensation by the first-instance court in a relatively short period of time.

41. The applicant argued that under the applicable legislation, she was entitled to default interest with effect at least from the date on which she had instituted compensation proceedings. She alleged that the possibility of being awarded a higher amount of compensation on that account was not a proper alternative to the award of default interest, since there were no exact official criteria according to which a claimant could have claimed the precise amount of compensation he or she was entitled to under that head.

42. Furthermore, the applicant stated that in her own case she had indeed not had to wait an excessively long time for the award, since the first-instance court judgment had been delivered one year and seven months after she had instituted the proceedings, but maintained that the differences in the length of time that persons claiming compensation for non-pecuniary damage had to wait for the court judgment put some of them in a discriminatory position in relation to others.

43. The applicant also alleged that such a system worked in favour of debtors owing compensation for non-pecuniary damage and insurance companies in particular, which were mostly owned by the State. In particular, since the insurance companies did not pay any default interest until the first-instance court judgment had been delivered, a prompt resolution of cases was not in their interest, a factor which resulted in protracted proceedings.

44. As to the applicability of Article 6 § 1 to the present case, the Court notes that it was not disputed between the parties that Article 6 § 1 could be applied to the case. Having in mind its established case-law (see, among many other authorities, Voggenreiter v. Germany, no. 47169/99, ECHR 2004 I, and Loiseau v. France (dec.), no. 46809/99, ECHR 2003 XII), the Court therefore sees no reason to dissent.

45. With regard to the Government’s preliminary objection that the applicant did not exhaust all domestic legal remedies at her disposal, the Court notes that the applicant pursued her claims at all the levels of domestic jurisdiction, including the Supreme Court and the Constitutional Court, raising the substance of all the complaints she brought before the Court. The Court therefore considers that the Government’s preliminary objection has to be dismissed.

46. The Court notes that the applicant challenged the decisions of the domestic courts, in particular the Supreme Court’s judgment of 3 March 1999, which upheld the Celje Higher Court’s judgment of 9 April 1998 awarding default interest from the date on which the first-instance court had given judgment. The Court further notes that it was undisputed by the parties that the challenged court decisions adhered to the jurisprudence concerning default interest on compensation for non-pecuniary damage as established until 2002, but that they disagreed as to whether this approach was consistent with the applicable legislative provisions. The Court therefore considers that the applicant’s complaint under Article 6 § 1 of the Convention concerns the interpretation and application of the legislation concerning default interest on compensation for non-pecuniary damage as in force at the material time. More generally, since the applicant challenged the manner in which she had been indemnified for the period during which she had been waiting for the court award, her complaint essentially amounts to an objection to the outcome of the proceedings before the Slovenian judicial authorities and to the errors allegedly committed by them in the interpretation and application of domestic law.

47. The Court reiterates that while its duty, according to Article 19 of the Convention, is to ensure the observance of the engagements undertaken by the Contracting Parties to the Convention, it is not its function to deal with errors of fact or law allegedly committed by a national court unless and in so far as they may have infringed rights and freedoms protected by the Convention. Moreover, it is primarily for the national administrative and judicial authorities, notably the courts, to interpret and apply domestic law (see, inter alia, Streletz, Kessler and Krenz v. Germany [GC], nos. 34044/96, 35532/97, 44801/98, § 49, ECHR 2001-II, and Houfova v. the Czech Republic (dec.), no. 58177/00, 1 July 2003).

48. The Court would also emphasise, on the other hand, that the principle of subsidiarity does not mean renouncing all supervision of the result obtained from using domestic remedies; otherwise, the rights guaranteed by Article 6 would be devoid of any substance. In that connection it should be reiterated that the Convention is intended to guarantee not theoretical or illusory rights, but rights that are practical and effective (see Prince Hans-Adam II of Liechtenstein v. Germany [GC], no. 42527/98, § 45, ECHR 2001-VIII). However, the Court will not question the national courts’ interpretation of domestic law unless there has been a flagrant failure to observe the provisions in question or arbitrariness in their application (see, inter alia, Laudon v. Germany, no. 14635/03, § 56, 26 April 2007; Société Colas Est and Others v. France, no. 37971/97, § 43, ECHR 2002-III; and also mutatis mutandis, Lavents v. Latvia, no. 58442/00, § 114, 28 November 2002).

49. In the present case, the challenged jurisprudence was based on the interpretation of the relevant provisions of the 1978 Obligations Act as established since 1987, when the SFRY Federal Court, the Supreme Courts of the Republics and Regions of the SFRY and the Federal Military Court adopted a legal opinion concerning default interest on compensation for non-pecuniary damage. As follows from that opinion, such damage was to be considered to have been established only on the date on which the first-instance court judgment was delivered and according to the prices valid on that day, and it was only from that day onwards that default interest was to be awarded. It further follows from that opinion that the national courts were required, when assessing a just amount of compensation, to take into account the time that had elapsed from the date on which the damage had occurred until the delivery of the first-instance court judgment. It was not disputed in the present case that such interpretation had been adopted in times of high inflation and monetary depreciation, with the aim of preserving the real value of a claim for non-pecuniary damage, while still indemnifying claimants for the time they had to wait for compensation.

50. The Court notes that after the independence of the Republic of Slovenia in 1991, the 1978 Obligations Act remained in force, and that the Supreme Court of the Republic of Slovenia adhered to the established interpretation of its relevant provisions owing to the continuing inflation in the country. The Court also notes that such interpretation of the 1978 Obligations Act was upheld also by the Constitutional Court, the decisions of which are legally binding. The Court further observes that economic stabilisation in the country, which followed in the years after the independence of the country, and the change of legislation in 2002 in particular, led the Supreme Court to adopt in 2002 a new legal opinion, according to which default interest for non-pecuniary damage could now be awarded from the day the damage had occurred.

51. The Court considers that the Supreme Court’s adherence to the interpretation of the relevant provisions of the 1978 Obligations Act as established since 1987 cannot be considered manifestly erroneous, arbitrary or blatantly inconsistent with the fundamental principles of the Convention. Indeed, its interpretation, though not based on the express terms of the 1978 Obligations Act, had been consistently applied and was in accordance with the latter’s object and purpose, which was to indemnify claimants for the non-pecuniary damage suffered, as well as for the length of time they had to wait for compensation (see, mutatis mutandis, Melchior v. Germany (dec.), no. 66783/01, ECHR 2006 II).

52. The Court also observes that, in accordance with section 2 of the Civil Procedure Act, it was for the claimants to submit the claim for compensation, and to seek an amount which would take into account all the circumstances of the case relevant for the court to award a just amount of compensation. In this connection, the Court notes that the applicant did not claim a higher amount of compensation on account of the time that had elapsed since the damage had occurred. Instead, she sought to be indemnified for the relevant period of time through an award of default interest. The Court also notes that a case where a court decided extra petitum and made an award that was higher than or did not correspond to what was claimed would result in a major violation of procedural law, pursuant to sections 350, 375 and 381 of the Civil Procedure Act. In the Court’s assessment, it therefore cannot be considered manifestly erroneous or arbitrary if the domestic courts did not award the applicant a higher amount of compensation on that account and indemnified her for the relevant period of time.

53. The Court therefore concludes that the national judicial authorities gave reasoned decisions, addressing all the relevant submissions by the applicant. They adhered to the jurisprudence as established since 1987 with regard to the interpretation of the relevant provisions of the 1978 Obligations Act, and to the Statutory Default and Basic Interest Rate Act as interpreted and applied since its entry into force in 1995. In the Supreme Court’s judgment of 3 March 1999 the applicant was also provided with the underlying reasons for the approach adopted.

54. Moreover, the Court observes that it was not contested in the present case that the applicant had a public hearing before the first-instance court, that throughout the proceedings her case was considered by an independent and impartial court established by law, that she was legally represented at all stages of the proceedings, that she was able to submit all the necessary arguments in her favour and to contest the submissions of the defendant, orally and in writing, and that all other procedural guarantees were observed. There is therefore nothing to show that the conclusion of the national judicial authorities was arbitrary or contrary to the provisions of domestic law applied by them.

55. It follows that the complaint relating to Article 6 § 1 must be considered manifestly ill-founded under Article 35 §§ 3 of the Convention.

56. As regards the applicant’s complaints under Article 6 § 1 in conjunction with Article 14, the Court refers to its previous findings that before 2002, the national courts were required, when determining a just amount of compensation for non-pecuniary damage, to consider also the time that had elapsed from the date on which the damage had occurred until the date on which the judgment was delivered. Differences in the length of time claimants had to wait for a court judgment could therefore be taken into account by the courts when awarding just compensation and indemnifying them for the time they had had to wait. The Court further notes that this approach was consistently applied in all cases similar to the applicant’s case. Lastly, the Court observes that it was not disputed between the applicant and the respondent Government that in the applicant’s case, the compensation proceedings lasted a relatively short period of time. The Court therefore considers that the applicant could not have suffered any violation on account of differences in the length of time she had to wait for the court judgment in comparison with other persons claiming compensation for non-pecuniary damage.

57. Taking into account the facts of the case, the Court finds that the applicant’s complaint relating to Article 6 § 1 in conjunction with Article 14 must be considered manifestly ill-founded under Article 35 §§ 3 of the Convention.

58. In view of the above, this part of the application must be rejected in accordance with Article 35 § 4 of the Convention.

59. The applicant also complained in substance that the deprivation of default interest from the date on which she had instituted proceedings until the date on which the first-instance court judgment had been delivered violated her rights under Article 1 of Protocol No. 1 to the Convention, which, in so far as relevant, reads:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”

60. The Government maintained that the decision of the domestic courts had not resulted in the deprivation of any of the applicant’s property rights or the diminution of any of her claims. They argued that the applicant’s claim for default interest at least from the date on which she had instituted the court proceedings until the date of delivery of the first-instance court judgment could not be interpreted as “possessions” within the meaning of the Convention, as she could not even have had a “legitimate expectation” of realising the claim in accordance with the law and the domestic courts’ practice applicable at the material time.

61. The applicant alleged that the impugned jurisprudence of the Supreme Court amounted to a systemic deprivation of property for all those seeking compensation for non-pecuniary damage before 2002, when the Supreme Court had finally changed its legal opinion. The very fact that the Supreme Court had changed its opinion was, in the applicant’s view, evidence that its previous opinion had been erroneous.

62. The Court reiterates that the Convention does not guarantee, as such, a right to acquire property. An applicant can allege a violation of Article 1 of Protocol No. 1 only in so far as the impugned decisions related to his “possessions” within the meaning of this provision. “Possessions” can be either “existing possessions” or “assets”, including claims, in respect of which the applicant can argue that he or she has at least a “legitimate expectation” of obtaining effective enjoyment of a property right (see Kopecký v. Slovakia [GC], no. 44912/98, §35, ECHR 2004-IX; Sirc v. Slovenia, no. 44580/98, § 272, 22 June 2006; and Slivenko and Others v. Latvia (dec.) [GC], no. 48321/99, § 121, ECHR 2002-II).

63. Turning to the facts of the present case, the Court considers it clear that at the time the applicant instituted compensation proceedings at the Celje Local Court on 20 October 1995, she could not be said to have had “existing possessions” within the meaning of Article 1 of Protocol No. 1, since the default interest she was claiming in addition to compensation for non-pecuniary damage was yet to be awarded, together with any compensation if appropriate. It thus remains to be examined whether at that time she could have had any “legitimate expectation” of realising her claim to default interest with effect from the date on which she had instituted compensation proceedings.

64. The Court notes that at the material time, default interest on compensation for non-pecuniary damage was governed by the 1978 Obligations Act and the 1992 Default Interest Rate Act, which were interpreted and applied by the courts in accordance with the joint legal opinion of the SFRY Federal Court, the Supreme Courts of the Republics and Regions of the SFRY and the Federal Military Court, adopted in 1987. As follows from that opinion, the courts were required to determine a just amount of compensation by also taking into account, inter alia, the time that had elapsed from the day the non-pecuniary damage had occurred until the date on which the first-instance court judgment was handed down. Default interest was to be awarded, on the other hand, only from the date of the first-instance court judgment. The Court further notes that the 1995 Statutory Default and Basic Interest Rate Act, which replaced the 1992 Default Interest Rate Act, did not entail any changes in the interpretation and application of the procedure by which claimants were to be compensated for the time they had to wait for an award.

65. The Court also observes that in the present case it was not disputed between the parties that such an approach in awarding default interest prevailed since 1987, that it also remained well-established jurisprudence after the Republic of Slovenia established its independence, and that it only changed after the new legislation entered into force in 2002. Persons claiming compensation for non-pecuniary damage were consistently awarded default interest only from the date on which the first-instance court delivered the judgment until the date on which the debtor actually paid the debt.

66. The Court therefore finds that at the time the applicant instituted compensation proceedings in the Celje Local Court on 20 October 1995, she could not legitimately have expected that if her claim for compensation was granted, she would be awarded default interest also for the period from the date on which she had instituted compensation proceedings until the date on which the first-instance court gave judgment.

67. Since the applicant’s claim for default interest on compensation for non-pecuniary damage for the period from when she instituted compensation proceedings on 20 October 1995 until the delivery of the first-instance court’s judgment on 12 May 1997 does not constitute either “existing possessions” or “a legitimate expectation” within the meaning of Article 1 of Protocol No. 1 to the Convention, the Court finds that the applicant’s complaint under Article 1 of Protocol No. 1 is incompatible ratione materiae with the Convention and must be rejected in accordance with Article 35 § 3 and § 4 of the Convention.

68. The application must therefore be rejected as a whole in accordance with Article 35 § 4 of the Convention.

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You are here: BAILII >> Databases >> European Court of Human Rights >> Marija GRUSOVNIK v Slovenia - 75201/01 [2009] ECHR 1046 (09 June 2009) URL: http://www.bailii.org/eu/cases/ECHR/2009/1046.html Cite as: [2009] ECHR 1046