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FIFTH
SECTION
CASE OF
VALENTIN v. DENMARK
(Application
no. 26461/06)
JUDGMENT
STRASBOURG
26
March 2009
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 Valentin v. Denmark,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Rait
Maruste,
President,
Peer
Lorenzen,
Karel
Jungwiert,
Renate
Jaeger,
Mark
Villiger,
Isabelle
Berro-Lefèvre,
Mirjana
Lazarova Trajkovska,
judges,
and
Stephen Phillips, Deputy
Section Registrar,
Having
deliberated in private on 22 January 2008 and on 3 March 2009,
Delivers
the following judgment, which was adopted on the last mentioned
date:
PROCEDURE
- The
case originated in an application (no. 26461/06) against the Kingdom
of Denmark lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Danish national, Mr James Valentin (“the
applicant”), on 15 June 2006.
- The
applicant was represented by Mr Anders Ørgaard, an
Associate Professor Ph.D. at the University of Aarhus. The Danish
Government (“the Government”) were represented by their
Agent, Mrs Nina Holst-Christensen.
- The
applicant alleged, in particular, that the bankruptcy proceedings
against him were not terminated within a reasonable time.
- By
a decision of 22 January 2008, the Court declared the application
partly admissible.
- The
applicant and the Government each filed further written observations
(Rule 59 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
6. The applicant was born in 1944 and lives in Copenhagen.
- He
was a partner in a commercial partnership, a banking and stockbroking
firm called Vekselerfirmaet Hugo Petersen I/S (hereafter “the
Partnership”). In addition to the applicant, the Partnership
had five other partners: VL, FVM, CHN, and two private limited
companies, namely Hugo Petersen Børsmæglerselskab
A/S and Kejpe A/S. Subsequently, in legal proceedings it was
established that a further partner, CEN, had not formally resigned
from the Partnership and therefore was also to be considered a
partner.
- On
29 March 1988, due to financial difficulties, proceedings
were initiated before the Bankruptcy Court (Skifteretten under Sø-
og Handelsretten) concerning the Partnership and the partners for
suspension of payments.
- On
29 August 1988, the Bankruptcy Court decided to discontinue the
suspension of payments. At the same time, having heard two bankruptcy
petitions against the applicant, who did not object to the claim that
the bankruptcy conditions had been met, the Bankruptcy Court
commenced bankruptcy proceedings against his estate. A trustee in
bankruptcy was appointed to sort out the estate and to settle the
accounts and the applicant was divested of the right to administer or
to deal with his assets.
- The
Bankruptcy Court formally commenced the examination of claims on 17
November 1988, but found that it was appropriate to wait until the
claims against the Partnership had been lodged and examined.
- On
8 December 1988, bankruptcy proceedings commenced against the
Partnership and by the end of 1988 bankruptcy notices regarding all
the co partners had been issued as well. The Partnership's
assets, including the individual partners' assets, were estimated at
about 8 million Danish kroner (DKK), while its liabilities were
estimated at DKK 15 million. The Partnership estate was closed on 5
December 1995 with distribution of dividends.
- In
the meantime, as regards the applicant's bankruptcy estate, in the
period between 1988 and 1990 various court sessions were held with a
view to determining the applicant's assets and considering creditor
claims.
- In
the beginning of 1991 a new trustee was appointed. Court hearings
were held in April and December 1991.
- Moreover,
the trustee held several meetings with the applicant and the partners
in 1991 and 1992.
- During
1993 and 1994 it appears that no court hearings as such were held.
Nevertheless the Bankruptcy Court and the trustee regularly examined
claims in this period.
- In
a report of 9 February 1995, the trustee stated, inter alia,
that the applicant's estate could not be dealt with until the closure
of the Partnership estate.
- Court
sessions were held on 6 November, 6 and 21 December 1995,
14 February and 17 April 1996. On the latter date, the
Bankruptcy Court adjourned the proceedings pending the preparation of
accounts.
- In
a report of 5 November 1996, the trustee stated that full
coverage for the Partnership creditors was expected in connection
with the closing of the partners' estates. He was therefore
endeavouring to obtain a compulsory composition so that the
bankruptcy proceedings could be finalised pursuant to section 144 of
the Bankruptcy Act. The accounts of the applicant's bankruptcy estate
could not be prepared, however, until formal accounts were available
in the estates of the co-partners Hugo Petersen's Børsmæglerselskab
A/S, CHN and FVM. At the relevant time, those accounts were being
prepared, but could not be completed until, inter alia, the
outcome of proceedings initiated by the Ministry of Taxation against
Hugo Petersen's Børsmæglerselskab A/S in bankruptcy was
known. The latter proceedings were finalised in 1999.
- On
4 April 1997, the trustee informed the Bankruptcy Court that the
draft accounts and report had been prepared and sent to the applicant
for his comments. On 29 August 1997 the trustee reminded the
applicant that his comments were awaited.
- On
2 September 1997, a hearing was held at the Bankruptcy Court during
which a representative for the applicant stated that before the
accounts could be approved, the applicant needed to examine certain
matters in detail. Accordingly, the Bankruptcy Court decided to
postpone the approval of the accounts. Moreover, it appointed a
lawyer as counsel for the applicant to help him with the matters
raised.
- In
a letter of 22 September 1997 to the creditors, the trustee stated
that the approval could not be given pending the review of various
matters by the applicant's counsel and clarification of the
applicant's tax affairs.
- By
1997 the bankruptcy proceedings against the other partners of the
Partnership were terminated.
- On
6 February 1998 having received several reminders, the applicant's
counsel replied as to the matters that needed to be examined and he
recommended that resources be applied to seek a settlement with both
the creditors of the bankruptcy estate and the tax authorities.
- By
letter of 4 March 1998, the trustee requested that the Bankruptcy
Court schedule another meeting of creditors to close the estate. He
referred to the fact that no objections had been filed against the
accounts and that the applicant's dispute with the tax authorities
did not affect the assets available for distribution.
- On
26 March 1998, the Bankruptcy Court declared that the estate would be
closed.
- At
a hearing on 5 May 1998, the Bankruptcy Court approved the accounts
of the applicant's bankruptcy estate. Thereafter, the proceedings
were adjourned pending the preparation of draft distribution accounts
to be presented at a meeting of creditors on 14 July 1998. On that
day, due to lack of agreement between the trustee and the Bankruptcy
Court, the proceedings were adjourned. Another hearing was held on 22
July 1998.
- In
accordance with the draft distribution accounts, preferential claims
would be fully covered. Moreover, an amount of approximately DKK 5.4
million remained for distribution to so-called section 98 claims
(section 98 of the Bankruptcy Act, which included deferred claims for
interest).
- On
25 August 1998, a distribution on account was made in respect of the
ordinary claims. During the period between November 1998 and October
1999 an amount of DKK 750,000 was made available to the applicant.
- Before
the final deadline for notifying claims in the estate, which the
Bankruptcy Court fixed at 1 October 1998, thirty-two Partnership
creditors lodged claims for interest in the estate. The applicant's
counsel negotiated with the creditors with a view to reaching a
settlement on the claims for interest, but in vain.
- Thus,
on 30 August and 5 October 1999 hearings were held at the
Bankruptcy Court. On the latter date the deferred claims for interest
were examined. The creditors, who appeared before the court, objected
to the trustee's recommendation concerning the calculation of the
claims for interest, and the parties therefore concluded a litigation
agreement on the filing of a pleading to the Bankruptcy Court by
6 December 1999 at the latest.
- In
addition, the applicant objected to the trustee's recommendation
concerning certain claims. He and the trustee therefore concluded a
litigation agreement to select one or more suitable lead cases.
- The
examination of the other claims, which were not objected to by the
creditors, but contested by the applicant, was adjourned pending the
outcome of the lead cases. Eight creditors then issued a writ against
the bankruptcy estate, and the applicant intervened as a third party.
- On
2 May 2001, the Bankruptcy Court passed judgment in the eight lead
cases, and at a meeting of creditors on 22 May 2001 the creditors
declared that they did not wish to appeal against the judgments
unless the applicant did so. The applicant subsequently appealed
against the judgments to the High Court of Eastern Denmark
(Østre Landsret), hereafter the High Court.
- On
26 June 2001, the Bankruptcy Court invited the applicant and the
creditors to consider whether the estate could be closed under
section 144 of the Bankruptcy Act by setting aside funds to cover the
contested claims pursuant to section 149. According to the former
provision, the estate could be finalised and the surplus assets
handed over to the debtor if the creditors had obtained full payment.
The latter provision, however, provided for the possibility of
finalising the estate even though there were disputed claims, if an
amount equal to those claims had been set aside. At the relevant time
it was not legally possible to combine section 144 and section 149,
unless the parties agreed to do so.
- On
20 November 2001, at a hearing at the Bankruptcy Court, the trustee
recommended that final distribution accounts be prepared in respect
of the deferred claims comprised by section 98 of the Bankruptcy Act,
which were not the subject of the pending appeal proceedings. In
respect of the disputed claims, the distribution could be postponed
until after the closing of the estate, as provided for by section 149
of the Bankruptcy Act. The Bankruptcy Court approved this
recommendation and scheduled a meeting of creditors.
- At
the scheduled meeting of creditors, which took place on
29 January 2002, the applicant objected to the Bankruptcy
Court closing the estate. In support thereof he argued that “the
length of the proceedings had been unreasonable [anyway] and that
therefore the closing of the estate ought to await [also] the outcome
of the appeal proceedings before the High Court”. Despite
the applicant's objection, the Bankruptcy Court decided to approve
the accounts and to make contributions in respect of the claims,
which were not the subject of the pending appeal proceedings. It was
also decided to make an amount of DKK 100,000 available to the
applicant pursuant to section 106 of the Bankruptcy Act, then
applicable. Finally, the estate was finalised by setting aside the
remaining funds to cover the disputed claims.
- The
applicant appealed against the finalisation of the estate in
accordance with section 149 to the High Court, which found against
him on 22 March 2002. It appears that the applicant failed to request
leave to appeal against this decision to the Supreme Court
(Højesteret).
- On
24 January 2003, in the appeal proceedings concerning the disputed
deferred claims for interest, the High Court passed judgment against
the applicant.
- On
27 March 2003 the Bankruptcy Court held a meeting of creditors to
produce additional distribution accounts concerning the disputed
deferred claims for interest. However, since the applicant had
requested that the Appeals Permission Board (Procesbevillingsnævnet)
grant him leave to appeal to the Supreme Court, the Bankruptcy Court
adjourned the proceedings.
- On
14 October 2003, the Appeals Permission Board informed the parties
that the applicant would be granted leave to appeal against the
judgment to the Supreme Court.
- On
19 September 2005, the Supreme Court passed judgment finding against
the applicant.
- On
20 December 2005, concluding that all creditors had been satisfied,
the Bankruptcy Court closed the estate and approved the handing over
of the remaining assets of the estate, minus the costs of
administration of the estate, to the applicant pursuant to section
144 of the Bankruptcy Court.
- Before
the Court the applicant submitted that on numerous occasions, in
vain, he had requested that the bankruptcy proceedings be expedited.
This was disputed by the Government.
- By
letter of 12 October 2006 the Ministry of Justice
(Justitsministeriet) invited the applicant to raise his
complaints about the length of the bankruptcy proceedings before the
court, where the case was pending.
II. RELEVANT DOMESTIC LAW AND PRACTICE
45. The Bankruptcy Act
The
Bankruptcy Act (Konkursloven), Consolidation Act no. 588 of
1 September 1986, which comprised the rules relevant to the
administration of the applicant's bankruptcy estate, stated in as far
as relevant:
Section 29
Upon the pronouncement of the bankruptcy order, the
debtor is deprived of his right to assign or to abandon his property,
to accept payments and other services rendered, to accept
terminations, complaints and similar declarations, to incur debts or
to deal in any other way with his property with any effect as regards
the estate.
Section 106
(1) Where the debtor is unable to provide for his own
and his family's needs by his own work, the estate may award
maintenance to the debtor or to his dependents.
(2) The estate may grant the debtor a right of use to
real property or chattels.
Section 113
...
(3) Where specific grounds so justify, the Bankruptcy
Court may reject the election of a trustee or remove him later. ...
Section 128
Where the trustee or meeting of creditors acts to the
detriment of the estate, or where rights vested in mortgagees, the
debtor or other parties are infringed upon, the Bankruptcy Court may
set aside the decisions made, give directions to the trustee, and
take any other requisite steps.
Section 144
(1) Where the debtor obtains a compulsory composition,
cf. section 196, and where the creditors of the bankruptcy estate
who, under section 158(2), are not comprised by the composition have
been satisfied or adequately secured, or where the debtor, after the
expiry of the period allowed for proof of claims, produces a consent
from all creditors or proof of their having been satisfied, the
bankruptcy proceedings must be finalised promptly, and the assets of
the estate must be handed over to the debtor, subject to deduction of
any costs inclined in connection with the bankruptcy proceedings.
(2) Where the debtor, after the bankruptcy proceedings
have been completed, substantiates that the creditors have been
satisfied or have waived their claims, the Bankruptcy Court shall
issue a certificate to such effect to him.
Section 149
On the basis of a recommendation from the trustee, the
bankruptcy court may decide that the preparation of the final
accounts, and distribution, if any, of an amount not yet collected,
of any amount set aside pursuant to section 147(2), or of any other
specifically limited parts of the estate, will be deferred to the
period after finalisation of the bankruptcy proceedings.
Section 127(a) of the Bankruptcy Act (Consolidation Act no. 1259 of
23 October 2007), now in force, reads as follows:
The debtor or a creditor may demand that the Bankruptcy
Court make use of its authorities set out in section 16, subsection
2, and that it fix a hearing pursuant to section 143 or 150 [with a
view to finalising the estate], if such proves necessary due to the
requirement in Article 6 of the Convention concerning a fair trial
within a reasonable time.
46. Partnerships (I/S)
A
partnership is an association formed by several natural or legal
persons for the purpose of promoting the partners' (members')
financial interests through business activities.
A
partnership is a form of business enterprise in which all members are
liable personally, without limitation and jointly and severally for
the obligations of the enterprise (see section 2(1) of Consolidation
Act no. 651 of 15 June 2006 on certain business enterprises). This
implies that the members are liable with their entire personal
property, that the individual member is liable for the entire debt,
and that the creditors of the partnership have a direct claim against
the individual member without first having to raise a claim against
the partnership.
The
partnership and its members are liable to the creditors of the
partnership. Under applicable Danish law, it is therefore a
prerequisite for administration of the bankruptcy estate of a
partnership that all partners are subject to bankruptcy proceedings.
A co-partner's bankruptcy estate is thus of importance to the closing
of the other co-partners' bankruptcy estates. By contrast, the
partnership is not liable to the partners' personal creditors. Hence,
personal creditors cannot seek satisfaction from partnership assets,
but only in the surplus distributed to the partners.
There
are few rules of law regulating partnerships. In the absence of a
rule of law regulating the matter, the legal position depends on an
interpretation of the partnership agreement and on what may be
inferred from non-mandatory rules.
If a
member of a partnership is declared bankrupt, section 61 of the
Bankruptcy Act applies. This provision enables the estate to release
the relevant partner's share of the net assets of the partnership
with a suitable notice so that all his assets are applied to satisfy
his creditors.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION
- The
applicant complained under Article 6 § 1 of the Convention that
the bankruptcy proceedings were not terminated within a reasonable
time. The relevant part of the provision 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...”
Period to be taken into consideration
- It
is not in dispute that the bankruptcy proceedings against the
applicant commenced on 29 August 1988.
- In
the Government's view the bankruptcy proceedings ended on 29 January
2002, when the Bankruptcy Court finalised the estate in accordance
with section 149 of the Bankruptcy Act by setting aside the
remaining funds to cover the disputed claim. Subsequently, the
Bankruptcy Court reopened the estate and approved the handing over of
the remaining assets of the estate less the costs of administration
of the estate to the applicant pursuant to section 144 of
the Bankruptcy Act, but the reopening of the estate had to be viewed
as a second set of proceedings.
- The
applicant maintained that the bankruptcy proceedings ended on
20 December 2005, when the Bankruptcy Court closed the estate.
- The
Court agrees with the applicant that the proceedings ended on
20 December 2005 and that the total length of the
proceedings thus lasted seventeen years and four months.
Reasonableness of the length of the proceedings
The Parties' submissions
-
In the applicant's view, the bankruptcy proceedings were not complex
at all and they were not delayed due to his conduct. He contended
that there was a significant inactive period from the change of
trustees on 31 January 1991 until the examination of claims on
6 November 1995. In addition, he stated that there was an
inactive period from 17 April 1996, when the proceedings were
adjourned pending the preparation of accounts, until the hearing on 2
September 1997, when accounts were produced. Finally, the applicant
submitted that the period from 5 October 1998, when it was
decided to institute certain lead cases about the deferred claims for
interest, until the Supreme Court judgment of 19 September 2005
was also an inactive period.
- The
Government found, notably due to the particularly complex nature of
the case and the applicant's conduct during the proceedings, that no
violation of Article 6 § 1 of the Convention had occurred. They
noted that the applicant himself had chosen to enter into a
partnership, which would render any bankruptcy proceedings complex
because it was a prerequisite for the administration of the partners'
estates that the partnership estate be administered and closed.
Moreover, for some time the applicant contemplated whether or not to
initiate compensation claims against the previous trustee and wanted
to have the cases on the deferred claims reviewed by both the High
Court and the Supreme Court. Thus, the proceedings were prolonged by
at least five years, which could not be attributed to the
authorities. In fact, since 1997 when the other partners' estates
were closed, the Bankruptcy Court had tried to close the applicant's
bankruptcy estate, but the applicant repeatedly objected.
Nevertheless, the Bankruptcy Court did close the administration of
the estate to the widest possible extent at several stages, first in
1998 and formally in 2002, so that distribution was effected in
respect of the undisputed claims, and funds were set aside for the
disputed claims for interest.
The Court's assessment
- 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 proceedings were complex and time consuming,
notably because it was a prerequisite for the administration of the
partners' estate that the partnership estate was administered and
closed. Moreover, the proceedings were prolonged by at least four
years due to the dispute which arose concerning deferred claims, and
which the applicant brought before the High Court and the Supreme
Court. Finally, it does not appear that any unjustified delays as
such occurred.
- Nevertheless,
having regard to the overall length of the proceedings, and the
Court's case law on the subject (see, inter alia,
Frydlender, cited above), the Court finds that the length of
the proceedings was excessive and failed to meet the “reasonable
time” requirement.
- There
has accordingly been a breach of Article 6 § 1.
II. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
- The applicant further complained that he had not had
an effective remedy in respect of his complaint about the excessive
length of the proceedings at the Bankruptcy Court. He relied on
Article 13 of the Convention, which
provides:
“Everyone whose rights and freedoms as set forth
in [the] Convention are violated shall have an effective remedy
before a national authority notwithstanding that the violation has
been committed by persons acting in an official capacity.”
- The
applicant maintained that he was a victim of a violation of Article
13 of the Convention. He alleged that as a rule he had not been
summoned to the meetings at the Bankruptcy Court but that
nevertheless several times, in vain, he had complained orally against
the excessive length of proceedings. He pointed out that at the
relevant time the Bankruptcy Act did not contain a provision
equivalent to section 127 (a), now to be found in the act currently
in force, according to which a debtor may demand that the Bankruptcy
Court make use of specific measures in order to comply with the
reasonable-time requirement set out in Article 6 of the Convention.
The Bankruptcy Act applicable during the applicant's bankruptcy
proceedings did not grant a debtor any rights of that kind or any
powers to influence the administration of his estate. Nor could he
bring such a complaint before the relevant appeal instance, namely,
the High Court of Eastern Denmark.
- The
Government contended that either the applicant could not be
considered to be a victim of a violation of Article 13 of the
Convention or the complaint was manifestly ill-founded, because the
applicant had access to an effective remedy as required by Article 13
of the Convention, but chose not to make use of it. The Government
noted that the Bankruptcy Court had a supervisory duty and could set
aside decisions made, or give the trustee directions, or do whatever
else was necessary if the debtor's rights were infringed, (see
section 128 of the Bankruptcy Act then applicable). Thus, the
Bankruptcy Court could have given the trustee directions about the
administration of the estate, ordered the trustee to complete the
accounts, or removed the trustee pursuant to section 113(3) of the
Bankruptcy Act then applicable, inter alia, due to slow or
otherwise incompetent administration of the estate. It could also
have fixed an ultimate date for the final meeting of creditors in the
estate or decided to apply section 144 of the Bankruptcy Act at an
earlier stage of the proceedings, even if all the parties to the
case, including the applicant, objected. Accordingly, regardless of
whether the courts could have provided the applicant with adequate
redress for delays that had already occurred, the remedies which
could have expedited the decisions taken during the proceedings had
to be considered “effective”.
- As the Court has held on many occasions, Article 13 of
the Convention guarantees the availability at national level of a
remedy to enforce the substance of the Convention rights and freedoms
in whatever form they may happen to be secured in the domestic legal
order. The effect of Article 13 is thus to require the provision of a
domestic remedy to deal with the substance of an “arguable
complaint” under the Convention and to grant appropriate
relief. The scope of the Contracting States' obligations under
Article 13 varies depending on the nature of the applicant's
complaint. However, the remedy required by Article 13 must be
“effective” both in law and in practice (see, among other
authorities, Kudła v. Poland
[GC], no. 30210/96, § 157, ECHR 2000-XI).
- In
the present case, the Government have referred to various measures
which the Bankruptcy Court could have taken if a debtor's right was
infringed and which, in their view, constituted an effective remedy
within the meaning of Article 13
of the Convention. They did not submit any domestic case law
in support thereof.
- Moreover,
as opposed to the Bankruptcy Act, now in force, at the relevant time
Danish law contained no provisions which were specifically designed
or developed to provide a remedy in respect of complaints of length
of bankruptcy court proceedings, whether preventive or compensatory
in nature.
- In
addition, the length of the applicant's bankruptcy proceedings was
primarily due to the fact that the proceedings had to await the
outcome of the bankruptcy proceedings against the Partnership and the
co-partners, and the proceedings concerning the disputed deferred
claims for interest.
- In
these circumstances, the Court does not find it proven by the
Government that, in the present case before the Bankruptcy Court, the
applicant had an effective, sufficient and accessible remedy in
respect of his complaint that the length of the proceedings had been
excessive (see, inter alia, Osmanov and Yuseinov v.
Bulgaria, nos. 54178/00 and 59901/00, § 41, 23
September 2004 and Nalbantova v. Bulgaria, no. 38106/02,
§ 36, 27 September 2007). The Government have not pointed
to any other remedy which in their view would have been effective
within the meaning of the invoked Article.
- It
follows that there has been a violation of Article 13 of the
Convention.
III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
- The
applicant also invoked Article 1 of Protocol No. 1 to the Convention
relating to the length of the bankruptcy proceedings during which he
was divested of the right to administer or to deal with his assets.
The provision reads as follows:
“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.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other
contributions or penalties.”
- The
Government submitted that in the light of the amounts made available
during the proceedings (see §§ 28 and 36) it was justified
to restrict the applicant's right to the peaceful enjoyment of his
possessions for the full duration of the proceedings and that the
interference did not place an individual and excessive burden on the
applicant.
- The
applicant disagreed.
- The
Court reiterates that a similar issue was dealt with in
Luordo v. Italy (no. 32190/96, ECHR 2003 IX),
in which the Court found a violation and stated, among other things,
(see §§ 67-71):
“The
Court notes that, following the bankruptcy order, the applicant was
deprived not of his property, but of the right to administer and deal
with his possessions, as the responsibility for administering them
was assigned to the trustee in bankruptcy. The interference with his
right to the peaceful enjoyment of his possessions thus took the form
of a control of the use of property within the meaning of the second
paragraph of Article 1 of Protocol No. 1. ... Consequently, the Court
finds that there was no justification for restricting the applicant's
right to the peaceful enjoyment of his possessions for the full
duration of the proceedings since, while in principle it will be
necessary to deprive the bankrupt of the right to administer and deal
with his or her possessions in order to achieve the aim pursued, the
necessity will diminish with the passage of time. In the Court's
view, the length of the proceedings [fourteen years and eight months]
thus upset the balance that had to be struck between the general
interest in securing the payment of the bankrupt's creditors and the
applicant's personal interest in securing the peaceful enjoyment of
his possessions. The interference with the applicant's right was
accordingly disproportionate to the aim pursued.”
- Likewise
in the present case, although noting that an amount of DKK 750,000
was made available to the applicant in the period from November 1998
to October 1999 and that DKK 100,000 was made available to him in the
beginning of 2002, nevertheless, having regard to the above finding
under Article 6 of the Convention, the Court considers that divesting
the applicant of the right to administer or to deal with his assets
for almost seventeen years and four months was disproportionate to
the aim pursued.
- It
follows that there has been a violation of Article 1 of
Protocol No. 1.
IV. 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. Pecuniary damage
- The
applicant claimed compensation for pecuniary damage, including his
alleged expenses for legal fees in the domestic proceedings amounting
to DKK 1,734,000 and a tax claim in the amount of DKK 3,573,275.
The claim also comprised an alleged loss of pension, about which he
was unable to give details at the relevant time. Subsequently, on
9 June 2008 the applicant added that he had suffered a loss of
DKK 10,000,000.
- The
Government contested the claims. From the outset, they noted that the
applicant had failed to provide any documentation for his claim. In
addition, they noted that the legal fee mentioned by the applicant
was the fee awarded to the trustee by the Bankruptcy Court for the
administration of all the estates, including the estate of the
partnership and each partner. Finally, they noted that the part of
the application concerning the tax claim had been declared
inadmissible and that the applicant had failed to elaborate further
on the alleged loss of pension.
- The
Court reiterates that only legal costs and expenses found to have
been actually and necessarily incurred and which are reasonable as to
quantum are recoverable under Article 41 of the Convention (see,
among other authorities, Nikolova v. Bulgaria [GC], no.
31195/96, § 79, ECHR 1999-II). Moreover, the costs of the
domestic proceedings may be awarded if they are incurred by an
applicant in order to try to prevent the violation found by the Court
or to obtain redress therefor (see, among other authorities, Le
Compte,
Van Leuven and De Meyere v. Belgium (Article 50), judgment of 18
October 1982, § 17, Series A no. 54). However, in so far as
the applicant incurred expenses in the proceedings before the
domestic courts which were actually and necessarily incurred in order
to prevent or to have redressed a breach of the Convention, he has
failed to submit relevant supporting documents as required by Rule 60
§ 2 of the Rules of Court. Moreover, in so far as substantiated,
the said tax claim and alleged loss of pension cannot be considered
related to the violation found. Accordingly, the Court makes no award
in respect of the costs of the domestic proceedings.
B. Non-pecuniary damage
- The
applicant claimed 500,000 Danish kroner (DKK), equal to 67,090 euros
(EUR),
in compensation for non-pecuniary damage.
- Subject
to the Court finding a violation, the Government agreed that
generally compensation should be awarded. They found, however, that
the applicant's claim was excessive and disproportionate.
- The
Court considers that the applicant must have sustained non-pecuniary
damage. Having regard to its finding above, notably as to the
complexity of the case and the conduct of the applicant (see, for
example, Kyriakidis and Kyriakidou v. Cyprus, no. 2669/02,
§§ 29 and 38, 19 January 2006), and ruling on an
equitable basis, it awards him EUR 16,000.
C. Costs and expenses before the Court
- The
applicant also requested reimbursement of legal fees and expenses
incurred in the proceedings before the Court, without specifying an
exact amount.
- The
Government submitted that the applicant had already received
DKK 40,000 under the Legal Aid Act (Lov
1999-12-20 nr. 940 om retshjælp til indgivelse og førelse
af klagesager for internationale klageorganer i henhold til
menneskerettighedskonventioner),
which in their view was sufficient to cover his costs and expenses
before the Court.
- The
Court notes the existence in Denmark
of a Legal Aid Act by virtue of which applicants may be granted free
legal aid for the lodging of complaints before international
institutions under human rights conventions and for the procedure.
The applicant has received EUR 5,365 (equal to DKK 40,000) by virtue
of the said Act. In these circumstances, and having regard to the
nature of the present case, the Court is satisfied that the applicant
has been reimbursed sufficiently under domestic law, and it sees no
reason to award him further compensation for costs and expenses
(see, among others, Vasileva v.
Denmark,
no. 52792/99, § 50, 25 September 2003).
D. 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
- Holds that there has been a violation of
Article 6 of the Convention;
- Holds that there has been a violation of
Article 13 of the Convention;
- Holds that there has been a violation of Article
1 of Protocol No. 1;
- 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, EUR 16,000
(sixteen thousand euros) in respect of non-pecuniary damage to be
converted into the national currency of the respondent State at the
rate applicable at the date of settlement, plus any tax that may be
chargeable;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount 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 26 March 2009, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Stephen Phillips Rait Maruste
Deputy Registrar President
