BARC COMPANY LTD v Malta - 38478/06 [2010] ECHR 1524 (21 September 2010)

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Application no. 38478/06
by Barc Company Limited BARC COMPANY LIMITED
against Malta

The European Court of Human Rights (Third Section), sitting on 21 September 2010 as a Chamber composed of:

Elisabet Fura, President,
Corneliu Bîrsan,
Boštjan M. Zupančič,
Alvina Gyulumyan,
Ineta Ziemele,
Luis López Guerra,
Ann Power^¹, judges,
and Santiago Quesada, Registrar,

Having regard to the decision of 6 July 2010 to restore the application to the Court's list of cases by virtue of Article 37 § 2 of the Convention,

1. The applicant company, Barc Company Limited, is a Limited Liability Company registered in Malta. It was represented before the Court by Bindmans LLP, lawyers practising in London.

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

3. On 22 June 1990 civil proceedings in relation to a block of apartments were instituted by CGB against GA, BA and RA as directors and on behalf of A. Ltd and RA also in his own personal capacity.

5. On appeal, on 24 February 1998 CGB requested the Court of Appeal to join the applicant company to the proceedings in substitution of RA, since it had inherited his rights and liabilities. The applicant company and the other defendants objected on the basis that an extraneous person could not be introduced at that stage of the proceedings.

6. By an interim decision of 8 July 1998 the Court of Appeal ordered the appellants to submit to the registry a copy of the relevant deed of transfer.

7. On 18 January 2000, following the relevant verification, namely that on 12 May 1995 BA, on behalf of the applicant company, had acquired one of the apartments at issue in the proceedings, the Court of Appeal accepted the request for substitution. It noted that the relevant deed of transfer explicitly stated that the vendors (RA and his spouse) were assigning to the purchaser all the litigation rights pertaining to them in the present lawsuit. Consequently, the request was justified.

8. The civil proceedings before the Court of Appeal remained pending throughout the following proceedings.

9. On 7 April 2000 the applicant company instituted constitutional redress proceedings. It complained under Article 6 of the Convention that the Court of Appeal decision of 18 January 2000 had deprived it of a double degree of jurisdiction in the proceedings in question, since it had only become part of the proceedings at the appeal stage. In consequence, it had not been given the opportunity to submit evidence and pleadings or to cross-examine witnesses.

10. On 30 June 2000 the Civil Court (First Hall) in its constitutional jurisdiction rejected the applicant company's claims. It held that by means of the contract dated 12 May 1995 the applicant company had bought the apartment at issue, together with any litigation rights according to law in the relevant proceedings. By means of this deed the applicant company undertook the duties and rights held by its predecessor RA and therefore it could not be considered a distinct entity. Moreover, this transfer of rights and obligations had taken place when the proceedings were still pending before the first-instance court and, at the time, the applicant company had not made any request for substitution. Thus, the Civil Court found that the claim was manifestly ill-founded, all the more so since Article 6 of the Convention did not guarantee a right of appeal against a decision in civil matters. It only stated that where such a right existed it should be in conformity with the guarantees under Article 6.

12. On 20 June 2005 the Constitutional Court upheld the first-instance judgment. It reiterated that the applicant company had fully taken over the rights and duties of its predecessor according to law and that it was the applicant company's duty to lodge a request to be substituted in the acts of the proceedings. However, as acknowledged by the applicant company, it had chosen not to intervene at that stage as it was not in its interests. It was paradoxical that at that stage the applicant company had chosen not to intervene to protect its interest and that now it was claiming that its right had been breached because it had not been a party to the first-instance proceedings. The Constitutional Court considered that since the applicant company had been at fault in failing to safeguard its interests at the time, it could not claim a breach of the Convention at this stage. Moreover, in this light, it was evident that the applicant company had been acting in bad faith.

14. On 13 February 2006 this request was rejected as null and void, it having been introduced after the three-month time-limit set by law.

15. On 18 October 2005 the applicant company instituted a new set of constitutional redress proceedings. It complained that the procedure adopted by the Court of Appeal resulting from its interim decisions of 8 July 1998 and 18 January 2000 was not provided for in the Code of Organisation and Civil Proceedure and was therefore “extra legem” (not covered by law). In consequence it had breached the applicant company's right to a fair trial under Article 6 of the Convention.

16. On 18 May 2006 the Civil Court (First Hall) in its constitutional jurisdiction rejected the applicant company's claims. It expressed doubt as to whether the applicant company could institute these proceedings, since the matters at issue had been or could have been invoked in previous proceedings. However, even on the merits the complaint was manifestly ill-founded. It considered, as had the previous constitutional jurisdictions, that it was for the applicant company to request to be substituted into the proceedings in order to safeguard its interests. Moreover, the procedure adopted by the Court of Appeal was not new. The transfer of litigation rights as a concept and its application was clearly enshrined in the Maltese Civil Code. The applicant company knew exactly what rights and duties it was purchasing on signing the deed of 12 May 1995 and was aware of the pending proceedings. In consequence, it could have opted not to purchase the said property if the conditions were not to its liking. Indeed, in the proceedings in question the applicant company could not be considered distinct to its predecessor RA. Upon the assignment of interests RA was divested of his litigation rights and no longer had any interest in the case, this juridical interest being now vested in the applicant company as owner of the apartment and the litigation rights pertaining to it. Ultimately, the court considered that the application was an abuse of process both because the impugned legal issues were clearly established in domestic procedure and because the applicant company should have made its complaint in its first set of proceedings and not in a new set of proceedings with the aim of stalling the judicial process. In consequence, finding the application to be frivolous and vexatious, the court ordered the applicant company to pay additional costs.

18. By a judgment of 6 June 2006, the Constitutional Court dismissed the appeal as null and void, since no appeal lay against judgments declaring applications frivolous and vexatious. Moreover, it was clear that the same appeal was yet another attempt to further stall the proceedings and was a clear abuse of process. The applicant company's attempt to lengthen the proceedings had been evident throughout, with particular reference to certain events. It held that in view of the circumstances of the case, where the applicant company had repeatedly instituted the same proceedings, including a request for retrial out of time, the applicant company's actions were undoubtedly and outrightly an abuse of process and the first-instance court had been perfectly justified in declaring the application frivolous and vexatious. It ordered the applicant to pay double the costs due.

19. Article 1469 of the Civil Code, Chapter 16 of the Laws of Malta, in so far as relevant, reads as follows:

“The assignment or sale of a debt, or of a right or of a cause of action is complete, and the ownership is ipso jure acquired by the assignee as soon as the debt, the right or the cause of action, and the price have been agreed upon, and, except in the case of a right transferable by the delivery of the respective document of title, the deed of assignment is made.”

20. The applicant company complained under Article 6 § 1 of the Convention, about the Court of Appeal's decision of 18 January 2000. It alleged that since it had been drawn into the proceedings at the appeal stage, its rights to a fair trial and to a double degree of jurisdiction had been breached.

21. The applicant complains that he did not have a fair hearing in that he was denied a double degree of jurisdiction by means of the extra legem procedure adopted by the Court of Appeal in its decision of 18 January 2000. He invoked Article 6 § 1 of the Convention, which, in so far as relevant, reads as follows:

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

22. The Court reiterates that Article 35 § 1 of the Convention requires that the only remedies to be exhausted are those that are available and sufficient to afford redress in respect of the breaches alleged. The purpose of Article 35 § 1 is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to the Court (see, inter alia, Selmouni v. France [GC], no. 25803/94, § 74, ECHR 1999-V). However, an applicant is not obliged to have recourse to remedies which are inadequate or ineffective (see Raninen v. Finland, 16 December 1997, § 41, Reports of Judgments and Decisions 1997-VIII). It follows that the pursuit of such remedies will have consequences for the identification of the “final decision” and, correspondingly, for the calculation of the starting point for the running of the six-month rule (see, for example, Kucherenko v. Unkraine, no. 41974/98, decision of 4 May 1999, and Prystavska v. Ukraine (Dec.), no. 21287/02, 17 December 2002).

23. In the present case, the applicant company brought the matter twice before the constitutional jurisdictions, reiterating, in substance, the same arguments. The second set of constitutional proceedings was rejected by the domestic courts not only as frivolous and vexatious but also as an abuse of process, particularly in the light of the numerous applications brought by the applicant. Thus, the Court considers that the second set of constitutional proceedings was repetitive and devoid of prospects of success. It follows that the judgment of 6 June 2006 cannot bring the application within the six-month time-limit laid down in Article 35 § 1 of the Convention. The “final” decision at the domestic level must be considered the Constitutional Court's judgment of 20 June 2005, which was given more than six months before the date of introduction of the application (19 September 2006). While it is not necessary to enter into the issue of whether retrial is an extraordinary remedy within the Maltese legal system (see San Leonard Band Club v. Malta, no. 77562/01, § 41, ECHR 2004 IX), the Court notes that even assuming that the decision of 13 February 2006, rejecting the applicant company's request for retrial, were to be considered as the final domestic decision, the latter was also delivered more than six months before the date of introduction of the application (19 September 2006). It follows that the application is out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.

24. Even assuming the application had been introduced within the six- month time-limit, the Court finds it opportune to reiterate that, the Convention does not guarantee a right to a double degree of jurisdiction in civil matters. In fact, since it does not provide any right to an appeal in civil cases, Article 6 § 1 does not require States to set up courts of appeal or of cassation (see Delcourt v. Belgium, judgment of 17 January 1970, Series A no. 11 pp. 13-14, § 25, and De Ponte Nascimento v the United Kingdom, (dec.), no.55331/00, 31 January 2002). It follows that the complaint in the present case would in any event be incompatible ratione materiae with the provisions of the Convention and rejected under Article 35 §§ 3 and 4 of the Convention.

25. Moreover, in so far as the complaint relating to the alleged extra legem procedure can be separated from the above complaint, the Court reiterates that it is in the first place for the national authorities, and notably the courts, to interpret domestic law and that the Court will not substitute its own interpretation for theirs in the absence of arbitrariness (see Bezzina Wettinger and Others v. Malta, no. 15091/06, § 79, 8 April 2008). The domestic court held that the transfer of litigation rights and its application were enshrined in the Maltese Civil Code and that the matter at issue was not at all novel. In the Court's view, the reasoning of the domestic courts does not appear in any way arbitrary. Therefore, the complaint is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected under Article 35 § 4 thereof.

1 Mrs Power sits as national judge in respect of Malta (Article 29 of the Rule of the Court).

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You are here: BAILII >> Databases >> European Court of Human Rights >> BARC COMPANY LTD v Malta - 38478/06 [2010] ECHR 1524 (21 September 2010) URL: http://www.bailii.org/eu/cases/ECHR/2010/1524.html Cite as: [2010] ECHR 1524