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FIRST
SECTION
CASE OF STEININGER v. AUSTRIA
(Application
no. 21539/07)
JUDGMENT
STRASBOURG
17
April 2012
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 Steininger v.
Austria,
The
European Court of Human Rights (First Section), sitting as a Chamber
composed of:
Nina Vajić,
President,
Anatoly Kovler,
Peer
Lorenzen,
Elisabeth Steiner,
Khanlar
Hajiyev,
Mirjana Lazarova Trajkovska,
Julia
Laffranque, judges,
and André Wampach,
Deputy Section
Registrar,
Having
deliberated in private on 27 March 2012,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 21539/07) against the Republic
of Austria lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a business firm registered in Austria, company
Franz Steininger (“the applicant company”), on 3 May
2007.
- The
applicant was represented by Mr J. Hofer and Mr T. Huemer, lawyers
practising in Wels. The Austrian Government (“the Government”)
are represented by their Agent, Ambassador H. Tichy, Head of the
International Law Department at the Federal Ministry for European and
International Affairs.
- The
applicant alleged, in particular, that no tribunal within the meaning
of Article 6 § 1 of the Convention had decided on the imposition
of surcharges for unpaid contributions to the Austrian Agricultural
Marketing Association.
- On
23 October 2008 the application was communicated to the Government.
It was also decided to rule on the admissibility and merits of the
application at the same time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant company, which has its seat of business in Ernstbrunn
(Austria), carries out cattle and pig slaughter, and is therefore
liable to agricultural marketing charges, calculated on the basis of
the number of animals slaughtered, to be paid to Agrarmarkt Austria
(AMA) under the Agricultural Market Act (Agrarmarktgesetz).
- On
30 May 2006 the AMA issued a payment order against the applicant
company, ordering it to pay outstanding contributions for the period
of December 2005 and January 2006 in the amount of 11.730,05 euros
(EUR) and, in addition, imposing a surcharge for failure to pay,
amounting to 60% of the unpaid contributions. The applicant company
appealed against the order. It argued in particular that the above
system was contrary to the rules of the European Union on state aid.
It also asked for oral hearings to be held on the appeal and also
asked that the proceedings for enforcing the payment order be
suspended.
- The Federal Minister of Agriculture, Forestry,
Environment and Water (Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft), acting as the
appeal authority, dismissed the applicant company’s appeal on
17 July 2006 without holding a hearing.
- As
regards the applicant’s argument that the AMA contributions
were levied for financing activities, the AMA quality programme,
which was not in accordance with EU law, the Federal Minister found
that after the decision of the European Commission of 30 June 2004
(C(2004)2037), the applicant company was in a position to know
precisely which charges it had to pay. In that decision the European
Commission had expressed that it had no objection to the AMA Quality
programmes and quality mark registered as state aid NN 34A/2000
(“Qualitätsprogramme und das AMA-Biozeichen und das
AMA-Gütezeichen”), because that state aid was in
accordance with the Common Market provided for in the Treaty
establishing the European Community. The Federal Minister referred
further to the Administrative Court’s decision of 20 March
2006, no. 2005/17/230, according to which also the levying of AMA
contributions was in accordance with the relevant provisions of EU
law (se §§ 24-27 below). The Federal Minister further held
that it had not been necessary to hold a hearing because a hearing
was only held if a decision was taken by a panel on an appeal against
the decision of a tax office or a regional directorate of finance,
which was not the case here.
- On
25 July 2006 AMA dismissed the request for suspension of the
enforcement.
- Thereupon
the applicant company lodged complaints with the Constitutional Court
and the Administrative Court against the Federal Minister’s
decision. Before the Constitutional Court the applicant company
complained, inter alia, that the surcharge imposed violated
its constitutional right to property. Before the Administrative Court
the applicant company complained that the appeal authority was not a
court within the meaning of the case-law of the European Court of
Justice which prevented it from having the lawfulness of the decision
by the European Commission of 30 June 2004 reviewed by the
European Court of Justice in proceedings under Article 234 of the
Treaty of the European Union. As regards the imposition of the
surcharge the applicant company complained that the findings of fact
were insufficient. In particular the authority had failed to
establish whether the objective and subjective elements of the
offence (objektiven und subjektiven Tatbildvoraussetzungen)
had been met. Relying on Article 6 of the Convention it complained
further that no public hearing had been held and that no impartial
tribunal established by law decided on the criminal charge against it
(“es ist kein unparteiisches, auf Gesetz beruhendes Gericht
über den erhobenen strafrechtlichen Vorwurf eingeschritten”).
As the authorities imposing the surcharges had failed to hold an oral
hearing, the applicant company asked the Administrative Court for a
public hearing.
- On
25 September 2006 the Constitutional Court declined to deal with the
applicant company’s complaint under Article 144 of the Federal
Constitution for lack of prospect of success.
- The
Administrative Court dismissed the applicant company’s
complaint on 30 January 2007 and held as follows:
“The present case does not differ in the questions
of relevance to the decision from the one decided by the
Administrative Court on 20 March 2006, no. 2005/17/230. Pursuant to
Section 43(2) of the Administrative Court Act reference is made to
it.
For the reasons set out in that decision the breach of
law complained of by the applicant company also does not exist in
view of the present complaint, for which reason it can be dismissed
without further proceedings in camera.
For the reasons set out in the decision referred to also
Article 6 of the Convention is of no relevance here.”
II. RELEVANT DOMESTIC LAW
1. The AMA Act
- The
Federal Act Establishing the Market Regulation Institution
“Agrarmarkt Austria”, Federal Law Gazette 376/1992
(Bundesgesetz über die Errichtung der Marktordnungsstelle
“Agrarmarkt Austria”, BGBl 276/1992 – “the
AMA Act”) defines “Agrarmarkt Austria (“AMA”)”
as a corporate body under public law (AMA Act section 2 paragraph 1).
Its tasks comprise, inter alia, the promotion of agricultural
marketing (AMA Act section 3 paragraph 1 (3)).
- According
to the AMA Act section 21a AMA collects agricultural marketing
charges (Agrarmarketingbeitrag) for the following aims: (i)
promoting and securing the distribution of domestic agricultural and
forestry products and related processed goods, (ii) opening up and
maintaining markets for these products in Austria and abroad, (iii)
improving the distribution of these products, (iv) promoting general
measures for improving and maintaining the quality of these products
(in particular agricultural products) and for providing relevant
information to the consumer regarding the quality of the products and
(v) promoting other marketing measures (in particular by means of
offering its services and bearing personnel costs).
- AMA
finances its activities by levying charges. Under Section 21c in
conjunction with sections 21e of the AMA Act, inter alia,
individuals and companies operating establishments for slaughtering
and butchery of cattle, calves, pigs, lambs and sheep are liable to
AMA for agricultural marketing charges. The duty to pay these charges
arises at the time the animals are slaughtered (AMA Act section 21f
paragraph 1 (3)).
- Section
21g of the AMA Act, in so far as relevant, reads as follows:
“(1) A debtor in respect of the charge has to
submit a declaration of the charge due within the time-limit set out
in section 21f para. 2 or 3, making use of a standard form provided
for this purposes by AMA, in which he himself has to calculate, ...
the charge to be paid ...
(2) If the debtor has not paid the charge at all, not
paid in due time or not in the correct amount, AMA has to make an
order for payment of the charge, issuing a formal written decision.
(3) If AMA establishes that the charge was not paid at
all or not paid in the correct amount, it may increase up to double
the amount due. In fixing the increased amount, it must be taken into
account to what extent the debtor could be expected to be aware of
the debt and whether the non-payment or insufficient payment had
occurred for the first time or repeatedly. In cases of late payment
AMA may impose default interest exceeding the base interest rate
(Basiszinssatz) by 3%, unless this would constitute
unacceptable hardship in the individual case.”
- The
collection of the charges is incumbent on the AMA. Appeals against
its declaratory decisions can be made to the Federal Minister for
Agriculture, Forestry, Environment and Water. The AMA and the Federal
Minister are tax authorities within the meaning of section 49 para. 1
of the Federal Tax Code (Bundesabgabenordnung). The Federal
Minister is also the superior supervisory authority (the AMA Act
section 21i (1-3)).
- Section
21l of the AMA Act provides that non-compliance with the duty to
submit a declaration of the charges due or non-payment of the charges
caused by untrue or incomplete statements is an administrative
offence for which the district administrative authority may impose a
fine of up to EUR 3,630 or imprisonment in default, unless the act
constitutes a criminal offence falling within the jurisdiction of the
ordinary criminal courts or is subject to more severe penalties
according to other provisions of the administrative criminal law. The
district administrative authority has to inform the AMA about the
outcome of any such administrative criminal proceedings pending
before it.
2. The Administrative Court
- Section
41(1) of the Administrative Court Act provides:
"In so far as the Administrative Court does not
find any unlawfulness deriving from the respondent authority’s
lack of jurisdiction or from breaches of procedural rules (section
42(2)(2) and (3)) ..., it must examine the impugned decision on the
basis of the facts found by the respondent authority and with
reference to the complaints put forward ... If it considers that
reasons which have not yet been notified to one of the parties might
be decisive for ruling on [one of these complaints] ..., it must hear
the parties on this point and adjourn the proceedings if necessary."
- Section
42(1) of the same Act states that, save as otherwise provided, the
Administrative Court must either dismiss an application as
ill-founded or quash the impugned decision.
- Section
42(2) provides that
"the Administrative Court shall quash the impugned
decision if it is unlawful
1. by reason of its content, [or]
2. because the respondent authority lacked
jurisdiction, [or]
3. on account of a breach of procedural
rules, in that
(a) the respondent authority has made findings of fact
which are, in an important respect, contradicted by the case file, or
(b) the facts require further investigation on an
important point, or
(c) procedural rules have been disregarded, compliance
with which could have led to a different decision by the respondent
authority."
- Section
43(2) of the Administrative Court Act provides:
“Every decision (Erkenntnis) must be
reasoned. Insofar as questions of law have been clarified in the
previous case-law, it is sufficient to refer to it.”
- If
the Administrative Court quashes the impugned decision, "the
administrative authorities [are] under a duty ... to take immediate
steps, using the legal means available to them, to bring about in the
specific case the legal situation which corresponds to the
Administrative Court’s view of the law (Rechtsanschauung)"
(section 63(1)).
3. The Administrative Court’s decision of 20
March 2006
- In
its decision of 20 March 2006, no. 2005/17/230 the Administrative
Court decided on a complaint against a decision of the Federal
Minister of Agriculture, Forestry, Environment and Water levying AMA
contributions for July 2004 - that is for the period following the
European Commission’s approval of the AMA state aid programme
on 30 June 2004.
- The
Administrative Court found that the Federal Minister had decided
correctly when he had dismissed the appeal against the imposition of
AMA charges for July 2004 and had interrupted proceedings on
contributions in respect of periods before that date, pending the
outcome of proceedings before the European Court of Justice
concerning a similar question.
- As
regards the period after July 2004 AMA contributions were due because
the European Commission had given its positive decision before that
date. Insofar the appellant had argued that the decision of the
European Commission was wrong and proceedings against that decision
were pending before the Court of First Instance the Administrative
Court found that, according to the case-law of the European Court of
Justice, an alleged unlawfulness of a state aid affected the levying
of contributions for financing that state aid only under specific
circumstances, namely if there was a direct link between the amount
of state aid granted and the amount levied as contribution. Since
this was not the case as regards the AMA contributions, any alleged
irregularity of the state aid had no relevance for its financing. For
the same reason there was also no breach of Article 28 of the Treaty
establishing the European Community (now Article 34 of the Treaty on
the functioning of the European Union).
- The
Administrative Court also declined to hold an oral hearing in this
case because the levying of parafiscal contributions, which was the
subject mater of the proceedings at issue, did not involve the
determination of a dispute on civil rights or obligations.
Accordingly Article 6 of the Convention did not require an oral
hearing.
4. The Constitutional Court’s judgment of 14
October 1987
- In
a judgment of 14 October 1987 (G 181/86) the Constitutional Court
held:
"From the fact that it has been necessary to extend
the reservation in respect of Article 5 of the Convention to
cover the procedural safeguards of Article 6 of the Convention,
because of the connection between those two provisions, it follows
that, conversely, the limited review (die (bloß)
nachprüfende Kontrolle) carried out by the Administrative
Court or the Constitutional Court is insufficient in respect of
criminal penalties within the meaning of the Convention that are not
covered by the reservation."
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION AS
REGARDS THE LACK OF A TRIBUNAL DECIDING IN THE SURCHARGE PROCEEDINGS
- The
applicant company, which complained solely about the surcharges that
it had to pay in excess of the charges due, complained that no
tribunal decided in the proceedings on the surcharges. It relied on
Article 6 § 1 of the Convention, which, in so far as
relevant, reads as follows:
“1. In the determination of his civil
rights and obligations or of any criminal charge against him,
everyone is entitled to a fair and public hearing ... by an
independent and impartial tribunal established by law. ...”
A. Admissibility
1. Applicability of Article 6 of the Convention
- The
Government argued that the complaint was incompatible ratione
materiae with the provisions of the Convention because Article 6
did not apply to the proceedings at issue. The imposition of
parafiscal charges, such as the marketing charges levied by AMA and
surcharges in the event of non-payment, did not concern the
determination of civil rights and obligations within the meaning of
Article 6 § 1. The Government maintained that only under certain
conditions proceedings on surcharges could be regarded as criminal
proceedings within the meaning of Article 6 § 1, as
the Court had found in the case of Jussila v. Finland [GC],
no. 73053/01, ECHR 2006 XIII. According to this judgment
the test for qualifying proceedings as criminal within the meaning of
Article 6 was based on three elements, namely the qualification of
the provision in domestic law as criminal, the character of the
offence and the severity of the penalty the person concerned risked.
- The
Government maintained however, that the first condition was not met,
because the imposition of a surcharge under domestic law was part of
ordinary administrative law. Moreover, the AMA Act provided for a
different and specific provision containing a criminal sanction,
namely the AMA Act section 21l. As regards the nature of the
surcharges, the relevant provisions of the AMA Act showed, in the
Government’s view, that this was primarily a lump-sum payment
for additional work to be performed by the AMA, namely conducting
formal administrative proceedings, and could not be regarded as a
penalty. Also the third criterion was not met. Considering that the
amount imposed did not exceed 60% of the unpaid charges, the
Government argued that the sanction could not be considered
particularly severe.
- The
applicant company argued that Article 6 applied to the proceedings at
issue because the proceedings on the surcharges imposed by the AMA
under the AMA Act section 21g concerned the determination of a
criminal charge, as the imposition of such charges clearly had a
punitive element.
- The
Court observes that in the present proceedings the applicant company
had been ordered by the AMA to pay surcharges, as they had failed to
pay marketing charges, which are parafiscal contributions.
- In the case of Jussila, (cited above), the
Court found that Article 6 under its criminal head applied to
proceedings on the imposition of surcharges for taxes. In doing so it
examined whether the surcharge proceedings were “criminal”
within the autonomous meaning of the Article, and to this end relied
on three criteria, commonly known as the “Engel
criteria” (see Engel and Others v. the Netherlands, 8
June 1976, § 82, Series A no. 22), to be considered in
determining whether or not there was a “criminal charge”.
The first criterion is the legal classification of the offence under
national law, the second is the very nature of the offence and the
third is the degree of severity of the penalty that the person
concerned risks incurring. The second and third criteria are
alternative and not necessarily cumulative. This, however, does not
exclude a cumulative approach where separate analysis of each
criterion does not make it possible to reach a clear conclusion as to
the existence of a criminal charge (see, as recent authority,
Sergey Zolotukhin v. Russia [GC], no. 14939/03, §
53, ECHR 2009).
- As
regards the first criterion, it is apparent that the surcharges in
the present cases were not classified as criminal but as part of the
general framework of the AMA Act on the levying of marketing charges.
This however is not decisive.
- As to the second criterion, the nature of the offence,
the Court observes that surcharges of the kind at issue in the
present cases were not imposed by a general legal provision applying
to taxpayers generally but to a more restricted group of persons –
both physical and legal – who pursue a specific economic
activity. Nevertheless the Court does not consider that section 21g
of the AMA Act was aimed at singling out a specific group of the
population and subjecting them to a particular regime, but rather at
adapting a general obligation, that of the payment of taxes and other
contributions due as a result of economic activities, to specific
circumstances in order to make that obligation foreseeable. This does
not therefore exclude the classification of section 21g of the AMA
Act as “criminal” in the autonomous sense of the
Convention.
- Further,
given the amount which can be imposed under the AMA Act section 21g,
namely up to double the amount due, such an amount is substantial and
cannot be intended merely as pecuniary compensation for additional
work. Also the sum actually imposed on the applicant company, which
was 60% of the original charge, shows that the amount was not
unimportant. Having regard to this, the Court considers that the
surcharges were imposed by a rule which purpose was deterrent and
punitive. The Court considers that this establishes the criminal
nature of the offence and hence that Article 6 applies under its
criminal head.
- Thus,
the Government’s objection of the incompatibility ratione
materiae of the applicant companies’ claims with the
provisions of the Convention has to be dismissed.
2. Exhaustion of domestic remedies
- The
Government submitted that the applicant company had not exhausted
domestic remedies as regards its complaint under Article 6 of the
Convention, as it had failed, in particular, to argue in the domestic
proceedings that no tribunal within the meaning of Article 6 had
decided on its case,
- This
is disputed by the applicant company which claimed that it made use
of all available domestic remedies.
- The
Court observes that the applicant company, in its complaint to the
Administrative Court argued that no impartial tribunal established by
law decided on the criminal charge against it and relied in this
respect on Article 6 of the Convention. The Court considers
therefore that this matter has been brought sufficiently to the
attention of the domestic authorities and thus rejects the argument
that the applicant failed to exhaust domestic remedies.
- The
Court further finds that this complaint is not manifestly ill-founded
within the meaning of Article 35 § 3 (a) of the Convention and
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
1. The parties’ submissions
- The
Government argued that even if Article 6 applied to the proceedings
at issue, there was no breach of this provision. They submitted that,
according to the constant case-law of the Court, the requirements for
a tribunal under Article 6 § 1 of the Convention were fulfilled
if that body had full jurisdiction to review all questions of law and
fact relevant to the legal dispute at issue. In the present case it
was the Administrative Court which made the decision in the surcharge
proceedings. Since it considered the applicant company’s
complaints on the merits, point by point, without ever having to
decline jurisdiction when replying to them, that court qualified as a
tribunal for the purposes of Article 6 § 1 (Zumtobel v.
Austria, 21 September 1993, § 32, Series A no. 268 A).
- The
applicant company did not comment on this point.
2. The Court’s assessment
- The
Court reiterates that Article 6 § 1 of the Convention guarantees
a right to a public hearing by an independent and impartial tribunal
established by law. According to the Court’s case-law, a
"tribunal" is characterised in the substantive sense of the
term by its judicial function, that is to say determining matters
within its competence on the basis of rules of law and after
proceedings conducted in a prescribed manner. It must also satisfy a
series of further requirements - independence, in particular of the
executive; impartiality; duration of its members’ terms of
office; guarantees afforded by its procedure - several of which
appear in the text of Article 6 § 1 itself (Belilos
v. Switzerland, 29 April 1988, § 64, Series A no. 132).
Where a penalty is criminal in nature there must be the possibility
of review by a court which satisfies the requirements of Article 6 §
1, even though it is not inconsistent with the Convention for the
prosecution and punishment of minor offences to be primarily a matter
for the administrative authorities (Baischer v. Austria, no.
32381/96, § 23, 20 December 2001; Malige v. France,
23 September 1998, § 45, Reports of Judgments and Decisions
1998 VII).
- The
Court reiterates further that decisions taken by administrative
authorities which do not themselves satisfy the requirements of
Article 6 § 1 of the Convention must be subject to
subsequent control by a "judicial body that has full
jurisdiction" (see Umlauft v. Austria, 23 October 1995, §
37, Series A no. 328 B with further references).
- In
the present case the AMA ordered the applicant company to pay
surcharges, and the Federal Minister of Agriculture, Forestry,
Environment and Water Federal Ministry, acting as an appeal
authority, decided on its appeal against that decision. While the
former is a public law body in which some administrative powers are
vested, the latter is an administrative and government authority.
None of them qualify as tribunals and it remains to be seen whether
the two courts which were seized in the present proceedings, the
Administrative Court and the Constitutional Court, do so.
- The
Constitutional Court, which did not to entertain the applicant
company’s complaint for lack of prospect of success,
cannot be considered a “judicial body that has full
jurisdiction” for the purposes of the present proceedings,
which are criminal in nature (see Umlauft, cited above,
§ 38), even though it has on occasions been considered a
tribunal in relation to civil claims (see Pauger v. Austria,
28 May 1997, § 59, Reports of Judgments and Decisions
1997 III, and Kugler v. Austria, no. 65631/01,
§ 50, 14 October 2010).
49. As
regards the Administrative Court the Court observes that where
an adjudicatory body which determines disputes over “civil
rights and obligations” does not comply with Article 6 § 1
in some respect, no violation of the Convention can be found if the
proceedings before that body are “subject to subsequent control
by a judicial body that has “full” jurisdiction and does
provide the guarantees of Article 6 § 1. Both the former
Commission and the Court have acknowledged in their case-law that the
requirement that a court or tribunal should have “full
jurisdiction” will be satisfied where it is found that the
judicial body in question has exercised “sufficient
jurisdiction” or provided “sufficient review” in
the proceedings before it (see Sigma Radio Television Ltd v.
Cyprus, nos. 32181/04 and 35122/05, §§
151-152, 21 July 2011, with further references).
- In
the case of Zumtobel, on which the Government relied, the
Court considered for the first time whether the limited review of the
Administrative Court, which is essentially bound by the findings of
fact of the administrative authorities, not empowered to take
evidence itself or to establish the facts and not entitled to rule in
the relevant authority’s stead, but has always to remit the
case to that authority, was sufficient for the purposes of Article 6
§ 1. The Court found that the subject matter of the dispute was
not a matter exclusively within the discretion of the administrative
authorities and, as to the submissions relied on before the
Administrative Court by the applicant, it considered these
submissions on their merits, point by point, without ever having to
decline jurisdiction when replying to them or ascertaining various
facts. The Court concluded that, in the circumstances of the case,
the scope of the competence of the Administrative Court satisfied the
requirements of Article 6 § 1 (see Zumtobel, cited above,
§§ 31-32). The subject matter of the dispute on which the
Court had put much emphasis was land expropriation for the
construction of a provincial highway, and thus concerned the
determination of civil rights and obligations (ibid. § 31). In
its subsequent judgments in the cases of Fischer and
Nowicky, the Court confirmed this approach in respect of cases
falling under the civil head of Article 6 § 1 (see Fischer v.
Austria, 26 April 1995, § 34, Series A no. 312; Nowicky
v. Austria, no. 34983/02, § 41, 24 February 2005).
- In
the subsequent case of Bryan, which concerned an order for
demolition of buildings, the Court found that in assessing whether
the limited review available to the applicant, an appeal on points of
law against a decision by an administrative authority, was sufficient
it was also necessary to have regard to matters such as the
subject-matter of the decision appealed against, the manner in which
that decision was arrived at, and the content of the dispute,
including the desired and actual grounds of appeal (Bryan v. the
United Kingdom, 22 November 1995, §§ 44-45, Series A
no. 335 A; see also Potocka and Others v. Poland, no.
33776/96, § 52, ECHR 2001 X; and DruZstevní
záloZna Pria and Others v. the Czech Republic, no.
72034/01, § 111, 31 July 2008).
- In
the present case, however, the criminal head of Article 6 § 1
applies to the proceedings at issue and in its case-law the Court
followed a different approach as regards the scope of review of
criminal sanctions imposed by administrative authorities.
- In
a series of cases decided in 1995 the Court had to consider whether
the Austrian system of administrative criminal justice in force at
the time, an administrative body intervening at the first and second
levels of jurisdiction, followed by a judicial review essentially
carried out by the Administrative Court, complied with the
requirements of Article 6 § 1 (see Schmautzer, Umlauft,
Gradinger, Pramstaller, Palaoro and Pfarrmeier v. Austria,
judgments of 23 October 1995, Series A nos. 328 A-C and 329 A-C). The
Court answered this question in the negative and, as regards the
Administrative Court, held as follows:
“39. The powers of the Administrative Court must
be assessed in the light of the fact that the court in this case was
sitting in proceedings that were of a criminal nature for the
purposes of the Convention. It follows that when the compatibility of
those powers with Article 6 § 1 is being gauged, regard must be
had to the complaints raised in that court by the applicant as well
as to the defining characteristics of a "judicial body that has
full jurisdiction". These include the power to quash in all
respects, on questions of fact and law, decisions of the body at the
level below. As the Administrative Court lacks that power, it cannot
be regarded as a "tribunal" within the meaning of the
Convention. Moreover, in a judgment of 14 October 1987 the
Constitutional Court held that in respect of criminal penalties not
covered by the reservation in respect of Article 5 the limited
review carried out by the Administrative Court or the Constitutional
Court was insufficient (see Schmautzer, cited above, §
36; Umlauft, cited above, § 39; Gradinger, cited
above, § 44; Pramstaller, cited above, § 41;
Palaoro, cited above, § 43; and Pfarrmauer, cited
above, § 40)”.
- The
same approach was followed in the case of Mauer (no. 2) (Mauer
v. Austria (no. 2), no. 35401/97, § 15, 20 June 2000).
- In two further cases, Janosevic v. Sweden and
Västberga Taxi Aktienbolag and Vulic v. Sweden, which
concerned the imposition of tax surcharges qualified as criminal
sanctions within the autonomous meaning of Article 6 § 1, the
Court found that Contracting States must be free to empower tax
authorities to impose sanctions like tax surcharges even if they come
to large amounts. Such a system was not incompatible with Article 6
§ 1 so long as the taxpayer can bring any such decision
affecting him before a judicial body that has full jurisdiction,
including the power to quash in all respects, on questions of fact
and law, the challenged decision (Janosevic v. Sweden,
no. 34619/97, § 81, ECHR 2002 VII; Västberga Taxi
Aktiebolag and Vulic v. Sweden, no. 36985/97, § 93, 23 July
2002). It observed that the Swedish administrative courts had
jurisdiction to examine all aspects of the matters before them and
was not restricted to points of law but could also extend to factual
issues, including the assessment of evidence. If they disagreed with
the findings of the Tax Authority, they had the power to quash the
decisions appealed against. For these reasons, the Court found that
the review had been conducted by courts that afforded the safeguards
required by Article 6 § 1 (Janosevic,
cited above, § 82; Västberga Taxi Aktienbolag and Vulic,
cited above, § 94).
- In
the present case, however, the power of review of the Administrative
Court is limited (see § 50 above) and has already been found by
the Court insufficient for regarding it a tribunal within the meaning
of the Convention in respect of proceedings that were of a criminal
nature for the purposes of the Convention. In this respect the Court
cannot overlook that the Austrian Constitutional Court itself has
considered that the limited review (die (bloß) nachprüfende
Kontrolle) carried out by the Administrative Court was
insufficient in respect of criminal penalties within the meaning of
the Convention (see § 28 above).
- Moreover,
turning to the decision taken by the Administrative Court in the
present proceedings on the complaint brought by the applicant before
it, the Court observes that this was a summary decision which merely
related to questions of law (see § 12 above) consisting in a
simple reference to a previous decision on a similar matter and
containing no answer to the applicant company’s complaint
relating to the facts and cannot therefore be qualified as adequate
“full review” of the applicant company’s criminal
conviction passed by an administrative authority.
- In
sum, the Court considers that in the proceedings at issue, which were
criminal in nature, the applicant company did not have access to a
tribunal within the meaning of Article 6 § 1.
- There
has accordingly been a violation of Article 6 of the Convention.
II. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION AS
REGARDS THE LACK OF A HEARING IN THE SURCHARGE PROCEEDINGS
- The
applicant company complained further under Article 6 § 1 of the
Convention that no public hearing has been held in the surcharge
proceedings.
- The
Government contested that argument.
- The
Court notes that this complaint is linked to the one examined above
and must therefore likewise be declared admissible.
- Having
regard to the conclusions above, namely that the surcharge
proceedings have not been conducted before a tribunal within the
meaning of Article 6 § 1 of the Convention, the Court considers
that it is not necessary to examine whether there has been a
violation of Article 6 on account of the lack of a public hearing,
because only a hearing before a body which qualifies as a tribunal
would have served a meaningful purpose (see Alge v. Austria,
no. 38185/97, § 29, 22 January 2004).
III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
Admissibility
- The
applicant company also complained under Article 1 of Protocol No. 1
that the surcharges were not proportionate to the aim sought. It
relied on Article 1 of Protocol No.1 to the Convention, which 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 argued that the applicant company had not exhausted
domestic remedies, as it had merely mentioned in the proceedings
before Constitutional Court that their “fundamental right to
protection of possession” had been violated without, however,
giving any substantive arguments in this respect. In any event there
was no breach of Article 1 Protocol No. 1 as the
contracting states had a wide margin of appreciation as regards the
levying of taxes and other contributions and the interference with
the applicant company’s rights, if any, had been proportionate,
as no excessive burden had been imposed on it.
- This
is disputed by the applicant company, which maintained that it
properly exhausted domestic remedies. It also argued that the
surcharges imposed on it were excessive, because, given their amount,
they could not be considered as merely covering additional
administrative costs incurred as a result of the non-payment of the
contributions.
- The
Court observes first that the applicant company merely mentioned in
the proceedings before Constitutional Court that its “fundamental
right to protection of possession” had been violated, without
giving any further details. However, it need not examine whether this
constituted proper exhaustion of domestic remedies, as this complaint
is in any event inadmissible for the following reasons.
- The Court reiterates that as regards the right of
States to enact such laws as they deem necessary for the purpose of
"securing the payment of taxes, provided for in Article 1 of
Protocol No.1, the legislature must be allowed a wide margin of
appreciation (Gasus Dosier- und Fördertechnik GmbH v. the
Netherlands, 23 February 1995, § 60, Series A no. 306 B).
According to the Court’s well-established case-law, the second
paragraph of Article 1 of Protocol No. must be construed in the
light of the principle laid down in the Article’s first
sentence. Consequently, an interference must achieve a "fair
balance" between the demands of the general interest of the
community and the requirements of the protection of the individual’s
fundamental rights. The concern to achieve this balance is reflected
in the structure of Article 1 as a whole, including the second
paragraph: there must therefore be a reasonable relationship of
proportionality between the means employed and the aim pursued (ibid,
§ 62). That balance will be lacking where the person concerned
has to bear an individual and excessive burden (see Wieczorek v.
Poland, no. 18176/05, §§ 59, 8 December 2009).
- In
the present case, the applicant company had to pay surcharges in the
amount of 60 % of the unpaid contribution. Considering the wide
margin afforded to the Contracting States and the amounts involved,
the Court cannot find that this amount constituted an individual and
excessive burden imposed on the applicant company.
- It
follows that this part of the application is manifestly ill-founded
and must be rejected in accordance with Article 35 §§ 3 (a)
and 4 of the Convention.
IV. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
- Lastly,
the applicant company complained under Article 6 § 3 (a)
that in the surcharge proceedings it had not been informed in detail
of the duty to pay these charges. Under Article 7 of the Convention
it complained that despite the decision of the European Commission of
30 June 2004 the question to what extent charges had to be paid was
not clear, and the relevant provision therefore lacked legal
certainty. Under Article 13 it complained that it could only avoid
the penalty by paying the allegedly illegal charges and therefore did
not have an effective remedy at its disposal. Under Article 14 read
in conjunction with Article 1 of Protocol No. 1 it
complained of discrimination because the same penalty could apply,
irrespective of the amount of charges not paid.
- However,
in the light of all the material in its possession, and in so far as
the matters complained of are within its competence, the Court finds
that they do not disclose any appearance of a violation of the rights
and freedoms set out in the Convention or its Protocols.
- It follows that this part of the application is
manifestly ill-founded and must be rejected in accordance with
Article 35 §§ 3 (a) and 4 of the Convention.
V. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- The
applicant company claimed compensation for pecuniary damage,
consisting in the amount of the surcharge it had had to pay.
- The
Government commented that there was no causal link between the
violation alleged and the pecuniary damage claimed by the applicant.
It was by no means certain that the applicant company would not have
had to pay the charges, had the procedural guarantees considered to
have been violated been complied with.
- The
Court agrees with the Government that there is no causal link between
the violation of the Convention and the pecuniary damage claimed by
the applicant. Consequently, it makes no award under this head.
B. Costs and expenses
- The
applicant companies also claimed 2,673.44 euros (EUR) for costs and
expenses incurred before the domestic authorities and courts and
EUR 1,006 for costs incurred in the proceedings before the
Court.
- The
Government argued that the costs claimed for the domestic proceedings
were excessive.
- According
to the Court’s case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and are
reasonable as to quantum.
- The Court considers that the costs claimed both in
respect of the domestic proceedings and the proceedings before the
Court were necessary and reasonable as to quantum and awards them in
full. It therefore awards the applicant company EUR 3,679.44 for
costs and expenses, plus any tax that may be chargeable to the
applicant company on this amount.
C. Default interest
- The
Court considers it appropriate that the default interest rate should
be based on the marginal lending rate of the European Central Bank,
to which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint concerning the lack of a
tribunal deciding in the surcharge proceedings and lack of a public
hearing admissible and the remainder of the application inadmissible;
- Holds that there has been a violation of
Article 6 § 1 of the Convention as regards the complaint
concerning the lack of a tribunal deciding in the surcharge
proceedings;
- Holds that there is no need to examine the
complaint under Article 6 § 1 of the Convention as regards
the complaint concerning the lack of a public hearing in the
surcharge proceedings;
- Holds
(a) that
the respondent State is to pay to the applicant company, within three
months of the date on which the judgment becomes final, in accordance
with Article 44 § 2 of the Convention, EUR
3,679.44 (three thousand six hundred seventy nine euros and forty
four cents), plus any tax that may be chargeable to the
applicant company, in respect of costs and expenses;
(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
company’s claim for just satisfaction.
Done in English, and notified in writing on 17 April 2012, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
André Wampach Nina Vajić
Deputy
Registrar President
