AS TO THE ADMISSIBILITY OF
Application no. 31908/96
by DRIEMOND BOUW BV
against the Netherlands
The European Court of Human Rights (First Section) sitting on 2 February 1999 as a Chamber composed of
Mrs E. Palm, President,
Mr J. Casadevall,
Mr G. Jörundsson,
Mr R. Türmen,
Mr C. Bîrsan,
Mrs W. Thomassen,
Mr R. Maruste, Judges,
with Mr M. O'Boyle, Section Registrar;
Having regard to Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 7 March 1996 by Driemond Bouw B.V. against the Netherlands and registered on 13 June 1996 under file no. 31908/96;
Having regard to the report provided for in Rule 49 of the Rules of Court;
Having regard to the observations submitted by the respondent Government on 10 November 1997 and the observations in reply submitted by the applicant on 6 January 1998 and 6 April 1998 respectively;
Decides as follows:
The applicant is a Dutch construction company with limited liability having its registered seat in Amsterdam. In the proceedings it is represented by Mr M.W.C. Feteris, a lawyer practising in Amsterdam.
The facts of the case, as submitted by the parties, may be summarised as follows.
a. Particular circumstance of the present case
In 1988 and 1989, the applicant company hired employees for work in the Netherlands from Schmitz Betonstahlbetrieb GmbH (hereinafter referred to as "Schmitz GmbH"), a company with limited liability having its registered seat in Germany. For the latter company's employees hired by third companies, the German Local Sickness Fund (Allgemeine Ortskrankenkasse) issued secondment certificates (detacherings-verklaringen), so-called E-101 certificates.
In accordance with the relevant statutory rules, the Dutch New General Occupational Association (Nieuwe Algemene Bedrijfsvereniging; "NAB") enlisted Schmitz GmbH as a member and decided that the latter had to pay Dutch social security contributions for these employees. As Schmitz GmbH failed to provide the NAB with the necessary information on wages paid, the NAB determined the relevant social security contributions ex officio. Schmitz GmbH was declared bankrupt in March 1989.
In its decision of 23 December 1992, the NAB held the applicant company severally liable (hoofdelijk aansprakelijk) for the payment of the social security contributions under the Unemployment Insurance Act (Werkloosheidswet; "WW"), the Sickness Benefits Act (Ziektewet; "ZW"), the Health Insurance Act (Ziekenfondswet; "ZFW") and the Labour Disability Insurance Act (Wet op de Arbeidsongeschiktheidsverzekering; "WAO") for the employees hired by the applicant company from Schmitz GmbH. These contributions amounted in total to 29,595 Dutch guilders.
In this decision it was stated that the applicant company would have been exempted from this liability if it would have reported, in accordance with the procedure stated in the decision Nr. 73943 of 21 July 1960 of the Social Security Council (Sociale Verzekeringsraad), that it was availing itself of the services of seconded employees and, in addition, if this secondment had taken place under a permit referred to in Article 2 para. 1a of Act on Secondment of Workers (Wet op het ter beschikking stellen van arbeidskrachten) issued to the seconding employer. It was found that the applicant company had not complied with either condition.
The applicant company filed an appeal with the Regional Court (Arrondissementsrechtbank) of Amsterdam. In the course of a hearing held on 8 December 1992 before the Regional Court, the applicant company submitted not to have found any social security contribution demands (premienota's) and, expressing doubts on the actual existence of such demands, raised the question whether under these circumstances it could be held liable for payment of these social security contributions. The NAB replied that the demands existed.
On 31 December 1993, the Regional Court rejected the applicant company's appeal as ill-founded. The Regional Court noted that no payment had been received on the social security contribution demands for the years 1987, 1988 and 1989 which the NAB had addressed to Schmitz GmbH.
As to the question whether the applicant company could be held liable for the payment of these contributions, the Regional Court held that the applicant company had failed to report that it was availing itself of seconded employees and that no permit had been issued to Schmitz GmbH.
Rejecting all arguments advanced by the applicant company in this respect, the Regional Court found that the facts at issue did not constitute a situation of international secondment as referred to in the EEC Ordinances 1408/71 and 574/72. It noted that the employees at issue were all Dutch nationals and were all residing and working in the Netherlands at the relevant time. It further noted that Schmitz GmbH had recruited these employees, who until that moment had been insured under the Dutch social security system, in the Netherlands where they had also been assigned to work.
Having reached this finding, the Regional Court concluded that the Dutch social security legislation was applicable to the employees hired by the applicant company and that, as Schmitz GmbH had failed to pay the contributions due, the applicant company could be held liable, pursuant to Article 16a of the Social Security Co-ordination Act, for payment of the social security contributions over the years 1988 and 1989 in respect of the employees it had hired from Schmitz GmbH.
The applicant company filed an appeal with the Central Appeals Tribunal (Centrale Raad van Beroep). In its written appeal it stated, inter alia, that it did not appear from the case-file that social security contribution demands had been issued to Schmitz GmbH. The applicant company argued that, as long as statutory social security contributions debts had not been formalised in a social security contribution demand, there could be no formally claimable contribution debt. It further doubted that any steps aimed at collecting this debt had been taken against Schmitz GmbH and submitted that, in these circumstances, it was inappropriate that it should be held liable for this debt.
In its written reply of 28 March 1995 to the applicant company's appeal, the NAB stated that social security contribution demands had been issued and, although it had not yet been possible to submit copies of these demands, that it would submit copies of these demands as soon as possible. As to the lack of any debt recovery steps, the NAB submitted that Schmitz GmbH had gone bankrupt in 1989 and that it was thus impossible to collect this debt.
In the course of a hearing held on 18 September 1995 before the Central Appeals Tribunal, the applicant company also argued that the letters of 18 June 1987 and 24 October 1988 from the Foundation Social Fund Construction Industry (Stichting Sociaal Fonds Bouwnijverheid; "SFB") to Schmitz GmbH had created a legitimate expectation that no Dutch social security contributions would be imposed. It further submitted that, since it still had not received any social security contribution demands addressed to Schmitz GmbH, no contributions had been imposed and thus no contributions were due.
The NAB replied that it could not bear any responsibility for acts of another administrative organ which may have led to certain expectations and, as regards the submission of the demands, responded that this had still not been done but that it would be able to submit these demands at the hearing.
In reply to this offer by the NAB to submit the demands, the President of the Central Appeals Tribunal, referring to Article 7:4 of the General Administrative Law Act (Algemene Wet Bestuursrecht), stated that additional documents were to be submitted up to 10 days before the date of the hearing.
When the applicant company submitted that the NAB, in its written submissions of 28 March 1995, had only stated that the demands would be submitted as soon as possible but that so far nothing had in fact been submitted, the President of the Central Appeals Tribunal stated that it appeared indisputably from the administrative records that social security contributions demands had been issued ("uit de administratie onomstotelijk blijkt dat er premienota's zijn opgelegd"). The applicant company's representative responded not to have seen these demands.
In its decision of 30 October 1995, the Central Appeal Tribunal rejected the applicant company's appeal and upheld the judgment of 31 December 1993.
It held, inter alia, that it agreed with the Regional Court's finding that the employees at issue fell under the Netherlands social security scheme and that the situation at issue did not concern secondment of employees recruited in Germany. It noted on this point that the applicant company did no longer contest this finding.
The Central Appeals Tribunal further agreed with the Regional Court that the letters of 18 June 1987 and 24 October 1988 from the SFB could not be regarded as constituting a violation of the principle of justified expectations (vertrouwensbeginsel) to such an extent that the applicant company's liability could not be maintained. It noted that these letters came from the SFB and not from the NAB and held that, given the manner in which the clauses contained in these letters were formulated, the applicant company could not have attached a decisive importance to them.
The Central Appeals Tribunal did not deal with the issues raised by the applicant company in respect of the social security contribution demands.
b. Relevant domestic law and practice
Under Article 11 of the Netherlands Social Security Co-ordination Act (Coördinatiewet Sociale Verzekeringen), social security contributions due by employers are determined by the occupational association to which the employer belongs. According to paragraph 5 of this provision, the occupational association must inform the employer in writing of the amount due and the delay for payment.
According to Article 13 para. 1 of the Social Security Co-ordination Act, social security contributions will no longer be determined after a period of five years has elapsed since the end of the calendar year for which such contributions are in principle due. Paragraph 2 of this provision states that payment of social security contributions, which have not been collected within ten years after their determination, can no longer be claimed.
Pursuant to Article 16a of the Social Security Co-ordination Act, a legal person hiring employees of a third party may in certain circumstances be liable to pay the social security contributions, in principle due by the third party employer, for such employees. One such circumstance is the failure of the third party to pay these contributions.
In a decision of 28 December 1994, the Central Appeals Tribunal held that a third party cannot be held liable for payment of social security contributions if the initial demand had not issued to the correct debtor. In that case it was held that the real debtor was a company with limited liability whereas the demand stated this company's director/shareholder in his personal capacity as debtor (CRvB, 28 december 1994, Rechtspraak Sociaal Verzekeringsrecht 1995, Nr. 171).
Under Article 8:42 of the General Administrative Law Act (Algemene Wet Bestuursrecht) the administrative organ against whose decision an administrative appeal has been lodged shall transmit to the court dealing with the appeal the documents relating to the case ("de op de zaak betrekking hebbende stukken") within a set time-limit.
Pursuant to Article 8:45 of the General Administrative Law Act, an administrative court can further request the parties and others to submit documents within a fixed time-limit. Under paragraph 2 of this provision, administrative organs, even if they are no party to the proceedings concerned, are obliged to comply with such a request. Pursuant to Article 8:28 of the General Administrative Law Act, parties are obliged to comply with a request of an administrative court to submit documents.
Under Article 8:69 para. 1 of the General Administrative Law Act, an administrative court shall give judgment on the basis of the notice of appeal, the documents submitted, the preliminary examination and the hearing before the court. Under the second and third paragraphs of this provision an administrative court may ex officio complete the legal grounds and the facts.
Under Article 8:77 of the General Administrative Law Act a written decision of an administrative judicial body shall include the grounds on which it is based.
The applicant company complains under Article 6 § 1 of the Convention that the Central Appeals Tribunal, in its decision of 30 October 1995, did not reply to the applicant company's defence arguments relating to the social security contribution demands. The applicant company submits that if these arguments had been accepted, this would have led to a finding that it was not liable to pay the contributions.
PROCEEDINGS BEFORE THE COURT
The application was introduced on 7 March 1996 and registered on 13 June 1996.
On 10 September 1997, the Commission decided to communicate the application to the respondent Government.
The Government's written observations were submitted on 10 November 1997. The applicant company replied on 6 January 1998.
The respondent Government submitted additional observations on 19 March 1998, to which the applicant company replied on 6 April 1998.
On 1 November 1998, by operation of Article 5 § 2 of Protocol No. 11 to the Convention, the case fell to be examined by the Court in accordance with the provisions of that Protocol.
The applicant company complains under Article 6 § 1 of the Convention that the Central Appeals Tribunal failed to respond to an essential argument raised by the applicant company.
Article 6 § 1 of the Convention, insofar as relevant, reads:
"In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by a ... tribunal established by law."
The Government submit that, unlike the situation in the case of Ruiz Torija v. Spain (Eur. Court HR, judgment of 9 December 1994, Series A no. 303-A) where the appellate court made no reference whatsoever to the appellants argument that an action against him was time-barred, the Central Appeals Tribunal did in fact deal with the applicant company's contention in respect of the issuance of the social security contribution demands. Although the Central Appeals Tribunal did not explicitly react to the applicant company's argument on this point in its decision of 30 October 1995, it did deal with this issue when it came up during the hearing of 18 September 1995. On that occasion the Central Appeals Tribunal could have decided to add these documents to the case-file. However, the President of the Central Appeals Tribunal was of the opinion that the NAB records made it indisputably clear that social security contributions had been imposed and, in order to reach a decision, the Central Appeals Tribunal obviously did not need to have the copies of the demands.
Recalling the Court's findings in the case of Van de Hurk v. the Netherlands (Eur. Court HR, judgment of 19 April 1994, Series A no. 288) where it was held that Article 6 § 1 of the Convention obliges courts to give reasons for their decisions, but cannot be understood as requiring a detailed answer to every argument, the Government further submit that, under Dutch administrative law, it falls within the court's discretion to decide what items of evidence are accepted and that the court gives judgment on the basis of the examination at the hearing. In the present case that examination revealed that social security contributions had been imposed. It was thus clear to the applicant company that the Central Appeals Tribunal found the absence of copies of the demands irrelevant for the determination of the applicant company's appeal. In its judgment, the Central Appeals Tribunal only dealt with the applicant company's main claims.
The applicant company submits that neither the Regional Court nor the Central Appeals Tribunal responded to its argument that no social security contribution demand had been issued to Schmitz GmbH. The fact that the Regional Court did not respond to this argument was one of the grounds for the applicant company's appeal to the Central Appeals Tribunal. The President of the Central Appeals Tribunal orally rejected the applicant company's argument on this point in the course of a hearing before the Central Appeals Tribunal and before the judges Central Appeals Tribunal finally determined the applicant company's appeal in the form of a judgment. The judgment itself is silent on this particular argument, which was an essential one to the applicant company in view of possible subsequent recovery proceedings against Schmitz GmbH and/or its former directors.
The Court recalls that proceedings concerning contributions under the Dutch social security schemes fall within the scope of Article 6 § 1 of the Convention (Eur. Court HR, Schouten and Meldrum v. the Netherlands judgment of 9 December 1994, Series A no. 304, pp. 19-24, paras. 47-60).
As to the complaint that, in its decision of 30 October 1995, the Central Appeals Tribunal failed to address explicitly an issue raised by the applicant company in the proceedings at issue, the Court recalls that Article 6 § 1 of the Convention obliges the courts to give reasons for their judgments, but cannot be understood as requiring a detailed answer to every argument. The extent to which this duty applies may vary according to the nature of the decision and can only be determined in the light of the circumstances of the case (cf. Eur. Court HR, Ruiz Torija v. Spain judgment of 9 December 1994, Series A no. 303-A, p. 12, § 29; Hiro Balani v. Spain judgment of 9 December 1994, Series A no. 303-B, p. 29, § 27; and Helle v. Finland judgment of 19 December 1997, Reports of Judgments and Decisions 1997-VIII No. 61, pp. 2928-2929, § 55).
The Court observes in the first place that it does not appear from the General Administrative Law Act that administrative courts are obliged to address every specific argument raised by the parties. The General Administrative Law Act merely obliges administrative courts to state the reasons for their decisions.
The Court notes that, unlike the situation examined by the Central Appeals Tribunal in its decision of 28 December 1994 where the demand for payment of social security contributions had been issued to an incorrect debtor, the dispute at issue concerned the question whether or not the applicant company could be held liable to pay the social security contributions which should have been paid by Schmitz GmbH. One of the questions raised by the applicant company was whether any social security contribution demand had in fact ever been sent to Schmitz GmbH.
However, it appears that the decisive issues as regards the applicant company's liability did not include whether or not social security contribution demands had in fact been issued and sent to Schmitz GmbH. What was decisive for the applicant company's liability, in the absence of any payment of social security contributions from Schmitz GmbH, was the question whether or not certain requirements contained in the applicable rules on international secondment had been respected on the basis of which the applicant company would have been exempted from the liability referred to in Article 16a of the Social Security Co-ordination Act or whether it could claim to be exempted from this liability on grounds of legitimate expectations raised by another administrative organ.
Moreover, even assuming that the question whether or not social security demands had been issued to Schmitz GmbH would have been an essential element for the outcome of the proceedings, it appears that this factual question was in fact determined by the Central Appeals Tribunal when its President, in the course of the hearing on 18 September 1995, stated that it appeared indisputably from the administration that social security contributions demands had been issued. The applicant company did not challenge that finding, but merely stated that it had not seen such demands itself.
The Court finds that the Central Appeals Tribunal's silence in its decision of 30 October 1995 on the question whether or not social security contribution demands had in fact been sent to Schmitz GmbH can reasonably be construed as an implied rejection of an argument which it did not consider as decisive for a determination of the issue before it. The Court is, therefore, of the opinion that this silence did not deprive the applicant company of a fair trial within the meaning of Article 6 § 1 of the Convention.
It follows that the application is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.
For these reasons, the Court, unanimously,
DECLARES THE APPLICATION INADMISSIBLE.
O'Boyle Elisabeth Palm
31908/96 - -
- - 31908/96