AS TO THE ADMISSIBILITY OF
by Aannemersbedrijf Gebroeders Van Leeuwen B.V.
against the Netherlands
The European Court of Human Rights (First Section) sitting on 25 January 2000 as a Chamber composed of
Mrs E. Palm, President,
Mr J. Casadevall,
Mr Gaukur Jörundsson,
Mr R. Türmen,
Mr C. Bîrsan,
Mrs W. Thomassen,
Mr R. Maruste, judges,
and 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 29 March 1996 by Aannemersbedrijf Gebroeders Van Leeuwen B.V. against the Netherlands and registered on 13 August 1996 under file no. 32602/96;
Having regard to the reports provided for in Rule 49 of the Rules of Court;
Having regard to the observations submitted by the respondent Government on 1 May 1997 and the observations in reply submitted by the applicant company on 23 July 1997;
Decides as follows:
The applicant is a limited liability company under Netherlands law (besloten vennootschap met beperkte aansprakelijkheid) which has its registered seat in Woerden. It was declared bankrupt in 1983.
It is represented before the Court by Mr W.T.J.G. Osse, a lawyer practising in Houten (the Netherlands). Mr Osse is also the trustee (curator) in the applicant company's bankruptcy proceedings.
A. Particular circumstances of the case
The facts of the case, as submitted by the applicant company and not contested by the respondent Government, may be summarised as follows.
On 14 September 1982 the applicant company was subjected to a search of its premises by the public authorities. They confiscated the administration of the applicant company because there was a suspicion that the applicant company had been drawing up false invoices. The applicant company ceased trading.
On 24 August 1983 the Regional Court (Arrondissementsrechtbank) of Utrecht declared the applicant company bankrupt and appointed Mr Osse as trustee in the bankruptcy proceedings.
On 5 September 1985 the applicant company was notified of the closure of the preliminary judicial investigation (gerechtelijk vooronderzoek). On 11 October 1985 the applicant company received a notification that the prosecution would not be pursued in view of the time which had elapsed since the alleged offences had been committed.
Despite repeated requests, the administration of the applicant company was not returned to it by the public authorities until 29 January 1987.
On 26 April 1990 the trustee in the bankruptcy proceedings initiated civil proceedings against the State claiming compensation on behalf of the applicant company for the actions of the police and justice officials. He argued that these actions had retrospectively lost all justification given that the charges had been dropped. On 22 April 1992 the Regional Court of The Hague gave judgment rejecting the trustee's claims. The trustee lodged an appeal with the Court of Appeal (Gerechtshof) of The Hague.
On 21 October 1993 the Court of Appeal, in an interlocutory judgment, held that the actions of the State, although initially justified, had in fact lost all justification and that as a result the State was liable to pay damages. However, the obligation to pay damages might be mitigated, or lapse altogether, in light of circumstances which might appear from statements made by management personnel of the applicant company before the police in the criminal investigation. In order to establish whether or not this was the case, the Court of Appeal requested the State to submit documents from the criminal investigation file.
The State submitted statements made to the police by the applicant company's managing directors in which it was admitted that false invoices had been drawn up and that taxes and social security contributions had been unlawfully withheld.
On 27 October 1994 the Court of Appeal confirmed the decision of the Regional Court. The judgment included quotations from the above-mentioned statements of the managing directors. The Court of Appeal's reasoning included the following:
“Op grond van deze verklaringen en de overige inhoud van het door de Staat overgelegde strafdossier is voldoende komen vast te staan dat er in de periode van in ieder geval 1980 tot de beëindiging van de bedrijfsactiviteiten in september 1982 valse facturen in de administratie van Van Leeuwen B.V. zijn opgenomen, dat er op diverse bouwwerken gebruik is gemaakt van werknemers die niet op de verzamelloonstaten waren verantwoord en dat er binnen deze vennootschap sprake was van een zogenaamd zwartgeldcircuit terwijl de directie wist dat daardoor aan de Staat en de betrokken sociale fondsen schade zou worden toegebracht door een geringere betaling of afdracht van belastingen en sociale premies. Deze feiten zijn in deze procedure ook niet uitdrukkelijk door de curator betwist.”
“It is sufficiently established on the basis of these statements and the other information contained in the case-file of the criminal proceedings that during the period from, at least, 1980 until trading ceased in 1982 forged invoices were entered into Van Leeuwen B.V.'s books, that on various building sites use was made of employees who were not accounted for on the consolidated pay slips and that there existed within this company a so-called circuit of illegal funds (zwartgeldcircuit), the management being aware that this would cause detriment to the State and the social-security bodies concerned through a reduction in payments of taxes and social-security contributions. Nor have these facts been explicitly contested by the trustee in the present proceedings.”
“Bij de beoordeling van de schadevordering van de curator is voorts van belang dat het hof het aannemelijk oordeelt, zoals de Staat gemotiveerd heeft gesteld, dat een verdere strafvervolging niet direct zinvol was (niet in het algemeen belang) nadat het faillissement ... was uitgesproken, maar dat die situatie anders zou komen te liggen bij een spoedige opheffing van het faillissement en dat tot seponering van de zaak is besloten nadat in 1985 door het voortduren van het faillissement duidelijk was geworden dat met dit laatste risico geen rekening meer behoefde te worden gehouden, temeer nu de bedrijfsactiviteiten vanaf september 1982 waren beëindigd.”
“In reviewing the trustee's claim for damages it is further significant that the Court of Appeal accepts that, as the State has argued, proceeding with the prosecution would not really serve any useful purpose (would not be in the general interest) after [the applicant company] was declared bankrupt ... , but that the situation might be different if the bankruptcy proceedings were to be terminated speedily, and that it was decided not to proceed after it had become clear in 1985, from the continuation of the bankruptcy proceedings, that it was no longer necessary to take this latter risk into account, the more so since trading had ceased from September 1982 onwards.”
"De hiervoor ... vermelde feiten en omstandigheden vormen het bewijs van een ernstige vorm van fraude die strenge en straffe maatregelen van de zijde van de Staat rechtvaardigen. ... Gelet op de uiteenlopende ernst van voormelde aan Van Leeuwen B.V. toe te rekenen omstandigheden en het enige steekhoudende verwijt dat de Staat bij de (trage) teruggave van de administratie van de vennootschap kan worden gemaakt, brengt de billijkheid mee dat de op de Staat in beginsel rustende verplichting tot vergoeding van de ... schade geheel komt te vervallen."
"The facts and circumstances mentioned above ... constitute evidence of a serious form of fraud justifying the taking of severe and strict measures by the State. ... Having regard to the varying degrees of seriousness of the aforementioned circumstances for which Van Leeuwen B.V. can be held responsible and the fact that the only convincing reproach which can be made of the State concerns the tardy return of the company's administration, principles of equity lead to the conclusion that the obligation on the State to provide compensation for the damage ... has ceased to exist."
The Court of Appeal also took into account the statement of the State according to which it had not been considered in the public interest to proceed with the criminal prosecution of the applicant company given that the applicant company had been declared bankrupt and had ceased trading.
On 22 December 1995 the Supreme Court rejected the appeal on points of law (cassatie) which had been filed on behalf of the applicant company.
1. The applicant company complains under Article 6 § 2 of the Convention that the presumption of innocence was not respected in the civil proceedings which it had brought against the State. It submits in this respect that despite the fact that the criminal charges against it had been dropped, which meant that it had not been found guilty of any offence, its request for compensation was nonetheless refused because evidence of its guilt was found to exist.
2. Furthermore, this finding of guilt was made in civil proceedings which did not comply with the requirements posed by Article 6 §§ 1 and 3 governing proceedings which may lead to the criminal conviction of a suspect.
The application was introduced on 29 March 1996 and registered on 13 August 1996.
On 26 February 1997 the European Commission of Human Rights decided to communicate the application to the respondent Government.
The Government's written observations were submitted on 1 May 1997. The applicant replied on 23 July 1997.
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.
Article 6 of the Convention, in so far as it is relevant, provides 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 ... hearing ... by [a] ... tribunal ...
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
1. The Government denied that there had been a violation of the presumption of innocence enshrined in Article 6 § 2. They noted that there had never been a formal finding on the applicant company's guilt, the criminal proceedings having been discontinued for purely procedural reasons. Praying in aid the Court's judgments of 25 August 1987 in the cases of Lutz v. Germany (Series A no.123-A), Englert v. Germany (Series A no. 123-B) and Nölkenbockhoff v. Germany (Series A no. 123-C) and the Court's judgment of 26 March 1996 in the case of Leutscher v. the Netherlands (Reports of Judgments and Decisions 1996-II), they argued that the Netherlands courts had therefore been free to take into account any lingering suspicion. In contrast, in its Sekanina v. Austria judgment of 25 August 1993 (Series A no. 266-A) the Court had found a violation of Article 6 § 2; that judgment, however, fell to be distinguished from the other judgments mentioned because in that case there had been a formal acquittal.
The Government drew attention to the admissions of involvement in criminal activity made by the applicant company's managing directors. The Court of Appeal had found these to constitute evidence of serious fraud attributable to the applicant company. Indeed, the applicant company was not found guilty in criminal proceedings but the criminal proceedings were terminated for reasons of procedure. Furthermore the Government points out that the Court of Appeal had not stated that the applicant company was guilty of criminal acts. The Court of Appeal had merely found, in civil proceedings for compensation of damage, that the evidence available provided sufficient grounds on which to dismiss the applicant company's claim on account of the serious suspicions still weighing against the applicant company.
The applicant company sought to distinguish the case-law relied on by the Government. In the above-mentioned Lutz case the Court had found that the refusal of compensation for costs and expenses had not amounted to a “penalty or measure that [could] be equated with a penalty”. In the instant case, in contrast, the official actions found by the Court of Appeal retrospectively to have been devoid of justification had resulted in the applicant company's bankruptcy – the severest penalty imaginable. The Englert, Nölkenbockhoff and Leutscher cases were different because, although those cases had been pursued to a conclusion for procedural reasons, they had in fact gone to trial. The Leutscher judgment, which had been given against the same respondent party, was moreover unsuitable as precedent because it concerned provisions of Netherlands law not relevant to the instant case.
The applicant company further reasoned that the above-mentioned Sekanina judgment, on the other hand, was important because of its ruling that the failure to award compensation was incompatible with the presumption of innocence. Although that judgment reflected the possibility that in the absence of a formal acquittal any lingering suspicion might be taken into account, that was not so in the instant case. The prosecuting authorities had been simply dilatory, which had resulted in the applicant company's bankruptcy. This had deprived the applicant company of all opportunity to defend itself. Yet the judgment of the Court of Appeal reflected the opinion that the applicant company had got what it deserved. In these circumstances, as in those of the Sekanina case, the failure to award compensation also constituted a violation of the presumption of innocence.
In the examination of this complaint the Court will assume that Article 6 applies to legal persons in the same way as it does to individuals.
The Court notes at the outset that in itself the refusal to pay compensation for damage caused by public authority in the course of criminal proceedings which are subsequently discontinued does not amount to a penalty or a measure that can be equated with a penalty (see, among other authorities and mutatis mutandis, the above-mentioned Leutscher judgment, § 29). Moreover, neither Article 6 § 2 nor any other provision of the Convention and its Protocols obliges the Contracting States, where a prosecution has been discontinued, to indemnify a person “charged with a criminal offence” for any detriment he may have suffered (see, among other authorities, the above-mentioned Lutz judgment, § 63).
Turning now to the facts of the instant case, the Court notes that the applicant company sued the Netherlands State in tort, claiming compensation for damage caused by measures taken in the course of the criminal proceedings against it. In refusing to award such compensation the Court of Appeal had regard to the unequivocal admission of the use of forged invoices which members of the applicant company's management had made during the criminal investigation. This clear admission of guilt in itself rebutted the presumption of innocence and provides sufficient justification for the Court of Appeal's reliance on this admission. In the circumstances, therefore, the Court finds no issue under Article 6 § 2 of the Convention.
It follows that the applicant company's first complaint is manifestly ill-founded.
2. The applicant company's second complaint is that it was found guilty in civil proceedings which by their nature were not attended by the guarantees to which a person “charged with a criminal offence” was entitled to under Article 6 §§ 1 and 3.
On the assumption that Article 6 applies to legal persons in the same way as it does to individuals, the Court notes that the applicant company was “charged with a criminal offence”, within the autonomous meaning of that expression for the purposes of Article 6 (see, among other authorities, the Corigliano v. Italy judgment of 10 December 1982, Series A no. 57, § 34), as early as September 1982 when its premises were searched and its records seized. From then onwards the applicant company was afforded the guarantees of Article 6 § 1, and was able to exercise the rights of the defence. It cannot be decisive that the case never actually went to trial, the decision to proceed to trial or not being one which it is not for the Court to question (see, among other authorities, the Deweer v. Belgium judgment of 27 February 1980, Series A no. 35, § 49).
For the remainder the Court finds that this complaint coincides with the applicant company's complaint under Article 6 § 2, so that it may confine itself to referring to its reasoning and conclusion with regard thereto.
The applicant company's second complaint is therefore likewise manifestly ill-founded.
For these reasons, the Court, unanimously,
DECLARES THE APPLICATION INADMISSIBLE.
Michael O'Boyle Elisabeth Palm
32602/96 - -
- - 32602/96