FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 34600/03 
by LEVÄNEN and Others  
against Finland

The European Court of Human Rights (Fourth Section), sitting on 11 April 2006 as a Chamber composed of:

Sir Nicolas Bratza, President
 Mr J. Casadevall
 Mr K. Traja
 Mr S. Pavlovschi
 Mr L. Garlicki
 Mrs E. Fura-Sandström, 
 Mrs L. Mijović, judges,

and Mr M. O’Boyle, Section Registrar,

Having regard to the above application lodged on 13 October 2003,

Having regard to the decision to grant priority to the above application under Rule 41 of the Rules of Court,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The applicants, Mr Timo Levänen and Mr Ahti Toivanen are Finnish nationals and live in the municipality of Riihimäki. They are owners of two private driving schools. The third applicant, Riihimäen Liikenneopisto Oy, is a driving school company in Riihimäki. They are represented before the Court by Mr Timo Hakanen, a lawyer practising in Jyväskylä. The Finnish Government (“the Government”) are represented by their Agent, Mr Arto Kosonen, Director in the Ministry for Foreign Affairs.

A.  The circumstances of the case

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

On 17 April 2000 the Provincial State Office (lääninhallitus, länssyrelsen) of Southern Finland granted the Joint Municipal Board of the Vocational Institute of Riihimäki (Riihimäen ammattioppilaitoksen kuntayhtymä, yrkesinstitutens samkommunen) a driving school licence to teach their students to drive. The licence was valid from 1 August 2000 until 31 July 2005, with the name “Autokoulu RAOL”. Mr T.S. was approved as its director.

The applicants appealed against the decision to the Administrative Court (hallinto-oikeus, förvaltningsdomstolen) of Hämeenlinna, claiming that the decision be annulled as, inter alia, T.S. did not meet the criteria for a director as required in the Decree on Driving Licences (ajokorttiasetus, körkortsförordningen; 845/1990, amend. 167/1994). They further alleged that operating a driving school did not belong to the functions of a municipality or a federation of municipalities. In any case, the name of the licence-holder, “Autokoulu RAOL” should have been deleted and the number of training vehicles limited to two motor vans and two passenger cars. They contended that the establishment of a new driving school affected their rights as it would reduce their incomes and thus they had a right to appeal pursuant to section 6 of the Administrative Judicial Procedure Act (hallintolainkäyttölaki, förvaltningsprocesslagen; 586/1996).

On 21 November 2000 the Administrative Court (hallinto-oikeus, förvaltningsdomstolen) of Hämeenlinna held an oral hearing, in which it heard the Provincial State Office, the Joint Municipal Board and the applicants. It further obtained written opinions from the parties.

On 19 February 2001 the Administrative Court annulled the decision of the Provincial State Office on the ground that T.S. was not competent to act as a director, and thus the Provincial State Office should not have granted a driving school licence to the Joint Municipal Board.

The Joint Municipal Board appealed to the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen), reiterating that T.S. fulfilled the criteria. The Provincial State Office, the Ministry of Transport and Communications (liikenneministeriö, kommunikations- ministeriet) and the applicants submitted opinions to the court and the Joint Municipal Board gave its observations.

On 13 August 2003 the Supreme Administrative Court annulled the decision of the Administrative Court and declared the applicants’ application to the Administrative Court inadmissible without considering its merits. It held that the issue was whether the applicants had a right of appeal against the decision of the Provincial State Office. It emphasised that pursuant to the Road Traffic Act (tieliikennelaki, vägtrafiklagen; 267/1981, amend. 103/1994) and the Decree on Driving Licences the licence for a driving school had to be granted if the applicant fulfilled certain criteria. The appropriateness of a new licence was not relevant to the decision-making. Therefore, when deciding on the new licence it was irrelevant whether the new licence affected the status of already existing driving schools. The court concluded that the owners of other driving schools were not directly affected by the decision and had no right to appeal under the Administrative Judicial Procedure Act. The decision became a precedent (KHO:2003:46).

B.  Relevant domestic law and practice

Procedure

Section 21 of the Constitution of Finland (perustuslaki, grundlagen; 731/1999) provides that everyone has the right to have his or her case dealt with appropriately and without undue delay by a legally competent court of law or other authority, as well as to have a decision pertaining to his or her rights or obligations reviewed by a court of law or other independent organ for the administration of justice.

Section 6, subsection 1 of the Administrative Judicial Procedure Act provides that any person to whom a decision is addressed or whose right, obligation or interest is directly affected by a decision may appeal against a decision.

Granting a driving school licence

Section 66 of the Road Traffic Act (267/1981, as in force until 1994) provided that a driving school licence was required for operating a driving school. The State Provincial Office might grant a licence, if the applicant was deemed to fulfil the criteria for operating a driving school and the establishment of the school was considered necessary and appropriate in accordance with the general instructions issued by the then Ministry of Transport.

According to the said section, as amended by Act on 1 March 1994 (103/1994), a licence to operate a driving school is granted by the relevant State Provincial Office. A driving school licence shall be granted if, having regarded his or her skills, reliability, solvency and other qualifications, the applicant is deemed suitable for operating a driving school. If the applicant is a legal person, the director responsible for the teaching at the driving school must, in light of his or her skills, reliability, solvency and other qualifications, be suitable to operate a driving school.

Section 66, subsection 3 of the said Act provides that a licence shall be granted for a certain period of time. It may also include preconditions and restrictions. According to subsection 4, a licence is not required if teaching takes place in drivers’ vocational training, which is supervised by the National Board of Education, or in an institute training driving instructors.

Chapter 8, section 39 of the Decree on Driving Licences sets the criteria for the licence of driving schools. A licence shall be granted if the applicant, or, where the applicant is a legal person, its director responsible for the teaching, has, inter alia, a driving instruction permit and has during the past ten years worked for at least four years as a full-time teacher in a driving school or in a vocational institution giving class C driver instruction.

Legal practice

 In its precedent (KHO 1987-A-75) the Supreme Administrative Court found that a decision of the Ministry of Transport to suspend a charter transport licence for a determined period of time did not affect the rights of a competing charter transport carrier within the meaning of section 26, subsection 5, of the Decree on Professional Motor Traffic. Thus the competing carrier had no right to appeal against the Ministry’s decision.

According to the Supreme Administrative Court’s precedent (KHO 1995-A-1), in a case where the Government had decided at the same time several applications for compensation to be paid with discretionary funds included in the state budget, a person had a right to appeal against the Government’s decision only to the extent the decision concerned his/her own application.

In 1995 the Supreme Administrative Court issued a precedent (KHO 1995-A-51) concerning a driving school licence. In that case the Provincial State Office had granted A a right to establish a driving school and allowed him to take responsibility for the teaching even though he had at the same time the same responsibility in another driving school. The Supreme Administrative Court annulled the decision of the Ministry of Transportation, by which it had declared inadmissible an application lodged by four other driving school owners, and found that the Provincial State Office’s decision concerned rights of the applicants, who had the right to appeal.

In its decision no. 63 of 8 January 1996 the Supreme Administrative Court ruled that the housing corporation located in the neighbourhood of a restaurant did not have a right to appeal against a decision by which a restaurant was granted a licence to serve alcohol both indoors and in the outdoor area of the restaurant.

The Supreme Administrative Court further found in its decision no. 795 of 8 April 1997 that a person operating a pharmacy in the neighbouring municipality did not have a right to appeal against a decision of the National Agency for Medicines by which it issued a licence for the storing of medicines, as the applicant in question had not applied for the licence and as the granting of a licence to him (being a pharmacist in another municipality) did not affect his rights and obligations within the meaning of section 4 of the Administrative Appeals Act.

COMPLAINTS

The applicants complained that even though the decision to grant a licence to a new driving school within the same municipality reduced their income they did not have an effective remedy against the decision before a national authority. Nor did anyone else have a right to appeal against a decision although it appeared to be unlawful. They invoked Article 1 of Protocol No. 1 and Article 13 of the Convention.

THE LAW

A.  The Government’s preliminary objection

The Government submitted that the granting of a driving school licence could not have any such implications on the applicants’ rights under the Convention that they could be characterised as being “victims” in the present case. They argued that the present application was more of an actio popularis nature as in their view the applicants had no “right” within the meaning of Article 6 § 1 of the Convention such as would make the said provision applicable to the present case nor had they any “possessions” within the meaning of Article 1 of Protocol No. 1 to the Convention.

The applicants contested the Government’s view. They were of the opinion that the domestic proceedings concerned their rights. Their application was examined by the Administrative Court and it gave them instructions on how to appeal.

The Court considers that the Government’s argument is so closely linked to the substance of the applicants’ complaints that the preliminary objection should be joined to the merits (see, inter alia, Athanassoglou and Others v. Switzerland [GC], no. 27644/95, § 37, ECHR 2000-IV).

B. Alleged violation of Article 1 of Protocol No. 1

The applicants complained that the lack of legal remedies to contest an unlawful administrative decision affected their right to the peaceful enjoyment of their possessions as guaranteed by Article 1 of Protocol No. 1, in particular as the fourth driving school would reduce their future income. The said Article reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

The Government submitted that Article 1 of Protocol No. 1 was not applicable to the present case. Referring to the Marckx v. Belgium (13 June 1979, Series A no. 31, § 50) they maintained that the applicability of Article 1 of Protocol No. 1 was limited to enshrining the right of everyone to the peaceful enjoyment of already existing possessions and did not protect a right to obtain possessions. The purpose of the assessment of criteria for the granting of driving school licences was not to restrict the number of driving schools, but rather to guarantee minimum standards of education. There was thus free competition between the driving schools. The applicants reacted against the free competition and appealed against the decision as the new driving school would reduce their income.

In the alternative, the Government submitted that there was no violation of the said Article. They recalled the aim of the licences and submitted that it was certainly in the general interest and that the means employed by the relevant authorities were proportionate to that aim.

The applicants did not submit any observations in this respect.

The Court recalls that Article 1 of Protocol No. 1 guarantees in substance the right to property. However, it has to consider first whether Article 1 of Protocol No.1 applies to the present case.

The Court recalls its case-law that goodwill may be an element in the valuation of a professional practice, but that future income itself is only a “possession” once it has been earned, or an enforceable claim to it exists (see Ian Edgar (Liverpool) Ltd v. the United Kingdom (dec.), no. 37683/97, ECHR 2000-I, Van Marle and Others v. the Netherlands, judgment of 26 June 1986, Series A no. 101, p. 13, §§ 39-41). In the present case, the Court considers that the applicants are complaining in substance of a possible loss of future income and a diminution in value of their business assets. They have made no assertion that the value of their business has been affected. The Court concludes that the complaint thus falls outside the scope of Article 1 of Protocol No. 1 (see, mutatis mutandis, Findlater v. United Kingdom (dec.), no. 38881/97, 26 September 2000).

It follows that this complaint is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

C. Alleged violation of Article 6 § 1 and 13

The applicants complained in essence that they did not have access to a court against a decision to grant a licence to a new driving school. They invoked Article 13. The Court finds it appropriate to examine their application also under Article 6 § 1 of the Convention. Article 13 reads as follows:

Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

Article 6 § 1, 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...”

1. The parties’ submissions

The Government contested the applicability of Article 6 § 1 and submitted that the applicants had no arguable claim under Article 13. The risk of competition and reduced income as a result of an increased number of driving schools could not, in their view, constitute a genuine dispute over a civil right within the meaning of that Article. They argued that the applicants were not parties to the case. At the initial stage, should the application for a licence have been refused by the Provincial State Office, the Joint Municipal Board would have had a right to appeal.

The Government emphasised that in the Supreme Administrative Court’s case-law the right to appeal had gradually been extended, subject to the condition that the decision to grant a licence directly affected the rights or legal interests of the person in question. Indirect or factual effects were not sufficient to grant a right to appeal. As circumstances relating to the competition could not affect the decision to grant a licence, the decision did not concern other driving schools already operating in the same municipality. Accordingly, the Supreme Court’s decision in the present case was consistent with the general interpretation given by the court in its constant case law.

They further pointed out that the Supreme Administrative Court did not find the applicants’ argument that the person applying for the driving school licence failed to fulfil the criteria set for the competence of driving school directors such as to give rise to a right to appeal, and submitted that this kind of appeal contained elements of an administrative complaint rather than those of an ordinary appeal.

The applicants maintained that granting a licence to a new driving school within the same municipality affected essentially their rights and thus, they should have had standing in the domestic proceedings. Furthermore, the authority’s decision to grant a licence had turned out to be contrary to the legislation. They further argued that in their case the Supreme Administrative Court’s conclusion was contrary to its earlier precedent (KHO 1995-A-51).

They further submitted that had the Joint Municipal Board’s application been refused, it would have had a right to appeal. However, when an unlawful application was accepted, no-one had a right to appeal, which was in their view contrary to the principles of the Convention and the rule of law.

2. The Court’s assessment

Under the Court’s case-law, for Article 6 § 1 in its “civil” limb to be applicable, there must be a dispute (“contestation” in the French text) over a “right” which can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious; it may relate not only to the actual existence of a right but also to its scope and the manner of its exercise. The outcome of the proceedings must be directly decisive for the right in question. As the Court has consistently held, mere tenuous connections or remote consequences are not sufficient to bring Article 6 § 1 into play (see, inter alia, Le Compte, Van Leuven and De Meyere v. Belgium, judgment of 23 June 1981, Series A no. 43, p. 21, § 47 and Zander v. Sweden, judgment of 25 November 1993, Series A no. 279-B, p. 38, § 22).

Article 6 § 1 of the Convention is not aimed at creating new substantive rights without a legal basis in the Contracting State, but at providing procedural protection of rights already recognised in domestic law (see, inter alia, Roche v. the United Kingdom [GC], no. 32555/96, § 117, ECHR 2005-..., W. v. the United Kingdom, judgment of 8 July 1987, Series A no. 121-A, p. 32-33, § 73). The term “right” must nevertheless be given an autonomous interpretation under Article 6 § 1 of the Convention (see, inter alia, König v. Germany, judgment of 28 June 1986, Series A no. 27, pp. 29-30, §§ 88-89).

The Court observes at the outset that the applicants’ main argument in opposing the grant of a licence was that T.S. did not meet the criteria for a director as required in the relevant domestic legislation. They did not claim to have suffered any direct loss, economic or any other. The right on which the applicants relied in substance before the domestic courts was that a new driving school would reduce their future income.

The Court takes note of the Government’s argument that the applicants were not parties to the case at the initial stage as the decision of the Provincial State Office concerned the granting of a licence to a third party, the Joint Municipal Board. The claim made by the applicants to the Administrative Court was based on the Decree on Driving Licences, which imposes certain obligations upon a person who intends to act as a director responsible for teaching. The Administrative Court examined their complaint and after having heard the Joint Municipal Board and the Provincial State Office, held that the Provincial State Office should not have granted a licence to the Joint Municipal Board as T.S. was not competent to act as its director. Thus, the Court finds that there can be no doubt that there was a dispute which was “genuine and serious” (see Balmer-Schafroth and Others v. Switzerland, judgment of 26 August 1997, Reports of Judgments and Decisions 1997-IV, §§ 33-34, 38).

It therefore remains to be determined whether the outcome of the proceedings in issue was directly decisive for “right” asserted by the applicants such as to bring Article 6 § 1 into play.

The Court reiterates that the applicants argued before the Administrative Court that the licence had been granted contrary to the provisions of Decree on Driving Licences. It recalls that, in accordance with Article 19 of the Convention, its task is to ensure the observance of the obligations undertaken by the Parties in the Convention. In particular, it is not its function to deal with an application alleging that errors of law or fact have been committed by domestic courts, except where it considers that such errors might have involved a possible violation of any rights and freedoms set out in the Convention. The Court refers on this point to its established case-law (see Schenk v. Switzerland, judgment of 12 July 1988, Series A no. 140, p. 25, § 45). Thus the mere fact that the decision to grant a licence was allegedly erroneous is not decisive when deciding on the applicability of Article 6.

It was not contested between the parties that the existence of a fourth driving school would reduce the applicants’ income. However, any effect on the applicants’ right to earn their livelihood would be indirect, flowing from the free competition conditions existing for driving school business in Finland. Furthermore, while the right to property is clearly a civil right (see, inter alia, Tre Traktörer AB v. Sweden, judgment of 7 July 1989, Series A no. 159, § 43) the Court notes its finding above that future income does not fall into the ambit of a “possession” within the meaning of Article 1 of Protocol No. 1. Consequently, the effects of a decision to grant a licence were not established with a degree of probability that made the outcome of the proceedings directly decisive within the meaning of the Court’s case-law for the right relied on by the applicants. The Court concludes that the connection between the Provincial State Office’s decision and the right invoked by the applicants was too tenuous and remote. Article 6 § 1 is accordingly not applicable in the present case.

The Court reaches the same conclusion with respect to Article 13 (see, mutatis mutandis, Balmer-Schafroth and Others v. Switzerland, cited above, § 42).

Consequently, it follows that this complaint is also incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.

For these reasons, the Court unanimously

Declares the application inadmissible.

Michael O’Boyle Nicolas Bratza 
 Registrar President

 

LEVÄNEN AND OTHERS v. FINLAND DECISION


LEVÄNEN AND OTHERS v. FINLAND DECISION