CASE OF AON CONSEIL ET COURTAGE S.A. AND ANOTHER v. FRANCE
(Application no. 70160/01)
25 January 2007
This judgment is final but it may be subject to editorial revision
In the case of Aon Conseil et Courtage S.A. and Another v. France,
The European Court of Human Rights (First Section), sitting as a Chamber composed of:
Mr L. Loucaides,
Mr J.-P. Costa,
Ms F. Tulkens,
Ms N. Vajić,
Mr A. Kovler,
Ms E. Steiner, judges,
and S. Nielsen, Section Registrar,
Having deliberated in private on 4 January 2007,
Delivers the following judgment, which was adopted on the last-mentioned date:
1. The case originated in an application (no. 70160/01) against the French Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two French companies, Aon Conseil et Courtage S.A. and Christian de Clarens S.A. (“the applicant companies”), on 3 May 2001.
2. The applicant companies were represented by Mr D. Garreau, of the Conseil d'Etat and Court of Cassation Bar. The French Government (“the Government”) were represented by their Agent, Ms E. Belliard, Director of Legal Affairs, Ministry of Foreign Affairs.
3. The applicant companies alleged, in particular, a violation of Article 1 of Protocol No. 1.
4. By a decision of 2 June 2005, the Chamber declared the application partly admissible.
I. THE CIRCUMSTANCES OF THE CASE
5. The applicants, Aon Conseil et Courtage S.A. and Christian de Clarens S.A., are two French companies based in Paris. Aon Conseil et Courtage succeeded to the rights of another company SGAP Expansion, which had in turn acquired them through two other companies, SGAP S.A. and OGIA S.A.
6. Christian de Clarens, SGAP and OGIA were engaged in insurance broking, a commercial activity which, by virtue of Article 256 of the General Tax Code as worded until 31 December 1978, attracted value-added tax (VAT). They paid 967,033.21 French francs (FRF), FRF 2,061,836.46 and FRF 93,216.98 respectively in VAT on their 1978 transactions.
7. However, Article 13-B-a of the Sixth Directive of the Council of the European Communities dated 17 May 1977 provided an exemption for “insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents”. The directive was due to come into force on 1 January 1978.
8. On 30 June 1978 the Ninth Directive of the Council of the European Communities dated 26 June 1978 was notified to the French State. It granted France an extension of time – until 1 January 1979 – in which to implement the provisions of Article 13-B-a of the Sixth Directive of 1977. Since such directives have no retroactive effect, the Sixth Directive should nevertheless have been applied from 1 January to 30 June 1978.
9. On 2 and 5 October 1978 and 21 and 26 June 1979 Christian de Clarens lodged four applications with the Paris Administrative Court seeking, on the basis of the Sixth Directive of 17 May 1977, a refund of the VAT it had paid.
10. On 7 December 1979 SGAP transferred all the assets of its insurance broking arm to a new company, SGAP Exploitation. SGAP nevertheless continued to be registered under the same number at the Trade and Companies Registry while changing its name to SOGEDEP the same day and to SGAP Expansion on 6 January 1988.
11. In a judgment of 8 January 1981, the Paris Administrative Court dismissed the four applications lodged by Christian de Clarens.
12. An administrative circular was issued on 2 January 1986 which stipulated:
“... no further action shall be taken to collect sums remaining due at the date of publication of this circular from insurance brokers who have failed to charge value-added tax on their transactions between 1 January and 30 June 1978 and have received supplementary tax assessments as a result.”
13. On 1 July 1992 the Paris Administrative Court of Appeal held in the S.A. Dangeville case that Article 256 of the General Tax Code, as worded in the relevant period, was incompatible with the provisions of the Sixth Directive.
14. Considering that the French State had acted unlawfully by failing to incorporate into domestic law the provisions of the Sixth Directive within the time allowed, SGAP, OGIA and Christian de Clarens wrote to the authorities on 20 December 1993 to claim compensation for their losses.
15. In decisions of 8 February 1994 in the case of SGAP and OGIA, and 4 March 1994 in the case of Christian de Clarens, the Minister for the Budget rejected their requests on the grounds that they were inadmissible by virtue of Article L 190 of the Code of Tax Procedure and that the amount of the loss had to be reduced by the amount of employment tax owed by companies exempted from VAT.
16. On 9 April 1994 SGAP, OGIA and Christian de Clarens brought proceedings in the Paris Administrative Court against the French State for failing to incorporate the Sixth Directive of 17 May 1977 into domestic law thereby causing them a loss equal to the amount of overpaid VAT for 1978, which they claimed should be refunded.
17. In a judgment of 15 March 1995, the Paris Administrative Court joined the applicant companies' applications with those of other claimants, including the Diot and Gras Savoye companies, and declared them inadmissible by virtue of Article L 190, paragraph 3 of the Code of Tax Procedure, on the grounds that:
“The provisions are general in scope and not intended as a bar to the application of Community treaties, regulations, directives or decisions or to the execution of judgments of the Court of Justice of the Communities.
Their sole purpose is to determine in accordance with the legitimate aim of legal certainty the period in which claims for release from liability to tax, for the recovery of sums paid but not due or for compensation may be made by taxpayers who have not taken any action themselves but have been shown, in a court decision in proceedings to which they were not parties, to have been wrongly subjected to tax. The limitation period laid down in the provisions does not prohibit reasonably diligent claimants from asserting the rights to which they may be entitled by virtue of Community norms.
It follows from the foregoing the Article L 190 of the Code of Tax Procedure is not manifestly incompatible with a Community norm of international-treaty status. There is consequently no reason why it should not be applied.
The provisions of the third paragraph of that Article expressly concern both actions for recovery of sums paid but not due and actions for compensation in respect of loss. There is no reason to consider that the legislature intended to exclude from the scope of these provisions certain forms of action on account of the nature of the alleged losses or of the tax liability concerned.
If it is not overruled on this point, the judgment delivered on 1 July 1992 by the Paris Administrative Court of Appeal on the application of the Jacques Dangeville company will be the first judicial decision to have revealed an incompatibility between Article 256-1 of the General Tax Code, as worded during the relevant period, and the Sixth Directive of the Council of the European Communities. Pursuant to the aforementioned provisions of Article L 190 of the Code of Tax Procedure it was consequently from the date of that decision that it became possible to determine, in respect of all taxpayers, the period which Article L 190 allowed for actions to be brought on the basis of that incompatibility for repayment of sums paid or not deducted, or for compensation for loss.
It follows from the foregoing that the claims of the applicant companies relating to taxes paid during the first semester of 1978 are inadmissible and must consequently be rejected.”
18. On 16 June 1995 SGAP Expansion took over OGIA following a merger. It is also took over SGAP Exploitation, the same company to which it had transferred its entire business on 7 December 1979.
19. On 18 September 1995 SGAP Expansion and Christian de Clarens appealed to the Paris Administrative Court of Appeal against the judgment of the Paris Administrative Court.
20. On 5 December 1995 they lodged written submissions in which, in addition to repeating their claims for reimbursement, they again argued that Article L 190 of the Code of Tax Procedure did not provide a valid defence to their claims, which were for compensation for losses resulting from the State's failure to comply with its obligations under Community law.
21. Meanwhile in the aforementioned Dangeville case, the Conseil d'Etat, hearing an appeal against the judgment delivered by the Paris Administrative Court of Appeal on 1 July 1992, gave judgment on 30 October 1996, essentially in the following terms:
“The documents in the file submitted to the Paris Administrative Court of Appeal show that by a decision of 19 March 1986 the Conseil d'Etat, acting in its judicial capacity, dismissed a claim by S.A. Jacques Dangeville seeking reimbursement of value-added tax it had paid for the period from 1 January to 31 December 1978, inter alia, on the ground that its liability to that tax had arisen from the application of statutory provisions that were incompatible with the objectives of the Sixth Directive of the Council of the European Communities of 17 May 1977. The claim by S.A. Jacques Dangeville which the Administrative Court of Appeal examined in the impugned judgment was for payment of 'compensation' in an amount equal to the amount of value-added tax that had thus been paid, by way of reparation for the 'damage' which that tax liability had caused the company to sustain, on the ground that that damage was attributable to the French State's delay in transposing the objectives of the Directive into domestic law. It follows that, as submitted by the Minister of the Budget, the Paris Administrative Court of Appeal erred in law in holding that the fact that the company '[had] first referred the issue of taxation to the tax court' did not render inadmissible a claim for reparation in which the only alleged damage was that resulting from the payment of the tax. The Minister of the Budget's application to have the impugned judgment overturned is accordingly founded to the extent that the Administrative Court of Appeal upheld in part the claims made by S.A. Jacques Dangeville in its submissions. ...”
22. On the same day the Conseil d'Etat delivered judgment on an appeal lodged on 23 August 1982 by S.A. Revert et Badelon against the Paris Administrative Court's judgment of 10 June 1982. The Conseil d'Etat did not follow the line it had taken in its judgment of 19 March 1986 in the Dangeville case, but instead declared S.A. Revert et Badelon's appeal on points of law admissible, holding that the company was entitled to rely on the provisions of the Sixth Directive and should be granted a release from the contested tax liability – for which there was no statutory basis as the statutory provisions conflicted with the objectives of the Directive – for the sums erroneously paid for the period from 1 January to 30 June 1978.
23. In a judgment of 28 January 1997, the Paris Administrative Court of Appeal dismissed the applicant companies' appeals on the grounds that:
“The claims lodged by the companies with the Administrative Court were for an award of damages ... as reparation, which the Minister for the Budget had refused to make, for the loss ... caused by their wrongly being required to pay value added tax for the first semester of 1978 in the exact amounts mentioned above. It is, however, common ground that as at 9 April 1994, when the claim was registered with the court registry, [the claimants] had not obtained a release from the said liability to value added tax through a request to the authorities to that end and, in the event of [their] request being rejected, an appeal to the tax court in accordance with the specific procedure described in Articles L 190 et seq. of the Code of Tax Procedure. In these circumstances, the claims were, as the Minister has argued, inadmissible. It follows that [the companies] have no basis on which to complain about the Paris Administrative Court's impugned decision to dismiss their claims as unfounded.”
24. By a notice of appeal dated 17 March 1997 and written submissions dated 17 July 1997, SGAP Expansion and Christian de Clarens appealed on points of law.
25. On 30 June 2000 SGAP Expansion was the subject of a takeover by a company called Aon France, which on the same day transferred its brokerage and insurance business to a company called Le Blanc de Nicolay Réassurance. The latter subsequently changed its name to Aon Conseil et Courtage.
26. In a judgment of 10 November 2000, the Conseil d'Etat dismissed the appeals in the following terms:
“In their submissions, [the companies] sought compensation from the State in an amount equal to the value added tax they had paid in respect of the first semester of 1978. These submissions, which in practice amounted to a claim for repayment of the value added tax paid, were inadmissible as they could only be made subject to the conditions and time-limits set out in Articles L 190 et seq. of the Code of Tax Procedure. This conclusion, which answers a point raised before the courts below and does not involve any assessment of the factual circumstances, shall replace the legally flawed finding that served as the basis for the operative provision in the impugned judgment. The appeal ... must be dismissed.”
II. RELEVANT DOMESTIC LAW
27. The provisions of Article L 190 of the Code of Tax Procedure, applicable at the relevant time, read as follows:
“Claims relating to taxes, contributions, duties, charges, dues, indemnities and penalties of any kind, assessed or recovered by revenue officials, fall within the jurisdiction of the courts where they seek compensation for errors committed in the assessment or calculation of tax, or an entitlement due under a statutory provision or regulation.
All actions seeking a release from or reduction in tax, or to a right to make a deduction, on the ground that the norm that has been applied is incompatible with a higher-ranking norm, shall be heard and determined in accordance with the rules laid down in the present chapter.
Where such incompatibility has been established by a judicial decision, an action for the restitution of the sums paid or not deducted or for compensation for loss may only relate to the period following 1 January of the fourth year preceding that of the judgment establishing such incompatibility.”
28. In its Roquette Frères S.A. judgment of 28 November 2000 (C-88/99), the Court of Justice of the European Communities (CJEC) gave the following answer to a question referred for a preliminary ruling on the provisions of Article L 190 of the Code of Tax Procedure:
“... Community law does not preclude legislation of a Member State laying down that, in tax matters, an action for recovery of a sum paid but not due based on a finding by a national or Community court that a national rule is not compatible with a superior rule of national law or with a Community rule of law may only relate to the period following 1 January of the fourth year preceding that of the judgment establishing such incompatibility.”
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
29. The applicant companies complained of the dismissal of their request for reimbursement of sums erroneously paid in respect of VAT for the first semester of 1978. They relied on Article 1 of Protocol No 1, which provides:
“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.”
A. The parties' submissions
1. The Government
30. The Government submitted that when the applicant companies first made a claim on 20 December 1993 they no longer had a “possession” within the meaning of Article 1 of Protocol No. 1. Although, in the light of the S.A. Dangeville v. France judgment (16 April 2002, no. 36677/97, ECHR 2002-III), SGAP Expansion, OGIA and Christian de Clarens had in 1978 possessed a claim against the State that met the requirements of Article 1 of Protocol No. 1, the factual and legal positions were so significantly different that the decision reached by the Court in the Dangeville case was not transposable: whereas S.A. Dangeville had contested the erroneous payment of VAT from the outset, the three companies involved in the present case had waited until 20 December 1993, that is to say until fifteen years after the payment of the VAT in issue and, more specifically, until after the Paris Administrative Court's judgment of 1 July 1992 in favour of Dangeville S.A. The Government explained that Article L 190 of the Code of Tax Procedure enabled taxpayers with statute-barred claims to rely, despite their past inaction, on changes in the case-law to obtain a refund of sums which the new decision had shown to have been paid erroneously. However, in the applicant companies' case, the impugned taxation had taken place more than ten years before the temporal limit fixed by Article L 190 of the Code of Tax Procedure. Independently of this ground of inadmissibility, which the domestic courts had upheld, the claim was in any event inadmissible pursuant to the Limitation of Claims against the State, Départements, Municipalities and Public Bodies Act (Law no. 68-1250 of 31 December 1968) as being a statute-barred claim against the State. In any event, the Government considered that in the light of the subsidiarity principle the applicant companies could not validly argue that they had not had an effective remedy as the administrative case-law at the time had yet to recognise the direct applicability of Community directives in domestic law: it was precisely through lodging a claim in the domestic courts that Dangeville had secured the important change to the case-law made by the Administrative Court of Appeal's judgment of 1 July 1992. The Government also considered that the applicant companies could have made an application to the European Commission of Human Rights at the outset in 1978 by arguing that the domestic remedies manifestly offered no prospects of success.
31. In the alternative, the Government submitted that, regard being had to the time that had elapsed since the impugned taxation and to the principle of legal certainty, the domestic courts' decision to declare the claim inadmissible on the basis of Article L 190 of the Code of Tax Procedure had struck 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.
2. The applicant companies
32. The applicant companies contested the Government's arguments based on Article L 190 of the Code of Tax Procedure. In their submission, that provision created a restriction that was contrary to Article 1 of Protocol No. 1 in that it limited access to a court solely to claims covering a reduced period and de facto prohibited appeals seeking compensation for the full period (Miragall Escolano and Others v. Spain, 25 January 2000, Reports of Judgments and Decisions 2000-I). In reality, either no favourable judicial decision was forthcoming, in which case the claimant did not have access to a court, or there was a favourable decision but the period in respect of which a claim could be made was then reduced depending on the date of that decision. Consequently, the courts could deprive a claimant of his right to full compensation simply by deferring a finding of incompatibility. In the instant case, by limiting the period in respect of which a claim could be made to the four years preceding the judgment delivered in favour of S.A. Dangeville in 1992, Article L 190 had excluded the right to reparation for the VAT erroneously paid in respect of the first semester of 1978 with the result that there had been a violation of Article 1 of Protocol No. 1.
33. Christian de Clarens added that, contrary to what the Government had asserted, it had taken action in 1978, in particular by lodging four applications with the Paris Administrative Court on 2 and 5 October 1978 and 21 and 26 June 1979 for a refund of the VAT on the basis of the Sixth Directive of 17 May 1977. However, ultimately the Administrative Court had dismissed the applications in a judgment of 8 January 1981. In those circumstances, Christian de Clarens submitted that it could not be said that it had taken no action for fifteen years or that its claim had subsequently been extinguished.
B. The Court's assessment
1. Whether there existed a possession within the meaning of Article 1 of Protocol No. 1
34. The Court notes that the parties disagreed as to whether or not the applicant companies had a “possession” capable of attracting the protection of Article 1 Protocol No 1. Consequently, it must determine whether the legal position in which the applicant companies found themselves was such as to fall within the scope of Article 1.
35. The provisions of the Sixth Directive of the Council of the European Communities should have entered into force on 1 January 1978. By the Ninth Directive France was given an extension of time (until 1 January 1979) in which to implement the provisions of Article 13-B-a of the Sixth Directive of 1977. Since such directives have no retrospective effect, the Sixth Directive should therefore have applied during the period from 1 January to 30 June 1978.
36. The tax authorities only began to give effect to the Sixth Directive in an administrative circular issued on 2 January 1986 which provided that brokers who had not paid the VAT concerned and had received a supplementary tax assessment as a result were exempted from payment. However, while this administrative circular gave effect to the Sixth Directive in respect of companies who had refused to pay the VAT, it completely failed to address the matter of VAT refunds to companies which had already paid it in error.
37. The Court also noted that until the S.A. Revert et Badelon judgment of 30 October 1996, the Conseil d'Etat had refused to uphold claims by the insurance companies concerned for refunds, considering in particular that it should not have to review a national norm in the light of a Community norm.
38. Even though it was not disputed that Community law should have been applied, as the Community norm in question was a directive whose implementation was overdue, its effect was negated in respect of companies like the applicant companies for almost seven and a half years from the date of notification of the Ninth Directive.
39. Consequently, it is unacceptable for a time-limit to have been imposed in which to make a claim on the applicant companies when, as the Court has previously found (in its judgments in S.A. Dangeville, cited above; and S.A. Cabinet Diot and S.A. Gras Savoye v. France, nos. 49217/99 and 49218/99, 22 July 2003) no effective remedy was available under domestic law. In that connection, the Court notes that the Conseil d'Etat departed from its previous case-law in October 1996 thus affording an effective means of obtaining a refund through the French administrative courts. The applicant companies had, however, lodged their claims several years earlier, on 20 December 1993, following the Paris Administrative Court of Appeal's judgment of 1 July 1992, which had for the first time upheld such a claim (in the S.A. Dangeville case). But while the applicant companies might legitimately have considered that the Administrative Court of Appeal's judgment was capable of making the domestic remedy effective, it was nevertheless quashed by the Conseil d'Etat.
40. In conclusion, the Court notes, firstly, that the binding provisions of the Sixth Directive had still not been incorporated into French law when the applicant companies lodged their claims and, secondly, that although the initial decision indicating a departure from the previous case-law was issued on 1 July 1992, ultimately it was not until the Conseil d'Etat's decision of October 1996 that a change in the case-law was made.
41. The applicant companies had nevertheless brought an action in the domestic courts at a time when their right was not only valid under the applicable Community norms, but also unrecognised at the domestic level by both the authorities and the administrative courts. In view of the foregoing, the Court cannot accept the Government's arguments as justification for imposing a limitation period on the applicant companies in the circumstances of the case.
42. Thus, as regards the limitation period laid down by Article L 190 of the Code of Tax Procedure, the Court notes that the applicant companies' rights to receive payment were based on a Community norm that was perfectly clear, precise and directly applicable. That right did not disappear with the expiry of the limitation period laid down by domestic law and relied on by the Government since (a) it was not in dispute that the domestic law violated the directly applicable Community law and (b) the limitation period related to a domestic remedy that was not effective.
43. The Court reiterates that the fact that the administrative courts relied on that domestic limitation period cannot by itself justify a failure to comply with the present requirements of European law (see, mutatis mutandis, Delcourt v. Belgium, 17 January 1970, § 36, Series A no. 11, and S.A. Dangeville, cited above, § 47). It also notes in that connection that an unreasonable construction of a procedural requirement which prevents a claim for compensation being examined on the merits entails a breach of the right to the effective protection of the courts (Miragall Escolano and Others v. Spain, nos. 38366/97, 38688/97, 40777/98, 40843/98, 41015/98, 41400/98, 41446/98, 41484/98, 41487/98 and 41509/98, § 37, ECHR 2001-I).
44. In the light of the foregoing, the Court considers that the limitation period laid down by Article L 190 of the Code of Tax Procedure could not negate a substantive right created by the Sixth Directive (see, mutatis mutandis, S.A. Dangeville, cited above) and that when they brought the proceedings the applicant companies had a valid claim against the State for the VAT they had erroneously paid in respect of the period 1 January to 30 June 1978. A claim of that nature “constituted an asset” and therefore amounted to “a possession within the meaning of the first sentence of Article 1, which was accordingly applicable in the present case” (see, among other authorities, Pressos Compania Naviera S.A. and Others v. Belgium, 20 November 1995, Series A no. 332, § 31; S.A. Dangeville, cited above, § 48; and S.A. Cabinet Diot and S.A. Gras Savoye, cited above, § 26).
45. In any event, the Court considers that the applicant companies had at least a legitimate expectation of being able to obtain reimbursement of the disputed sum (Pine Valley Developments Ltd and Others v. Ireland, 29 November 1991, § 51, Series A no. 222; S.A. Dangeville, cited above; and S.A. Cabinet Diot and S.A. Gras Savoye, cited above).
2. The applicant companies' right to the peaceful enjoyment of their possessions”
46. The Court notes that in its judgment in the S.A. Dangeville case it found, firstly, that the interference with the peaceful enjoyment of the applicant company's possessions was not required in the general interest (§ 58) and, secondly, that both the negation of the claim against the State and the absence of domestic procedures affording a sufficient remedy to ensure the protection of the right to the peaceful enjoyment of one's possessions had upset the fair balance that ought to have been maintained between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights (§ 61; see, also, S.A. Cabinet Diot and S.A. Gras Savoye, cited above, § 26).
47. Since the present case raises an identical complaint the Court sees no reason to distinguish it from the previous cases it has examined.
48. It follows that for the aforementioned reasons the balance between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights has been upset.
49. In conclusion, there has been a violation of Article 1 of Protocol No. 1.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
50. 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.”
51. Aon Conseil et Courtage sought 328,535.78 euros (EUR) in respect of overpaid VAT for 1978 (EUR 314,324.94 by SGAP and EUR 14,210.84 by OGIA), together with EUR 664,961.37 in interest (EUR 636,198.42 due to SGAP and EUR 28,762.95 to OGIA), making a total of EUR 993,497.15. Christian de Clarens claimed reimbursement of EUR 147,423.26 in respect of overpaid VAT for 1978 and EUR 298,386.78 in interest, making a total of EUR 445,810.04.
52. The Government considered that the awards should be EUR 168,440.35 to Aon Conseil et Courtage (EUR 161,335.35 in respect of SGAP and EUR 7,105 in respect of OGIA) and EUR 73,712 to Christian de Clarens.
53. The Court considers that the most appropriate form of reparation for the violation that has been found of Article 1 of Protocol No. 1 would be reimbursement of the VAT erroneously paid for the period 1 January to 30 June 1978 (see S.A. Dangeville, cited above, § 70, and S.A. Cabinet Diot and S.A. Gras Savoye, cited above, § 32). It notes that the amount of VAT paid for a single semester of 1978 was EUR 164,267.89 by Aon Conseil et Courtage and EUR 73,711.63 by Christian de Clarens. In the light of the foregoing and ruling on an equitable basis in accordance with Article 41 of the Convention, the Court awards these sums in respect of pecuniary damage. It dismisses the remainder of the applicant companies' claims.
B. Costs and expenses
54. Aon Conseil et Courtage claimed EUR 6,387.62 in respect of SGAP's costs (EUR 3,652.68 for the proceedings before the domestic courts and EUR 2,734.94 for the proceedings before the Court) and EUR 9,682.98 in respect of OGIA's costs (EUR 1,446.44 for the proceedings before the domestic courts and EUR 8,236.54 for the proceedings before the Court), making a total of EUR 16,070.60. Christian de Clarens sought EUR 10,408.86 (EUR 3,652.68 for the proceedings before the domestic courts and EUR 6,756.18 for the proceedings before the Court).
55. The Government considered that the awards should be EUR 15,000 to Aon Conseil et Courtage and EUR 10,000 to Christian de Clarens.
56. Under the Court's case-law applicants may only obtain the reimbursement of their costs and expenses to the extent that they were genuinely and necessarily incurred and are reasonable in quantum. Further, on finding a violation of the Convention, the Court will only award applicants costs and expenses incurred in the domestic proceedings to the extent that they were incurred to prevent or redress that violation. The domestic remedies exercised by the applicant companies in the instant case fall into that category. The Court accordingly awards the amounts claimed under this head, namely EUR 5,099.12 to Aon Conseil et Courtage and EUR 3,652.68 to Christian de Clarens.
It does not, however, consider the amounts claimed for the proceedings before it reasonable in the circumstances of the case. Consequently, ruling on an equitable basis in accordance with Article 41, it awards each of the two applicant companies EUR 2,000 under this head.
C. Default interest
57. The Court considers it appropriate that the default interest 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
1. Holds unanimously that there has been a violation of Article 1 of Protocol No. 1 in respect of Christian de Clarens SA;
2. Holds by five votes to two that there has been a violation of Article 1 of Protocol No. 1 in respect of Aon Conseil et Courtage SA;
3. Holds by five votes to two
(a) that the respondent State is to pay, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, Aon Conseil et Courtage EUR 164,267.89 (one hundred and sixty-four thousand two hundred and sixty-seven euros and eighty-nine cents) in respect of pecuniary damage and EUR 7,099.12 (seven thousand and ninety-nine euros and twelve cents) in respect of costs and expenses and Christian de Clarens S.A. EUR 73,711.63 (seventy-three thousand seven hundred and eleven euros and sixty-three cents) in respect of pecuniary damage and EUR 5,652.68 (five thousand six hundred and fifty-two euros and sixty-eight cents) in respect of costs and expenses, plus any tax that may be chargeable;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
4. Dismisses unanimously the remainder of the applicant companies' claims for just satisfaction.
Done in French, and notified in writing on 25 January 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Christos
In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the joint partly dissenting opinion of Mr Costa and Mr Kovler is annexed to this judgment.
JOINT PARTLY DISSENTING
OPINION OF JUDGES COSTA
1. The majority of the Chamber found that there had been a violation of Aon Conseil et Courtages' rights under Article 1 Protocol No. 1. We do not share that view.
2. In arriving at that conclusion, our colleagues found that the authorities had not been legally entitled to impose on that company – the first applicant – the four-year limitation period laid down by Article L 190 of the Code of Tax Procedure for making its claim for the refund of the amount of value added tax (VAT) it had paid in error.
3. However, having paid that tax on its 1978 transactions pursuant to Article 256 of the General Tax Code as worded at the time Aon Conseil et Courtages waited until 20 December 1993 before making a request for a refund for the first time, that is more than fifteen years later and well after the expiration of the four-year limitation period. Its position is very different from that of the second applicant company, which also paid VAT on its transactions relating to the same period but claimed a refund on 2 October 1978, thereby very quickly interrupting the limitation period.
4. Admittedly, it was only in 1992 that, in a judgment on an appeal by S.A. Dangeville, a company in the same situation (see S.A. Dangeville v. France, no. 36677/97, ECHR 2002-III), the Administrative Court of Appeal held that Article 256 of the General Tax Code could not apply as it was incompatible with the provisions of the Sixth Community Directive on VAT, which France had implemented belatedly.
5. However, the clearly worded Article L. 190 of the Code of Tax Procedure, which is cited at paragraph 27 of the present judgment, allowed the first applicant company to avoid being caught by the statute of limitations in respect of its claim for recovery of sums paid but not due only if it made its claim – as the second applicant company and S.A. Dangeville did – at the most four years before the date of the court decision revealing the incompatibility of the legal rule applied in its case (Article 256) with a higher-ranking rule (the Sixth Directive). This it failed to do.
6. While it would of course be possible to object that the limitation period was too short and therefore in breach of the Convention, we do not consider that to have been the case.
7. Firstly, in its Roquette Frères S.A. judgment of 28 November 2000, which is cited in paragraph 28 of the judgment in the instant case, the Court of Justice of the European Communities (CJEC) held that Community law did not preclude the validity of Article L 190 of the French Code of Tax Procedure. Even though the CJEC was not required to apply Article 1 of Protocol No. 1 (indeed, that provision was not referred to in the request for a preliminary ruling), we consider it unfortunate for there to be any hint of a divergence of opinion between Europe's two highest courts, which are careful to avoid such differences (see, for example, the Court's judgments in the cases of Matthews v. the United Kingdom [GC], no. 24833/94, ECHR 1999-I and Société Colas Est and Others v. France, no. 37971/97, ECHR 2002-III, and, respectively, the CJEC's judgments in the cases of Kingdom of Spain v. United Kingdom, 12 September 2006, case C 145/04, and Roquette Frères S.A. – a separate case to that mentioned above – 22 October 2002, case C-94/00; see also the European Court of Human Rights' judgment in the case of Stec and Others v. the United Kingdom [GC], no. 65731/01, § 58, ECHR 2006-..., which expressly refers to the CJEC's judgment in Regina Virginia Hepple v Adjudication Officer and Adjudication Officer v Anna Stec, case C 196-98).
8. Secondly, the Court has always accepted that limitation periods, which serve to ensure legal certainty and fall within the States' margin of appreciation, are compatible with the Convention provided they are reasonable in length. Thus, in Stubbings (Stubbings and Others v. the United Kingdom, 22 October 1996, Reports of Judgments and Decisions 1996-IV) the Court found that, notwithstanding the serious nature of the case, a six-year limitation period did not violate the right of access to a court even though it prevented minors who had been victims of sexual abuse from claiming compensation in the civil courts.
9. Lastly, as regards the right of property, the Court has held that the hope of recognition of the survival of an old property right which it has long been impossible to exercise effectively cannot even constitute a “possession” within the meaning of Article 1 of Protocol No. 1 (Malhous v. the Czech Republic [GC], no. 33071/96, ECHR 2000-XII). That decision is transposable, mutatis mutandis, to the claim of the first applicant company, as it paid tax in 1978 and did not seek a refund until the end of 1993.
10. For these reasons, we consider that Article 1 of Protocol No. 1 was not applicable ratione materiae in the case of Aon Conseil et Courtages or, in the alternative, that there has been no violation of that provision in its case.
AON CONSEIL ET COURTAGE S.A. AND ANOTHER v. FRANCE JUDGMENT