FOURTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 75619/01
by Lars AHLSKOG and OY MAPLE HOUSE AB
against Finland
The European Court of Human Rights (Fourth Section), sitting on 4 May 2004 as a Chamber composed of:
SirNicolas Bratza, President,
MrM. Pellonpää,
MrsV. Strážnická,
MrJ. Casadevall,
MrR. Maruste,
MrL. Garlicki,
MrsE. Fura-Sandström, judges,
and Mr M. O'Boyle, Section Registrar,
Having regard to the above application lodged on 18 May 2001,
Having deliberated, decides as follows:
THE FACTS
The applicant, Lars Johan Ahlskog (A.) is a Finnish national, who was born in 1929 and resides in Kokkola. He owned and represented a limited liability company (M.) before it was declared insolvent and wound up.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
On 21 March 2000 the District Court of Kokkola issued a default judgment obliging the applicant's company M. to pay a bank almost 1,500,000 Finnish marks (FIM; corresponding to 251,284 euros) in capital. An estate owned by M. was distrained. The default judgment was based on the fact that M. had in its two written observations to the court failed to answer clearly the questions put to it.
On 29 March 2000 the bank applied that M. be declared insolvent claiming that it had failed to pay its debt and invoking the default judgment of 21 March 2000. M. contested the application arguing that the bank did not have an undisputed claim as required by the Bankruptcy Act as M. had appealed against the default judgment on 11 May 2000.
On 22 May 2000, following the applicant's appeal, the Court of Appeal of Vaasa stayed the execution of the default judgment however maintaining, inter alia, that the pending insolvency proceedings against M. were based on different debts and that there were no grounds to prohibit the creditor to use the default judgment in the insolvency proceedings.
On 15 June 2000 the District Court of Kokkola also issued a separate decision to stay the execution of the default judgment until further notice or until the appeal against it had been decided.
On 19 June 2000 the District Court of Kokkola rejected the bank's insolvency application. It noted in this connection that M. had not stated its grounds for opposing the bank's claims even when directly asked by the court to do so. It however held that M. had lodged an application to set aside the default judgment, which application was not manifestly groundless. The bank's claim was thus not regarded as clear and undisputed. The applicant claims that M. was not summoned to the hearing and was not represented at the hearing.
The bank appealed to the Court of Appeal of Vaasa and demanded that M. be declared insolvent due to its debt. The bank seems to have been the only creditor at this stage. The Court of Appeal requested M. to produce its written observations on 3 August 2000 at the latest. Following M.'s request dated that day (in which M. stated its intention to give the bank full security for its claims) the time-limit for observations was extended to 17 August 2000. M.'s observations were dated 15 August 2000 and it seems that they were sent by fax to the Court of Appeal. Apparently the fax was received at the Court of Appeal only after the time-limit, as M. requested in its letter of 23 August 2000 that its observations might be taken into account despite the delay and explained the circumstances in which the observations were sent. In its observations M. held that as it had appealed against the default judgment the bank's claims were not undisputed as required by the Bankruptcy Act. M. further maintained that it was not possible to examine the question of whether the bank had a claim against M. in the insolvency proceedings. At this stage M. did not request an oral hearing.
On 11 September 2000 M. sent a fax to the Court of Appeal, in which, inter alia, an oral hearing in the matter was requested (M. also claimed that it had not been heard prior to the giving of the default judgment of 21 March 2000 and that the District Court had not taken into account their documents). The fax was apparently received only after the Court of Appeal had made its decision in the insolvency proceedings on the same day (the decision was made at noon and the fax was apparently received at 1.30 p.m.).
In its judgment of 11 September 2000 the Court of Appeal of Vaasa quashed the District Court's decision and declared M. insolvent based on a promissory note signed by the applicant on 4 September 1999 and a request for payment dated 25 November 1999. The court held that according to established case law a claim which was liable for an action for debt (lainhaku, lagsökning) was clear and undisputed. The Court of Appeal referred the case back to the District Court of Kokkola for the execution of the winding up proceedings. The Supreme Court refused M. leave to appeal against the insolvency decision on 21 November 2000.
The subsequent winding up proceedings took place in the District Court, in which there were several creditors. During these proceedings M. instigated several civil proceedings against some of its creditors (for example the bank, tax authorities and an insurance company). There is no indication of the outcome of these proceedings.
On 9 April 2001 the District Court of Kokkola accepted most of the claims made against M. and decided the priority order of the debts to be settled. It stated, inter alia, that the amount of the bank's claim would be decided in a separate trial (in the setting aside proceedings against the default judgment, which were still pending). On 22 May 2001 the Court of Appeal of Vaasa upheld this decision. On 22 April 2002 the Supreme Court refused M. leave to appeal.
B. Relevant domestic law
Section 1(d) of the Bankruptcy Act (konkurssisääntö, konkursstadga; 31/1868) provides that the Act on Petitionary Matters in District Courts (laki hakemusasioiden käsittelystä yleisessä alioikeudessa, lag om behandling av ansökningsärenden vid allmän underrätt; 307/1986), as in force at the relevant time, shall be applicable when dealing with insolvency applications. Pursuant to the Act on Petitionary Matters in District Courts a hearing shall always be held when the matter requires the hearing of witnesses or others in person.
Insofar as relevant, section 6, subsection 2 of the Bankruptcy Act provides that when a creditor has applied that a debtor be declared insolvent the court must summon the debtor without delay to appear before the court. The debtor shall be declared insolvent unless the debtor proves that he or she can satisfy the debt or gives acceptable security for the payment of the debt. If the debtor fails to appear to the court hearing as indicated in the summons, the court may declare the debtor insolvent.
COMPLAINTS
1. The applicant complains under Article 6 of the Convention that:
(a) M. had not been summoned to the District Court's hearing on 19 June 2000 when the bank's insolvency application was dismissed and that the Court of Appeal did not hold an oral hearing when it declared M. insolvent. The applicant also invokes Article 13 of the Convention in this respect;
(b) the insolvency decision was in contradiction to the District Court's decision of 15 June 2000 to stay the execution of the default judgment. The applicant complains that the District Court judge should have appended the decision to stay the execution of the default judgment to the insolvency case-file, or otherwise informed the Court of Appeal of the said decision, following the bank's appeal against the decision of 19 June 2000. The applicant further complains that the District Court's decision to stay the execution of the default judgment was made too late and only after the Court of Appeal had issued a decision to stay the said execution. He also seems to invoke Article 17 of the Convention in this respect. He further complains under Article 1 of Protocol No. 1 to the Convention that the decision to declare M. insolvent was an unlawful deprivation of his property;
(c) the District Court held in its decision to dismiss the bank's application for insolvency that M. had not stated its grounds for opposing the bank's claims even when directly asked by the court to do so. This lack of grounds for objecting to the bank's application – which the applicant claims were provided in other proceedings, namely in the setting aside procedure against the default judgment – led according to the applicant to the Court of Appeal's decision to declare M. insolvent;
(d) the District Court of Kokkola was biased;
(e) the Court of Appeal's decision to declare M. insolvent was based on a law which was revoked in 1993;
(f) the Supreme Court had removed from the case file his application for leave to appeal. The applicant also alleges that other documents have been lost or misplaced at the Supreme Court and that a legal clerk at the Supreme Court was biased as she was allegedly a friend of the trustee of the insolvency estate;
(g) M. did not have the benefit of an oral hearing in the setting aside proceedings against the default judgment in the District Court and there was a delay in these proceedings as the principal hearing in the matter commenced only seven months later and after M. had been declared insolvent.
2. The applicant complains under Article 14 of the Convention that he has been discriminated against as the authorities have allegedly been on the side of his considerably wealthier opponent.
3. The applicant also complains about several criminal investigations conducted following his reports of offences as well as about procedures followed by a public prosecutor. He further complains about the procedure of the National Board of Patents and Registration and about the conduct of some judges who, according to the applicant, failed to take action to remove the President of the Republic from his office after a seminar in 1992.
THE LAW
1. The applicant invokes Article 6 § 1 of the Convention, which reads, insofar as relevant, as follows:
“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”
(a) The applicant complains that M. had not been summoned to the District Court's hearing on 19 June 2000 and about the lack of an oral hearing before any of the domestic courts in the insolvency proceedings. Insofar as the applicant also invokes Article 13 of the Convention (right to an effective remedy) in this context, the Court notes that this provision, as a more general guarantee, does not normally apply in cases where the more specific guarantees of Article 6 are at issue, Article 6 of the Convention being the lex specialis in relation to Article 13 and absorbing its requirements. The Court finds that no separate issue arises under Article 13 of the Convention in this case.
The Court considers that it cannot, on the basis of the case file, determine the admissibility of the complaints under Article 6 of the Convention and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.
(b) The applicant complains under Articles 6 § 1 (above) and 17 (prohibition of the abuse of rights) of the Convention that M. should not have been declared insolvent as on 15 June 2000 the District Court had stayed the execution of the default judgment and that the District Court had failed to inform the Court of Appeal about the said decision when it examined the insolvency case. He also complains that as a result he was deprived of his property, invoking 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.”
As regards the complaint under Article 17 of the Convention the Court notes that the complaint is vague. This part of the complaint is manifestly ill-founded and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
The Court considers that it cannot, on the basis of the case file, determine the admissibility of the remaining complaints and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.
(c) The applicant complains that when examining the insolvency case the District Court should have taken into account M.'s objections to the bank's claims which had been made in the setting aside procedures against the default judgment. The Court observes that in its decision on 19 June 2000 the District Court stated that M. had not specified its grounds for its objections against the bank's debt even when directly asked about it in its procedure. It is not apparent that this is an incorrect statement. In any event, the District Court dismissed the bank's application to declare M. insolvent. In the Court's opinion the complaints about the reasoning of the District Court's decision are unsubstantiated and disclose no unfairness to M. The Court finds that this part of the complaint is manifestly ill-founded and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
(d) The applicant complains that the District Court of Kokkola was biased. The Court observes that there is nothing in the case-file to substantiate any indication of a violation of the requirements of an impartial tribunal. Consequently, this part of the complaint is manifestly ill-founded and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention
(e) The applicant complains that the insolvency decision was based on a law which was revoked. The Court observes that the complaint is vague and furthermore that the applicant did not raise this issue before the Supreme Court. The applicant has thus failed to exhaust domestic remedies as required by Article 35 § 1 of the Convention. Consequently, the Court rejects this part of the complaint pursuant to Article 35 §§ 1 and 4 of the Convention.
(f) The applicant complains about the handling of case documents at the Supreme Court and claims that a legal clerk at the Supreme Court was biased. The Court notes that the claims are unsubstantiated and that there is nothing indicating any appearance of a violation of fair trial. Consequently, this part of the complaint is manifestly ill-founded and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
(g) The applicant complains about the delay of an oral hearing in the setting aside procedure against the default judgment in the District Court, which allegedly only took place after M. had been declared insolvent. The Court notes that there is no indication of the outcome of this procedure. The applicant has not shown that he has exhausted domestic remedies as required by Article 35 § 1 of the Convention. Consequently, the Court rejects this part of the complaint pursuant to Article 35 §§ 1 and 4 of the Convention.
2. The applicant complains that he has been discriminated against contrary to Article 14 of the Convention which provides:
“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
The Court notes that the applicant has not substantiated his complaint and finds that this part of the complaint is manifestly ill-founded and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
3. Finally, as regards the applicant's complaints about criminal investigations and the measures taken by a public prosecutor, the Court notes that the Convention does not guarantee a right to have a criminal investigation conducted or charges brought against third parties. His complaint about the National Board of Patents and Registration is vague, while it is not apparent that his complaint about the seminar in 1992 falls within the scope of any of the rights guaranteed under the Convention. This part of the applicant must therefore be rejected, respectively, as incompatible ratione materiae and manifestly ill-founded pursuant to Article 35 §§ 3 and 4.
For these reasons, the Court unanimously
Decides to adjourn the examination of the applicant's complaints regarding the lack of an oral hearing in the insolvency proceedings (a) and the alleged failure to comply with the decision to stay the execution of the default judgment (b);
Declares the remainder of the application inadmissible.
Michael O'BoyleNicolas Bratza
RegistrarPresident
Full & Egal Universal Law Academy