FIFTH SECTION
FINAL DECISION
Application no. 13578/04
by ARMEX HOLDING, A. S.
against the Czech Republic
The European Court of Human Rights (Fifth Section), sitting on 2 May 2007 as a Chamber composed of:
MrP. Lorenzen, President,
MrsS. Botoucharova,
MrK. Jungwiert,
MrV. Butkevych,
MrsM. Tsatsa-Nikolovska,
MrJ. Borrego Borrego,
MrM. Villiger, judges,
and Mrs C. Westerdiek, Section Registrar,
Having regard to the above application lodged on 7 April 2004,
Having regard to the decision to apply Article 29 § 3 of the Convention and examine the admissibility and merits of the case together,
Having regard to the partial decision of 10 July 2006,
Having regard to the formal declarations accepting a friendly settlement of the case,
Having deliberated, decides as follows:
THE FACTS
The applicant, Armex Holding, a. s., is a Czech company with its seat in Děčín. It was represented before the Court by Mr M. Kolář, a lawyer practising in Děčín. The Czech Government (“the Government”) were represented by their Agent, Mr V.A. Schorm, Ministry of Justice.
The facts of the case, as submitted by the parties, may be summarised as follows.
On 4 November 1998 the applicant company purchased some real estates. The purchase contract stipulated, inter alia, that a part of the purchase price corresponding to real estate transfer tax would be paid by the applicant company instead of the seller. In doing so the applicant company, assuring the payment of the tax as provided for in section 8(1) of the Inheritance, Gift and Real Estate Transfer Tax Act, aimed at avoiding its possible later tax obligation if the seller failed to pay the tax.
On 13 May 1999 the Děčín Finance Office (finanční úřad) levied on the seller real estate transfer tax of CZK 242,016 (EUR 8,734) (including an increase of the tax by CZK 22,001 (EUR 794)). Acting in accordance with the purchase contract, the applicant company paid the tax on 18 June 1999. The amount was received in the seller’s personal account of the real estate transfer tax. This payment was used up for satisfying its tax liabilities in the sequence stipulated in section 59(6) of the Administration of Taxes Act. Thus, the real estate transfer tax, amounting to CZK 220,015 (EUR 7,940), remained outstanding, and a collection process for this tax would be started. Subsequently, the Finance Office conducted examination to identify the assets owned by the tax debtor. At the same time, it enquired with other financial authorities about overpayments, if any, in any of the tax debtor’s accounts.
When the Finance Office’s above steps failed to result in the payment of the tax arrears by the seller, on 10 December 2001, it notified the applicant company that it was required to pay the real estate transfer tax as a guarantor under section 57 of the Administration of Taxes Act, amounting to CZK 220,015 (EUR 7,940).
On 25 September 2002 the applicant company paid the tax of CZK 242,016 (EUR 8,734). The Government admitted that this payment had been in excess of the Finance Office’s request of 10 December 2001.
On 4 November 2002 it filed a constitutional appeal (ústavní stížnost) which the Constitutional Court (Ústavní soud) rejected on 24 March 2003 as having been introduced outside the statutory time-limit. It observed that the Finance Department’s decision of 30 August 2002 had been notified to the applicant company on 2 September 2002, and that the latter had brought its constitutional appeal on 27 November 2002. It added that the constitutional appeal could also be dismissed for non-exhaustion of domestic remedies.
The court finally noted that the applicant company could request the Ministry of Finance to review the finance authorities’ decisions.
On 22 December 2003 the Ministry of Finance did not grant the applicant company’s request for review which the latter had filed on 27 May 2003.
COMPLAINTS
The applicant company complained under Article of the Protocol No. 1 that its property rights were violated in that it had had to pay the same tax twice.
THE LAW
The Court received the following declaration from the Government:
“I, Vít Alexander Schorm, Agent of the Government of the Czech Republic, declare that the Government of the Czech Republic offer to pay ex gratia 300,000 Czech korunas to Armex Holding, a.s. with a view to securing a friendly settlement of the above-mentioned case pending before the European Court of Human Rights.
This sum, which is to cover any pecuniary and non-pecuniary damage as well as costs and expenses, will be payable, with applicable taxes, within three months from the date of notification of the decision taken by the Court pursuant to Article 37 § 1 of the European Convention on Human Rights. In the event of failure to pay this sum within the said three-month period, the Government undertake to pay simple interest on it, from the expiry of that period until settlement, at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points. The payment will constitute the final resolution of the case.”
The Court received the following declaration signed by the applicant company:
“I, Armex Holding, a.s., note that the Government of the Czech Republic are prepared to pay me ex gratia the sum of 300,000 Czech korunas with a view to securing a friendly settlement of the above-mentioned case pending before the European Court of Human Rights. This sum, which is to cover any pecuniary and non-pecuniary damage as well as costs and expenses, will be payable, with applicable taxes, within three months from the date of notification of the decision taken by the Court pursuant to Article 37 § 1 of the European Convention on Human Rights. From the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points.
I accept the proposal and waive any further claims against the Czech Republic in respect of the facts giving rise to this application. I declare that this constitutes a final resolution of the case.”
The Court takes note of the friendly settlement reached between the parties. It is satisfied that the settlement is based on respect for human rights as defined in the Convention and its Protocols and finds no public policy reasons to justify a continued examination of the application (Article 37 § 1 in fine of the Convention). Accordingly, Article 29 § 3 of the Convention should no longer apply to the case and it should be struck out of the list.
For these reasons, the Court unanimously
Decides to strike the remainder of the application out of its list of cases.
Claudia WesterdiekPeer Lorenzen
RegistrarPresident
Full & Egal Universal Law Academy