Communicated on 28 January 2016
FIRST SECTION
Application no. 74957/11
BOREKS - 95
against the former Yugoslav Republic of Macedonia
lodged on 1 December 2011
STATEMENT OF FACTS
The applicant, Boreks – 95, is a limited-liability company incorporated in the respondent State. It is represented before the Court by Mr V. Donevski, a lawyer practising in Skopje.
The facts of the case, as submitted by the applicant, may be summarised as follows.
A. The circumstances of the case
1. Background to the case
On 9 March 1995 the applicant imported from Italy (for the price of 45,300 German marks) a cargo truck manufactured in 1990 and sought that the Customs Office of the respondent State released it from customs duties. In so doing it relied on the then applicable legislation according to which cargo trucks up to five years old could be imported customs free. The Customs Office, relying on an expert opinion by the Faculty of Mechanical Sciences (“the Faculty”), rejected the applicant’s request for exemption of the customs duties finding that the truck had been over five years old when imported. After the Supreme Court had remitted the case for reconsideration, with a final decision of 14 March 1997, the Customs Office accepted the applicant’s request finding that the truck had met the statutory requirements to be imported free of customs. On 18 March 1997 the Customs Office issued a separate decision that the truck could be imported free of customs. As established in the compensation proceedings (see below), between 14 June 1995 and 14 March 1997 the truck was under customs supervision by the Customs Office and the applicant was unable to use it.
2. Compensation proceedings against the respondent State
On 26 June 1997 the applicant lodged a civil action against the State/ Ministry of Finance/ Customs Office seeking compensation for the gain of which it had been deprived due to its inability to use the truck between 14 June 1995 and 14 March 1997.
On 24 November 2004 the Skopje Court of First Instance (“the first-instance court”) accepted the applicant’s claim and ordered the Customs Office to pay the equivalent to 37,600 euros in compensation for the profit lost during the reference period. The court found that the applicant had been unable to use the truck due to a fault of the Customs Office. The amount of damages was determined on the basis of an opinion drawn up by experts commissioned by the court as half the tariff set by a specialised freight organisation.
On 1 March 2006 the Skopje Court of Appeal quashed this judgment and remitted the case for re-examination. It found that the amount of presumed damages that the applicant had sustained as profit lost had been determined solely on the basis of the expert opinion without certain facts having been established. Therefore, it instructed the lower court to establish whether the applicant had been authorised to provide cargo services; whether it had previously been involved in such an activity and what had been its income; and whether there had been any actual transport arrangements with other persons.
On 19 June 2006 the first-instance court ruled again in favour of the applicant and awarded the same amount of damages. The court established that at the relevant time the main registered business activity of the applicant had been road transport of goods and that the truck had been imported for that purpose. On 21 December 2006 the Skopje Court of Appeal set aside this judgment for the same reasons indicated in its earlier judgment of 1 March 2006 (see above).
On 24 December 2007 the first-instance court accepted the applicant’s claim and ordered the Customs Office to pay the applicant the amount specified in its first judgment (see above), together with interest. The court rejected a proposal by the Customs Office for an additional expert examination of the applicant’s transport arrangements in the critical time for the following reasons:
“The [applicant] is registered for road transport of goods, but it was not engaged in [such a] transport; it neither had contracts for transport of goods nor was it in business relations with other legal persons [for that purpose]. There is accordingly no reason for an expert examination, because these facts, which would enable determination of the profit lost, cannot be established because they did not exist at the relevant time ...
After almost twelve years, it cannot be expected that an expert could establish facts so that the amount of income lost is determined more precisely. Moreover, it is not specified which are those relevant facts. Those indicated, such as the existence of contracts, previous transport arrangements, business relations with other legal persons for transport of goods, did not exist.”
The court further stated:
“The claim concerns compensation of the profit lost due to a fault for which the defendant was responsible ... an assumption for (the award of) compensation of loss of income is that the aggrieved party had an intention and objective to gain profit at the time when the damage occurred and that such intention and objective ... were possible and attainable. In the absence of a contract or any other legal action, the amount of [such compensation] is determined on the basis of legitimate and reasonable expectations with a view of ... objective circumstances, such as the income which the aggrieved party would normally and objectively expect to gain as any other person involved in transport of goods ...
On the basis of admitted evidence, it is obvious that [the applicant] had such an intention. It is registered for road transport of goods and it imported a [cargo truck] for which it had paid 45,300 German marks ... due to the defendant’s fault [the truck] could not be used between 14 June 1995 and 14 March 1997.
It is about future damage and its amount is to be determined on the basis of income that could be reasonably gained under ordinary circumstances ...”
On 16 April 2008 the Skopje Court of Appeal upheld the first-instance court’s judgment. It dismissed the defendant’s claims that no responsibility could be attributed to it and that the applicant had failed to present evidence for the profit lost. During the proceedings, the first- and second-instance courts relied on sections 155 and 189(3) of the Obligations Act of 1978, valid at the material time (see “Relevant domestic law” below).
On 4 July 2008 the Customs Office lodged with the Supreme Court an appeal on points of law in which it claimed that the responsibility for the damage sustained by the applicant should have been shared with the Faculty and the Government which had decided the applicant’s claim (to import the truck free of customs) in second instance. In the observations submitted in reply, the applicant contested these arguments and stated that the exclusive responsibility of the Customs Office had not been disputed during the proceedings. In this connection it submitted that the remittal orders of the Court of Appeal concerned only the amount of damages.
With a judgment of 16 March 2011, served on the applicant on 8 June 2011, the Supreme Court upheld the defendant’s appeal on points of law and overturned the lower courts’ judgments. Relying on section 377 § 3 of the Civil Proceedings Act (see “Relevant domestic laws” below), it found that on the established facts they had wrongly applied the substantive law. The relevant parts of the judgment read as follows:
“... on the basis of admitted evidence, it does not transpire that [the applicant] had sustained damages in respect of loss of income due to the fact that the truck had been under customs supervision. [The applicant] did not present any evidence during the proceedings with a view of an objective determination of the profit lost, namely it did not present contracts for transport or any other legal action to prove that it had sustained damages in respect of loss of income. Given the absence of evidence that [the applicant] had transport arrangements or other services to provide with the [truck] while it had been under customs supervision, (the court considers) that the requirements for compensation of damages in respect of loss of income were not fulfilled ... “
B. Relevant domestic law
1. Civil Proceedings Act
Under section 375 § 1(3) of the Civil Proceedings Act of 2005, as valid at the time, an appeal on points of law could be lodged for wrong application of the substantive law (погрешна примена на материјалното право).
Section 377 § 1 provided that the party concerned should clearly state the reasons for his or her appeal. Sub-section 3 of this provision, provided that the Supreme Court would examine the impugned judgment in the part challenged with the appeal and for the reasons clearly indicated therein.
2. Obligations Act of 1978
Section 155 of the Obligations Act of 1978 was a general provision concerning pecuniary (ordinary damage and loss of income) and non-pecuniary damage.
Section 189 concerned pecuniary damage. Under sub-section 3 of this provision, the amount of profit lost was to be determined on the basis of income which could reasonably be gained under ordinary circumstances.
Sections 142 and 178(3) of the Obligations Act of 2001 provides for the same provisions as 1978 Act.
COMPLAINTS
The applicant complains under Article 6 of the Convention that the Supreme Court adjudicated on grounds which had not been put to it and that the compensation proceedings were too lengthy. He also complains of violation of its rights under Article 1 of Protocol No. 1.
QUESTIONS TO THE PARTIES
1. Did the applicant have a fair hearing in the determination of its civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular, was it given the opportunity to present its case effectively before the Supreme Court given that the reasons advanced in its judgment of 16 March 2011 had not been put to it in the appeal of points of law of the Customs Office?
2. Was the length of the civil proceedings in the present case in breach of the “reasonable time” requirement of Article 6 § 1 of the Convention?
3. Was the applicant’s claim sufficiently established at the time so as to be regarded “possession” within the meaning of Article 1 of Protocol No.1? If so, has there been an interference with the applicant’s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1? If so, was that interference in accordance with this Article?
Full & Egal Universal Law Academy