FIRST SECTION
CASE OF JAKIMOVSKI AND KARI PREVOZ
v. NORTH MACEDONIA
(Application no. 51599/11)
JUDGMENT
STRASBOURG
14 November 2019
This judgment is final but it may be subject to editorial revision.
In the case of Jakimovski and Kari Prevoz v. North Macedonia,
The European Court of Human Rights (First Section), sitting as a Committee composed of:
Aleš Pejchal, President,
Tim Eicke,
Raffaele Sabato, judges,
and Renata Degener, Deputy Section Registrar,
Having deliberated in private on 22 October 2019,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 51599/11) against the Republic of North Macedonia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 8 August 2011, by Mr Savčo Jakimovski (“the first applicant”), a Macedonian/citizen of the Republic of North Macedonia, and Kari Prevoz D.O.O. Sveti Nikole (“the second applicant”), a company incorporated in the respondent State.
2. The applicants were represented by Mr T. Torov, a lawyer practising in Štip. The Government of North Macedonia (“the Government”) were initially represented by their former Agent, Mr K. Bogdanov, and then by Ms D. Djonova.
3. The applicants alleged, in particular, that the confiscation of their lorry and commercial goods in the course of the customs misdemeanour proceedings had violated their rights under Article 1 of Protocol No. 1 to the Convention.
4. On 8 October 2014 these complaints were communicated to the Government and the remainder of the application was declared inadmissible, pursuant to Rule 54 § 3 of the Rules of Court.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
A. Background information to the case
5. The first applicant was born in 1967 and lives in Sveti Nikole. Prior to the events described below, the first applicant purchased a lorry and registered a limited liability company (“the second applicant”). According to the first applicant he had taken a bank loan and put up his house as security to purchase the lorry in order to be able to provide for his family. From the available material, it can be seen that at the relevant time the second applicant was a limited liability company founded by a single person (ДООЕЛ). It appears that subsequently the second applicant was transformed into a limited liability company (ДОО), with the first applicant’s wife as its co-owner.
6. On 8 March 2008 (a Saturday) the first applicant entered the respondent State via the border crossing point at Novo Selo driving the lorry, which was loaded with 450 rolls of plastic foil. The first applicant was transporting goods from a Bulgarian company to their buyer – company B. The lorry was weighed by the customs authorities of the respondent State and the first applicant drove off from the customs terminal in the lorry.
7. On 10 March 2008 (a Monday) the first applicant submitted the lorry for inspection by the Bitola customs authorities (approximately 200 kilometres away from the point of entry at Novo Selo). The customs inspection seals that had been placed on the lorry by the Bulgarian authorities were undamaged. The customs officers found that the customs declaration had not been registered with the customs office at Novo Selo. On the same day the customs authorities seized the lorry and the transported goods.
B. Misdemeanour proceedings against the first applicant
8. On 11 March 2008 the Bitola customs office requested that the Commission for Customs-related Misdemeanours (Комисија за одлучување по царински прекршок – hereinafter “the Commission”) initiate misdemeanour proceedings against the first applicant in the light of the fact that the customs declaration had not been registered with the customs office at Novo Selo, which amounted to a misdemeanour punishable under sections 263 (1)(5) and 269 (1) of the Customs Act (hereinafter: “the Act” – see paragraphs 16, 17 and 19 below). The value of the transported goods was set at 30,890 euros (EUR). According to an expert report ordered by the Bitola customs office, the lorry had a value of 805,000 denars (MKD).
9. The first applicant argued that he had crossed the border at the official border crossing post at Novo Selo, where he had submitted the lorry to the customs authorities for them to undertake the appropriate procedures. After the weighing of the lorry and the completion of the customs formalities, the first applicant had been allowed to leave the customs terminal. Any mistake in the handling of the documents should not have been held against him. He had not been familiar with the relevant procedures and had had no intention of committing an offence. The goods had been submitted to the customs authorities in Bitola with the seals unbroken, so it followed that no damage had been caused. Lastly, the first applicant stated that he had only recently purchased the lorry and had taken out a loan, using his house as collateral, in order to be able to buy it.
10. On 11 July 2008 the Commission found that the first applicant had committed a misdemeanour under section 263 (1)(5) of the Act. It imposed a fine on him in an amount equivalent to EUR 1,500 and ordered the confiscation of the goods as a mandatory special measure (задолжително предвидена посебна прекршочна мерка) under section 267 (1) and (2) of the Act. It also imposed a protective measure (заштитна мерка) ‑ confiscation of the lorry, pursuant to section 269 (1) of the Act, from the owner, who in the case in issue was also the offender.
11. On 8 May 2009 the Administrative Court granted administrative actions brought by the first applicant and company B., and quashed the Commission’s decision. It noted, inter alia, that the Commission had failed to establish whether the owner of the goods (company B.) and the owner of the lorry (the second applicant) had known or ought to have known that the goods were the subjects of an offence and that the lorry would be used as transport vehicle for that purpose.
12. In the resumed proceedings, on 22 June 2009 the Commission found that the first applicant had committed a misdemeanour under section 263 (1)(5) of the Act because the customs declaration had not been registered at the customs office Novo Selo (as the point of entry), which meant that the goods had not been duly submitted for inspection to the customs authorities, contrary to section 50 of the Act, and could therefore not be subject to further customs proceedings. It imposed a fine on the first applicant in the amount of EUR 1,500 (MKD 92,000) and ordered the confiscation of the goods as a mandatory special measure under section 267 (1) and (2) of the Act. Lastly, it imposed a protective measure ‑ confiscation of the lorry, pursuant to section 269 (1) of the Act, since the relevant value criterion had been met (see paragraph 19 below). It repeated its earlier findings that the first applicant was the owner of the lorry. In determining the level of the fine, it took into consideration as mitigating circumstances the fact that the goods had been submitted to the customs authorities in Bitola with the seals unbroken.
13. The first applicant lodged a claim challenging that decision with the Administrative Court, reiterating his arguments (see paragraph 9 above). He maintained that he had no experience in the transport business and was not familiar with the customs procedures.
14. On 2 February 2010 the Administrative Court dismissed the first applicant’s claim. It upheld the Commission’s findings, holding that the relevant domestic law had been correctly applied. Under sections 4 (19) and 50 (1) of the Act and section 219 (1) of the Regulation on the Implementation of the Customs Act (“the Regulation” – see paragraphs 16 and 20 below), the failure to register a customs declaration with the customs office was considered to constitute a failure to submit the goods in question for inspection. As to the confiscation of the lorry, the court found that it had been lawful since the two relevant statutory conditions had been met (see paragraph 19 below). In respect of the second of those conditions, the court found that it had been satisfied since the second applicant, as the owner of the lorry, was liable for the actions of the first applicant, who had acted as its agent – as provided in Article 3 of the Convention on the Contract for the International Carriage of Goods by Road (hereinafter “the CMR Convention” – see paragraph 21 below). Lastly, it dismissed the first applicant’s arguments regarding his lack of intent to commit the offence, finding that they could not lead to a different ruling.
15. Following appeals by the first applicant, that decision was upheld by the Supreme Court’s judgment of 22 November 2010, which was served on the first applicant on 23 March 2011.
II. RELEVANT DOMESTIC LAW
A. The Customs Act (Царински Закон, Official Gazette nos. 39/2005 and 4/2008)
16. Section 4 (19) of the Act, as applicable at the time in question, stated that the due “submission of goods for inspection with the custom authority” would be deemed to have taken place upon the notification of the customs authority, in the prescribed manner, that the goods in question had reached it. Under section 50 (1) of the Act, goods that had reached the customs authority at a border crossing were to be submitted for inspection to the customs authorities by the person that had brought the goods into the customs area or, if necessary, by the carrier in question.
17. Section 263 (1)(5) of the Act, as applicable at the relevant time, provided that a monetary fine of between EUR 5,000 and EUR 100,000 would be imposed on a legal person that failed to submit the goods for inspection to the customs authority (section 50 of the Act). Section 263 (3) provided that a monetary fine of between EUR 500 and EUR 15,000 should be imposed on an individual who had committed such a misdemeanour.
18. Section 267 (1) and (2) of the Act provided that goods that were subjects of misdemeanours defined in section 263 should be confiscated. Such goods should be confiscated even in the event that they were not owned by the offender if the owner knew (or, given the circumstances of the case ought to have known) that the goods were subjects of misdemeanours.
19. Section 269 (1) and (3) of the Act provided that the vehicle used for transportation of goods that were subjects of misdemeanours defined in section 263 of the Act should be confiscated if the value of the goods was higher than 20% of the value of the vehicle and the owner knew or ought to have known that the vehicle would be used for such transportation. Third parties were entitled to claim compensation from the offender.
B. Regulation on the Implementation of the Customs Act (Уредба за спроведување на царински закон, Official Gazette nos. 66/2005, 73/2006, 40/2007 and 62/2007)
20. Section 219 (1) of the Regulation defined the initial customs authority as the authority to which declarations in respect of the transit transportation of goods were to be submitted.
III. RELEVANT INTERNATIONAL LAW
The UN Convention on the Contract for the International Carriage of Goods by Road (CMR), adopted on 19 May 1956
21. The relevant provision of the Convention on the Contract for the International Carriage of Goods by Road, 399 UNTS 189 (“the CMR Convention”) reads as follows:
Chapter II – Persons for whom the Carrier is Responsible
Article 3
“For the purposes of this Convention the carrier shall be responsible for the acts of omissions of his agents and servants and of any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment, as if such acts or omissions were his own.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No.1 TO THE CONVENTION
22. The applicants complained that the confiscation of the lorry and goods had violated their property rights, as provided in Article 1 of Protocol No. 1 to the Convention, which 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.”
A. Admissibility
1. The applicants’ victim status regarding the confiscation of the goods
(a) The parties’ submissions
23. The Government submitted that the applicants had no victim status regarding the confiscation of the goods, since company B. had been the owner of the goods. Furthermore, no evidence had been submitted to show that the applicants’ legal interests had in any way been affected, since no compensation claims had been lodged against them and the statutory limitation period for lodging such claims had expired.
24. The applicants asserted that the decisions delivered during the domestic proceedings indicated that the goods had been confiscated from the first applicant and that they (the applicants) were liable to provide compensation to the owner of the goods (company B.).
(b) The Court’s assessment
25. According to the Court’s established case-law, the word “victim”, as used in Article 34 of the Convention, denotes the person directly affected by the act or omission in issue (see, among other authorities, Brumărescu v. Romania [GC], no. 28342/95, § 50, ECHR 1999‑VII; Amat-G Ltd and Mebaghishvili v. Georgia, no. 2507/03, § 32, ECHR 2005‑VIII; and J.M. v. the United Kingdom, no. 37060/06, § 27, 28 September 2010).
26. In the present case it is undisputed that the confiscated goods were the property of company B. Furthermore, as stated by the Government (and not convincingly contested by the applicants), the latter has not been and can no longer be sued for damages by company B. In such circumstances, and having regard to the fact that the applicants were not the owners of the confiscated goods, the Court considers that they cannot claim to be “victims”, within the meaning of Article 34 of the Convention, of the alleged violation in respect of the confiscation of the goods.
27. It follows that the complaint in this part is incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected, in accordance with Article 35 § 4 of the Convention.
2. The first applicant’s victim status regarding the confiscation of the lorry
(a) The parties’ submissions
28. The Government argued that the first applicant could not claim to be a victim in respect of the confiscation of the lorry because it had been owned by the second applicant, a limited liability company of which the first applicant was only one of the owners.
29. The first applicant reiterated that the decisions delivered during the domestic proceedings had indicated him as the only party to be sanctioned; accordingly, it had been, from him that the lorry and goods had been confiscated. The first applicant’s wife had been the second applicant’s co-owner, and the confiscation of the lorry had caused great financial difficulties for their family.
(b) The Court’s assessment
30. The Court reiterates that the relevant principles in this regard are set out in, for example, Centro Europa 7 S.r.l. and Di Stefano v. Italy ([GC], no. 38433/09, § 92, ECHR 2012).
31. Turning to the present case, notwithstanding the contradictory findings of the national authorities as to the ownership of the lorry (see paragraphs 12 and 14 above), it is common ground between the parties that the second applicant had title to the lorry. From the available material it can be seen that at the relevant time the second applicant was a limited liability company owned by a single person – namely the first applicant. The first applicant was the only party to the domestic proceedings, in which he maintained that he had taken out a bank loan in order to purchase the lorry so that he could carry on a business and support his family (see paragraphs 9 and 13 above). In such circumstances, it can be said that, according to the Court’s relevant case-law (see Ankarcrona v. Sweden (dec.), no. 35178/97, 27 June 2000), there was no risk of competing interests between the first applicant and any other party that could give rise to difficulties. Consequently, the Court considers that even though the official owner of the lorry was the second applicant, the applicants are so closely identified with each other that it would be artificial to distinguish between them in this context (see Eugenia Michaelidou Developments Ltd and Michael Tymvios v. Turkey, no. 16163/90, § 21, 31 July 2003; Kin-Stib and Majkić v. Serbia, no. 12312/05, § 74, 20 April 2010; and Vujović and Lipa D.O.O. v. Montenegro, no. 18912/15, §§ 29-30, 20 February 2018).
32. The second applicant was subsequently transformed into a limited liability company co-owned by the first applicant’s wife. This was not disputed by the Government, and neither did they argue that in the present case there existed competing interests between the first applicant on the one hand and any other person or entity on the other (contrast Veselá and Loyka v. Slovakia (dec.), no. 54811/00, 13 December 2005). Rather, the Court finds that the second applicant remained a vehicle for the family business and that there appear to be no competing interests which could give rise to difficulties (compare Khamidov v. Russia, no. 72118/01, § 125, 15 November 2007). The Court concludes that, given the specific circumstances of the present case, the first applicant’s complaints are compatible ratione personae with the provisions of Article 1 of Protocol No. 1 to the Convention. The Government’s objection in this regard must therefore be dismissed.
3. Non-exhaustion of domestic remedies by the second applicant
(a) The parties’ submissions
33. The Government stated that the second applicant had failed to exhaust domestic remedies, since it had not availed itself of the opportunity to challenge the confiscation of the lorry before the Administrative Court, even though it had been fully entitled to do so. Section 269 (1) of the Act had provided two cumulative conditions for the confiscation of the vehicle (see paragraph 19 above): a value criterion and a subjective condition relating specifically to the owner of the transport vehicle. The latter criterion had never been challenged before the domestic authorities, given that the first applicant’s complaints had concerned the elements of the misdemeanour and not the subjective condition in respect of the confiscation.
34. The applicants made no substantive comments in this respect.
(b) The Court’s assessment
35. The relevant Convention principles have been summarised in the case of Vučković and Others v. Serbia ((preliminary objection) [GC], nos. 17153/11 and 29 others, §§ 69-77, 25 March 2014).
36. In the present case the Court notes that the gist of the applicants’ grievances concerns the confiscation of the lorry by the customs authorities. In this respect, it is common ground that the first applicant properly used all available domestic remedies by challenging the confiscation order before the domestic courts. In his submissions, the first applicant raised in substance the complaints which he subsequently submitted before the Court (see paragraphs 9 and 13 above). The second applicant, as the formal owner of the lorry, was not a party to the domestic proceedings. Nevertheless, the Administrative Court examined whether the subjective condition stipulated under section 269 (1) of the Act had been met and held that the second applicant, as the carrier, had been liable for the acts or omissions of its agents (specifically, the first applicant), as provided by the relevant provisions of the CMR Convention. These findings were upheld by the Supreme Court (see paragraphs 14 and 15 above).
37. Having regard to its earlier findings regarding the existence of a close and personal link between the applicants (see paragraphs 31 and 32 above) and the domestic courts’ findings regarding the liability of the second applicant for the actions of the first applicant, the Court finds that the first applicant made the domestic authorities sufficiently aware of the situation and gave them an adequate opportunity to remedy the violation also alleged in respect of the second applicant. The domestic authorities examined the substance of the applicants’ complaint; accordingly, the fact that the second applicant did not participate in the impugned proceedings cannot be held against it (compare Gäfgen v. Germany [GC], no. 22978/05, § 143, ECHR 2010; see also Skałka v. Poland (dec.), no. 43425/98, 3 October 2002). The Court furthermore considers that there is no reason to believe that the domestic proceedings would have taken any different course had the second applicant formally joined them itself (see M.S. v. Croatia, no. 36337/10, §§ 68-69, 25 April 2013).
38. Given the circumstances, Court rejects the Government’s objection as to the non-exhaustion of domestic remedies by the second applicant.
4. Conclusion
39. The Court considers that the complaint concerning the confiscation of the lorry in the course of the misdemeanour proceedings is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.
B. Merits
1. The parties’ submissions
(a) The applicants
40. The applicants argued that the confiscation measures had not been in accordance with the domestic law. They maintained that the first applicant had not committed a misdemeanour since the goods had been submitted for inspection at the Novo Selo customs office. He had not been required to have the declaration registered with the customs authorities and the applicants should not be liable for omissions on the part of the customs authorities in Novo Selo. They maintained that the interference with their possession had not been in the public interest – there had been no damage caused, as the goods had been submitted for inspection in the Bitola customs office with the seals of the Bulgarian authorities unbroken. Lastly, the applicants argued that the confiscation measures had placed a disproportionate burden on them.
(b) The Government
41. The Government affirmed that the confiscation measure had been lawful and in the public interest, as its aim had been to suppress the smuggling of goods, to protect the market from unfair competition and to protect human health. Furthermore, section 269 (1) of the Act, as worded at the relevant time, had not stipulated automatic confiscation – whether or not it was to be applied had depended on the value criterion (see paragraph 19 above). The measure had been intended to discourage the illegal import of goods by deterring both individuals engaging in smuggling themselves and owners of transport vehicles who had made their vehicles available for such a practice. In the present case, the domestic courts had found that the statutory conditions had been met, and they had provided relevant and sufficient reasoning in support of their decision.
2. The Court’s assessment
(a) General principles
42. The general principles for the Court’s assessment are set out in the case of Vasilevski v. the former Yugoslav Republic of Macedonia (no. 22653/08, §§ 47-49, 28 April 2016).
(b) Application of these principles to the present case
43. The “possession” in the present case was the lorry, which was confiscated by a decision delivered by the administrative authorities in the course of customs-related misdemeanour proceedings. That decision was subsequently upheld by the judicial authorities. It is not disputed between the parties that the confiscation constituted interference with the applicants’ right of property and that Article 1 of Protocol No.1 is therefore applicable.
44. The Court’s consistent approach is that a confiscation measure, even though it does involve the deprivation of possessions, nevertheless constitutes control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1 (see Gabrić v. Croatia, no. 9702/04, § 33, 5 February 2009, with further references). It finds no grounds to depart from that approach in the present case (see Vasilevski, cited above, § 52).
45. Turning to the lawfulness of the measure, the Court notes that the confiscation of the lorry was imposed as a protective measure, on the basis of section 269 (1) of the Act, after it had been established that the first applicant had committed a misdemeanour under section 263 (1)(5) of the Act by failing to register the customs declaration at the point of its entry into the country. As a result, a fine of EUR 1,500 was imposed on the first applicant and the goods and the lorry were confiscated. In so far as the applicants argued that the confiscation had not been lawful because the first applicant’s actions had not constituted a misdemeanour, the Court observes that the Commission’s findings were reviewed and upheld by the domestic courts. The latter affirmed that the failure to register the customs declaration with the customs office at the point of entry was to be considered as constituting a failure to submit the goods for inspection in accordance with the relevant provisions of the Customs Act and the Regulation (both of which had been published in the Official Gazette) (see paragraph 14 above). The Court does not find that this interpretation on the part of the domestic courts was tainted by arbitrariness. Accordingly, and bearing in mind its limited power to review compliance with domestic law (see Beyeler v. Italy [GC], no. 33202/96, § 108, ECHR 2000-I, and S.C. Service Benz Com S.R.L. v. Romania, no. 58045/11, § 31, 4 July 2017), the Court concludes that the interference was prescribed by law within the meaning of its case-law.
46. The Court furthermore accepts that the confiscation measure pursued the legitimate aim of preventing the smuggling of goods and the abuse of the customs system, which undoubtedly falls within the general interest, as provided by Article 1 of Protocol No.1 (see, mutatis mutandis, Vasilevski, cited above, § 54).
47. The Court will therefore turn to the question of the balance struck between that aim and the applicants’ rights under this head.
48. Section 269 (1) of the Act, on which the confiscation order was based, allows for the confiscation of a transportation vehicle as a protective measure when two cumulative conditions have been met: (i) a value criterion and (ii) a subjective condition (see paragraph 19 above). Accordingly, the confiscation was not mandatory and the domestic authorities were required to assess the diligence and the behaviour of the owner of the vehicle. The Administrative Court held that the subjective condition had been met, finding that the second applicant, as the carrier of the goods, had been liable for the acts and omissions of the first applicant, who had been acting as its agent (see paragraph 14 above). However, the domestic courts did not consider the relationship between the applicants’ conduct and the offence. The fact that the lorry had entered the country at an official border crossing point (where it had been weighed) and had subsequently been submitted for inspection to the custom authorities in Bitola with the Bulgarian authorities’ seals unbroken were not taken into account in reaching the decision to confiscate the lorry, even though they were taken into account as a mitigating circumstance with respect to the determination of the fine (see paragraph 12 above). Similarly, the domestic authorities did not give any weight to the first applicant’s arguments that the confiscated lorry had been his family’s only source of income and that the impugned measure had imposed a disproportionate burden on him, given the circumstances.
49. Moreover, the goods were not illegal in any way, and nor was it established that the lorry had been adapted for the purposes of smuggling or that there was a record of previous similar incidents caused by a failure on the part of the applicants to prevent the use of their vehicle for the purposes of committing similar offences (see Andonoski v. the former Yugoslav Republic of Macedonia, no. 16225/08, § 36, 17 September 2015; and B.K.M. Lojistik Tasimacilik Ticaret Limited Sirketi v. Slovenia, no. 42079/12, § 48, 17 January 2017). In fact, the first applicant had consistently argued before the domestic authorities that he had no experience in the transport business and that the lorry had been purchased only a short time before. The Court also notes that there was no evidence that the applicants or company B. had been criminally prosecuted in relation to any related offences (see Ismayilov v. Russia, no. 30352/03, § 37, 6 November 2008; Gabrić, cited above, § 38; and Boljević v. Croatia, no. 43492/11, § 43, 31 January 2017).
50. The Court considers that, in order for a measure to be proportionate, the interference should correspond to the severity of the infringement (in the instant case, failure to comply with the requirement to submit goods to the customs authority for inspection at the first point of entry into the country) rather than to the gravity of any presumed infringement (such as the smuggling of goods), which has not, however, actually been established (see Gabrić, cited above, § 39, and Boljević, cited above, § 44). In this connection, it is important to note that the present case differs from cases in which the confiscation measure applied either to goods whose importation was prohibited or to vehicles used for transporting prohibited substances or for trafficking in human beings (see the cases referred to in Ismayilov, cited above, § 35). The confiscation of the lorry in the present case was not undertaken for the purpose of obtaining pecuniary compensation for damage, but was rather intended as a deterrent, as stated by the Government. The Court reiterates that the first applicant was fined for the misdemeanour and the goods were confiscated. It has not been convincingly shown that in the circumstances of the case those sanctions would not have been sufficient to achieve the desired deterrent effect and prevent future breaches of the relevant domestic legislation. The confiscation of the lorry, as an additional sanction, was, in the Court’s view, disproportionate in that it imposed an excessive burden on the applicants (see, mutatis mutandis, Grifhorst v. France, no. 28336/02, § 105, 26 February 2009; Gabrić, cited above § 39; and Boljević, cited above, § 45; see also Milosavljev v. Serbia, no. 15112/07, §§ 61-62, 12 June 2012).
51. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
52. 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.”
A. Damage
53. The applicants claimed 65,770 euros (EUR) in respect of pecuniary damage vis-à-vis the confiscated goods. They also claimed 805,000 denars (MKD) (the value of the lorry) and a further MKD 889,249, corresponding to the amount of accrued interest (calculated on the basis of the statutory default interest rate) running from the date of the confiscation of the lorry until the day of the submission of the claim to the Court. In support of their claim for statutory interest they submitted a calculation from a bank. They furthermore claimed EUR 49,140 for loss of earnings, in respect of which they submitted an expert report; EUR 2,615 for the amount of the fine, including accrued interest; and EUR 6,048, corresponding to the sum in respect of which the second applicant’s bank account had been blocked. The applicants also claimed EUR 10,000 in respect of non-pecuniary damage.
54. The Government contested these claims on various grounds, submitting that they were unjustified. They also rejected the applicants’ claims regarding the accrued interest, arguing that interest may be awarded only on monetary claims and not in respect of alleged pecuniary damage.
55. The Court notes that the relevant principles with regard to pecuniary damages have been summarised in the Vasilevski case (cited above, § 66). It accepts the applicants’ claim in respect of pecuniary damage regarding the confiscation of the lorry and considers that return of the lorry, in the state that it was in at the time of its confiscation, would place the applicants in the position in which they would have found themselves had the violation not occurred (ibid., § 67). Alternatively, if such a return is impossible, the Court awards the applicants jointly EUR 13,000 in respect of pecuniary damage, plus any tax that may be chargeable, which is the figure corresponding to the estimated value of the lorry, as established in the domestic proceedings (see paragraph 8 above).
56. As regards the claim representing accrued statutory interest in respect of the value of the lorry, the Court, having regard to the circumstances of the instant case and the documents in its possession, awards the applicants jointly EUR 14,500, plus any tax that may be chargeable. The Court considers that this amount represents adequate compensation for the pecuniary damage that the applicants sustained since the authorities took possession of the lorry.
57. The applicants also claimed an additional amount in respect of loss of profit, in respect of which they submitted an expert report that stated that the second applicant had started to operate in 2008 and that it had failed to submit any pending contracts with clients. The Court finds that, given that the lorry had been used for the purposes of the economic activity of the applicants, which is by its very nature subject to uncertainty and risk, the assessment of any gains that the applicants might have realised, or losses they could have sustained is necessarily speculative. In such circumstances, the Court rejects the applicants’ claims in this part.
58. The Court does not discern a sufficient causal link between the violation found and the remaining claims for pecuniary damage alleged. It therefore rejects them.
59. On the other hand, the Court considers that the applicants must have sustained non-pecuniary damage that cannot be compensated for solely by the finding of a violation of the Convention. Making its assessment on an equitable basis, the Court awards the applicants jointly EUR 3,000 under this head, plus any tax that may be chargeable.
B. Costs and expenses
60. The applicants also claimed EUR 1,508 for the costs and expenses incurred before the domestic courts and EUR 1,010 for those incurred before the Court.
61. The Government contested these claims as unsubstantiated, excessive and unnecessary.
62. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum (see Andonoski, cited above, § 51). In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award jointly the sum of EUR 385 covering costs and expenses in the domestic proceedings and EUR 540 for the proceedings before the Court, plus any tax that may be chargeable.
C. Default interest
63. The Court considers it appropriate that the default interest rate 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, UNANIMOUSLY,
1. Declares the applicants’ complaint concerning the confiscation of the lorry admissible and the remainder of the application inadmissible;
2. Holds that there has been a violation of Article 1 of Protocol No.1 to the Convention on account of the confiscation of the lorry;
3. Holds
(a) that the respondent State is to return to the applicants, within three months, in accordance with Article 44 § 2 of the Convention, the confiscated lorry in the state that it was in at the time of its confiscation;
(b) that, failing such restitution, the respondent State is to pay the applicants, jointly, within the same three-month period, EUR 13,000 (thirteen thousand euros), plus any tax that may be chargeable, in respect of pecuniary damage:
(c) that in any event, the respondent State is to pay jointly to the applicants, within the same three-month period, the following amounts:
(i) EUR 14,500 (fourteen thousand five hundred euros), plus any tax that may be chargeable, in respect of pecuniary damage;
(ii) EUR 3,000 (three thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;
(iii) EUR 925 (nine hundred twenty-five euros), plus any tax that may be chargeable to the applicants, in respect of costs and expenses;
(d) that the amounts in question are to be converted into the currency of the respondent State at the rate applicable at the date of settlement;
(e) 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 the remainder of the applicants’ claim for just satisfaction.
Done in English, and notified in writing on 14 November 2019, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Renata DegenerAleš Pejchal
Deputy RegistrarPresident
Full & Egal Universal Law Academy