CASE OF LAAKSONEN v. FINLAND

FOURTH SECTION

CASE OF LAAKSONEN v. FINLAND

(Application no. 70216/01)

JUDGMENT

STRASBOURG 

12 April 2007

FINAL

12/07/2007

This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Laaksonen v. Finland,

The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:

SirNicolas Bratza, President,
MrJ. Casadevall,
MrS. Pavlovschi,
MrL. Garlicki,
MsL. Mijović,
MrJ. Šikuta,
MrsP. Hirvelä, judges,
and Mr T.L. Early, Section Registrar,

Having deliberated in private on 20 March 2007,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 70216/01) against the Republic of Finland lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Finnish national, Mr Pekka Laaksonen (“the applicant”), on 28 May 2001.

2. The applicant was represented by Mr T. Salminen, a lawyer practising in Helsinki. The Finnish Government (“the Government”) were represented by their Agent, Mr A. Kosonen of the Ministry for Foreign Affairs.

3. The applicant alleged a breach of Article 6 §§ 1 and 3(a) and (b) of the Convention.

4. On 13 October 2005 the Court decided to give notice of the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the application at the same time as its admissibility.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicant was born in 1949 and lives in Riihimäki.

6. The applicant was the Administrative Director and a deputy board member in a company initially called ICC, later Cedro Oy (henceforward ICC/Cedro Oy). It bought, sold and rented out computers. It was declared bankrupt on 30 December 1992.

A. The Espoo District Court

7. In the District Court, the public prosecutor charged the applicant with inter alia debtor dishonesty on the grounds that he allegedly had participated, while the company was already in serious financial difficulty, in arranging for the company to be bought essentially with its own money by another company. It was alleged that the applicant put together this plan with two other persons, R. and K., one of whom owned the purchasing company, and that the purpose of the purchase, which made no commercial sense, was to divert money away from the debtors of ICC/Cedro Oy. The indictment concerning count 9 read:

“On 24 July 1992 Cedro Oy's bank account contained 815,000 Finnish marks [FIM]. Before, the balance was FIM 135,655. For the return sale and the onward sale of the information technology equipment and the leases mentioned in count five, CPT IS Oy credited Cedro Oy's account with FIM 650,000.

According to a mutual agreement between [R., the applicant and K.], [K.], on behalf of Sipoon Finanssi Oy, immediately after CPT IS Oy had sold the worthless Cedro Oy shares for FIM 580,000 to Sipoon Finanssi Oy, owned by [K.], withdrew money from Cedro Oy's bank account leaving FIM 655.

The sale by CPT IS Oy of the Cedro Oy shares to Sipoon Finanssi Oy was actually financed by funds belonging to Cedro Oy itself. [K.], on behalf of Cedro Oy, lent FIM 580,000 to the insolvent Sipoon Finanssi Oy ... . Those moneys were used in order to pay for the Cedro Oy shares.

The transfer in the bookkeeping accounts of the information technology equipment ... from Cedro Oy back to CPT IS Oy was a condition for the purchase of the Cedro Oy shares. Accordingly, on 24 July 1992, by the joint measures of [R., the applicant and K.], FIM 815,000 was withdrawn to the detriment of Cedro Oy's debtors leaving a balance in the account of FIM 655. Of that amount, FIM 580,000 was withdrawn to the benefit of CPT IS Oy and the remaining over FIM 230,000 to the benefit of [K.]. This took place in accordance with an agreement made by him, [R.] and [the applicant.] There were no acceptable reasons for the withdrawals.

The mutual understanding between [the three men] had risen before and in connection with the purchase.”

8. On 27 March 1997, while convicting the applicant of two counts of an accounting offence and sentencing him to a suspended term of four months' imprisonment, the District Court rejected the charge of debtor dishonesty on count 9, on the grounds that it had not been shown that there had existed an agreed plan or that the applicant had been aware of the origin of the money used for the purchase. K., who in the pre-trial investigation had testified that there had been such a plan, had retracted his statement in the District Court.

B. The Helsinki Court of Appeal

9. The prosecutor appealed, charging the applicant again with debtor dishonesty. There was an oral hearing, in which however count no. 9 was not addressed.

10. On 22 June 1999, the Court of Appeal of its own motion convicted the applicant of aiding and abetting debtor dishonesty and imposed on him a suspended term of a total of ten months' imprisonment.

11. It found that it was undisputed that R. had been the chairman of ICC/Cedro Oy's board of directors and the applicant a deputy board member, authorised to act on behalf of the company and the administrative director until 24 July 1992, when K. had become a board member. R. who on behalf of CPT IS Oy signed the documents relating to the sale of the ICC/Cedro Oy shares was a board member in the first-mentioned company, of which the applicant was also a board member. It was further undisputed that K. stated in the pre-trial investigation that during the negotiations with the applicant it had become apparent to him that it would be his job to close down the companies in question. On 24 July 1992 CPT IS Oy bought back the information technology equipment (which it had sold earlier). As a result, ICC/Cedro Oy's bank account contained a balance of FIM 815,000 on that day. Following this, K. withdrew the said FIM 815,000 from the account. Of that amount, Sipoon Finanssi Oy borrowed FIM 580,000 without surety. It never repaid the loan (the Court of Appeal's judgment pages 22-23).

12. Contrary to the District Court, the Court of Appeal held that it had been clearly shown that the applicant, given his position in the company at the time of the offence under count 9, his training and experience, and the fact that he had taken an active part in the transactions, had known about the financial difficulties in spring 1992 at the latest (page 12). Further, it had been clearly shown, having regard to the pre-trial statements of R., K. and the applicant and other evidence, that the three of them had planned the transaction together. However, the applicant did not, in the Court of Appeal's view, hold a significant enough position of power in ICC/Cedro Oy to be convicted as a principal offender. As he had furthered the act of R. and K., he was guilty of having aided and abetted that act.

C. The Supreme Court

13. On 31 January 2001, the Supreme Court refused the applicant leave to appeal. On 28 September 2001 it rejected his extraordinary appeal.

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. Aiding and abetting

14. Chapter 5, Article 3(1), of the Penal Code, in force at the relevant time, provided that a person who, during or before the commission of an offence by someone else, intentionally furthers the act through advice, action or exhortation, shall be convicted of aiding and abetting the principal offence. The sentence imposed on the person who aids and abets shall be reduced to three quarters of the maximum penalty prescribed for the principal offence.

B. Procedure

15. The present case was commenced and therefore also concluded under the then provisions on criminal procedure in the Code of Judicial Procedure (oikeudenkäymiskaari, rättegångsbalken). The rule according to which an accused might not be convicted of an offence other than the one with which he or she had been charged was not included in the legislation until the coming into force on 1 October 1997 of the Criminal Procedure Act (laki oikeudenkäynnistä rikosasioissa, lagen om rättegång i brottmål; Act no. 689/1997). The rule was however established through case-law and it was codified upon the enactment of the new Act.

16. Chapter 11, section 3, of the Criminal Procedure Act provides that the court may only pass a sentence for an act for which a punishment has been requested. The court is not bound by the heading or the reference to the applicable provision in the indictment. The court is however bound by the conduct described in the indictment. The prosecutor is under an obligation to define the alleged offence and the accused must be provided with an opportunity to defend himself or herself within the limits of the indictment.

17. Chapter 26, Article 7, of the Code of Judicial Procedure in force at the relevant time (Act no. 661/1978) required the Court of Appeal to hold an oral hearing when it was needed. An oral hearing could be limited to only a part of the appeal. Article 8 provided that the Court of Appeal could not, on the basis of a reassessment of evidence, change the District Court's judgment in respect of a charge without holding an oral hearing unless the sentence was only a fine or the oral hearing was, particularly in view of the legal protection of the defendant, manifestly unnecessary.

According to a Supreme Court's precedent (Year Book 1980 II 80) on the application of Chapter 26, Article 8, the Court of Appeal should not have altered the District Court's acquittal following a reassessment of the evidence without holding an oral hearing, as a hearing was not to be considered clearly unnecessary, having regard in particular to the fact that the defendant had contested the charge. The Court of Appeal had imposed a term of imprisonment on the accused.

18. According to the terms of the reservation made by Finland in accordance with Article 64 of the Convention, as in force at the relevant time, Finland could not guarantee a right to an oral hearing insofar as Finnish laws at the time of the events in issue did not provide such a right. This applied, inter alia, to proceedings which were held before the Court of Appeal.

C. Leave to appeal to the Supreme Court

Chapter 30, section 3 (Act no. 104/1979), of the Code of Judicial Procedure reads in relevant part:

“Leave to appeal may be granted only if it is important to bring the case before the Supreme Court for a decision with regard to the application of the law in other, similar cases or because of the uniformity of legal practice; if there is a special reason for this because of a procedural or other error that has been made in the case on the basis of which the judgment is to be reversed or annulled; or if there is another important reason for granting leave to appeal.”

THE LAW

I. ALLEGED VIOLATIONS OF ARTICLE 6 OF THE CONVENTION

19. The applicant complained under Articles 6 § 1 and 6 §§ 3 (a) and (b) of the Convention that he was convicted by the Court of Appeal of aiding and abetting debtor dishonesty after having been acquitted of debtor dishonesty in the District Court, and without an oral hearing being conducted on that particular count. He also complained that the conviction had been erroneous on the ground that the prosecution had been barred under the statute of limitations.

Article 6 of the Convention, which reads in relevant part:

“1. In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ...

...

3. Everyone charged with a criminal offence has the following minimum rights:

(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;

(b) to have adequate time and facilities for the preparation of his defence;

...”

A. Admissibility

1. Alleged time-barred prosecution

20. As to the complaint that the nature of the prosecution was time-barred, the Court reiterates that, in accordance with Article 19 of the Convention, its only task is to ensure the observance of the obligations undertaken by the Parties in the Convention. In particular, it is not competent to deal with an application alleging that errors of law or fact have been committed by domestic courts, except where it considers that such errors might have involved a possible violation of any of the rights and freedoms set out in the Convention (see Schenk v. Switzerland, judgment of 12 July 1988, Series A no. 140, p. 25, § 45). In the present case, the examination of the application does not disclose any indication of a violation.

21. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

2. Lack of an oral hearing in the Court of Appeal

22. The Government relied on the reservation made by Finland as regards the right to an oral hearing in the Court of Appeal. The applicant argued that since the right to an oral hearing before the Court of Appeal had been provided for by the Code of Judicial Procedure and an oral hearing had indeed been held by that court, although it, for reasons that had not been explained, had not concerned count 9 the reservation was inapplicable.

23. The Court recalls that when the Convention refers back to domestic law, compliance with such law is an integral part of the obligations of the Contracting States and the Court is accordingly competent to satisfy itself of such compliance where relevant. The scope of its task in this connection, however, is subject to limits inherent in the logic of the European system of protection, since it is in the first place for the national authorities, notably the courts, to interpret and apply domestic law (see Lukanov v. Bulgaria, judgment of 20 March 1997, Reports of Judgments and Decisions 1997-II, p. 543, § 41). Similar considerations apply mutatis mutandis to the interpretation of the Finnish reservation, the scope of which is defined in part by a reference to domestic law.

24. In the present case the Court of Appeal did not hold an oral hearing on count 9. This must be taken to mean that, in the Court of Appeal's opinion, the Code of Judicial Procedure did not guarantee a general right to an oral hearing in the circumstances of the applicant's case. Having regard to the terms of Chapter 26, Articles 7 and 8, of the Code of Judicial Procedure, the Court cannot find that this interpretation of domestic law was arbitrary as such. The Court therefore accepts that the decision of the Court of Appeal not to hold a hearing on count 9 was in conformity with domestic law. In view of the above and having regard to the terms of Finland's reservation, Finland was under no Convention obligation to ensure in respect of the Court of Appeal that an oral hearing was held on count 9. While it is true that the effect of the reservation was to deny the applicant a right to an oral hearing as to the charge in dispute before the Court of Appeal, this result must be considered compatible with the Convention as a consequence of the operation of a valid reservation (see Helle v. Finland, judgment of 19 December 1996, Reports 1997-VIII, pp. 2925-2926, §§ 44 and 47).

25. It follows that insofar as the applicant has complained that he had a general right to an oral hearing in the Court of Appeal, this aspect of the application is incompatible ratione materiae with the provisions of the Convention, within the meaning of Article 35 § 3 of the Convention, and must be rejected pursuant to Article 35 § 4. It remains for the Court to consider the question whether the Court of Appeal proceedings as qualified by Finland's reservation were, given their outcome, fair within the meaning of Article 6 of the Convention. The Court will examine that question below (see paragraphs 28-33).

3. Other alleged unfairness of the Court of Appeal proceedings

26. The applicant complained that he was convicted by the Court of Appeal of aiding and abetting debtor dishonesty after having been charged with and acquitted of the principal offence in the District Court. At no time had the public prosecutor presented an alternative indictment of aiding and abetting. The applicant had not been aware of the fact that he could be convicted of aiding and abetting and he had not therefore been able to defend himself properly. The re-characterisation of the offence had come as a surprise to him when the Court of Appeal had given judgment. It was not simply a question of degree of participation, since aiding and abetting was an independent offence albeit related to the principal offence. Had the applicant been accused of aiding and abetting, his defence would have been different. It would not even have been possible to charge the applicant with aiding and abetting in the Court of Appeal, because he had not been present at the hearing.

27. The Government emphasised that in the indictment the applicant's position in the management of the company had been explicitly expressed. It was undisputed that the applicant had been authorised to act for the company and that he had been the administrative director until 24 July 1992. Thus, his position in the company was a fact known to him and mentioned in the indictment such that it could be taken into account by him when submitting his written reply to the prosecutor's appeal (see, mutatis mutandis, De Salvador Torres v. Spain, judgment of 24 October 1996, Reports 1996‑V, p. 1587, § 33).

28. As to the question whether the Court of Appeal proceedings were fair, the Court considers, in the light of the parties' submissions, that this aspect of the application raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this part of the application is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible.

B. Merits

29. The Court reiterates that when determining whether Article 6 of the Convention has been complied with, it must take into account the proceedings as a whole. Furthermore, the guarantees in Article 6 § 3 are specific aspects of the right to a fair trial set forth in general in Article 6 § 1 (see, inter alia, Foucher v. France, judgment of 18 March 1997, Reports 1997‑II, p. 464, § 30). The Court finds that the applicant's complaints are best examined under Article 6 § 1 of the Convention.

30. In the present case, the applicant was charged with the principal offence. The District Court acquitted him. The Court of Appeal, having reviewed the applicant's case, found that there had been a conspiracy as mentioned in the indictment, that the applicant had known about the financial difficulties of the company and that he was criminally liable. It found, however, that his position in the company had not been such as to have made it possible for him to commit the offence as a principal offender and it convicted him of aiding and abetting that offence. It is not the Court's task to give a ruling as to whether Finnish law, at the time of the proceedings, allowed the Court of Appeal to convict a defendant of aiding and abetting although he had been charged as the principal offender without drawing his attention to this possibility. Given the practice at the relevant time, it is obvious that the impugned interpretation and procedure applied were possible. It could thus be regarded that, at the material time, it was for a defendant in general to take into account the possibility that the court could return a verdict of aiding and abetting.

31. The Court reiterates that the right to be informed of the nature and the cause of the accusation must be considered in the light of the accused's right to prepare his defence (see Pélissier and Sassi v. France [GC], no. 25444/94, §§ 51-52 and 54, ECHR 1999‑II). Regarding this question in the present case, the Court finds that the description of the factual situation described in the indictment did not change during the proceedings. Neither was there any modification of the timing of the commission of the offence. When the Court of Appeal found that the elements of aiding and abetting were established instead of those concerning the principal offence, it did not find the applicant guilty of any act which had not been described in the indictment characterising him as a principal offender. It only assessed the applicant's role, the elements of which had been contained in the indictment, in a manner different from the prosecutor. As noted in the previous paragraph, this was possible at the material time.

32. Further, it is true that, as a consequence of the Finnish reservation, the applicant could not derive from the Convention any general right to an oral hearing before the Court of Appeal. However, it is equally true that the reservation did not exempt the courts from ensuring the fairness of the proceedings. The Court observes that the Court of Appeal's judgment was based on an overall reassessment of the evidence. In the light of the Supreme Court's precedent on the application of Chapter 26, Article 8, of the Code of Judicial Procedure (see paragraph 17 above) it is obvious that the outcome of the Court of Appeal proceedings came as a surprise to the parties. Although the appellate court had not held an oral hearing regarding count 9 it nevertheless, following a reassessment of the evidence, altered the District Court's acquittal (which had taken place after a full hearing and receipt of evidence in that court). The Court of Appeal found him guilty and increased his suspended term of imprisonment. In those circumstances, given the outcome, fairness required that the applicant should have been given an opportunity to contest the charge, a possibility regarding which he must be considered to have had a strong expectation in the light of the domestic law as interpreted by the Supreme Court.

For this reason, the Court considers, in the circumstances of this case, that the proceedings in the Court of Appeal were unfair.

33. Accordingly, there has been a violation of the right to a fair trial under Article 6 § 1 of the Convention.

II. APPLICATION OF ARTICLE 41 OF THE CONVENTION

34. 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

35. Under the head of pecuniary damage the applicant claimed reimbursement of the compensation he was ordered to pay on count no. 9 in the amount of 97,549 euros (EUR). Under the head of non-pecuniary damage he claimed EUR 7,000 for suffering and distress.

36. The Government submitted that there was no causal link between the pecuniary damage and the alleged violation. They considered that the claim for non-pecuniary damage was excessive and that any award should not exceed EUR 2,000.

37. The Court cannot speculate about the outcome of the proceedings had they been in conformity with Article 6. The Court has found a violation of the applicant's right to a fair trial but finds no sufficient causal link between that violation and the pecuniary damage allegedly suffered. These claims must therefore be rejected.

The Court accepts that the unfairness of the proceedings on appeal caused the applicant non-pecuniary damage, which cannot be made good by the mere finding of a violation. The Court, making its assessment on an equitable basis, awards the applicant EUR 3,000 in respect of non-pecuniary damage.

B. Costs and expenses

38. The applicant claimed reimbursement of his costs at Strasbourg in the amount of EUR 4,951.37 (including value-added tax).

39. The Government considered the claim, in particular the hourly rate, excessive. Any award should not exceed EUR 2,500 (net of value-added tax).

40. The Court reiterates that an award under this head may be made only in so far as the costs and expenses were actually and necessarily incurred in order to avoid, or obtain redress for, the violation found (see, among other authorities, Hertel v. Switzerland, judgment of 25 August 1998, Reports 1998-VI, p. 2334, § 63).

The Court agrees with the Government that the hourly rate for which the applicant claims reimbursement is excessive. It also notes that the application was examined under the joint procedure provided for under Article 29 § 3 of the Convention, that the applicant was not represented at the time of lodging his application and that counsel produced one written submission to the Court. Taking into account all the circumstances, the Court awards EUR 3,000 (inclusive of value-added tax).

C. Default interest

41. 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 UNANIMOUSLY

1. Declares the complaint concerning the fairness of the proceedings admissible and the remainder of the application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention;

3. Holds

(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final according to Article 44 § 2 of the Convention, the following amounts:

(i) EUR 3,000 (three thousand euros) in respect of non-pecuniary damage;

(ii) EUR 3,000 (three thousand euros) in respect of costs and expenses and

(iii) any tax that may be chargeable on the above amounts;

(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 the remainder of the applicant's claims for just satisfaction.

Done in English, and notified in writing on 12 April 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

T.L. EarlyNicolas Bratza
RegistrarPresident

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