THIRD SECTION
DECISION
Application no. 40174/08
Vincent CECCHETTI
against San Marino
The European Court of Human Rights (Third Section), sitting on 9 April 2013 as a Chamber composed of:
Josep Casadevall, President,
Alvina Gyulumyan,
Corneliu Bîrsan,
Luis López Guerra,
Nona Tsotsoria,
Kristina Pardalos,
Johannes Silvis, judges,
and Santiago Quesada, Section Registrar,
Having regard to the above application lodged on 13 August 2008,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr Vincent Cecchetti, is a San Marinese national, who was born in 1956 and lives in Dogana. He was represented before the Court by Mr P. Reffi, a lawyer practising in San Marino.
2. The San Marinese Government (“the Government”) were represented by their Co-Agent, Mr G. Bellatti Ceccoli.
A. The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows.
1. Administrative proceedings
4. In 1994 the Personal Income Assessment Committee (Commissione degli Accertamenti – “the CA”), an administrative authority responsible for auditing tax declarations, sought to ascertain the correctness of the income declared by the applicant for the year 1991. By an assessment dated 22 September 1994 it found that the applicant had failed to declare an additional sum of 417,817 liras (approximately 215 euros (EUR)). It therefore ordered the applicant to pay tax on the aforementioned amount plus interest, and the sanction established by section 63 of Law no. 91/1984 equal to the amount of tax payable on the additional amount of undeclared income.
5. The applicant appealed against the decision before the Board of Estimate (Giunta di Stima – “the GS”), an administrative body of contentious jurisdiction in fiscal matters, on the basis that he had been unable to make submissions to the CA, notwithstanding a request to that effect. On 28 January 1998 the GS upheld the applicant’s appeal, declared the CA’s findings inadequate and proceeded with a new tax assessment. It concluded that the applicant had to pay income tax on the higher (unspecified) amount, together with interest on that amount and the sanction established by section 63 of Law no. 91/1984 in an amount equal to a quarter of the amount of tax payable on the additional income. This amounted to EUR 13.91 in tax on the higher amount of income and a sanction amounting to EUR 3.48.
2. Ordinary court proceedings
6. On 23 April 1998 the applicant instituted proceedings before the ordinary courts, asking the judge (Commissario della legge) to declare the GS’s findings null and void on the basis, inter alia, that the decision had been ultra vires, as the GS did not have the competence to proceed with the new tax assessment.
7. By a judgment of 11 April 2002 the applicant’s appeal was dismissed. However, having authority to look at all the reasons which could make a decision illegitimate, namely jurisdictional competence, an incorrect application of the law and acting ultra vires, the Commissario della legge declared the GS’s decision null and void on the grounds that the latter had wrongly upheld the argument that the applicant’s submissions should have been heard. The case was remitted to the GS for fresh consideration.
8. The applicant lodged an administrative appeal on 26 February 2003 and by a decision of 17 February 2008, published on 6 March 2008, the administrative appeal judge quashed the first-instance court’s decision and upheld the appeal. It considered that the GS’s decision had been null and void on grounds of non ultra petita, the latter not having had the competence to assess the matter but rather having been under the obligation to send it back to the CA. The administrative appeal judge remitted the case to the CA.
9. None of the parties having appealed against the judgment, it became final.
3. Subsequent proceedings
10. The remittal of the case required proceedings to be restarted before the CA. Despite a question to that effect, neither the applicant nor the Government have informed the Court of the progress of those proceedings following the lodging of the application in 2008.
B. Relevant domestic law
11. Section 40 of Law no. 91/1984 (“the Law”), in so far as relevant, reads as follows:
“The Personal Income Assessment Committee is the competent authority for the auditing of income received by physical persons and the imposition of any eventual administrative sanctions.”
12. Section 48(4) of the Law provides that the Board of Estimate is competent to rectify errors committed by the Personal Income Assessment Committee. Section 48(5) of the Law provides that a decision of the Board of Estimate can be challenged before the ordinary courts on the basis of a violation or incorrect application of the law, lack of competence or abuse of power.
13. Section 63 of the Law, regarding omission, incompleteness and false declarations, in so far as relevant, reads as follows:
“If the declaration does not contain one or more assets from which income is derived, the monetary penalty may vary between a quarter and twice the amount of the tax due and the tax owed in respect of the income received from the undeclared assets.
... [I]f, save for the above-mentioned provisions, an individual has declared a net income below that assessed, the penalty applicable may vary between a quarter and twice the amount of the tax due in respect of the undeclared amount. The sanction is increased by a quarter if the difference between the assessed income and that declared includes income received from abroad, and is halved if the tax due in respect of the undeclared amount is less than a quarter of that assessed. ...
No administrative sanction is applicable if the taxpayer has committed a material error or omission or falsity in his or her declaration where there was no criminal intent (dolo), in so far as well-founded reasons are presented.”
COMPLAINTS
14. The applicant complained under Article 6 of the Convention about the length of the proceedings, in particular the ten years it had taken the judicial authorities to determine the legitimacy of the GS’s decision. He further complained that he did not have an effective remedy as required by Article 13 of the Convention in so far as the judicial authorities could have only assessed the formal legitimacy of the decisions at issue but could not have reviewed them on the merits. He highlighted that after fourteen years the income he had been required to declare for the year 1991 still had to be established by the CA and that any such decision would again be potentially subject to further proceedings.
THE LAW
A. Alleged violation of Article 6 § 1 of the Convention
15. The applicant submitted that the length of the proceedings in the present case breached the “reasonable time” requirement laid down in Article 6 § 1 of the Convention which, in so far as relevant, reads as follows:
“In the determination of his civil rights and obligations or any criminal charge against him, everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”
1. The Government’s objection ratione materiae
(a) The parties’ submissions
16. The Government submitted that Article 6 was not applicable to the present case. They were of the view that the proceedings had been inherently fiscal in nature and could not be regarded as either civil or criminal.
17. They reiterated that according to the Court’s case-law, tax-related proceedings could not be regarded as falling under the civil limb of Article 6 despite their pecuniary element.
18. The Government contended that the criminal head of Article 6 was also not applicable. The judgments in the present case had been delivered by administrative bodies and were subject to appeals before the ordinary courts. The applicant had been requested to pay further tax of EUR 13.91 and had been ordered to pay a sanction of EUR 3.48 in accordance with the legal provisions relating to administrative sanctions; thus, this amounted to a violation of administrative, not criminal law. Such sanctions applied to all nationals in their capacity as taxpayers and not to a group with a special status. These pecuniary sanctions were aimed at protecting the tax interests of the State by compelling taxpayers to fully and properly comply with tax obligations. Thus, they aimed to sanction anyone in violation of these obligations and to prevent new such violations from occurring; therefore the sanction acted as a deterrent. However, in the Government’s view this was not sufficient to classify the pecuniary sanction as criminal. Referring to the case of Bendenoun v. France (24 February 1994, Series A no. 284) the Government submitted that in the present case, the sanction could not be converted into imprisonment, and was in fact very small, amounting only to EUR 3.48. Indeed they noted that the highest sanction which could have been ordered in the present case would have amounted to EUR 27.82.
19. The applicant submitted that Article 6 was indeed applicable, despite the fact that the proceedings had related to tax matters. He was of the view that the amount of the sanction was irrelevant for the purposes of assessing the applicability of the provision. Moreover, he contended that if he had not paid the additional tax and the relevant sanction within a period of ninety days, he could have been subject to criminal proceedings on charges of tax evasion pursuant to Article 389 of the Criminal Code. The applicant was of the view that Article 6 should not be considered restrictively, particularly as tax matters could also be subject to abuse and could lead individuals or companies to ruin.
(b) The Court’s assessment
20. The Court reiterates that merely showing that a dispute is pecuniary in nature is not in itself sufficient to attract the applicability of Article 6 § 1 under its civil head. Tax matters still form part of the hard core of public authority prerogatives, with the public nature of the relationship between the taxpayer and the community remaining predominant. Thus, tax disputes fall outside the scope of civil rights and obligations, despite the pecuniary effects which they necessarily produce for the taxpayer (Ferrazzini v. Italy [GC], no. 44759/98, ECHR 2001-VII).
21. It follows that Article 6 in its civil head is not applicable in the present case.
22. The Court further observes that subsequent to the case of Bendenoun cited by the Government, the Grand Chamber in the case of Jussila v. Finland ([GC], no. 73053/01, ECHR 2006‑XIII) held that no established or authoritative basis had emerged in the case-law for holding that the minor nature of the penalty, in taxation proceedings or otherwise, could be decisive in removing an offence, otherwise criminal by nature, from the scope of Article 6. Furthermore, the Grand Chamber was not persuaded that the nature of tax surcharge proceedings was such that they fell, or should fall, outside the protection of Article 6. While there was no doubt as to the importance of tax to the effective functioning of the State, the Court was not convinced that removing procedural safeguards in the imposition of punitive penalties in that sphere was necessary to maintain the efficacy of the fiscal system or indeed could be regarded as consonant with the spirit and purpose of the Convention. In that case, therefore, the Court applied the Engel criteria (as affirmed by the Grand Chamber in Ezeh and Connors v. the United Kingdom [GC], nos. 39665/98 and 40086/98, § 82, ECHR 2003‑X) to identify whether the criminal aspect existed, namely:
“... [I]t is first necessary to know whether the provision(s) defining the offence charged belong, according to the legal system of the respondent State, to criminal law, disciplinary law or both concurrently. This however provides no more than a starting point. The indications so afforded have only a formal and relative value and must be examined in the light of the common denominator of the respective legislation of the various Contracting States.
The very nature of the offence is a factor of greater import. ...
However, supervision by the Court does not stop there. Such supervision would generally prove to be illusory if it did not also take into consideration the degree of severity of the penalty that the person concerned risks incurring. ...”
23. As to the application of these criteria in the present case, the Court observes that as to the first criterion, it appears that the sanction applied was not classified as criminal but as part of the fiscal administrative regime. This is, however, not decisive. The second criterion, the nature of the offence, is the more important. The Court observes that the Government have acknowledged that such sanctions were imposed by general legal provisions applying to taxpayers generally. Further, as also acknowledged by the Government, they were intended to deter reoffending. It may therefore be concluded that they were imposed by a rule which had both a deterrent and punitive purpose. The Court considers that this establishes the criminal nature of the offence in question. Moreover, in relation to the third criterion, as held by the Grand Chamber, the minor nature of the penalty does not remove the matter from the scope of Article 6 (see Jussila, cited above, § 37-38). Hence, in the present case Article 6 applies under its criminal head notwithstanding the minor nature of the sanction.
24. It follows that the Government’s objection is dismissed.
2. Other admissibility issues
25. The Court must, however, determine whether the complaint is admissible under Article 35 of the Convention, as amended by Protocol No. 14 which entered into force on 1 June 2010. The Protocol added a new admissibility requirement to Article 35 which, in so far as relevant, provides as follows:
“3. The Court shall declare inadmissible any individual application submitted under Article 34 if it considers that:
...
(b) the applicant has not suffered a significant disadvantage, unless respect for human rights as defined in the Convention and the Protocols thereto requires an examination of the application on the merits and provided that no case may be rejected on this ground which has not been duly considered by a domestic tribunal.”
26. In accordance with Article 20 of Protocol No.14, the new provision applies from the date of the Protocol’s entry into force to all applications pending before the Court, except those that have already been declared admissible. Thus, in view of the circumstances of the present case the Court finds it appropriate to examine whether the applicant’s complaint complies with this admissibility requirement.
27. In doing so, the Court will bear in mind that the purpose of the new admissibility criterion is, in the long run, to enable more rapid disposal of unmeritorious cases and thus to allow it to concentrate on the Court’s central mission of providing legal protection of human rights at the European level. The High Contracting Parties clearly wished the Court to devote more time to cases which warrant consideration on the merits, whether seen from the perspective of the legal interest of the individual applicant or considered from the broader perspective of the law of the Convention and the European public order to which it contributes (see Korolev v. Russia (dec.), no. 25551/05, ECHR 2010).
(a) Whether the applicant has suffered a significant disadvantage
28. The main element contained in the new admissibility criterion is the question of whether the applicant has suffered a “significant disadvantage”. It is common ground that these terms are open to interpretation and that they give the Court some degree of flexibility, in addition to that already provided by the existing admissibility criteria. In the Court’s view, these terms are not susceptible to exhaustive definition, like many other terms used in the Convention. The High Contracting Parties thus expected the Court to establish objective criteria for the application of the new rule through the gradual development of the case-law (see Korolev (dec.), cited above).
29. Inspired by the above-mentioned general principle de minimis non curat praetor, the new criterion hinges on the idea that a violation of a right, however real from a purely legal point of view, should attain a minimum level of severity to warrant consideration by an international court. The assessment of this minimum level is, in the nature of things, relative and depends on all the circumstances of the case (see, mutatis mutandis, Soering v. the United Kingdom, 7 July 1989, § 100, Series A no. 161). The severity of a violation should be assessed, taking account of both the applicant’s subjective perceptions and what is objectively at stake in a particular case (see Korolev (dec.), cited above). Thus, the absence of any such disadvantage can be based on criteria such as the financial impact of the matter in dispute or the importance of the case for the applicant (see Adrian Mihai Ionescu v. Romania (dec.) no. 36659/04, § 34, 1 June 2010, Rinck v. France (dec.) no. 18774/09, 19 October 2010; and Kiousi v. Greece (dec.) no. 52036/09, 20 September 2011).
30. In the present case, the Court notes that the applicant has been ordered by the Board of Estimate to pay EUR 13.91 in tax and a sanction which would amount to EUR 3.48. These payments have to date not been made, given that the proceedings are still pending. The Court is conscious that the impact of a pecuniary loss must not be measured in abstract terms; even modest pecuniary damage may be significant in the light of the person’s specific condition and the economic situation of the country or region in which he or she lives. However, the Court considers it to be beyond doubt that the amount at stake in the present case was of minimal significance to the applicant (see Korolev (dec.), Rinck (dec.), and Kiousi (dec.), all cited above).
31. The Court is mindful at the same time that the pecuniary interest involved is not the only element in determining whether the applicant has suffered a significant disadvantage. Indeed, a violation of the Convention may concern important questions of principle and thus cause a significant disadvantage without affecting pecuniary interests (see Korolev (dec.), cited above). However, in the circumstances of the present case, even considering the applicability of Article 6 under its criminal head, nothing in the case file suggests that these proceedings could have had any significant consequences for the applicant.
32. Admittedly, the applicant’s insistence to appeal against the domestic decisions and subsequently to ask an international court to assess whether proceedings dealing with the determination of an insignificant sum such as the one at issue conformed to the reasonable time requirement, may have been prompted by his subjective perception that it was an important question of principle. However, although relevant, this element does not suffice for the Court to conclude that he suffered a significant disadvantage (ibid., mutatis mutandis).
33. In view of the foregoing, the Court concludes that the applicant has not suffered a significant disadvantage as a result of the alleged violation of the Convention.
(b) Whether respect for human rights as defined in the Convention and the Protocols thereto requires an examination of the application on the merits
34. The second element contained in the new criterion is intended as a safeguard clause compelling the Court to continue the examination of the application, even in the absence of any significant damage caused to the applicant, if respect for human rights as defined in the Convention and the Protocols thereto so requires. The Court notes that the wording is drawn from the second sentence of Article 37 § 1 of the Convention where it fulfils a similar function in the context of decisions to strike applications out of the Court’s list of cases. The same wording is used in Article 39 § 1 as a basis for securing a friendly settlement between the parties (ibid.).
35. The Court notes that the Convention organs have consistently interpreted those provisions as compelling them to continue the examination of a case, notwithstanding its settlement by the parties or the existence of any other ground for striking the case out of its list. The further examination of a case has, for example, been found to be necessary when it raised questions of a general character affecting the observance of the Convention (see Tyrer v. the United Kingdom, no. 5856/72, Commission’s report of 14 December 1976, Series B 24, § 2).
36. Such questions of a general character would arise, for example, where there is a need to clarify the States’ obligations under the Convention or to induce the respondent State to resolve a structural deficiency affecting other persons in the same position as the applicant. The Court has thus been frequently called upon, under Articles 37 and 38, to verify that the general problem raised by the case had been or was being remedied and that similar legal issues had been resolved in other cases before it (see, among many other authorities, Can v. Austria, 30 September 1985, §§ 15-18, Series A no. 96, and Léger v. France (striking out) [GC], no. 19324/02, § 51, 30 March 2009).
37. Considering the present case in this way, as required by the new Article 35 § 3 (b), and having regard to its responsibilities under Article 19 of the Convention, the Court does not see any compelling reason of public order (ordre public) to warrant its examination on the merits. The Court has on numerous occasions determined issues analogous to that arising in the instant case and ascertained in great detail the States’ obligations under the Convention in that respect (see Kudła v. Poland [GC], no. 30210/96, § 131, ECHR 2000‑XI, and McFarlane v. Ireland [GC], no. 31333/06, § 156, 10 September 2010), including in cases against the respondent State (see, for example, Tierce v. San Marino, no. 69700/01, § 32, ECHR 2003‑VII). An examination on the merits of the present case would not bring any new element in this regard.
38. The Court therefore concludes that respect for human rights, as defined in the Convention and the Protocols thereto, does not require an examination of the present application on the merits.
(c) Whether the case was duly considered by a domestic tribunal
39. Article 35 § 3 (b) does not allow the rejection of an application on the grounds of the new admissibility requirement if the case has not been duly considered by a domestic tribunal. Qualified by the drafters as a second safeguard clause, its purpose is to ensure that every case receives a judicial examination whether at national level or at European level, in other words, to avoid a denial of justice. The clause is also consonant with the principle of subsidiarity, as reflected notably in Article 13 of the Convention, which requires that an effective remedy against violations be available at national level (see Korolev (dec.), cited above).
40. The Court must first examine the notion of “case”, which seems to be distinguished in this provision from the term “application”. The question is thus whether the due consideration by a domestic tribunal should concern the case (in the sense of request, action or claim) that the applicant brought before that tribunal or the complaints as subsequently submitted to this Court (see Holub v. the Czech Republic (dec.), no. 24880/05, 14 May 2010).
41. In the Court’s view, the first of those two possibilities is the correct one, that is to say that it should be ascertained whether the case which allegedly entailed violations of the Convention or the Protocols thereto has undergone a judicial examination at national level. If the notion of “case” here were to be regarded as a synonym of “application”, the situation would arise where there might be complaints concerning decisions of last-instance domestic courts which could no longer be examined at national level and which the Court would then be precluded from declaring inadmissible on account of the trivial nature of the application. The Court is not convinced that it should assume such general jurisdiction of super-review (ibid.).
42. The Court notes that this approach is corroborated by its recent decision in the case of Korolev ((dec.), cited above), which it declared inadmissible in accordance with the new admissibility criterion in Article 35 § 3 (b) of the Convention. It should be observed in this connection that, according to paragraph 79 of the Explanatory Report on Protocol No. 14, the purpose of the new admissibility criterion is to enable more rapid disposal of unmeritorious cases (see Holub (dec.), cited above).
43. In the present case the determination of the applicant’s taxable income and the supervening sanction have been subject to various decisions by the domestic courts, including those of appeal. Thus, the applicant has had the protection of various tribunals examining the matter.
44. As to the question whether his case has been “duly considered”, the Court is of the view that this condition should not be interpreted as strictly as the requirements of a fair trial; otherwise it would difficult to understand why the wording of Article 35 § 3 (b) did not read “fairly considered” (ibid.).
45. It follows that in the present case it cannot be considered that the applicant’s case has not been duly considered by the domestic courts as required by Article 35 § 3 (b) in fine.
(d) Conclusion
46. In view of the foregoing, the Court finds that this complaint must be declared inadmissible in accordance with Article 35 § 3 (b) of the Convention, as amended by Protocol No. 14.
B. Other complaints
47. Under Article 13, the applicant complained that after fourteen years no decision in respect of his income tax assessment for 1991 had yet been taken, largely because the various courts before which he could have contested the initial assessment had not had the power to enter into the merits of the assessment and make a substitute assessment.
48. The Court considers that the focus of his complaint regards the length of proceedings, a complaint which has been dealt with above. As to the competence of the courts to which he had access, the Court does not consider that this raises an issue under Article 13 or 6 of the Convention.
49. It follows that this complaint is inadmissible under Article 35 § 3 (a) as manifestly ill-founded and must be rejected pursuant to Article 35 § 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Santiago QuesadaJosep Casadevall
RegistrarPresident
Full & Egal Universal Law Academy