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THE FACTS
The applicants are Ms Arlette Delage, who was born in 1948 and lives at Soignolles en Brie, and Mr Charles Magistrello, who was born in 1939 and lives at Fontenay-sous-Bois. Both are French nationals. They were represented before the Court by Mr Patrick Renaud, a lawyer practising in Paris.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
Ms Delage was the manager of a firm of general building contractors Mecabati Sarl (“Mecabati”), a private company she had formed in 1984. Mr Magistrello, who was the managing director of a hotel complex, had business dealings with Mecabati and had awarded it contracts to fit out and decorate some of his hotels.
As a result of financial difficulties Mecabati was declared insolvent on 30 June 1991.
By a judgment of 11 July 1991 the Créteil Commercial Court, composed of Mr Kalt, President, and Mr Levêque and Mr Duhamel, made an order for the judicial reorganisation of Mecabati under the simplified procedure and appointed Mr Levêque as the insolvency judge and Mr Kalt as his substitute.
On 8 August 1991, after hearing the report of the insolvency judge, Mr Levêque, a differently constituted bench of the Créteil Commercial Court ordered the company’s liquidation under the supervision of the court, renewed the appointments of the insolvency judge and the substitute insolvency judge and appointed a liquidator.
On 13 February 1992 the Commercial Court made an order on its own initiative for an audit of the company’s accounts.
On 8 October 1992 it appointed Mr Kalt as insolvency judge in place of Mr Levêque.
On 19 November 1993 the auditor appointed on 13 February 1992 lodged his report.
On 24 November 1993 the liquidator issued proceedings against Ms Delage, in her capacity as de iure manager of the company, and against Mr Magistrello, as de facto manager, in which he sought a receivership order against them, a declaration that they were jointly and severally liable to pay the entire shortfall in the company’s assets and a decision on whether they should be declared personally bankrupt.
The case was heard in the Commercial Court on 9 December 1993. The court was presided over by Mr Kalt, assisted by two wing members. The representative of State Council’s Office sought an order declaring the applicants personally bankrupt. The court reserved judgment and granted the parties permission to exchange notes to the court in deliberations and to adduce documentary evidence by no later than 20 December 1993. The applicants sent various documents to the court on that date.
Meanwhile, by an order of 17 December 1993 the insolvency judge, Mr Kalt, declared an application by Ms Delage for the liquidator’s replacement inadmissible and refused to refer it to the Commercial Court, which was the sole body with jurisdiction to hear it.
By a judgment of 13 January 1994 the Créteil Commercial Court dismissed the applicants’ applications and made a receivership order against them. In that connection, it added:
“And on the basis of the finding in the insolvency judge’s report that reorganisation will only be ordered to protect undertakings and there is no prospect of recovery in the instant case, the court makes an order for the commencement of judicial liquidation proceedings against [the applicants]...”
The Commercial Court also made an order declaring the applicants personally bankrupt for a period of thirty years, and ruled that it was immediately enforceable pending appeal. The applicants and the company appealed against that judgment. In their submissions, the applicants complained inter alia of the insolvency judge’s presence on the bench that had delivered the judgment.
By a judgment of 6 October 1994 the Paris Court of Appeal upheld all the provisions of the judgment, noting inter alia:
“... the court heard the report of the insolvency judge from which it emerged that there were no prospects of recovery in the instant case;
... there is no provision of the Law of 1985 that prevents an insolvency judge from sitting on the bench that delivers judgment.”
By a judgment of 6 May 1997 the Court of Cassation dismissed the applicants’ appeal on points of law, holding that the insolvency judge’s presence on the bench that had made the order for the liquidation of the applicants’ assets did not contravene Article 6 § 1 of the Convention, even though he had previously acted as the insolvency judge in the liquidation of the company.
B. Relevant domestic law
Section 188 of Law no. 85-98 of 25 January 1985 on the Judicial Reorganisation and Liquidation of Undertakings provides:
“At any stage of the [judicial reorganisation or liquidation] proceedings the court may make a personal bankruptcy order against any de iure or de facto manager, whether paid or unpaid, of a juristic person...”
Article 24 of the implementing decree, Decree no. 85-1388 of 27 December 1985, provides:
“... The court shall, after submission of the insolvency judge’s report, decide all issues arising out of the judicial reorganisation or liquidation that are referred to it.”
COMPLAINT
Relying on Article 6 § 1 of the Convention and their right to an impartial tribunal, the applicants complained that the same judge had acted both as insolvency judge and President of the Commercial Court, and had in the former capacity made a report on which the court had relied in making orders for the judicial reorganisation and subsequent liquidation of the company and, lastly, a bankruptcy order against them personally.
THE LAW
The applicants complained that the same judge had sat as both insolvency judge and president of the commercial court that had heard their case. They relied on Article 6 § 1 of the Convention, the relevant provisions of which read as follows:
“In the determination of his civil rights and obligations ... against him, everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”
After outlining the role of the insolvency judge the Government submitted, firstly, that although the judge concerned, Mr Kalt, had indeed presided over the trial court when the order commencing judicial reorganisation proceedings against Mecabati was made on 11 July 1991, that had been only a preliminary stage of the proceedings. At that stage in the proceedings, which followed a declaration by the company to the registry of the commercial court that it was unable to pay its debts, the commercial court merely heard representations from the parties at an adversarial hearing and started an investigation without prejudging the course the subsequent proceedings would take. That initial stage of the proceedings could not therefore give rise to any complaint.
The Government next observed that it was apparent from the judgment of 8 August 1991 that the judge concerned had played no part in making the order for the company to be placed in compulsory liquidation. At that point he had only been the substitute insolvency judge. He was not appointed as the insolvency judge overseeing the liquidation of the company as a replacement for his colleague, Mr Levêque, who was involved in the drafting of the judgment, until 8 October 1992. The applicants’ complaints therefore simply did not tally with the facts.
As matters transpired, the only stage of the proceedings in which the functions of insolvency judge and president of the court called upon to decide the case in the light of the insolvency judge’s report were combined was when the fate of the company’s managers was decided.
The Government noted that the applicants had not suggested that the judge had displayed any subjective bias against them. As to objective bias, while it was true that appearances could be important (Piersack v. Belgium, 1 October 1982, Series A no. 53; and Padovani v. Italy, 26 February 1993, Series A no. 257-B), the decisive issue in the Government’s submission was whether the applicants’ fears could be regarded as objectively justified (Sramek v. Austria, 22 October 1984, Series A no. 84; and Saraiva de Carvalho v. Portugal, 22 April 1994, Series A no. 286-B).
In the instant case, the Government noted that out of a total of seven procedural steps taken by the insolvency judges, Mr Kalt had made only one order (on 17 December 1993). In that order he had declared an application by Ms Delage for the liquidator’s replacement inadmissible, as it was within the sole jurisdiction of the full commercial court. In making that order, which Ms Delage had not challenged, Mr Kalt had not needed to make any findings regarding the matters that resulted in the judgment of 13 January 1994.
The other decisions had been taken by his predecessor who, incidentally, was not sitting when either the judgment of 8 August 1991 or the judgment of 13 January 1994 was delivered.
The Government also maintained that the judge’s neutrality was demonstrated by the fact that the personal bankruptcy proceedings against the managers were instituted by the liquidator, not the commercial court acting on its own initiative, as it was empowered to do by statute. Furthermore, in receivership and bankruptcy proceedings against the managers personally, the only purpose of the insolvency judge’s report was to provide the commercial court with information of a general nature. A judge’s detailed knowledge of a case did not mean that he or she was prejudiced in a way that prevented him or her from being impartial (Saraiva de Carvalho cited above).
The Government went on to explain that since the insolvency judge’s role in liquidation proceedings was confined to winding up the company’s affairs without examining the managers’ role, there could be no question of bias on that subject. They submitted that if every judge who dealt with connected proceedings was to be treated as suspect and excluded from the trial court, the judicial system would rapidly come to a complete standstill.
The Commercial Court did not refer at any stage in its judgment to the insolvency judge’s report or to the sole order which he had made. Its judgment had been based solely on the audit of the accounts and the documents produced by the liquidator. While it was true that the audit had been ordered by the Commercial Court acting on its own initiative – as an interlocutory matter without any predetermination of the merits – it had been requested by the liquidator, and the insolvency judge who had opined in favour of referring the application to the Commercial Court had been Mr Levêque.
The Government contended in the alternative that the case had been the subject of a full review by the Court of Appeal and that the applicants had not complained of bias on the part of the appeal-court judges.
The applicants submitted that the role of insolvency judges had substantially evolved since the reform of the insolvency procedures in 1985, as they were under a duty not only to ensure that the procedure was conducted properly but also to protect the competing interests. Though a formal step in the proceedings, the insolvency judge’s report to the commercial court was based on public-policy considerations and could have a decisive bearing on a case, owing to the judge’s very precise terms of reference and detailed knowledge of the file.
The applicants noted, inter alia, that the bench of the Commercial Court which delivered the judgment of 11 July 1991 commencing the judicial reorganisation proceedings was presided over by Mr Kalt, while Mr Levêque was a wing member. The same bench appointed Mr Levêque and Mr Kalt as insolvency judge and substitute insolvency judge respectively. The applicants’ complaint had originated from that decision while the decision impugned in their application was the order of 13 January 1994 declaring them personally bankrupt. The bench that had made that order was presided over by Mr Kalt, who was also the incumbent insolvency judge since his appointment on 8 October 1992. The applicants argued that, contrary to what the Government maintained, it was clear from the judgment that it was after examining the insolvency judge’s report that the Commercial Court had reached its decision to institute judicial liquidation proceedings against them and to declare them personally bankrupt for a period of thirty years. The contentions that the insolvency judge’s report merely provided information of a general nature and that his dual role did not entail any form of prejudgement of the case were therefore untenable.
The applicants said that on the basis of the case-law of the European Court of Human Rights (Hauschildt v. Denmark, 24 May 1989, Series A no. 154), the Court of Cassation had held that a judge was precluded by his detailed knowledge of the facts of a case from subsequently trying the dispute, as an intervention of that nature was incompatible with the requirements of objective impartiality set out in Article 6 § 1 of the Convention (decision of the Court of Cassation, First Civil Division, 5 October 1999). In their submission, the decision of 13 January 1994 had therefore infringed the applicants’ right to a fair trial.
The Court reiterates that there are two tests for assessing whether a tribunal is impartial within the meaning of Article 6 § 1: the first consists in seeking to determine the personal conviction of a particular judge in a given case and the second in ascertaining whether the judge offered guarantees sufficient to exclude any legitimate doubt in this respect (see, among other authorities, Gautrin and Others v. France, 20 May 1998, Reports 1998-III, pp. 1030-1031, § 58).
As to the subjective test, the personal impartiality of a judge must be presumed until there is proof to the contrary (see, among other authorities, Padovani v. Italy, 26 February 1993, Series A no. 257-B, p. 20, § 26). In the instant case, the judge’s subjective impartiality was not disputed by the parties.
As to the second test, when applied to a body sitting as a bench, it means determining whether, quite apart from the personal conduct of any of the members of that body, there are ascertainable facts which may raise doubts as to its impartiality. In this respect even appearances may be of some importance. It follows that when it is being decided whether in a given case there is a legitimate reason to fear that a particular body lacks impartiality, the standpoint of those claiming that it is not impartial is important but not decisive. What is decisive is whether the fear can be held to be objectively justified (Gautrin and Others cited above, ibid.).
In the present case, the fears of bias stem principally from the fact that the President of the Commercial Court was also the insolvency judge on the bench that declared the applicants personally bankrupt on 13 January 1994.
As regards the other matters complained of in the initial application, the Court notes that while it is true that Mr Kalt presided over the bench that made the order commencing the judicial reorganisation proceedings against Mecabati on 11 July 1991, the proceedings were only at a preliminary stage. In addition, although he was the substitute insolvency judge, he did not play any role in the judgment of 8 August 1991 placing the company in compulsory liquidation and did not succeed Mr Levêque as insolvency judge until 8 October 1992. Although the applicants did not raise this complaint, the Court also notes in passing that Judge Levêque was not on the bench when the judgment of 8 August 1991 was delivered or when the applicants were declared personally bankrupt on 13 January 1994.
Consequently, the Court finds no appearance of a violation of the provisions of the Convention on account of those matters.
It therefore remains for the Court to examine whether the fact that Mr Kalt acted as both the President of the Commercial Court and the insolvency judge on the bench that made the order of 13 January 1994 infringed Article 6 § 1 of the Convention.
The Court accepts that that situation could raise doubts in the applicant’s mind about the impartiality of the Commercial Court. However, it has to decide whether those doubts were objectively justified (Morel v. France, 6 June 2000, ECHR 2000-VI, § 44).
The answer to that question depends on the circumstances of the case. The mere fact that a judge has already taken pre-trial decisions cannot by itself be regarded as justifying concerns about his impartiality. What matters is the scope and nature of the measures taken by the judge before the trial. Likewise, it does not follow from the fact that a judge has detailed knowledge of the case that he or she has prejudged it and cannot be regarded as impartial when the decision on the merits is taken. Nor does the fact that a preliminary analysis of the available information has been carried out mean that the final analysis has been prejudged. What is important is for that analysis to be carried out when judgment is delivered and to be based on the evidence produced and argument heard at the hearing (see, among other authorities, mutatis mutandis, Hauschildt v. Denmark, 24 May 1989, Series A no. 154, p. 22, § 50; Nortier v. the Netherlands, 24 August 1993, Series A no. 267, p. 15, § 33; Saraiva de Carvalho v. Portugal, 22 April 1994, Series A no. 286-B, p. 38, § 35; Morel cited above, § 45).
Accordingly, what the Court must decide is whether, having regard to the nature and extent of his functions during the earlier phase of the proceedings, the insolvency judge displayed any bias regarding the decision to be taken by the Commercial Court. Such would be the case if the issues dealt with by the insolvency judge were analogous to those on which he ruled as a member of the trial court (Saraiva de Carvalho cited above, p. 39, § 38; and Morel cited above, § 47).
However, there is nothing in the case file to suggest that that was the position in this instance. The Court has already noted that Mr Kalt was only appointed insolvency judge on 8 October 1992, that is to say not only after the applicants’ company was liquidated, but also after the Commercial Court’s order made on 13 February 1992 of its own initiative for an audit of the accounts. Under the applicable domestic law, his role was to ensure that matters proceeded expeditiously and to protect the interests of those concerned. In the proceedings concerning the company, out of the total of seven orders that were made by the insolvency judge, he made only one, the other six being made by Mr Levêque. That order of 17 December 1993 – a declaration that an application by Ms Delage for the liquidator’s replacement was inadmissible and a refusal to refer it to the Commercial Court, which had sole jurisdiction to decide it – had no bearing on the issue of the managers’ conduct and the matters decided on 13 January 1994.
The Commercial Court’s earlier order under the presidency of Mr Kalt for an audit of the accounts was made at the behest of the liquidator and the insolvency judge, Mr Levêque. As an interlocutory measure, made precisely in order to enable the facts to be established, it did not entail any prejudgement of the case. On this point, the Court reiterates that the mere fact that a trial judge has also dealt with the case at the pre-trial stage cannot be held as in itself justifying fears as to his impartiality (Sainte-Marie v. France, 16 December 1992, Series A no. 253-A, p. 16, § 33, Fey v. Austria, 24 February 1993, Series A no. 255-A, p. 13-14, § 35, Padovani v. Italy, 26 February 1993, Series A no. 257-B, pp. 20-21, § 28, Bulut v. Austria, 22 February 1996, Reports 1996-II, § 33).
Like the Government, the Court also notes that the Commercial Court presided over by Mr Kalt did not assume jurisdiction to hear the allegations of misconduct against the applicants on its own initiative, as it was empowered to do and had done when it ordered an audit of the accounts on 13 February 1992, but on the basis of a summons taken out by the liquidator and an application made at the hearing by the representative of State Council’s Office for a personal bankruptcy order.
With regard to the order declaring the applicants bankrupt and, consequently, the evidence of misconduct on their part, the Court notes that the Commercial Court relied in its judgment on the auditor’s report and the documents produced by the liquidator which revealed that there were irregularities in Mecabati’s accounts, that the company had assumed liability for personal debts of the applicants and that the applicants had continued with a loss-making concern. There is no reference in the section of the judgment setting out the reasons for the court’s decision to the insolvency judge’s report or to the sole order which he made. In addition, it appears that the hearing took place on 9 December 1993, with judgment being reserved, but that the Commercial Court gave the parties permission to exchange notes to the court in deliberations and to lodge documentary evidence with it by no later than 20 December 1993.
The Court further notes that the applicants did not object to the President of the Commercial Court acting as the insolvency judge, either at the hearing (despite Mr Kalt’s presence on the bench with the wing members), or in a note to the court in deliberations.
Subsequently, before turning to the issue of liability, the Commercial Court found that Mr Magistrello was a de facto manager. It did so on the basis of the auditor’s report and a letter from the factory inspectorate and made no reference to the insolvency judge’s report, which was only cited in general terms elsewhere in the judgment.
Lastly, as a subsidiary consideration, the Court notes that on an appeal by the applicants and after an adversarial hearing all the provisions of the Commercial Court’s judgment were upheld by the Paris Court of Appeal.
In the light of the foregoing, the Court therefore finds no objective reason in the instant case for considering that the nature and extent of the insolvency judge’s duties in the earlier part of the proceedings entailed his prejudging the – separate – issue before the Commercial Court of the managers’ liability.
In view of the special circumstances of the present case, and even supposing that domestic remedies have been exhausted despite their failure to challenge the judge concerned, the Court holds that the applicants’ fears were not objectively justified.
Consequently, there has been no violation of the right guaranteed by Article 6 § 1 to an impartial tribunal.
It follows that the application is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be dismissed in accordance with Article 35 § 4.
For these reasons, the Court unanimously,
Declares the application inadmissible.
Erik FriberghChristos Rozakis
RegistrarPresident
Full & Egal Universal Law Academy