FIRST SECTION
DECISION
Application no. 50520/15
DOO VIO-MARK-IN INSOLVENCY
against North Macedonia
The European Court of Human Rights (First Section), sitting on 18 June 2019 as a Committee composed of:
Aleš Pejchal, President,
Tim Eicke,
Raffaele Sabato, judges,
and Renata Degener, Deputy Section Registrar,
Having regard to the above application lodged on 7 October 2015,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant company,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Doo Vio-Mark in Insolvency, is a company registered in Resen (“the applicant company”). It was represented before the Court by Mr I. Spirovski, a lawyer practising in Skopje, authorised by the manager of the applicant company, and subsequently by its insolvency practitioner. On 21 April 2015 insolvency proceedings were opened in respect of the applicant company, which were subsequently closed on 28 October 2015. Its assets were distributed among its creditors, and the insolvency practitioner was vested with the power to finish all ongoing proceedings in respect of the applicant company. On 23 November 2015 the applicant company was struck off the registry of companies.
2. The Government of North Macedonia (“the Government”) were represented by their former Agent, Mr K. Bogdanov, succeeded by their present Agent, Ms D. Djonova.
The circumstances of the case
3. On 24 October 2005 the Macedonian Orthodox Church lodged a civil action against the applicant company with the Ohrid Court of First Instance (“the first-instance court”), seeking to establish that it had property rights in respect of a building near Ohrid. The value of the claim was set at 40,000 Macedonian denars (MKD).
4. On 17 October 2006 the applicant company, represented by a lawyer, submitted observations in reply and a counterclaim, seeking to be recognised as the owner of the same property. It also set the value of the claim at MKD 40,000.
5. On 18 October 2006 and 29 January 2007 a preparatory hearing and another subsequent hearing were held before the first-instance court. No information was submitted as to whether the parties discussed the value of the claim.
6. At a hearing held on 3 July 2009 the parties jointly proposed to set the value of the claim at MKD 2,000,000. The court granted that request and adjourned the hearing in order to change the formation of the court from a single-judge formation to a three-judge panel.
7. After one remittal, the first-instance court and an appeal court allowed the claimant’s action and dismissed the applicant company’s counterclaim by judgments of 29 October 2012 and 16 September 2013 respectively. Both judgments stated that the value of the claim was MKD 2,000,000.
8. On 4 December 2013 the applicant company lodged an appeal on points of law (ревизија). On 11 March 2015 the Supreme Court (Врховен суд) rejected it as inadmissible ratione valoris, relying on section 33 of the Civil Proceedings Act, in accordance with which, if the subject of a dispute was not monetary (тужбеното барање не се однесува на паричен износ), the value indicated in the claim should be taken as the relevant value of the claim. Furthermore, if the value of the dispute specified by the claimant appeared to be “obviously too high or too low”, the first-instance court should itself assess the accuracy of the specified value. That was to be done at the preparatory hearing (подготвително рочиште) at the latest, or, if one was not held, at the main oral hearing (главна расправа) before the examination of the merits. The court established that the value of the claim initially indicated by both parties had been MKD 40,000, and that it had not been modified at the preparatory or main oral hearing (see paragraph 5 above). The change in value that had occurred later was not relevant, as it had occurred at an inappropriate stage of the proceedings. Accordingly, the initial value of MKD 40,000 was below the statutory threshold of MKD 1,000,000 required in commercial disputes in order to have a review of the merits by the Supreme Court, in compliance with section 469 of the Civil Proceedings Act.
COMPLAINTS
9. The applicant company complained that the rejection of its appeal on points of law by the Supreme Court had violated its rights under Article 6 of the Convention. It further complained under Article 1 of Protocol No. 1 to the Convention, alleging an arbitrary interference with its property rights.
THE LAW
10. The applicant company complained under Article 6 about the Supreme Court’s refusal to examine its appeal on points of law on the merits. Under Article 1 of Protocol No. 1 to the Convention, it complained of an arbitrary interference with its property rights. As regards the complaint under Article 6, the Court considers that this complaint should be examined in relation to the applicant company’s right of access to a court under Article 6 § 1, which, in so far as relevant, reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
Article 1 of Protocol No. 1 to the Convention, in so far as relevant, reads:
“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. The Government’s objection ratione personae
11. The Government submitted that the applicant company had been struck off the registry of companies and therefore the application should be declared inadmissible ratione personae.
12. The applicant company submitted that the fact that it had been struck off the registry of companies did not affect its standing before the Court, since the insolvency practitioner and the lawyer representing it were entitled to complete all ongoing proceedings. Furthermore, in accordance with domestic law, any award resulting from the application would be distributed among the applicant company’s shareholders and creditors.
13. The Court is aware that, in view of the applicant company having been struck off the registry of companies, there may be an issue with regard to its standing before the Court (see RF spol. s.r.o. v. Slovakia (dec.), no. 9926/03, 20 October 2010, and compare Aviakompaniya A.T.I., ZAT v. Ukraine, no. 1006/07, § 23, 5 October 2017). However, in view of the fact that the applicant company’s insolvency practitioner was given the authority to finish all proceedings that the applicant company was a party to, and considering the interests of its successors, the Court does not consider it necessary to examine this issue (see, mutatis mutandis, Kurić and Others v. Slovenia [GC], no. 26828/06, § 270, ECHR 2012 (extracts)), because the application is in any event inadmissible for the following reasons.
B. Complaint under Article 6 § 1 of the Convention
1. The parties’ submissions
14. The Government submitted that the rejection of the applicant company’s appeal on points of law had been lawful, had pursued a legitimate aim, and had been proportionate. Lastly, the Supreme Court’s decision was consistent with its case-law. In this respect, they submitted four decisions of the Supreme Court from 2012 and 2014 in which the court had rejected appeals on point of law in similar circumstances.
15. In response, the applicant company submitted that the decision to increase the value of the dispute had increased the overall costs and expenses that it had had to bear. Such a decision, once made, became final and was binding throughout proceedings.
2. The Court’s assessment
16. The general principles relating to the right of access to a court are set out in the case of Naït-Liman v. Switzerland ([GC], no. 51357/07, §§ 112‑116, 15 March 2018). The principles relating specifically to ratione valoris restrictions on access to a court were recently reiterated in the case of Zubac v. Croatia ([GC], no. 40160/12, §§ 80 - 85, 5 April 2018).
17. The Court accepts that the refusal of the Supreme Court to examine the applicant company’s appeal on points of law constituted an interference with its right of access to a court. It further holds that the refusal was in accordance with the applicable domestic law (see paragraph 8 above) and the Supreme Court’s established practice (see paragraph 14 above). It also considers that having a statutory threshold for the value of a claim for appeals to the Supreme Court is a legitimate and reasonable procedural requirement (see, for example, Jovanović v. Serbia, no. 32299/08, § 48, 2 October 2012).
18. In the case of Zubac (cited above, §§ 110-125), the following elements were examined to determine if a restriction of the right of access to a court was proportionate: the foreseeability of the restriction, which party bore the consequences of the errors made during the proceedings and the existence of excessive formalism.
19. As to the foreseeability of the restriction in the instant case, the Court notes that the rules are laid out in section 33 of the Civil Proceedings Act, and the relevant practice was consistent as regards the application of those rules (see paragraph 14 above). Moreover, the applicant company was represented by a qualified lawyer throughout the proceedings.
20. As to who bore the consequences of the procedural errors made in the course of the proceedings, the Court notes that the applicant company had the opportunity to request that the value of the dispute be altered when it lodged the counterclaim and when the preparatory hearing took place on 18 October 2006, but it failed to do so. The change in value occurred only later, on 3 July 2009. This omission on the part of the applicant company cannot give rise to a reasonable expectation as to the jurisdiction of the Supreme Court (see Zubac, § 120), nor does the fact that the company had to pay somewhat higher court fees and legal costs.
21. Lastly, as to the existence of excessive formalism, the Court observes that it cannot be said that the Supreme Court should be bound by an erroneous decision of the lower courts and grant someone access to the Supreme Court as a consequence. By making the impugned decision, the Supreme Court simply restored the actual legal situation, thereby correcting an error made by the applicant company and the lower courts as regards its jurisdiction.
22. In view of the above, the Court finds that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention (see Zubac, § 125).
C. Complaint under Article 1 of Protocol No. 1 to the Convention
23. The applicant company also complained that it had had a legitimate expectation to acquire title to the building in question, and that the domestic judgments had amounted to an arbitrary interference with its property rights.
24. In view of the above findings (see paragraphs 19–22 above), the Court considers that, in the circumstances of the present case, an appeal on points of law before the Supreme Court was not an effective remedy which the applicant company was required to exhaust. Therefore, the final judgment was that of the appeal court delivered on 16 September 2013. With respect to this complaint, in the absence of any evidence as to the date when that judgment was served on the applicant company, the start date for the running of the six-month period can be no later than 4 December 2013, the day when the applicant company lodged the appeal on points of law with the Supreme Court (see paragraph 8 above). The applicant company lodged its application with the Court on 7 October 2015, that is, more than six months later.
25. Accordingly, this complaint was lodged out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 11 July 2019.
Renata DegenerAleš Pejchal
Deputy RegistrarPresident
Full & Egal Universal Law Academy