E.L., R.L. and J.O.-L. v. SWITZERLAND



              EUROPEAN COMMISSION OF HUMAN RIGHTS

                   Application No. 20919/92

                   E. L., R. L. and J. O.-L.

                            against

                          Switzerland

                   REPORT OF THE COMMISSION

                  (adopted on 10 April 1996)

                       TABLE OF CONTENTS

                                                          Page

I.   INTRODUCTION

     (paras. 1-15). . . . . . . . . . . . . . . . . . . . . .1

     A.   The application

          (paras. 2-4). . . . . . . . . . . . . . . . . . . .1

     B.   The proceedings

          (paras. 5-10) . . . . . . . . . . . . . . . . . . .1

     C.   The present Report

          (paras. 11-15). . . . . . . . . . . . . . . . . . .2

II.  ESTABLISHMENT OF THE FACTS

     (paras. 16-30) . . . . . . . . . . . . . . . . . . . . .3

     A.   The particular circumstances of the case

          (paras. 16-26). . . . . . . . . . . . . . . . . . .3

     B.   Relevant domestic law

          (paras. 27-30). . . . . . . . . . . . . . . . . . .4

III. OPINION OF THE COMMISSION

     (paras. 31-50) . . . . . . . . . . . . . . . . . . . . .6

     A.   Complaint declared admissible

          (para. 31). . . . . . . . . . . . . . . . . . . . .6

     B.   Point at issue

          (para. 32). . . . . . . . . . . . . . . . . . . . .6

     C.   Article 6 para. 2 of the Convention

          (paras. 33-49). . . . . . . . . . . . . . . . . . .6

          CONCLUSION

          (para. 50). . . . . . . . . . . . . . . . . . . . .8

DISSENTING OPINION OF MM. E. BUSUTTIL, A.S. GÖZÜBÜYÜK, J.-C. SOYER,

L. LOUCAIDES, B. MARXER, I. BÉKÉS, J. MUCHA, G. RESS, A. PERENIC,

C. BÎRSAN and K. HERNDL . . . . . . . . . . . . . . . . . .  9

DISSENTING OPINION OF MR. S. TRECHSEL . . . . . . . . . . . 10

DISSENTING OPINION OF MR. H.G. SCHERMERS. . . . . . . . . . 11

APPENDIX: DECISION OF THE COMMISSION AS TO THE

          ADMISSIBILITY OF THE APPLICATION. . . . . . . . . 12

I.   INTRODUCTION

1.   The following is an outline of the case as submitted to the

European Commission of Human Rights, and of the procedure before the

Commission.

A.   The application

2.   The applicants, Swiss citizens, are the heirs of Mr. L. who died

on 7 October 1985.  The first applicant, a housewife born in 1922 and

residing at Sarnen, is L.'s widow.  The second applicant, a businessman

born in 1951 and residing at Sarnen, and the third applicant, a

housewife born in 1956 and residing at Ennetmoos, are the children of

L.  They are represented before the Commission by Mr. R. Küchler, a

lawyer practising in Lucerne.

3.   The application is directed against Switzerland.  The respondent

Government are represented by Mr. Ph. Boillat, Head of the European Law

and International Affairs Section of the Federal Office of Justice,

Agent.

4.   The case concerns the applicants' complaint that, irrespective

of any personal guilt, they were convicted of an offence allegedly

committed by L.  The applicants invoke Article 6 para. 2 of the

Convention.

B.   The proceedings

5.   The application was introduced on 29 October 1992 and registered

on 6 November 1992.

6.   On 5 September 1994 the Commission decided, pursuant to Rule 48

para. 2 (b) of its Rules of Procedure, to give notice of the

application to the respondent Government and to invite the parties to

submit written observations on its admissibility and merits.

7.   The Government's observations were submitted on 15 November 1994.

The applicants replied on 10 and 11 January, 10 February and 14 June

1995.

8.   On 16 October 1995 the Commission declared the application

admissible.

9.   The text of the Commission's decision on admissibility was sent

to the parties on 3 November 1995 and they were invited to submit such

further information or observations on the merits as they wished.

However, no further submissions were made.

10.  After declaring the case admissible, the Commission, acting in

accordance with Article 28 para. 1 (b) of the Convention, also placed

itself at the disposal of the parties with a view to securing a

friendly settlement.  In the light of the parties' reaction, the

Commission now finds that there is no basis on which such a settlement

can be effected.

C.   The present Report

11.  The present Report has been drawn up by the Commission in

pursuance of Article 31 of the Convention and after deliberations and

votes, the following members being present:

          MM.  H. DANELIUS, Acting President

               S. TRECHSEL

               E. BUSUTTIL

               G. JÖRUNDSSON

               A.S. GÖZÜBÜYÜK

               A. WEITZEL

               J.-C. SOYER

               H.G. SCHERMERS

          Mrs. G.H. THUNE

          Mr.  F. MARTINEZ

          Mrs. J. LIDDY

          MM.  L. LOUCAIDES

               J.-C. GEUS

               M.P. PELLONPÄÄ

               B. MARXER

               M.A. NOWICKI

               I. CABRAL BARRETO

               B. CONFORTI

               N. BRATZA

               I. BÉKÉS

               J. MUCHA

               E. KONSTANTINOV

               D. SVÁBY

               G. RESS

               A. PERENIC

               C. BÎRSAN

               P. LORENZEN

               K. HERNDL

12.  The text of this Report was adopted on 10 April 1996 by the

Commission and is now transmitted to the Committee of Ministers of the

Council of Europe, in accordance with Article 31 para. 2 of the

Convention.

13.  The purpose of the Report, pursuant to Article 31 of the

Convention, is:

     (i)  to establish the facts, and

     (ii) to state an opinion as to whether the facts found disclose

          a breach by the State concerned of its obligations under

          the Convention.

14.  The Commission's decision on the admissibility of the application

is annexed hereto.

15.  The full text of the parties' submissions, together with the

documents lodged as exhibits, are held in the archives of the

Commission.

II.  ESTABLISHMENT OF THE FACTS

A.   The particular circumstances of the case

16.  L. was the proprietor of a mail-order company.  It appears that

he had not reported to the tax authorities certain monies earned in

Germany.  Following the advice of a tax adviser, he informed the Sarnen

Municipal Tax Office (Gemeindesteueramt) on 21 December 1984 thereof,

namely that he had not declared the amount of 270,000 SFr.

17.  After L.'s death on 7 October 1985 the Tax Administration

(Steuerverwaltung) of the Canton of Obwalden informed the first

applicant on 29 October 1985 of the institution of tax and criminal tax

proceedings.

18.  On 7 January 1986 the period expired during which the applicant's

heirs could have refused the heritage (see below, para. 30).

19.  On 18 August 1990 the Tax Administration found that L. had

committed tax evasion and ordered the applicants as heirs to pay taxes

of 13,227.90 SFr and a fine of 38,069.60 SFr.

20.  On 19 December 1989 the Cantonal Tax Appeals Board (Steuerrekurs-

kommission) of the Canton of Obwalden partly upheld the applicants'

appeal and reduced the taxes due to 1,481.30 SFr and the fine to

630.90 SFr.  The Appeals Board considered in particular that there were

no indications that the amount at issue had arisen from evaded monies.

The Appeals Board further found that the Tax Administration had not

sufficiently expressed itself on L.'s guilt.  However, it did not refer

the case back for renewed decision, finding that the applicants had had

sufficient opportunity to state their views before the Appeals Board

itself.  In respect of the liability of heirs the Appeals Board

referred to Section 130 para. 1 of the Ordinance on Federal Taxes

(Beschluss über die direkte Bundessteuer; see below, para. 28).

21.  The Federal Tax Administration (Eidgenössische Steuerverwaltung)

then filed an administrative law appeal (Verwaltungsgerichtsbeschwerde)

which the Federal Court (Bundesgericht) upheld on 22 May 1992.

22.  In the Federal Court's opinion, the Appeals Board had incorrectly

distributed the burden of proof, as it fell to the taxpayer to prove

that any increase of fortune did not result from undeclared income.

The Court concluded that L. had deliberately evaded the entire amount

of 270,000 SFr and that L.'s heirs were liable to pay the incurred

fine, irrespective of their personal guilt.

23.  Insofar as the applicants maintained that the imposition of the

fine breached Article 6 para. 2 of the Convention, the Court referred

to its case-law according to which the fine concerned the deceased, not

the heirs, the latter merely being liable in respect of their part of

the inheritance which they were free to refuse.  A further confirmation

of this could be seen in the fact that the amount of the fine was

determined according to the culpability of the deceased.

24.  As a result, the Federal Court imposed taxes on the applicants

to the amount of 29,470.10 SFr and ordered the Appeals Board again to

determine the fine.

25.  On 4 February 1993 the Cantonal Appeals Board imposed a fine of

14,678.80 SFr on the applicants.  The applicants then filed an

administrative law appeal with the Federal Court in which they

complained of the amount imposed.

26.  On 9 January 1994, the Federal Court upheld the applicants'

administrative law appeal and referred the case back to the Cantonal

Appeals Board.  On 24 July 1995 the Cantonal Tax Appeals Board imposed

a fine of 5,513.80 SFr on the applicants.  No further appeal was fined

against this decision.

B.   Relevant domestic law

     1.   Swiss Penal Code

27.  The Swiss Penal Code (Strafgesetzbuch) determines fines (Bussen)

as one of the forms of punishment for a criminal offence (Section 48

et seq.).  According to Section 48 para. 3, a fine is extinguished if

the convicted person dies (stirbt der Verurteilte, so fällt die Busse

weg).

     2.   Ordinance on Direct Federal Taxes

28.  According to Section 129 para. 1 of the Ordinance on Direct

Federal Taxes (Beschluss über die direkte Bundessteuer )in force

at the relevant time, tax evasion (Steuerhinterziehung) shall be

punished with a fine.  Section 130 para. 1 provides, inter alia:

     "If the evasion is discovered only after the death of the person

     liable to pay taxes, proceedings are instituted and carried out

     against his heirs.  Irrespective of personal guilt, these will

     be jointly liable for the deceased person's evaded taxes and the

     fine incurred by him up to an amount not exceeding their share

     in the estate."

     "Wird die Hinterziehung erst nach dem Tode des Steuerpflichtigen

     entdeckt, so wird das Verfahren gegenüber seinen Erben angehoben

     und durchgeführt, und diese haften bis zur Höhe ihrer Erbteile

     solidarisch für die vom Erblasser hinterzogene Steuer und die von

     ihm verwirkten Bussen ohne Rücksicht auf ein eigenes

     Verschulden."

29.  Section 179 para. 1 of the Federal Direct Taxation Act

(Bundesgesetz über die direkte Bundessteuer), in force since 1 January

1995, envisages the liability of the heirs inter alia in respect of any

fines determined with legal force.  According to para. 2, if the tax

evasion proceedings have been concluded after the death of the person

concerned, and if no guilt falls on the heirs, they shall not pay a

fine.

     3.   Swiss Civil Code

30.  Section 560 para. 2 of the Swiss Civil Code (Zivilgesetzbuch)

provides:

     "Subject to the statutory exceptions, all claims, the property,

     the mortgages and the possessions of the deceased shall

     automatically pass over to (the heirs) and the debts of the

     deceased shall become the personal debts of the heirs."

     "Unter Vorbehalt der gesetzlichen Ausnahmen gehen die

     Forderungen, das Eigentum, die beschränkten dinglichen Rechte und

     der Besitz des Erblassers ohne weiteres auf (die Erben) über, und

     die Schulden des Erblassers werden zu persönlichen Schulden der

     Erben."

     According to Section 566 para. 1 of the Swiss Civil Code, "the

legal and instituted heirs have the possibility to refuse the

inheritance which has fallen to them" ("die gesetzlichen und

eingesetzten Erben haben die Befugnis, die Erbschaft, die ihnen

zugefallen ist, auszuschlagen").

III. OPINION OF THE COMMISSION

A.   Complaint declared admissible

31.  The Commission declared admissible the applicants' complaint

that, irrespective of any personal guilt, they were convicted of an

offence allegedly committed by L.

B.   Point at issue

32.  The point at issue is whether there has been a violation of

Article 6 para. 2 (Art. 6-2) of the Convention.

C.   Article 6 para. 2 (Art. 6-2) of the Convention

33.  The applicants complain under Article 6 para. 2 (Art. 6-2) of the

Convention that they have been convicted of an offence irrespective of

any personal guilt.

34.  Article 6 para. 2 (Art. 6-2) of the Convention provides:

     "Everyone charged with a criminal offence shall be presumed

     innocent until proved guilty according to law."

35.  In the applicants' opinion, it transpires from the case-law of

the Federal Court that criminal tax proceedings clearly fall under the

guarantees of Article 6 (Art. 6) of the Convention, and that the

statutory provisions on the punishment of tax evasion clearly

constitute criminal provisions.  The applicants find it difficult to

understand why a different solution should apply in the case of

proceedings instituted against the heirs of a person who evaded taxes.

It is not possible merely to charge the estate but not the heirs.  Even

if it is assumed that the deceased was culpable (schuldhaft), such

culpability cannot be transposed on the heirs.

36.  The applicants refer to various Swiss authors according to which

the liability of heirs for tax fines of the deceased clearly breaches

the presumption of innocence enshrined in Article 6 para. 2 (Art. 6-2)

of the Convention.  This view is also maintained by certain cantonal

courts.

37.  The respondent Government contest, with reference to the decision

of the Federal Court, that the applicants were charged with a criminal

offence.  It is submitted that the proceedings at issue established the

guilt of the deceased, not of the applicants.  Furthermore, according

to Section 566 of the Swiss Civil Code, the applicants were not obliged

to accept the inheritance.  Indeed, the applicants only become liable

to the extent that they have inherited, and not in respect of the

entire estate.  Finally, the names of the heirs assuming the deceased's

fine will not be listed in the criminal register.

38.  The Government point out that under Swiss law the estate has no

legal personality and that the heirs, as it were, represent the

deceased in proceedings where only the latter, not the heirs, is the

accused.  By envisaging the responsibility of the heirs, the law aims

at discouraging a person from withholding taxes during his lifetime.

In the present case, the guilt of the deceased was established.

39.  According to the Commission's case-law, Article 6 para. 2

(Art. 6-2) of the Convention protects everybody against being treated

by public officials as being guilty of an offence before this is

established according to law by a competent court.  This provision may

therefore be violated if somebody is found guilty of criminal acts

without this having been duly proved during a trial (see No. 7986/77,

Krause v. Switzerland, dec. 3.10.78, D.R. 13 p. 73; No. 11669/85, dec.

7.12.87, D.R. 54 p. 95).

40.  In the present case, the Commission must first examine whether

the applicants were "charged with a criminal offence" within the

meaning of Article 6 para. 2 (Art. 6-2) of the Convention.

41.  The Commission notes that after L.'s death on 7 October 1985, the

Tax Administration of the Canton of Obwalden informed the first

applicant on 29 October 1985 of the institution of tax and criminal tax

proceedings.  On 18 August 1990 the Tax Administration found that L.

had committed tax evasion.

42.  Thus, the decision of the Tax Administration formally refers to

criminal offences committed by L.  However, it does not transpire from

the decision that the Tax Administration also laid criminal charges

against the applicants.  There is furthermore no indication that the

applicants were in any other way accused of having committed a criminal

offence.

43.  Nevertheless, on 18 August 1990 the Tax Administration ordered

the applicants to pay the fine for the tax evasion committed by L. as

well as the taxes which L. had withheld.  The Tax Administration

thereby relied on the fact that, after L.'s death in 1985, the

applicants had become heirs to L.'s estate.

44.  The Commission has examined the nature of the obligation imposed

on the applicants.  According to Section 130 para. 1 of the Ordinance

on Direct Federal Taxes, the applicants assumed the obligation to pay

the fine and the outstanding taxes, not on account of their own guilt,

but because they had become liable therefor as heirs.  This is

confirmed by the Federal Court's decision of 22 May 1992 which

emphasised the element of liability and excluded in such cases the

applicability of Article 6 para. 2 (Art. 6-2) of the Convention which

applied only to criminal offences.

45.  In this respect the Commission also notes that fines imposed on

the basis of Section 130 para. 1 of the said Ordinance are not entered

into the criminal register.

46.  In the Commission's opinion, the applicants' liability must be

seen in connection with Section 560 para. 2 of the Swiss Civil Code

according to which heirs shall become liable for any debts of the

inheritance.  Thus, according to Section 130 para. 1 of the Ordinance

on Direct Federal Taxes the applicants only became liable up to the

amount which they had actually inherited.  The applicants could not

become liable in respect of the entire estate, nor was the liability

made dependent on their own fortune.  Indeed, after L.'s death the

applicants could have refused to accept the inheritance altogether.

Had they done so, they would not have been liable either for L.'s debts

or for any fines associated with his estate.

47.  As the applicants chose to accept the inheritance, they became

responsible for their share of the inheritance.  They were thus obliged

to pay L.'s tax debts as well as L.'s fine, not on account of their own

criminal responsibility, but because they had become liable therefor

as heirs to L.'s estate.

48.  It follows that the applicants were not "charged with a criminal

offence" within the meaning of Article 6 para. 2 (Art. 6-2) of the

Convention.  This provision does not therefore apply to the present

case.

49.  On the other hand, the Commission does not exclude that the

proceedings at issue concerned "the determination of (the applicants')

civil rights and obligations" within the meaning of Article 6 para. 1

(Art. 6-1) of the Convention and that to this extent guarantees of this

provision concerning the fairness of civil proceedings would apply to

the present case. However, the Commission finds it unnecessary to

resolve this issue as the applicants have not raised any further

complaints about the unfairness of the proceedings.

     CONCLUSION

50.  The Commission concludes, by 15 votes to 13, that in the present

case there has been no violation Article 6 para. 2 (Art. 6-2) of the

Convention.

Secretary to the Commission                Acting President

                                          of the Commission

       (H.C. KRÜGER)                         (H. DANELIUS)

                                                 (Or. English)

    DISSENTING OPINION OF MM. E. BUSUTTIL, A.S. GÖZÜBÜYÜK,

   J.-C. SOYER, L. LOUCAIDES, B. MARXER, I. BÉKÉS, J. MUCHA,

         G. RESS, A. PERENIC, C. BÎRSAN and K. HERNDL

     We have voted against the finding of no violation of Article 6

para. 2 of the Convention for the following reasons.

     In our opinion even where no formal accusation is raised,

Article 6 para. 2 of the Convention will be breached where a criminal

sanction, implying guilt, is imposed on a person without it having been

duly proved that that person had committed a criminal offence.

     In the present case, we note that on 18 August 1990 the Tax

Administration ordered the applicants to pay the fine for the tax

evasion committed by L. as well as the taxes which L. had withheld.

The Tax Administration thereby relied on the fact that, after L.'s

death in 1985, the applicants had become heirs to L.'s estate.

     It is true that according to Section 130 para. 1 of the Ordinance

on Direct Federal Taxes, the applicants assumed the obligation to pay

the fine and the outstanding taxes, not on account of their own guilt,

but because they had become liable therefor as heirs.  Indeed, the

applicants only became liable up to the amount which they had actually

inherited.  Moreover, fines imposed on the basis of Section 130 para. 1

are not entered into the criminal register.

     We nevertheless observe that the measure imposed on the

applicants was a fine.  According to the Swiss Penal Code, a fine

serves the purpose of punishing a criminal offence (see above,

para. 27) and therefore implies guilt.  A confirmation of the criminal

nature of the fine can further be seen in the present case, on the one

hand, in that the fine was imposed on account of the criminal offence

of tax evasion; and, on the other, in that the deceased, L., was

considered guilty after his death of having committed this offence.

     The applicants were, therefore, victims of a criminal sanction.

The fine, however, as well as its amount, were determined, not on the

basis of the applicants' conduct or of their guilt, but of the conduct

and guilt of another person, namely the deceased L.

     Contrary to Article 6 para. 2 of the Convention, therefore, the

applicants were punished for a criminal offence which was not duly

proved during a trial and which indeed another person had committed.

     Consequently we consider that there has been a violation of

Article 6 para. 2 of the Convention.

                                                 (Or. English)

             DISSENTING OPINION OF MR. S. TRECHSEL

     I regret that, in the present case, I cannot agree with the

majority of the Commission.  In my view there has been a violation of

Article 6 paragraph 2 of the Convention.

     It is true that the applicants themselves have not formally been

charged with a criminal offence.  Nevertheless, they in fact had the

position of defendants in the proceedings concerning the tax evasion

allegedly committed by the deceased.  After L.'s death it was the first

applicant whom the authorities informed of the opening of criminal tax

proceedings.  I accept that the issue in these proceedings was the

guilt not of the applicants but of L.

     However, at the time the decision to impose a penalty was taken

the person found guilty had died and those directly affected were the

applicants.

     According to the case-law of the Commission and the Court,

Article 6 paragraph 2 can be violated even in the absence of any

conviction by a declaration of an authority that a person is guilty of

an offence.  In my view, on the other hand, there must also be a

violation of that guarantee in a case where a retributive sanction is

imposed upon a person for an offence committed by another person.

     I am not impressed by the Government's argument that the heirs

could have refused the inheritance.  At the time the fine was imposed

they had, according to Section 560 of the Swiss Civil Code, already

acquired title to and possession of whatever the deceased had left.

Rejecting the inheritance would only have eliminated the problem if,

even disregarding the fine, the applicant had left more debts than

assets.  They would also have suffered a loss if they had had to reject

the inheritance because after deduction of the fine nothing was left

over.

     In a nutshell:  The present case concerns applicants who were

punished for an offence somebody else had committed.  Such a punishment

is not compatible with Article 6 para. 2 of the Convention and there

has, accordingly, been a violation of that guarantee.

                                                 (Or. English)

           DISSENTING OPINION OF MR. H.G. SCHERMERS

     Unlike the majority of the Commission I am of the opinion that

Article 6 para. 2 of the Convention has been violated in the present

case.

     The rights of the applicants cannot be fully separated from those

of the de cujus, Mr. L.  Had L. been lawfully convicted to pay a fine,

then that fine would have been part of the inheritance and there would

be no objection against charging the heirs for payment.  Therefore, we

first have to consider whether Mr. L. had been lawfully charged of the

fine and in particular, whether L.'s presumption of innocence was

respected.  In my opinion that is not the case.  Only after his death

suspicion arose against him and after his death he was prosecuted for

tax evasion.  According to the Federal Court he was to be found guilty

unless he could prove his innocence (para. 22 of the Report).  Being

dead L. could not prove anything.  Subsequently, he was convicted (post

mortem) of having deliberately evaded taxes.  Under Article 6 para. 2

L. had to be considered innocent until proved guilty according to law.

In my opinion "law" also includes the Convention and the general

principles of law.  I cannot accept that the de cujus L. was proved

guilty according to law.

     This affects the case of the applicants.  At the time of the

death of Mr. L. there was no fine yet, not even a suspicion against

him.  Only after the heritage had gone into the legal possession of the

applicants was a fine established, but that fine cannot be seen as a

lawful part of the inheritance.  Considering the date of its

establishment the fine can hardly be other than a fine upon the heirs.

One cannot punish a dead person.  If the fine is any kind of a

punishment of the heirs, it is obviously in violation of Article 6

para. 2, as no guilt of the heirs has been proved.

     Remains the question whether the fine can be seen as a charge on

the heritage other than a fine.  As noticed above there can be no

question of a lawful fine of the de cujus which is binding for the

heirs as a charge on the heritage.  Can it be seen as any other kind

of charge forming part of the inheritance?  Of course, the taxes

themselves can be charged against the heritance, even if their being

due is established only after the death of the de cujus.  In my

opinion, the same will apply to a reasonable interest automatically

added to taxes in undeclared income.  The finding out of the duty to

pay such taxes and the delays involved cause costs to the tax

authorities and an extra charge may be justified for covering such

costs.  This should, however, be irrespective of any guilt of the

assessable person.  When, as in the present case, the additional charge

is named "fine" and depends on the question whether or not the tax

evasion was deliberate, it cannot be otherwise determined than a

criminal charge in the sense of Article 6.  Therefore, the requirements

of Article 6 should be fulfilled.  As the applicants have been fined

without having been found guilty of any offence, Article 6 para. 2, has

been violated.

 

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