THIRD SECTION
DECISION
Application no. 28681/06
by Freddy EMFELDT
against Sweden
The European Court of Human Rights (Third Section), sitting on 24 June 2008 as a Chamber composed of:
Josep Casadevall, President,
Elisabet Fura-Sandström,
Corneliu Bîrsan,
Alvina Gyulumyan,
Egbert Myjer,
Ineta Ziemele,
Ann Power, judges,
and Stanley Naismith, Deputy Section Registrar,
Having regard to the above application lodged on 7 April 2006,
Having regard to the Court’s decision to examine jointly the admissibility and merits of the case (Article 29 § 3 of the Convention),
Having regard to the formal declarations accepting a friendly settlement of the case,
Having deliberated, decides as follows:
THE FACTS
The applicant, Mr Freddy Emfeldt, is a Swedish national who was born in 1959 and lives in Stockholm. He was represented before the Court by Mr L. Tärnqvist, a lawyer practising in Stockholm. The Swedish Government (“the Government”) were represented by their Agent, Mr B. Sjöberg, Ministry for Foreign Affairs.
The facts of the case, as submitted by the applicant, may be summarised as follows.
On 10 December 1996 the Tax Authority (skattemyndigheten) of the County of Stockholm decided to carry out a tax audit of the company Fastighets Monumentet AB, indirectly wholly-owned by the applicant.
Following the conclusion of the audit, the Tax Authority, by a decision of 31 May 1999, considered that the company had issued false subcontractor invoices in order to pay black labour and transfer untaxed funds from the company to the owner. As a consequence, value-added tax, employers’ contributions and tax surcharges were imposed on the company for the period September 1994 – January 1997.
On 8 December 1999 the Tax Authority decided on the applicant’s taxation for the assessment year 1997. Being the representative and indirect owner of the company, he was considered to have received the above untaxed funds as income. Accordingly, his taxable income was increased by 1,954,683 Swedish kronor (SEK; equivalent to approximately 210,000 euros). Moreover, as the information supplied by the applicant in his tax returns was found to be incorrect, the Tax Authority ordered him to pay tax surcharges amounting to 40% of the increased tax liability.
The applicant appealed to the County Administrative Court (länsrätten) of the County of Stockholm. He also requested a stay of execution of the enforcement of the taxes and surcharges. This was refused by the Tax Authority on 16 March 2000 and, on appeal, by the County Administrative Court on 27 June 2000. On 14 July 2000 the Administrative Court of Appeal (kammarrätten) in Stockholm refused leave to appeal with respect to the stay-of-execution issue. No appeal was made against the appellate court’s decision. The applicant’s request for a stay was later renewed. On 8 October 2001 it was refused by the County Administrative Court. On 6 December 2001 and 4 April 2002, respectively, the Administrative Court of Appeal and the Supreme Administrative Court (Regeringsrätten) refused leave to appeal.
On 12 January 2001 the applicant was declared bankrupt through a decision of the District Court (tingsrätten) of Nacka. At that time, the tax debt, including tax surcharges and interest, amounted to SEK 1,861,981. However, on 12 February 2001 the Svea Court of Appeal (Svea hovrätt) quashed the declaration of bankruptcy. It noted that the tax case was pending before the County Administrative Court and that the Tax Authority’s decision thus had not acquired legal force. It was therefore necessary to examine the State’s tax claims independently in the bankruptcy proceedings on the basis of the evidence presented. The appellate court considered that the State had neither commented on the applicant’s objections concerning his tax liability nor produced any material relating to the grounds for the contested taxation. In view of this, the court found that it could not be considered unlikely that the applicant’s tax appeal would be successful and, consequently, it had not been shown that he was insolvent.
Nevertheless, the Enforcement Office (kronofogdemyndigheten) in Stockholm levied execution on the applicant’s personal assets, including the compensation of SEK 18,000 for legal costs awarded in the bankruptcy proceedings. The execution order still remains in force.
By judgments of 18 May 2001, the County Administrative Court upheld the Tax Authority’s decisions concerning the taxation of the applicant and the company. On 10 October 2003 the Administrative Court of Appeal upheld these judgments. In regard to the applicant’s claim that the tax surcharges should be remitted due to the length of the tax proceedings, the court found that there had not been such a situation in the case that the surcharges should be remitted on this ground. By decisions of 27 October 2005, the Supreme Administrative Court refused leave to appeal.
COMPLAINTS
1. The applicant complained, under Article 6 of the Convention, that he had been deprived of effective access to court, as he had been denied a stay of execution and, as a consequence, the taxes and tax surcharges fixed by the Tax Authority had been enforced prior to a court having determined the principal tax dispute.
2. Further under Article 6, he claimed that the tax dispute had not been determined within a reasonable time.
3. The applicant also complained, under Article 6 § 3 (d), that a tape recording of testimony, given before the County Administrative Court in the stay-of-execution proceedings, had been destroyed and thus could not be invoked in the proceedings concerning the principal tax dispute.
THE LAW
On 25 March 2008 the Court received the following declaration from the Government, signed by the Agent of the Government on 4 March 2008 and by the applicant on 13 March 2008:
“The Government and the applicant have now reached the following friendly settlement on the basis of respect for human rights, as defined in the [Convention], in order to terminate the proceedings before the Court.
a) The Government will pay, ex gratia, the sum of SEK 70,000 (seventy thousand) to the applicant. Execution of payment will take place when the Government has received the Court’s decision striking the case out of its list of cases.
b) The applicant declares that he has no further claims on the Swedish State based on the facts of the [present] application.
This settlement is dependent upon the formal approval of the Government at a Cabinet meeting.”
By a decision of 10 April 2008, the Government approved the settlement reached.
The Court takes note of the friendly settlement reached between the parties. It is satisfied that the settlement is based on respect for human rights as defined in the Convention and its Protocols and finds no public policy reasons to justify a continued examination of the application (Article 37 § 1 in fine of the Convention).
For these reasons, the Court unanimously
Decides to strike the application out of its list of cases.
Stanley NaismithJosep Casadevall
Deputy RegistrarPresident
Full & Egal Universal Law Academy