FIFTH SECTION
DECISION
Application no. 37869/14
Jan HLADKÝ
against the Czech Republic
The European Court of Human Rights (Fifth Section), sitting on 9 September 2014 as a Committee composed of:
Inse Boštjan M. Zupančič, President,
Helena Jäderblom,
Aleš Pejchal, judges,
and Stephen Phillips, Deputy Section Registrar,
Having regard to the above application lodged on 14 May 2014,
Having deliberated, decides as follows:
THE FACTS
The applicant, Mr Jan Hladký, is a Czech national, who was born in 1933 and lives in Valašské Meziříčí. He was represented before the Court by Mr V. Dvořáček, a lawyer practising in Prague.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
In 1991 the applicant invested, together with thousands of other small investors, 30,000 then Czechoslovak korunas (approx. EUR 1,091) (the “sum”) in a limited partnership named Joint Invest Action, k.s. (“JIA”). The partnership allegedly undertook to return the sum together with a high yield. The applicant has never received any proceeds back.
In March 1997 the police had initiated criminal proceedings against JIA’s managers for embezzlement of the partnership’s assets. The applicant joined the criminal proceedings as a civil party, claiming damages corresponding to the sum owed to him by JIA together with interest. The criminal proceedings continued until March 2008. By the police decision dated 31 March 2008 they were discontinued because of formal defects at the commencement of the proceedings. In particular, it was held that the police decision charging JIA’s managers with embezzlement did not comply with the form and content prescribed in the then Code of Criminal Procedure. The police decided that as the criminal proceedings had never correctly begun, the criminal case against the managers was time-barred.
The applicant did not submit any observations regarding the insolvency proceedings. According to the publicly available records JIA was declared bankrupt on 13 June 2002 and insolvency proceedings began. The insolvency proceedings are still pending. At an unknown date the applicant registered his debt corresponding to the sum in these proceedings.
By a letter dated 4 October 2011 the applicant claimed the sum (together with interest) from the Ministry of Justice, relying on Sections 7 and 13 of the State Liability Act no. 82/1998 Coll. He submitted that the police had issued an illegal decision purporting to initiate criminal proceedings against JIA’s managers, and conducted a criminal procedure vitiated by many irregularities. The defects in the police prosecution had effectively deprived him of a possibility to recover the sum owed to him by JIA.
In a reply dated 10 October 2011 the Ministry rejected the claim as premature, on the grounds that the applicant had registered the debt corresponding to the sum in the insolvency proceedings brought against JIA which were still pending at that time.
The applicant then turned to the Prague 2 District Court which, on 29 November 2012, dismissed the applicant’s claim as being premature due to the pending insolvency proceedings. The District Court further held that the applicant had not exhausted all remedies enabling him to recover the sum prior to claiming it from the State, namely that he had not initiated civil proceedings against the JIA’s managers for the loss sustained. In the court’s view such civil claim was not time-barred.
On 15 May 2013 the Prague Municipal Court upheld the judgment of the the Prague 2 District Court.
Relying, among other arguments, on Article 6 of the Convention and Article 1 of Protocol No. 1, the applicant lodged a constitutional appeal. In the appeal he complained that, in principle, the ordinary courts had not accepted evidence submitted by him, that they had not reflected his submissions and that the State’s (police’s) failure to institute criminal proceedings properly had effectively prevented him from recovering the sum. The applicant maintained that his claim had become time barred.
On 12 November 2013 the Constitutional Court dismissed the constitutional appeal as manifestly ill-founded. In its view, the applicant’s arguments were of a third instance nature as the applicant continued in his disagreement with the decisions of the ordinary courts. Furthermore, the Constitutional Court held that the applicant could initiate civil proceedings for damages against JIA’s managers and that such claim was not time-barred.
B. Relevant domestic law
1. Act no. 82/1998 on State liability for damage caused in the exercise of public authority by an irregularity in a decision or the conduct of proceedings
Under Sections 7 and 8 individuals who suffer loss because of a final unlawful decision that is later quashed or changed are entitled to claim damages.
Section 13 provides that the State is also liable for damage caused by an irregularity in the conduct of proceedings, including non-compliance with the obligation to perform an act or give a decision within the statutory time-limit.
2. Civil Code (Act no. 40/1964, applicable at the relevant time)
Section 112 provided that if the creditor exercised his right at a court or during the limitation period and properly continued the commenced proceedings, the limitation period shall stop running from the moment of this exercise during the course of the proceedings.
3. Code of Criminal Procedure (Act no. 141/1961)
Section 229 provides that if the outcome of evidence produced [to the court] does not give enough grounds to grant the civil party damages, or deciding on damages would require further evidence being produced which would substantially delay the criminal proceedings, the court shall inform the civil party about the possibility to bring civil proceedings.
The court shall also refer the civil party to the civil proceedings with the remainder of the claim if the party’s claim is satisfied, for whatever reason, only partially in the criminal proceedings.
If the court acquits the accused it shall always refer the civil party with his or her damage claim or non-pecuniary damage claim to the civil proceedings.
COMPLAINTS
1. The applicant complained under Article 6 of the Convention that his right to a fair trial was infringed. First, the criminal proceedings which he had joined as a civil party became statute-barred due to the failure of the investigators to properly conduct these proceedings, which frustrated any means he could have to pursue his civil claim for damages. Second, the courts refused to accept evidence proposed by him in the compensation proceedings.
2. The applicant further contended that there had been a violation of Article 1 of Protocol No. 1 as the State, responsible for carrying out defective criminal proceedings, did not provide him with effective means to enforce his claim against JIA’s managers. Thus the State frustrated his debt in the form of the damages claim which he had against those managers.
THE LAW
1. The applicant complained that the criminal proceedings in which he took part as a civil party did not observe the requirements of fairness laid down in Article 6 § 1 of the Convention which, so far as relevant, reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal established by law.”
First, the applicant submitted that, as the case could not be tried in the criminal proceedings because of the faults committed by the police, he was deprived of the possibility to recover his compensation claim.
Recalling that the Convention does not give the applicant the right to have JIA’s managers convicted, the Court observes that the criminal proceedings against the JIA’s managers were discontinued in 2008, on the grounds that they had not been properly started. At that time new charges could not be brought against the managers because the case was statute-barred. Therefore, the applicant lost the chance to have his compensation claim examined within the criminal proceedings even if he had not, through the operation of Section 229 of the Code of Criminal Procedure, an absolute right to have his claim determined by the criminal court.
Nevertheless it was beyond any doubt that the discontinuation of the criminal proceedings left the applicant’s claim intact in so far as the applicant had alternative means to pursue it. The Court will therefore assess whether the applicant had an effective right of access to a court competent to hear his civil claim (see, mutatis mutandis, Atanasova v. Bulgaria, no. 72001/01, § 41, 2 October 2008).
The Court observes at the outset that the applicant registered his claim in the insolvency proceedings brought against JIA. According to the publicly available records, the JIA had been declared bankrupt already on 13 June 2002, i.e. before the discontinuation of the criminal proceedings, and this procedure is still pending. Thus the applicant had and used means enabling him to recover the sum sought, at least potentially, from the proceeds of insolvency.
Furthermore the Court notes that all the domestic courts hearing the applicant’s compensation case held that had he brought civil proceedings, his claim would not have been time-barred because of the operation of Section 112 of the Civil Code. The applicant could therefore have initiated civil proceedings already in 2008, and these proceedings were considered by the domestic courts as an effective remedy available to him. Yet, apart from disagreeing with the domestic courts’ interpretation of Section 112 of the Civil Code, he did not submit any relevant arguments or reasons why he did not bring a civil claim against JIA’s managers.
The Court does not find any arbitrariness in the domestic authorities’ conclusion that the applicant could pursue his claim in the insolvency and in the civil proceedings, and it sees no reason to consider that he was deprived of an effective right of access to a court.
Second, the applicant asserted that the domestic courts refused to accept evidence proposed by him in the compensation proceedings. However Article 6 of the Convention does not lay down any rules on the admissibility of evidence as such, which is therefore primarily a matter for regulation under national law (see, among others, Schenk v. Switzerland, 12 July 1988, § 46, Series A no. 140). The domestic courts do not have an obligation to accept all the evidence proposed by an applicant, in so far as they give sufficient reasons for their refusal. In the instant case there is no indication the domestic courts did not meet the required threshold.
It follows that that the applicant’s complaints under Article 6 of the Convention are manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
2. The applicant further contended that there had been a violation of Article 1 of Protocol No. 1, which provides:
“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.”
The applicant submitted that the State, by carrying out defective criminal proceedings, frustrated his debt corresponding to the sum that he had invested in JIA.
The Court has consistently held that “possessions” within the meaning of Article 1 of Protocol No. 1 can be either “existing possessions” or assets, including claims, in respect of which an applicant can argue that he has at least a “legitimate expectation” that they will be realized (see, for example, Gratzinger and Gratzingerova v. the Czech Republic (dec.), no. 39794/98, § 69, ECHR 2002‑VII).
In the present case, the applicant made an investment bearing a certain degree of risk. Any assertion that the criminal court would order JIA’s managers to pay him the sum sought is speculative. Therefore the applicant cannot be said to have had a legitimate expectation that he would recover his debt in the criminal proceedings. Moreover, the applicant’s complaint appears to be premature in so far as the insolvency proceedings are still pending.
It follows that this complaint must also be rejected in accordance with Article 35 § 3 (a) and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Stephen PhillipsBoštjan M. Zupančič
Deputy RegistrarPresident
Full & Egal Universal Law Academy