FOURTH SECTION
DECISION
Application no. 14610/05
LATVIJAS JAUNO ZEMNIEKU APVIENĪBA
against Latvia
The European Court of Human Rights (Fourth Section), sitting on 17 December 2013 as a Chamber composed of:
Päivi Hirvelä, President,
Ineta Ziemele,
George Nicolaou,
Zdravka Kalaydjieva,
Vincent A. De Gaetano,
Paul Mahoney,
Krzysztof Wojtyczek, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having regard to the application lodged on 15 March 2005,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The case originated in an application (no.14610/05) filed against the Republic of Latvia under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by the Union of Latvian Young Farmers (Latvijas Jauno zemnieku apvienība – “the ULYF”), an organisation registered in Latvia (“the applicant organisation”). It complained that it had been prevented from protecting its property as a result of the domestic courts’ refusal to consider its claim against a former manager, R.K., because it had failed to pay the requisite court fee.
2. The application was lodged before the Court on 15 March 2005.
3. The applicant organisation was represented before the Court by S.I. The Latvian Government (“the Government”) were represented by their Agent at the time, Ms I. Reine, and subsequently by Ms K. Līce.
A. The circumstances of the case
4. The relevant facts submitted by the parties may be summarised as follows.
1. Establishment of the applicant organisation
5. The applicant organisation was registered in the Enterprise Register of the Republic of Latvia (Latvijas Republikas Uzņēmumu reģistrs – “the LRUR”) on 10 April 2000.
2. Criminal proceedings
6. Advertisements for farming job opportunities abroad were circulated with the applicant organisation’s contact details. On 31 May 2000, the State Revenue Service (Valsts ieņēmumu dienests – “the VID”) carried out an inspection of the applicant organisation’s office. It was discovered that it did not possess a licence to offer that service and that funds were regularly being withdrawn from its bank accounts and cashbox. The matter was further investigated and charges of aggravated fraud were brought against S.I., R.K. and A.G.
7. On 7 July 2003 the Riga Regional Court (Rīgas apgabaltiesa) found S.I., R.K. and A.G. guilty of aggravated fraud.
8. The court established that S.I. had arrived in Latvia as a representative of another organisation, the International Union of Young Farmers (“the IUYF”), with a registered office in Austria. His aim had been to set up an organisation in Latvia which would appear to be arranging jobs abroad, and to appropriate funds from individuals interested in such employment opportunities.
9. The court found that S.I., without disclosing his intention, had engaged persons who had agreed to set up an organisation in their own names. Consequently, the applicant organisation had been formed and S.I. had organised the hiring of other staff by placing advertisements and conducting interviews in the applicant organisation’s office. R.K. had been appointed in that manner as the organisation’s manager. In May 2000, S.I. had met A.G. and offered him a position on the IUYF’s board. Later, A.G. had been appointed as the applicant organisation’s manager, and R.K. had continued to work as his deputy.
10. The Riga Regional Court also found that between 24 April and 31 August 2000, 536 persons had entered into agreements with the applicant organisation trusting in job opportunities abroad. They had paid monies into the applicant organisation’s bank accounts and cashbox, and had paid fees for IUYF membership and for the translation of documents. R.K. and A.G. had regularly withdrawn the funds from the applicant organisation’s bank accounts and cashbox, and transmitted them to S.I. Following the inspection by the VID on 31 May 2000, S.I. had agreed with R.K. to sign payment orders between the applicant organisation and the IUYF in attempt to conceal the misappropriation of funds.
11. Consequently, the Riga Regional Court convicted S.I., R.K. and A.G. of aggravated fraud and ordered that they compensate all the injured parties for damage.
12. On 6 June 2007 the decision of the Riga Regional Court was upheld on appeal by the Criminal Chamber of the Supreme Court (Augstākās tiesas Krimināllietu tiesu palāta). On 29 November 2007 the criminal department of the Senate of the Supreme Court (Augstākās tiesas Senāta Krimināllietu departaments) refused to examine the case on points of law.
13. S.I., representing the applicant organisation before the Court, submitted that he disagreed with the findings of the domestic courts.
3. Civil proceedings
14. On 1 October 2004, S.I., acting on behalf of the applicant organisation, lodged a claim against R.K. in the Riga Regional Court requesting that R.K. return to the applicant organisation the sum of 75,626.44 Latvian lati (LVL) and that payment orders be annulled. S.I. asked that the applicant organisation be exempted from the court fees. He stated that the payment of the fee was beyond the applicant organisation’s means because its managers, R.K. and A.G., had not repaid the organisation’s funds.
15. On 6 October 2004 the Riga Regional Court stayed the proceedings. It also demanded payment of the State fee of LVL 996.26. With regard to the State fee, it reasoned:
“Section 43 of the Civil Procedure Law, which provides for the exemption of persons from paying a State fee (valsts nodeva), does not provide for an exemption for legal persons owing to their financial situation. Therefore, the reasons for requesting an exemption from payment of the State fee cannot be considered and the request must be refused.”
16. S.I. lodged an appeal against the aforementioned decision. On 17 December 2004 the Civil Chamber of the Supreme Court (Latvijas Republikas Augstākās tiesas Civillietu tiesu palāta) rejected the appeal and upheld the impugned decision. Regarding the State fee, it explained:
“The provisions of section 43(4) of the Civil Procedure Law entitle a court or a judge to exempt a natural person fully or partly from payment of court costs (tiesas izdevumi) to the State in view of his or her financial circumstances.
The provisions of section 43 of the Civil Procedure Law do not entitle a court or a judge to exempt a legal person fully or partly from the payment of court costs ...”
17. On 14 February 2005 the Riga Regional Court noted that the shortcoming with regard to the absence of payment of the State fee had not been eliminated. The court therefore decided to dismiss the claim by the organisation’s representative and to discontinue the proceedings.
B. Relevant domestic law and practice
1. Constitutional provisions
18. The relevant articles of the Latvian Constitution (Satversme) provide:
Article 85
“In Latvia, there shall be a Constitutional Court [Satversmes tiesa], which, within the limits of its jurisdiction as provided for by law, shall review cases concerning the compliance of laws with the Constitution, as well as other matters regarding which jurisdiction is conferred upon it by law. The Constitutional Court shall have the right to declare laws or other enactments or parts thereof invalid ...”
Article 92
“Everyone has the right to defend his or her rights and lawful interests in a fair court ...”
2. Constitutional Court Law
19. For the relevant provisions of the Constitutional Court Law (Satversmes tiesas likums), see Grišankova and Grišankovs v. Latvia ((dec.), no. 36117/02, ECHR 2003‑II (extracts)). The most relevant provision for the purposes of the present case reads as follows:
Section 192 – Constitutional Complaint
“1. Any person who considers that a legal provision, which is not in compliance with a provision having superior legal force, has infringed his or her fundamental rights under the Constitution may lodge a constitutional complaint with the Constitutional Court.”
3. Statutory provisions concerning court costs
20. The relevant provisions of the Civil Procedure Law are worded as follows:
Section 43
“(4) A court or a judge may, in view of a natural person’s financial condition, exempt him or her fully or partly from the payment of court costs to the State ...”
4. Criminal Procedure Code
21. The provisions pertinent to a civil claim in criminal proceedings, read as follows:
Section 100
“The victim is a natural or a legal person who has been caused moral, physical or pecuniary harm by a criminal offence.
...”
Section 101
“A civil claim in a criminal case may be submitted by a person ... or organisation which has been caused pecuniary damage by a criminal offence ...
...
The civil claim in a criminal case is exempt from a State fee.
...
A person who has not submitted a civil claim in a criminal case ... has the right to submit it in accordance with the civil procedure.”
5. Case-law of the Constitutional Court
22. In case no. 2008-07-01, the Constitutional Court examined a constitutional complaint lodged by Mr M. Kondakovs contesting sections 458(1) and (4) of the Civil Procedure Law. Until 25 June 2008, the disputed provisions had been phrased as follows:
“(1) A security deposit (drošības nauda) of LVL 50 shall be paid when lodging an appeal on points of law.
...
(4) Persons who, pursuant to the law or a decision of a court or a judge, are exempted from the State fee (valsts nodeva) shall not be required to pay the security deposit.”
23. By virtue of the amendments of 22 May 2008, effective as of 25 June 2008, the following words were added to section 458(4) of the Civil Procedure Law:
“(4) ... A court or a judge may, in view of a natural person’s financial circumstances, fully or partly exempt that person from the payment of a security deposit.”
24. Mr M. Kondakovs argued that his right of access to a court had been breached in that, at the time of lodging the appeal on points of law, he had been indigent. However, the Civil Procedure Law did not provide that a court or a judge could waive or reduce the security deposit if the person concerned had not been exempted from the State fee.
25. The relevant part of the Constitutional Court’s ruling read:
“The legislator, in not providing a mechanism[1] allowing indigent persons to be fully or partly exempted from the obligation to pay the security deposit ... completely denied those persons the opportunity to submit an appeal on points of law ... The legislator, in providing for the payment of a particular fee for an appeal against a court decision in a court of higher instance, should have provided a possibility for persons without such financial means to protect their rights in a fair court ...”
26. The Constitutional Court thus found that the disputed provisions did not meet the requirement of proportionality. It further pronounced:
“In order to remedy the infringement of [Mr M. Kondakovs’s] fundamental right ... the disputed provisions with respect to [Mr M. Kondakovs] shall be deemed invalid from the moment he lodged the appeal on points of law.
Pursuant to section 479(5) of the Civil Procedure Law, a finding on the incompatibility of a provision applied in the adjudication of a case with a provision of a superior legal force shall be regarded as a newly discovered fact. Based on this provision, [Mr M. Kondakovs] is entitled to submit an application ... to ... the court in view of the newly discovered fact – the finding on the incompatibility of the disputed provisions with Article 92 of the Constitution.”
27. The Constitutional Court declared the disputed provisions, as worded until 25 June 2008, incompatible with Article 92 of the Constitution with respect to the date on which Mr M. Kondakovs had lodged his appeal on points of law “to the extent that these provisions did not entitle[2] the court or judge to decide that a person be fully or partly exempted from the payment of a security deposit when lodging an appeal on points of law ...”
28. In case no. 2005-18-01, the Constitutional Court examined a constitutional complaint lodged by Mr O. Kožečenkovs contesting the provisions of section 98 of the Land Registry Law and section 449(4) of the Civil Procedure Law. At the material time, those provisions required that a security deposit of LVL 40 be paid on lodging an appeal against a decision of the Land Registry Court.
29. Mr O. Kožečenkovs complained that his right of access to a court had been substantially restricted. He emphasised that the law did not provide for the possibility of waiving or reducing the security deposit.
30. The relevant part of the Constitutional Court’s ruling read as follows:
“... the legislator has not provided a possibility[3] for a person to ask the court for a full or partial exemption from the payment of the security deposit ... the legislator should provide for a less restrictive measure – the right of a person to request an exemption from the payment of a security deposit or a reduction in the amount of the security deposit ... The legislator, in requiring a particular payment for an appeal against a court decision in a court of higher instance, should at the same time provide a possibility for persons without such financial means to protect their rights in a fair court.”
31. The Constitutional Court found that the disputed provisions did not meet the requirement of proportionality. It therefore invalidated the provisions as of 1 July 2006, and further held:
“Until 1 July 2006 the general principle of civil procedure law enshrined in sections 43(4) and 458(4) of the Civil Procedure Law shall be applied in this category of cases, in accordance with procedural analogy.”
32. According to the Constitutional Court, the aforementioned ruling entitled the court to decide whether to grant a person’s request for full or partial exemption from the payment of a security deposit in view of the person’s financial situation.
33. The Constitutional Court ruled that Mr O. Kožečenkovs had the right to lodge the appeal and request a full or partial exemption from the payment of a security deposit.
COMPLAINT
34. The applicant organisation complained, under Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention, that the domestic courts had not examined its claim against R.K. on account of its failure to pay the requested court fee. It also complained of the ensuing lack of opportunity to protect its property.
THE LAW
35. Relying on Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention, the applicant organisation submitted that it had been denied the opportunity to institute proceedings in the domestic courts against R.K. on the grounds that it had not paid the requisite court fee, and that it had therefore been deprived of an opportunity to protect its property.
36. The Court finds that this complaint falls to be examined under Article 6 § 1 of the Convention, the relevant part of which reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
A. Alleged violation of Article 6 § 1 of the Convention
1. Submissions of the parties
37. The Government raised several preliminary objections. They argued first that the complaint had not been validly lodged on behalf of the applicant organisation. Secondly, they argued that it was incompatible ratione materiae with the provisions of the Convention. Lastly, they maintained that the applicant organisation had failed to use the remedies provided for in the Criminal Procedure Code and the Constitutional Court Law, which were effective, accessible and offered reasonable prospects of success.
38. The Government stressed that the issue of withdrawal of the applicant organisation’s funds by R.K. had been examined in the course of the criminal proceedings. Therefore, the applicant organisation had been entitled, under section 101 of the Criminal Procedure Code, to submit a civil claim in the criminal proceedings, for which no State fee was payable. The Government emphasised that the national court already had a complete case file on those proceedings, and 536 civil claims had been lodged by the injured parties, all of which had been upheld by the national court.
39. In the Government’s submission, the applicant organisation should have challenged section 43(4) of the Civil Procedure Law before the Constitutional Court. They relied on the Court’s decision in Grišankova and Grišankovs (cited above), in which the Court accepted that recourse to the Constitutional Court was an effective remedy. The Government stressed that the Constitutional Court’s interpretation of a legal provision was binding on the domestic authorities.
40. In response to the Government’s preliminary objection concerning the exhaustion of domestic remedies, the applicant organisation commented that it had used all the opportunities available in its claim against R.K. With regard to the possibility of submitting a claim in the context of criminal proceedings, it argued that its representative, S.I., had been authorised to act in the civil proceedings. Referring to Ivanovas v. Latvia ((dec.), no. 25769/02, 04 December 2012), the applicant organisation asserted that its representation in the criminal proceedings had been impossible because of human rights violations committed in those proceedings. Therefore it had been prevented from recovering the misappropriated funds and returning them to the organisation’s 536 former members.
2. The Court’s assessment
41. The Court refers to the applicable principles on the exhaustion of domestic remedies (see Melnītis v. Latvia, no. 30779/05, § 46, 28 February 2012, and Bazjaks v. Latvia, no. 71572/01, § 85, 19 October 2010). The purpose of Article 35 § 1 of the Convention is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to the Court. The obligation to exhaust domestic remedies is, however, limited to making use of those remedies which are likely to be effective and available, meaning that their existence is sufficiently certain and they are capable of directly redressing the alleged violation of the Convention (see Savičs v. Latvia, no. 17892/03, § 104, 27 November 2012, and Bazjaks, cited above, § 58).
42. The Court is not persuaded by the applicant organisation’s contention that it had been prevented from lodging a civil claim against R.K. in the framework of the criminal proceedings. Indeed, as pointed out by the Government, criminal proceedings had been conducted, inter alia, with respect to the withdrawal of funds from the applicant organisation’s bank accounts and cashbox (see paragraphs 6 and 10 above). The possibility of lodging a civil claim, without paying a State fee, had existed under the national law (see paragraph 21 above) and a considerable number of injured parties had been awarded compensation in those proceedings (see paragraphs 10 and 11 above). The Court is unable to discern the reasons preventing the applicant organisation from appointing a representative to act on its behalf in those proceedings. The Court does not see the relevance of the Ivanovas case, referred to by the applicant organisation. The judgment of the Court in Ivanovas did not establish a violation of Article 6 of the Convention with respect to those criminal proceedings.
43. In view of the above, the Court accepts the Government’s argument that in the circumstances of the present case, a civil claim in the criminal proceedings was an effective and available remedy in respect of the applicant’s complaint.
44. The Court has already examined the scope of the Constitutional Court’s review in Latvia and noted that it examined, inter alia, individual complaints challenging the constitutionality of a legal provision or its compliance with a provision of superior legal force. An individual constitutional complaint can only be lodged against a legal provision where an individual considers that the provision in question infringes his or her fundamental rights as enshrined in the Constitution (see Liepājnieks v. Latvia (dec.), no. 37586/06, § 73, 2 November 2010, and Grišankova and Grišankovs, cited above).
45. The procedure of an individual constitutional complaint therefore cannot serve as an effective remedy if the alleged violation resulted only from erroneous application or interpretation of a legal provision which, in its content, is not unconstitutional (see Savičs, cited above, § 113, and Liepājnieks, cited above, ibid.). With that in mind, in the present case the Court observes that section 43(4) of the Civil Procedure Law, to which the domestic courts referred in their refusal to exempt the applicant organisation from the court fee, was clear in providing that “a natural person” could be exempt fully or partly from the court costs. It was therefore explicit that a person other than a natural person, such as the applicant organisation, could not benefit from that provision. Accordingly, the Court distinguishes these circumstances from those in Savičs where the interpretation and application of a legal provision were at stake (see Savičs, cited above, § 115).
46. The Court observes that the domestic courts were consistent in their finding that section 43(4) of the Civil Procedure Law did not entitle a court or a judge to exempt a legal person fully or partly from the payment of the court fee. In that sense, these circumstances are not comparable to those in Grišankova and Grišankovs, in which the situation complained of resulted from the actual wording of the relevant provision, which prescribed the consequence complained of. In the present case, the complaint stemmed rather from the lack of prescription in the provision, at least as deemed by the domestic courts. The Court is yet to recognise the effectiveness of the Constitutional Court when the alleged problem stems from a lack of statutory regulation. In the case of Liepājnieks the Court was cautious of accepting that an appeal to the Constitutional Court was an effective remedy. There were indications of a legislative gap with regard to the invoked right or its implementation, and the Government had not provided relevant examples of the Constitutional Court’s case-law (see Liepājnieks, cited above, § 75).
47. For the purposes of this case, however, the Court notes that in cases nos. 2008-07-01 and 2005-18-01, the Constitutional Court was confronted with a similar issue: the Civil Procedure Law did not provide for a full or partial exemption from the payment of court costs.
48. In the first case, the Constitutional Court declared the disputed provisions incompatible with Article 92 of the Constitution from the date Mr M. Kondakovs had lodged his appeal on points of law “to the extent that these provisions did not entitle[4] the court or judge to decide that a person be fully or partly exempted from the payment of a security deposit when lodging an appeal on points of law ...” The Constitutional Court confirmed that in view of that finding, Mr M. Kondakovs could submit his application to the court under section 479(5) of the Civil Procedure Law.
49. In the second case, the Constitutional Court ruled that the incompatibility of the provisions with the Constitution must be eliminated by 1 July 2006. Until that date, the general principle contained in sections 43(4) and 458(4) of the Civil Procedure Law had to be applied in accordance with procedural analogy. Thus if a person requested full or partial exemption from the payment of a security deposit in view of the person’s financial situation, the court would be entitled to decide on the matter. It further ruled that Mr O. Kožečenkovs had the right to lodge the appeal and request a full or partial exemption from the payment of a security deposit.
50. The Court observes that in the above-mentioned cases the Constitutional Court was able to remedy the grievances brought before it by the respective persons.
51. In the present case, it could not be said that the problem had arisen within a sphere that had not at all been regulated in the domestic law, so as to amount to a legal vacuum. Section 43(4) of the Civil Procedure Law did provide for exemption from court costs. However, the domestic courts considered that it did not provide for the exemption of persons other than natural persons. The above-mentioned case-law of the Constitutional Court shows that while the latter may declare a legal situation created by the wording of a norm unconstitutional the effect of that may be to declare the applicability of another norm.
52. In that light and in view of the nature of the applicant organisation’s complaint, which raises an issue similar to the ones previously decided on by the Constitutional Court, the Court accepts in the present case the effectiveness of the Constitutional Court. Irrespective of the fact that the applicant organisation could have lodged a civil claim in the course of the criminal proceedings, had it chosen to bring its claim before the courts of general jurisdiction, it should also have brought the proceedings with respect to section 43(4) of the Civil Procedure Law – on which the courts had based their refusal of its request for exemption from the court fee – before the Constitutional Court prior to applying to this Court.
53. Accordingly, the Court considers that there were effective domestic remedies available to the applicant organisation which it has not used. In the light of this conclusion, the Court does not need to rule on the other preliminary objections advanced by the Government.
54. It follows that this complaint must be rejected on the ground of non‑exhaustion of domestic remedies, in accordance with Article 35 §§ 1 and 4 of the Convention.
B. Other alleged violations of the Convention
55. Referring to Article 1 of Protocol No. 1 to the Convention and Article 13 of the Convention, the applicant organisation complained of the inactivity of the domestic courts with respect to its request to institute criminal proceedings against its former managers. It further complained that its documents seized during the search and later used as evidence in the criminal proceedings had not been returned and the domestic courts had decided to destroy them.
56. In the light of all the material in its possession, and in so far as the matters complained of are within its competence, the Court finds that they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention or its Protocols. It follows that this part of the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Fatoş AracıPäivi Hirvela
Deputy RegistrarPresident
[1] Emphasis added.
[2] Emphasis added.
[3] Emphasis added.
[4] Emphasis added.
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