FIRST SECTION
DECISION
Application no. 26659/08
by Ana MILAŠINOVIĆ
against Croatia
The European Court of Human Rights (First Section), sitting on 28 June 2011 as a Chamber composed of:
Anatoly Kovler, President,
Nina Vajić,
Peer Lorenzen,
George Nicolaou,
Mirjana Lazarova Trajkovska,
Julia Laffranque,
Linos-Alexandre Sicilianos, judges,
and Søren Nielsen, Section Registrar,
Having regard to the above application lodged on 21 April 2008,
Having regard to the partial decision of 1 July 2010,
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
The applicant, Mrs Ana Milašinović, is a Croatian national who was born in 1950 and lives in Karlovac. She was represented before the Court by Mr M. Mihočević, an advocate practising in Zagreb. The Croatian Government (“the Government”) were represented by their Agent, Mrs Š. Stažnik.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
On 10 March 1992 the applicant’s business premises in Karlovac were blown up by an unknown perpetrator.
The proceedings instituted by the applicant
(a) The two sets of civil proceedings for damages during the period before 31 July 2003
On 1 March 1995 the applicant brought two separate civil actions against the State in the Zagreb Municipal Court (Općinski sud u Zagrebu) seeking compensation for pecuniary damage. She relied on section 180 of the Obligations Act, which provided that the State was liable for damage resulting from “acts of violence or terrorist acts”. Eventually, she sought the counter value in Croatian kunas (HRK) of 65,000 and 50,000 euros (EUR) respectively together with the accrued statutory default interest.
On 3 February 1996 the Amendment to the Obligations Act (Zakon o izmjeni Zakona o obveznim odnosima, Official Gazette no. 7/1996 of 26 January 1996 – “the 1996 Amendment”) entered into force. It repealed section 180 and stayed all proceedings instituted on the basis of that provision, pending enactment of new legislation.
Accordingly, the applicant’s proceedings were stayed ex lege, pursuant to the 1996 Amendment.
On 31 July 2003 the Act on Liability for Damage Resulting from Terrorist Acts and Public Demonstrations (Zakon o odgovornosti za štetu nastalu uslijed terorističkih akata i javnih demonstracija, Official Gazette of the Republic of Croatia no. 117/2003) of 23 July 2003 – “the 2003 Liability Act”) entered into force. It provided that the State was liable in tort for damage caused by death, bodily injury or impairment of health resulting from terrorist acts, whilst damage to property was to be compensated through reconstruction assistance, obtainable before the competent administrative authorities, under the Reconstruction Act. The Act also provided that all proceedings stayed on the basis of the 1996 Amendment were to be resumed in accordance with its provisions.
Accordingly, the Municipal Court resumed both proceedings instituted by the applicant, pursuant to the 2003 Liability Act.
(b) The two sets of civil proceedings for damages during the period after 31 July 2003
(i) Civil proceedings no. Pn-1736/95
On 28 January 2005 the Municipal Court gave judgment dismissing the applicant’s claim and ordered her to reimburse the State the costs of the proceedings in the amount of HRK 15,000.
On 17 February 2005 the applicant appealed to the Zagreb County Court (Županijski sud u Zagrebu) against that judgment, including the decision on costs.
On 4 April 2006 the Zagreb County Court dismissed the applicant’s appeal and upheld the first-instance judgment.
On 10 October 2006 the Supreme Court (Vrhovni sud Republike Hrvatske) dismissed the applicant’s subsequent appeal on points of law (revizija).
On 2 July 2007 the applicant lodged a constitutional complaint against the Supreme Court’s judgment alleging, inter alia, a violation of her constitutional and Convention right to a fair hearing.
On 10 June 2009 the Constitutional Court dismissed the applicant’s constitutional complaint.
(ii) Civil proceedings no. Pn-1739/95
On 25 May 2005 the Municipal Court gave judgment dismissing the applicant’s claim and ordered her to reimburse the State the costs of the proceedings in the amount of HRK 20,000.
On 14 June 2005 the applicant appealed to the Zagreb County Court against that judgment, including the decision on costs.
On 20 June 2006 the Zagreb County Court dismissed the applicant’s appeal and upheld the first-instance judgment.
On 28 December 2006 the Supreme Court dismissed the applicant’s subsequent appeal on points of law.
On 16 May 2007 the applicant lodged a constitutional complaint against the Supreme Court’s judgment alleging, inter alia, a violation of her constitutional and Convention right to a fair hearing.
On 10 June 2009 the Constitutional Court dismissed the applicant’s constitutional complaint.
B. Relevant domestic law and practice
1. The Obligations Act
The relevant provision of the Obligations Act (Zakon o obveznim odnosima, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 29/1978, 39/1985 and 57/1989, and Official Gazette of the Republic of Croatia nos. 53/1991, 73/1991, 3/1994 – “the Obligations Act”), as in force before the 1996 Amendment, read as follows:
Section 180
“Liability for loss caused by death or bodily injury or by damage or destruction of another’s property, resulting from acts of violence or terrorist acts ..., lies with the ... authority whose officers were under a duty, according to the laws in force, to prevent such loss.”
2. The 1996 Amendment to the Obligations Act
The relevant part of the 1996 Amendment to the Obligations Act (Zakon o izmjeni Zakona o obveznim odnosima, Official Gazette no. 7/1996 of 26 January 1996 – “the 1996 Amendment”), which entered into force on 3 February 1996, provided as follows:
Section 1
“Section 180 of the Obligations Act (the Official Gazette nos. 53/91, 73/91 and 3/94) shall be repealed.”
Section 2
“(1) Proceedings for damages instituted under section 180 of the Obligations Act shall be stayed.
(2) The proceedings referred to in paragraph 1 of this section shall be resumed after the enactment of special legislation which shall regulate liability for damage resulting from terrorist acts.”
3. The 2003 Liability Act
(a) Relevant provisions
The relevant part of the Act on Liability for Damage Resulting from Terrorist Acts and Public Demonstrations (Zakon o odgovornosti za štetu nastalu uslijed terorističkih akata i javnih demonstracija, Official Gazette of the Republic of Croatia no. 117/2003) of 23 July 2003 – “the 2003 Liability Act”), which entered into force on 31 July 2003, provides as follows:
Section 1
“(1) This Act regulates liability for damage caused by acts of terrorism or other acts of violence committed with the aim of seriously disturbing public order by provoking fear or stirring up feelings of insecurity in citizens ...
(2) A terrorist act within the meaning of this Act is especially an act of violence committed for political reasons [motives] with a view to stirring up fear, terror or feelings of personal insecurity in citizens.”
Section 2
“The Republic of Croatia shall be liable for the damage referred to in section 1 of this Act ...”
Section 7(1)
“The victim shall have the right to compensation [in the form of damages] for damage resulting from death, bodily injury or impairment of health.”
Section 8
“Damage to property ... shall be repaired by reconstruction of damaged or destroyed material goods in accordance with the Reconstruction Act.”
Section 10
“Judicial proceedings for damages stayed pursuant to the 1996 Amendment shall be resumed in accordance with the provisions of this Act.”
(b) The case-law of the Supreme Court
In its judgment no. Rev 910/05-2 of 26 October 2005 the Supreme Court held that the 2003 Liability Act was to be applied to all pending civil proceedings in which plaintiffs sought compensation for damage caused by terrorist acts, including those instituted before its entry into force.
(c) The Constitutional Court’s jurisprudence
In its decision no. U-I-2921/2003 of 19 November 2008 (Official Gazette of the Republic of Croatia no. 137/2008 of 26 November 2008) the Constitutional Court rejected nine petitions for abstract constitutional review and thus refused the initiative to institute proceedings to review the constitutionality of the 2003 Liability Act. In that decision it also addressed the issue of the costs of proceedings instituted under former section 180 of the Obligations Act, and held as follows:
“While examining [the 2003 Liability Act] from the point of view of reaching a fair balance between the protection of the rights of individuals and the public and the general interests of the community, the following question remains to be answered: having regard to the situation in which the victims referred to in section 10 of [the 2003 Liability Act] found themselves owing to the justified legislative intervention whereby the judicial proceedings were stayed because section 180 of the Obligations Act was repealed ..., is the petitioners’ complaint that [the plaintiffs in those proceedings] today bear a disproportionate and excessive burden by paying the costs of proceedings, including [the costs incurred in] the period before those proceedings were resumed ... on the basis of section 10 of [the 2003 Liability Act], well-founded?
The Constitutional Court finds it necessary to examine that question in these proceedings because it concerns the general effects of [the 2003 Liability Act] (substantive legislation) which is applicable in judicial proceedings conducted under the rules of the Civil Procedure Act – the procedural legislation – and affects a large number of persons in an identical legal situation, that is, all persons concerned under section 10 of [the 2003 Liability Act] (... on the entire territory of the Republic of Croatia a total [number] of 381 sets of proceedings were stayed by operation of [the 1996 Amendment]).
In the light of all the above ... the Constitutional Court finds that paying the legal costs – in which the costs from the date of bringing the actions on the basis of section 180 of the Obligations Act in the early or mid-1990s are included – would result in a disproportionate and excessive burden being shifted onto the plaintiffs that would upset the balance between the protection of the rights of individuals and the public on the one hand and the general interests of the community on the other hand (on account of which all judicial proceedings instituted on the basis of section 180 of the Obligations Act, which had been repealed ..., were stayed after 3 February 1996).
It has been established beyond all doubt that the property of the parties affected was destroyed or damaged in the early or mid-1990s. The decision whether the destruction of or damage to that property was caused by an act of terror referred to in section 1 of [the 2003 Liability Act] falls within the competence of the ordinary courts, which shall apply the rules of [the 2003 Liability Act] that entered into force only on 31 July 2003. If an ordinary court, applying [the 2003 Liability Act] to a particular case, finds such an action unfounded, there is not one rational or legitimate reason for such a [plaintiff] to have to pay legal costs from the day the action was brought on the basis of section 180 of the Obligations Act. It was precisely because of the legislator’s intervention that those proceedings were stayed and section 180 of the Obligations Act repealed ... Even though such a legislative intervention was justified, account has to be taken of the fact that it directly influenced the legal situation of plaintiffs whose actions had not yet been decided by the courts by that date, and those whose actions had not even been examined before the courts for more than seven years (in particular, from 3 February 1996 until the resumption of the proceedings, which were resumed in August 2003 at the earliest, but under the new statutory rules).
The mere fact that [the 2003 Liability Act] enabled the courts to resume the proceedings at issue does not affect the finding that the legislature nevertheless interfered with the previously recognised right of the plaintiffs to seek damages from the State, imposing new conditions under which the State could be held liable for the damage inflicted on the property of the parties affected.
The principle of proportionality requires that the competent state authorities take these facts into account. Any action contrary to that principle would be constitutionally unacceptable because calculating the costs of judicial proceedings from the day the actions were brought would shift a disproportionate and excessive burden onto the parties, and the question of a violation of the constitutional guarantee of a fair judicial hearing provided for in Article 29 of the Constitution would also arise.”
(d) The Government of Croatia’s decision of 28 May 2009
In implementing the part of the above-mentioned Constitutional Court’s decision no. U-I-2921/2003 of 19 November 2008 concerning the costs of civil proceedings instituted under former section 180 of the Obligations Act, on 28 May 2009 the Government of Croatia adopted a decision, which entered into force on the same day, writing off unpaid costs awarded to the State in those proceedings (Odluka o otpisu tražbina troškova parničnog postupka dosuđenih Republici Hrvatskoj u određenim postupcima, unpublished). In particular, the competent state attorney’s offices were instructed not to institute enforcement proceedings to collect such costs and to withdraw applications for enforcement in enforcement proceedings that had already been instituted.
D E C I S I O N
on the writing off of claims for the costs of civil proceedings awarded to the Republic of Croatia in certain proceedings
I.
“Unpaid claims for the costs of civil proceedings awarded to the Republic of Croatia in final judgments delivered after 31 July 2003 in proceedings instituted on the basis of [former] section 180 of the Obligations Act, and resumed on the basis of section 10 of [the 2003 Liability Act], in which the plaintiffs’ action was dismissed in application of section 8 of that Act and the plaintiffs were obliged to reimburse the costs of civil proceedings to the Republic of Croatia, are hereby written off.
II.
...
III.
The competent state attorney’s offices are hereby authorised not to institute enforcement proceedings to collect claims referred to in point I. and II. of this Decision and to withdraw applications for enforcement in enforcement proceedings already instituted.
IV.
The Ministry of Justice is hereby entrusted with the duty of collecting information on costs [already paid] of civil proceedings awarded to the Republic of Croatia in the judgments referred to in point I. and II. of this Decision, and making proposals to the Government of Croatia regarding the method of their reimbursement.
V.
This Decision shall enter into force on the day of its adoption.”
(e) The College of State Attorneys General Instruction of 7 July 2009
On 7 July 2009 the College of State Attorneys issued a general instruction for the implementation of the above-mentioned Government’s decision of 28 May 2009 (Opća uputa za postupanje državnih odvjetništava u provedbi Odluke Vlade Republike Hrvatske o otpisu tražbina troškova parničnog postupka dosuđenih Republici Hrvatskoj u određenim postupcima, unpublished). In particular, all state attorney’s offices were first instructed to review all cases in which civil proceedings had been instituted on the basis of former section 180 of the Obligations Act, as well as pending enforcement proceedings instituted with a view to collecting the costs awarded in those civil proceedings. They were further instructed
i) as regards pending enforcement proceedings, to immediately withdraw the application for enforcement,
ii) as regards civil proceedings that had ended, not to request plaintiffs to pay the costs awarded in those proceedings nor institute enforcement proceedings with a view to collecting those costs that had been written off by the Government’s decision of 28 May 2009, and
iii) in pending civil proceedings, to inform the plaintiffs or their representatives of the Government’s decision of 28 May 2009 and of the intention of the state attorney’s offices to seek an award of the costs of those proceedings unless the plaintiffs withdrew their actions.
4. The Civil Procedure Act
(a) Relevant provisions
The relevant part of the Civil Procedure Act (Zakon o parničnom postupku, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 4/1977, 36/1977 (corrigendum), 36/1980, 69/1982, 58/1984, 74/1987, 57/1989, 20/1990, 27/1990 and 35/1991 and Official Gazette of the Republic of Croatia nos. 53/1991 with subsequent amendments) reads as follows:
C h a p t e r t w e l v e
COSTS OF PROCEEDINGS
Section 151
“The costs of proceedings involve disbursements made during, or in relation to, the proceedings.
The costs of proceedings also include a fee for services of an advocate and other persons entitled to a fee by law.”
Section 154(1)
“A party who loses a case completely shall reimburse the costs of the opposing party and his or her intervener.”
Section 155
“In deciding which costs shall be reimbursed to the party, the court shall take into account only those costs which were necessary for the conduct of the proceedings. When deciding which costs were necessary and their level, the court shall carefully consider all the circumstances.
If there is a prescribed scale of advocates’ fees or other costs, these costs shall be awarded according to that scale.”
Section 163
“The provisions on costs [of proceedings] are also applicable to parties which are represented by the State Attorney’s Office. In that case the costs of proceedings also include the amount that would be awarded to the party as advocates’ fees.”
(b) The Constitutional Court’s jurisprudence
In its decisions nos. U-III-4020/2003 of 30 June 2004 (Official Gazette of the Republic of Croatia no. 93/2004 of 9 July 2004) and U-III-3097/2005 of 18 October 2007 the Constitutional Court took the view that decisions on costs of proceedings are not decisions concerning meritorious determination of rights or obligations within the meaning of section 62 of the Constitutional Court Act against which a constitutional complaint would be allowed. Therefore, in the first case the Constitutional Court declared inadmissible the constitutional complaint lodged solely against the lower court’s decision on costs of proceedings whereas in the second case that court declared inadmissible the constitutional complaint against the lower court’s judgment only in so far as it was directed against the decision on costs.
COMPLAINT
The applicant complained under Article 6 § 1 of the Convention that in the aforementioned two sets of civil proceedings the domestic courts unjustifiably ordered her to reimburse the State for the costs of those proceedings.
THE LAW
The applicant complained that as her actions had become devoid of any prospects of success following the 2003 Liability Act, they had been dismissed and she had had to reimburse the costs of proceedings to the State even though at the time when the actions had been brought they would have been successful. She relied on Article 6 § 1 of the Convention, which in its relevant part reads as follows:
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
In their observations on the admissibility and merits of 21 October 2010 the Government disputed the admissibility of this complaint arguing that it was manifestly ill-founded. On 11 March 2011, in their comments on the applicant’s observations, they also argued that the applicant had failed to exhaust domestic remedies.
In their letter of 29 April 2011 the Government informed the Court of the Government of Croatia’s decision of 28 May 2009 and the State Attorneys College General Instruction of 7 July 2009 (see “Relevant domestic law and practice”, above). They also enclosed two official notes (službena bilješka) of 31 August and 16 September 2009 by which the competent state attorney’s offices decided not to institute enforcement proceedings against the applicant with a view to collecting costs awarded in the above-mentioned two sets of civil proceedings. On that basis the Government invited the Court to either (a) declare the complaint inadmissible because the applicant was no longer a victim of the violation complained of, or (b) strike the application out of its list of cases because the matter has been resolved.
On 4 May 2011 the Government’s letter was forwarded to the applicant, who was invited to inform the Court by 18 May 2011 whether, having regard to the information provided by the Government, she wished to pursue her application and, if so, for what reasons.
In her letter of 7 June 2011 the applicant, without further substantiating her request, asked the Court to continue the examination of the application.
The Court reiterates that, under Article 37 § 1 (b), it may “... at any stage of the proceedings decide to strike an application out of its list of cases where the circumstances lead to the conclusion that ... the matter has been resolved ...” In order to ascertain whether that provision applies to the present case, the Court must answer two questions: first, whether the circumstances complained of directly by the applicant still obtain, and secondly whether the effects of a possible violation of the Convention have been redressed (see, for example, Stojanović v. Serbia, no. 34425/04, § 80, 19 May 2009.
The Court notes in this connection that the State has never instituted enforcement proceedings against the applicant in order to collect the costs awarded to it in the above-mentioned two sets of civil proceedings. It further notes that after the Constitutional Court’s decision of 19 November 2008, the Government of Croatia adopted on 28 May 2009 a decision writing off all claims for unpaid costs awarded to the State in civil proceedings instituted under former section 180 of the Obligations Act (see “Relevant domestic law and practice”, above), and instructing the competent state attorney’s offices not to institute enforcement proceedings to collect such costs.
It follows that since 29 May 2009 the applicant no longer runs any risk that the State will seek enforcement of the part of the above-mentioned judgments of 28 January and 25 May 2005 concerning the award of costs, or that she would have to pay those costs. In these circumstances, it cannot but be concluded that the matter giving rise to the applicant’s complaint can therefore now be considered to have been “resolved” within the meaning of Article 37 § 1 (b) of the Convention. In addition, there are no particular reasons relating to respect for human rights as defined in the Convention which would require the Court to continue its examination of this complaint under Article 37 § 1 in fine.
Accordingly, the case should be struck out of the list.
In view of this conclusion, the Court does not find it necessary to examine any of the Government’s objections on grounds of inadmissibility (see Stojanović, cited above, § 79).
For these reasons, the Court unanimously
Decides to strike the remainder of the application out of its list of cases.
Søren NielsenAnatoly Kovler
RegistrarPresident
Full & Egal Universal Law Academy