AS TO THE ADMISSIBILITY OF
Application No. 17285/90
by Dagmar INSAM
against Austria
The European Commission of Human Rights sitting in private on
15 January 1994, the following members being present:
MM. C.A. NØRGAARD, President
S. TRECHSEL
A. WEITZEL
G. JÖRUNDSSON
A.S. GÖZÜBÜYÜK
J.-C. SOYER
H.G. SCHERMERS
H. DANELIUS
F. MARTINEZ
Mrs. J. LIDDY
MM. L. LOUCAIDES
J.-C. GEUS
M.P. PELLONPÄÄ
B. MARXER
G.B. REFFI
M.A. NOWICKI
I. CABRAL BARRETO
B. CONFORTI
N. BRATZA
I. BÉKÉS
J. MUCHA
E. KONSTANTINOV
D. SVÁBY
Mr. H.C. KRÜGER, Secretary to the Commission
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 2 October 1990 by
Dagmar INSAM against Austria and registered on 15 October 1990 under
file No. 17825/90;
Having regard to the report provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having regard to the observations submitted by the respondent
Government on 5 June 1992 and the observations in reply submitted by
the applicant on 28 July 1992;
Having deliberated;
Decides as follows:
THE FACTS
The applicant is an Austrian citizen, born in 1945. She lives
in Graz and is represented before the Commission by Mr. F. Insam, a
lawyer practising in Graz.
The particular circumstances of the case
The facts of the case, as submitted by the parties and apparent
from the documents submitted, may be summarised as follows:
The applicant bought a firm (Unternehmen) from the liquidator of
an insolvent limited company. She then brought proceedings in her own
name and in the name of the firm against three former managers of the
company. At a hearing before the Vienna Commercial Court
(Handelsgericht) on 7 July 1988, the question was discussed whether
formal approval of the applicant's action by the shareholders was
required under Section 35 (1) of the Limited Companies Act (Gesetz über
Gesellschaften mit beschränkter Haftung). The applicant and her
co-plaintiff were ordered to produce any declarations or other
documents within 14 days. The proceedings were then declared closed.
According to the trial record, it was accepted by the parties that
there was no need to discuss the contents of the documents. On
18 July 1988 the plaintiffs submitted declarations by the shareholders
and the liquidator under Section 35 (1) of the Limited Companies Act.
The declarations were dated 12 and 13 July 1988. With the declarations
the plaintiffs submitted a request for the proceedings to be re-opened.
On 14 September 1988 the Vienna Commercial Court rejected the
plaintiffs' claims. It found, inter alia,
- that the applicant had no right to discovery of the company
records prepared by the former managers,
- that the Court need not re-open the oral hearings in the
proceedings because the applicant had renounced the possibility
of having discussion on the declaration by the shareholders,
- that after the oral proceedings had terminated, it was no
longer possible to bring further evidence before the Court, and
- that the substantive claims should be rejected.
In its reasons, the Court noted in particular that the
declaration of the shareholders and the liquidator were dated after the
oral hearing had been closed and accordingly, pursuant to Section 35
of the Companies Act, a vital formal condition for bringing the
proceedings was not present. The Court referred to the German case-law
in the matter, as Austrian decisions were not conclusive.
After an oral hearing on 26 January 1989 the Vienna Court of
Appeal (Oberlandesgericht), in two separate decisions of the same date
(one concerning the plaintiffs' appeal against the substantive judgment
(Berufung), the other concerning the appeal against the procedural
decisions (Rekurs)), rejected the plaintiffs' appeal concerning the re-
opening of the oral hearing and allowed their appeals as to the
remainder of the decision of 14 September 1988. The proceedings were
only to recommence before the first instance court after the Court of
Appeal's decision had become final. Before the Court of Appeal's
decisions became final, the parties had made a further appeal
(Revision) to the Supreme Court (Oberster Gerichtshof) which, on
8 February 1990, dealt with the interlocutory matters and gave a
partial decision on the merits of the case.
The Supreme Court confirmed that a declaration by the
shareholders was a formal pre-condition to bringing proceedings in the
name of a company, even a company in liquidation, so that in the
absence of such a declaration at the beginning of the proceedings, or
at the latest, during the oral proceedings, the claim was bound to
fail. Accordingly, there was no need for further evidence, and the
case was ready for a final decision as regards the requests for
compensation and for declaratory relief. The Supreme Court was able
to determine the substantive issues by virtue of Article 519 para. 2
of the Code of Civil Procedure (Zivilprozeßordnung).
Relevant Domestic Law
Section 35(1)(6) of the Limited Companies Act (Gesetz über
Gesellschaften mit beschränkter Haftung) states that a shareholders'
declaration is required for a company to bring a claim for damages
against its managers.
Article 502 para. 4 of the Code of Civil Procedure provided, at
the relevant time, as follows:
" If a further appeal is not inadmissible for the grounds set out
in paras. 2 and 3 above, it is in any event only admissible where
1. the decision turns on a question of substantive or procedural
law which is of particular importance for the preservation of
legal consistency, legal certainty or the development of the law,
for example because the appeal court diverges from the case-law
of the Supreme Court or because such case-law does not exist or
is not uniform, or
2. the matter determined by the appeal court exceeds AS 300,000
in money or money's worth."
The final sentence of Article 519 para. 2 of the Code of Civil
Procedure provides that the Supreme Court may take a decision on the
merits of a case if the matter is ready for a decision.
At the time of the judgments and decisions in the present case,
Section 15 of the Supreme Court Act (Gesetz über den Obersten
Gerichtshof) provided as follows:
"(1) Decisions of the Supreme Court of general importance shall
be officially published ...
(2) Professors who teach legal subjects at inland universities
shall be given access at their request and for scientific
purposes to the decisions of the Supreme Court. ..."
On 28 June 1990 the Constitutional Court (Verfassungsgerichtshof)
quashed Section 15 (2) of the Supreme Court Act in norm control
proceedings (G 67/90). It found that the way in which Section 15 was
worded clearly intended to exclude categories of persons who were not
mentioned from having access to Supreme Court decisions. The
Constitutional Court recalled that one of the Supreme Court's functions
was to ensure legal certainty and uniformity, and that access to
Supreme Court decisions was a pre-condition for such a function:
without adequate access, appeals could not be properly made (especially
in the light of the - amended - provisions of Article 502 para. 1 of
the Code of Civil Procedure that a further appeal (Revision) could only
be made in the majority of cases where an important question of law was
involved), and the provision therefore contravened the principle of the
rule of law. The Constitutional Court noted that with the quashing of
Section 15(2), which was to take effect on 31 May 1991, the limitation
on access to the Supreme Court's decisions fell away.
COMPLAINTS
The applicant complains that she had no fair chance to answer the
view of the judge at first instance that a declaration by shareholders
was a formal pre-condition for bringing proceedings in the name of a
company. She also complains that no hearing took place before the
Supreme Court, that the proceedings were not public and that the
judgment, which was served on the applicant in writing, was not
"publicly pronounced". The applicant alleges a violation of Article 6
para. 1 of the Convention.
The applicant also alleges a violation of Article 1 of Protocol
No. 1 to the Convention in that she paid 1.26 million schillings for
the firm which she bought from the limited company, but that because
of the decisions of the court, she was unable to use that firm in order
to institute proceedings against the former managers, as she had
intended.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 2 October 1990 and registered
on 15 October 1990.
On 20 February 1992 the Commission decided to invite the parties
to submit written observations on the admissibility and merits of
certain issues under Article 6 para. 1 of the Convention.
The Government's observations were submitted on 5 June 1992, with
a correction on 1 July 1992. The applicant's observations in reply
were submitted on 28 July 1992. The applicant submitted an English
translation of her observations on 18 August 1992, and the Government
submitted a translation of their observations on 12 October 1993.
THE LAW
1. The applicant alleges a violation of Article 6 para. 1
(Art. 6-1) of the Convention in several respects. She alleges that the
lack of an oral hearing before the Supreme Court did not comply with
the provision. Article 6 para. 1 (Art. 6-1) provides, so far as
relevant, as follows:
"1. In the determination of his civil rights and obligations
..., everyone is entitled to a fair and public hearing within a
reasonable time by an independent and impartial tribunal
established by law. Judgment shall be pronounced publicly ...".
The Government submit that the Commission is prevented from
considering this complaint by virtue of the Austrian reservation to
Article 6 (Art. 6) of the Convention. They further consider that,
because Article 526 para. 1 of the Code of Civil Procedure enables
appeal courts to take such investigations as necessary, the applicant
has failed to exhaust domestic remedies because she failed to request
such investigations. Finally, the Government consider that although
the Supreme Court took a final decision on part of the merits of the
case, it did so only because, once it had found that a declaration
pursuant to Section 35 (1) (6) of the Limited Companies Act was
necessary and had not been made before the close of the proceedings,
it was in a position to determine the merits of the case by reference
to the question of law it had to decide. They also point out that a
hearing did take place at first and second instance. Accordingly, they
consider that Article 6 (Art. 6) of the Convention did not require an
oral hearing before the Supreme Court.
The applicant submits that the Austrian reservation to Article
6 (Art. 6) of the Convention does not comply with Article 64 (Art. 64),
principally because it does not supply a "brief statement of the law
concerned" by not referring to Article 509 para. 1 and Article 526
para. 1 of the Code of Civil Procedure, which permit the Supreme Court
to take decisions without oral hearings. She considers that the
complaint cannot be inadmissible for non-exhaustion of domestic
remedies as she stated in her appeal against the decision of the Vienna
Court of Appeal that the court of first instance had wrongly stated
that she had "renounced" the possibility of discussing the documents
to be produced, and that this relates to the question of a fair
hearing. Finally, she considers that the question determined by the
Supreme Court did indeed cover matters of fact, and points to the
difference between the property interests in the shares of a company
and the property interests in the assets of a company (which she had
purchased).
The Commission is not required in the present case to determine
the effect of the Austrian reservation to Article 6 (Art. 6) of the
Convention on the proceedings nor to assess whether the applicant has
exhausted domestic remedies in this respect as the complaint is in any
event inadmissible for the following reasons.
The Commission recalls that the way in which Article 6 (Art. 6)
applies to hearings before courts of appeal depends on the special
features of the proceedings (cf., for example, Eur. Court H.R., Fejde
judgment of 29 October 1991, Series A no. 212-C, p. 67, para. 26). In
certain circumstances the complete absence of an oral hearing at any
instance may be compatible with Article 6 para. 1 (Art. 6-1) of the
Convention (cf. Eur. Court H.R., Schuler-Zgraggen judgment of 24 June
1993, Series A no. 263, para. 58). In the present case an oral hearing
was held both at first and at second instance. The Supreme Court,
dealing with the further appeals of the parties from the second
instance decisions (Rekurse) found that a formal condition for the
applicant's action to succeed had not been met, and it gave a judgment
on the merits pursuant to Article 519 para. 1 (2) of the Code of Civil
Procedure. Whilst questions of fact will be relevant on such appeals,
it remains the case that such appeals in principle deal with questions
of law. Although the Supreme Court in the present case took a decision
on the merits of the case (which distinguishes this case from the
Sutter case, Eur. Court H.R., Sutter judgment of 22 February 1984,
Series A no. 74, p. 13, para. 30), no new arguments were brought, and
the alternative would have been for the Supreme Court to have made its
finding on the law and to have remitted the case to a lower court for
a final decision. Such a course would however have led to a wholly
unnecessary prolongation of the proceedings.
The Commission finds that in the circumstances of the present
case, Article 6 (Art. 6) of the Convention did not require an oral
hearing before the Supreme Court.
It follows that this part of the application is manifestly ill-
founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
2. The applicant also alleges a violation of Article 6 (Art. 6) of
the Convention in that the judgment of the Supreme Court was not
pronounced publicly, but merely sent to the parties.
The Government submit in this respect that the case is comparable
with the Sutter case (above-mentioned Sutter judgment of 22 February
1984, pp. 14-15, paras. 31-34), in that application could be made by
anyone who could establish an interest for permission to inspect the
case-file under Article 219 para. 2 of the Code of Civil Procedure.
They consider that the applicant's right to public pronouncement of the
Supreme Court's decision cannot have been violated as it was served on
her in writing.
The applicant underlines that in the decision of the
Constitutional Court (Verfassungsgerichtshof) of 28 June 1990 quashing
Section 15 (2) of the Supreme Court Act, the Constitutional Court
accepted that it was very difficult to establish sufficient interest
for permission to consult the case-file to be granted.
The Commission notes that the limitations on access to Supreme
Court judgments have now been removed by the judgment of the
Constitutional Court of 28 June 1990, which quashed Section 15 (2) of
the Supreme Court Act with effect from 31 May 1991, so that access to
the decision in the present case is now possible for interested members
of the public.
Given the subsequent possibility of access to the decision, the
Commission finds that this part of the application is manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
3. The applicant also complains that she was unable to answer the
view of the trial judge at first instance that a shareholders'
declaration was a formal pre-condition for the proceedings.
The Commission notes that the trial record states that the
question of the necessity of such a declaration was discussed, and that
the parties agreed that it was not necessary to discuss the contents
of such declaration. The oral proceedings were then closed.
The Convention does not guarantee the right to further discussion
of a particular issue after the closure of proceedings, and it appears
that the question of whether a declaration was at all necessary was
discussed before the first instance judge. The question of the
contents of such a declaration, or the date on which it had to be made,
appears indeed not to have been raised, but the Commission finds no
indication that the applicant could not have raised it at the trial if
she had wished.
The Commission finds this part of the application manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
4. The applicant also alleges a violation of Article 1 of Protocol
No. 1 (P1-1) to the Convention in that she was unable to carry out her
intentions with the assets she had bought because of the decisions in
the case.
The Commission recalls that the applicant was unsuccessful in her
action because a formal pre-condition for such an action, namely the
requisite declarations under the Limited Companies Act, was not met at
the appropriate time. The Convention does not prevent regulation of
access to court provided certain criteria are met (cf the Fayeds v. the
United Kingdom, No. 17191/90, Comm. Report 7.4.93), and the Commission
finds that the limitation in the present case was not arbitrary or
disproportionate to the aim of regulating access to court and
protecting retired managers of companies from late claims concerning
their responsibilities as such managers. Accordingly, even assuming
that the decisions in the present case constitute an interference with
the applicant's right to peaceful enjoyment of her possessions, the
Commission finds that that interference was a control of property in
accordance with the general interest, in conformity with Article 1 of
Protocol No. 1 (P1-1).
It follows that this part of the application is manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
For these reasons, the Commission by a majority
DECLARES INADMISSIBLE the complaints concerning the proceedings
before the Supreme Court, and unanimously
DECLARES INADMISSIBLE the remainder of the application.
Secretary to the Commission President of the Commission
(H.C. Krüger) (C.A. Nørgaard)
Full & Egal Universal Law Academy