[TRANSLATION]
…
THE FACTS
The applicant [Mr Bernhardt Olbertz] is a German national who was born in 1945 and lives in Munich.
He was represented before the Court by Mr C. Lenz, of the Stuttgart Bar.
The facts of the case, as put forward by the applicant, may be summarised as follows.
A.The circumstances of the case
The applicant was originally from the Federal Republic of Germany (FRG), where he had first worked as a chartered accountant and later managed an office for a firm of tax consultants. In 1984 he set up his own business, specialising in advising and rescuing companies in difficulty. In 1990, before Germany’s reunification, which came into effect on 3 October 1990, he moved to Potsdam in the German Democratic Republic (GDR) with the intention of setting up a tax consultancy there although he had not taken the examination required in the FRG for carrying on the occupation of a tax consultant (Steuerberater). Also in 1990 the applicant acquired East German citizenship so as to be able to set up his tax consultancy in the GDR.
In a decision taken on 6 September 1990 the Ministry of Finance (Finanzministerium) of the GDR, acting through the Director of the Tax Department (Leiter der Abteilung Besitz- und Verkehrsteuern), granted the appointment (Bestellung) of tax consultant to the applicant although he had not taken the examination likewise normally required in the GDR for the practice of that profession.
The applicant then set up his tax consultancy, which was quite successful. In 1995 he had seventeen employees and an annual turnover of 1,600,000 German marks (DEM).
After reunification, the Berlin tax authorities (Senatsverwaltung für Finanzen) stated in a note (Vermerk) of 14 March 1991 that the applicant’s appointment had been lawful and that none of the grounds for revocation referred to in section 46(1) of the FRG’s Tax Consultants Act 1990 (Steuerberatungsgesetz 1990 – see Relevant domestic law and practice below) existed.
In a decision of 13 April 1993 the tax authorities of the Land of Brandenburg (Landesfinanzverwaltung) revoked the appointment pursuant to section 46(1) as amended in the Tax Consultants Act 1992 (Steuer- beratungsgesetz 1992 – see Relevant domestic law and practice below) on the ground that the appointment had been made in breach of the statutory provisions then in force in the GDR. They said that conditions of appointment at the relevant time, – namely, the requirement of fifteen years’ previous experience as a tax consultant in the GDR – as set out in Article 15
§§ 1 and 2 of the GDR’s Tax Consultants Order 1990 (Steuerberatungs-ordnung – see Relevant domestic law and practice below) had not been satisfied. According to the tax authorities, that Order did not take into account experience gained as a tax consultant in the FRG. The purpose of the Order was, in fact, to facilitate access to the occupation of tax consultant by citizens of the GDR who had the knowledge of the subject required in the GDR, not to allow citizens of the FRG to use it as a roundabout way of gaining appointment without taking the requisite examination.
The applicant appealed against that decision. According to him, his appointment as a tax consultant by the Finance Ministry of the GDR was permanent and lawful. By virtue of section 40a(1) of the Tax Consultants Act 1990 (see Relevant domestic law and practice below), tax consultants appointed between 6 February 1990 and 1 January 1991 had been granted provisional appointments until at least 1997; and the subsequent amendment of the Act in 1992 was unconstitutional because in section 46 a new ground for revocation had been added, one not mentioned in the previous Act (see Relevant domestic law and practice below). Moreover, he had acted in good faith since he had given all the requisite details to the Finance Ministry, which in full knowledge of the facts had appointed him as a tax consultant. He had then, he said, made substantial investments in the running of his firm and he could not at the time foresee that his appointment would be revoked following subsequent legislative amendments.
In a judgment of 18 April 1996 the Tax Court (Finanzgericht) dismissed the applicant’s appeal and upheld the decision of the tax authorities on the same grounds. It stated, inter alia, that the provisions of Article 15 § 2 of the GDR’s Tax Consultants Order were clear, as was apparent from the settled case-law of the Federal Tax Court (Bundesfinanzhof) in similar cases, and that the provisions excluded any experience gained in the FRG. At the time of the applicant’s appointment in September 1990, there might have been isolated instances of East German civil servants who, given the general “end-of-an-era” state of the regime, had made appointments based on their own interpretations of the relevant statutory provisions, but that had not in any way reflected a general practice.
In a decision of 14 November 1996 the Federal Tax Court refused to allow an appeal on points of law by the applicant, on the ground that it did not raise a new question of law.
In a decision of 5 February 1997 the Federal Constitutional Court (Bundesverfassungsgericht), sitting as a bench of three judges, refused to stay execution of the decisions of the lower courts. It held that neither the interpretation nor the application of the relevant legislative provisions by the Tax Court, which had relied on settled case-law of the Federal Tax Court, infringed the applicant’s fundamental rights. That applied both to the Tax Court’s analysis of the initial conditions to be met for the applicant’s appointment and to its belief that the applicant must, in view of section 46(1) of the Tax Consultants Act, have known why his appointment was illegal.
In a decision of 18 February 1997 the Federal Constitutional Court refused to consider the merits of the applicant’s appeal.
In late 1997, as a result of those decisions and in accordance with section 40a(1) of the 1992 Tax Consultants Act (see Relevant domestic law and practice below), the applicant had to close his firm of tax consultants. He subsequently sold his firm and his good will.
B.Relevant domestic law and practice
1. Legislative provisions applicable in the GDR before the signing of the German Unification Treaty
The GDR’s Tax Consultants Order (Steuerberatungsordnung) was issued by the Cabinet (Ministerrat) in the State’s final months. It was dated 27 June 1990 and came into force on 27 July 1990.
In Article 13 § 1 it provided that in order to be appointed as a tax consultant, a candidate had to have taken an examination for tax consultants or have been granted an exemption.
Under Article 14 of the Order, two of the conditions for being appointed as a tax consultant were that the candidate was a citizen of the GDR and resided there.
Article 15 provided:
“Conditions of exemption from the examination
(1) Candidates shall be exempted from the examination for tax consultants if they satisfy the conditions set out in Article 14 § 1 and
1. ...
2. ...
3. establish that they have fifteen years’ experience as a ‘skilled worker’ in the area of tax consultancy as their main occupation.
(2) The following shall be deemed to be carrying on their main occupation in the area of tax consultancy:
1. assistant accountants admitted under Article 107a of the Tax Code,
2. former directors and executives of ‘people’s enterprises’ in accountancy and business consultancy and of the financial bodies,
3. authorised tax agents, in accordance with Article 19 of this Order.
(3) ...
(4) Exemption from the examination shall be subject to the consent of the supervisory authority.”
(“Voraussetzungen für die Befreiung von der Prüfung
(1) Von der Steuerberaterprüfung sind die Bewerber zu befreien, die die Voraussetzungen gemäß § 14 Absatz 1 erfüllen und
1. ...
2. ...
3. als Facharbeiter mindestens eine fünfzehnjährige hauptberufliche Tätigkeit auf dem Gebiet des Steuerwesens nachweisen.
(2) Eine hauptberufliche Tätigkeit auf dem Gebiet des Steuerwesens üben aus:
1. praktizierende Helfer in Steuersachen, die über eine Zulassung gemäß § 107a der Abgabenordnung (Sonderdruck Nr. 681 des Gesetzblattes) verfügen,
2. ehemalige verantwortliche und leitende Mitarbeiter der VEB Rechnungsführung und Wirtschaftsberatung sowie der Finanzorgane,
3. Steuerbevollmächtigte gemäß § 19 dieser Verordnung.
(3) ...
(4) Die Befreiung von der Prüfung bedarf der Zustimmung durch die Aufsichtsbehörde.”)
2. Legislative provisions applicable in the former GDR after the signing of the German Unification Treaty
As a result of the German Unification Treaty (Einigungsvertrag) of 31 August 1990, all the FRG’s legislation was extended to cover the territory of the GDR. This was also true of the FRG’s Tax Consultants Act whose provisions applied to the former GDR from 1 January 1991. Reunification itself took effect on 3 October 1990.
After the treaty had been signed, the 1975 version of the FRG’s Tax Consultants Act (Steuerberatungsgesetz) was twice amended: once in 1990 and once in 1992.
In the 1990 version section 40a(1), first paragraph, was worded as follows:
“A tax consultant shall be regarded as having been appointed provisionally (vorläufige Bestellung) if he was appointed in the former GDR after 6 February 1990 and before 1 January 1991 in accordance with the legislative provisions then in force. This provisional appointment shall allow him to practise his profession in the district in which he was appointed. After 31 December 1994 the highest Land authority shall decide on his permanent appointment after consulting with the relevant Chamber of Tax Consultants (Steuerberaterkammer). Permanent appointment cannot be refused if the candidate has successfully completed a training course. ...”
(“Als vorläufig bestellt gelten Steuerberater und Steuerbevollmächtigte, die nach dem 6. Februar 1990 und vor dem 1. Januar 1991 bestellt worden sind. Steuerbevollmächtigte haben mit der vorläufigen Bestellung das Recht zur uneingeschränkten Hilfe in Steuersachen für das Gebiet des Bezirks, in dem sie bestellt worden sind. Über die endgültige Bestellung entscheidet die zuständige oberste Landesbehörde im Benehmen mit der zuständigen Steuerberaterkammer nach dem 31. Dezember 1994. Die endgültige Bestellung darf nicht versagt werden, wenn der Berufsangehörige an einem Übergangsseminar erfolgreich teilgenommen hat. ...”)
In the 1992 version the following two sentences were added to section 40a(1):
“... Permanent appointment also presupposes that none of the grounds set out in section 46(1), second sentence, for revoking a provisional appointment exists. Provisional appointments shall expire on 31 December 1997 at the latest. ...”
(“... Die endgültige Bestellung setzt ferner voraus, daß Gründe für eine Rücknahme der vorläufigen Bestellung nach § 46 Abs. 1 Satz 2 nicht vorliegen. Eine vorläufige Bestellung erlischt spätestens mit dem 31. Dezember 1997. ...”)
In the 1990 version section 46(1) read:
“The appointment shall be revoked if the tax consultant secured it by means of intentional deception, threat or bribery or by supplying information that was incorrect or incomplete in a material respect.”
(“Die Bestellung ist zurückzunehmen, wenn der Steuerberater ... die Bestellung durch arglistige Täuschung, Drohung oder Bestechung oder durch Angaben erwirkt hat, die in wesentlicher Beziehung unrichtig oder unvollständig waren.”)
In the 1992 version a second sentence was also inserted in section 46(1) which provided:
“... A provisional appointment of a tax consultant (section 40a) shall be revoked if it was unlawful (rechtswidrig) and the person knew or should have known the circumstances giving rise to the unlawfulness...”
(“... Eine vorläufige Bestellung (§ 40a) ist zurückzunehmen, wenn sie rechtswidrig war und der Begünstigte die Umstände kannte oder kennen mußte, die die Rechtswidrigkeit begründen...”)
In the following years the finance ministries of the various Länder carried out a general check on the provisional appointments made during the transitional period.
COMPLAINTS
1. The applicant complained of the Finance Ministry’s decision, upheld in subsequent decisions by the domestic courts, to revoke his appointment as a tax consultant following the 1992 amendment of the FRG’s Tax Consultants Act. He alleged that those decisions infringed his right to peaceful enjoyment of his possessions secured in Article 1 of Protocol No. 1.
2. He also argued that the decisions infringed his right to equal treatment in respect of his right to peaceful enjoyment of his possessions and that they were therefore contrary to Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1.
THE LAW
1. The applicant complained of the Finance Ministry’s decision, upheld in subsequent decisions by the domestic courts, to revoke his appointment as a tax consultant following the 1992 amendment of the FRG’s Tax Consultants Act. He alleged that those decisions infringed his right to peaceful enjoyment of his possessions secured in 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 revocation of his appointment as a tax consultant constituted a disproportionate interference with his right to peaceful enjoyment of his possessions. He stated that the appointment by the GDR authorities was entirely lawful and that he could assume in good faith that it would be permanent. He had, he said, given all the requisite information to the Finance Ministry of the GDR and it had appointed him in full knowledge of the facts. He argued that revoking his appointment would mean that he had to bear the consequences of a procedural error made by an East German civil servant; the decision had had dramatic consequences because it amounted to a prohibition on carrying on his occupation (Berufsverbot) and it had led to “the destruction of his economic existence” (Zerstörung seiner wirtschaftlichen Existenz).
The Court considers that the right relied on by the applicant can be likened to the right to property in Article 1 of Protocol No. 1: by setting up his firm of tax consultants and running it successfully, the applicant had built up a clientele; this had in many respects the nature of a private right and constituted an asset and, hence, a possession within the meaning of the first sentence of Article 1 (see, mutatis mutandis, the Van Marle and Others v. the Netherlands judgment of 26 June 1986, Series A no. 101, p. 13, § 41, and the H. v. Belgium judgment of 30 November 1987, Series A no. 127-B, pp. 33-34, § 47(b)).
The Court notes that “Article 1 in substance guarantees the right of property ... It comprises ‘three distinct rules’: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property by enforcing such laws as they deem necessary in the general interest ... However, the three rules are not ‘distinct’ in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule ...” (see, inter alia, the Tre Traktörer AB v. Sweden judgment of 7 July 1989, Series A no. 159, pp. 21-22, § 54, and the Fredin v. Sweden (no. 1) judgment of 18 February 1991, Series A no. 192, p. 17, § 51).
In the instant case the revocation of the applicant’s appointment, which meant that he had to close down his tax consultancy, indisputably led to his loss of good will and income. Consequently, there was interference with his right to the peaceful enjoyment of his possessions.
This was a measure of control of the use of his property, which falls to be considered under the second paragraph of Article 1 of Protocol No. 1, as has been decided by the Court in similar cases (see, mutatis mutandis, the Tre Traktörer and Fredin judgments cited above, p. 22, § 55, and p. 15, § 47, respectively). Although the applicant had to close down his business, he was nevertheless able to sell it, together with the good will he had built up over the years.
The fact that the applicant was appointed by the authorities of the GDR, a State which no longer exists and to which the Convention did not apply, is immaterial, because the revocation of the appointment, that is to say the interference complained of, was founded on court decisions delivered in the FRG after reunification, and the Convention applied at the time.
As to the lawfulness of the interference, the Court first of all notes that the disputed measure was based on section 46(1) of the Tax Consultants Act 1992 (see Relevant domestic law and practice above) and that it was therefore provided for by law. The Act expressly provides for a review of the lawfulness of appointments of tax consultants by the authorities of the former GDR during the transitional period. Construing Article 15 § 1 of the GDR Tax Consultants Order as covering only persons who gained their experience in tax matters in the GDR does not appear arbitrary. Moreover, the Court notes that it has only limited power to review domestic law and it is in the first place for the national authorities to interpret and apply their laws (see, inter alia, the Tre Traktörer judgment cited above, pp. 22-23, § 58).
As to the purpose of the interference, the Court considers that in this case the interference pursued an aim that was in the general interest, since it appeared to be legitimate for the FRG to review the appointments made by the authorities of the GDR in the final months of that State’s existence; the appointments had perhaps at times been made in an uncontrolled manner and attended by abuses which that fact might have given rise to in a transitional period wholly exceptional in a country’s history. The purpose of these checks was therefore also to protect the public by ensuring the competence of those carrying on the occupation of tax consultant.
Finally, the Court has to consider the proportionality of the interference. With respect to this, it notes that the second paragraph of Article 1 of the Protocol must be read in the light of the principle in the first sentence of the Article. From that sentence, the Court has derived the requirement that an interference must strike a “fair balance” between the demands of the general interest of the community and the requirements of the individual’s fundamental rights (see, inter alia, the Sporrong and Lönnroth v. Sweden judgment of 23 September 1982, Series A no. 52, p. 26, § 69). The concern to achieve this balance is reflected in the structure of Article 1 as a whole, and hence also in the second paragraph. There must be a reasonable relationship between the means employed and the aim pursued (see the Tre Traktörer judgment cited above, p. 23, § 59).
In the instant case the Court first of all notes that the interference complained of was plainly a serious one, seeing that it led to the applicant’s tax consultancy being closed, thereby indisputably causing him damage. Furthermore, the applicant had at the time given all the requisite information to the Finance Ministry of the GDR, which had appointed him in full knowledge of the facts; indeed, the domestic courts did not accuse him of having made false representations but rather based their decisions on section 46(1) of the FRG’s Tax Consultants Act 1992, which provides for the revocation of a provisional appointment if it is found to be unlawful and if the appointee knew of or should have known of the factors that made it unlawful.
In this connection, as already observed, the Court notes that the applicant’s appointment took place during a transitional period which was wholly exceptional in the history of Germany and that the purpose of the 1992 legislative amendment was to make a retrospective check on the appointments made during that period in order to ensure that there had been no abuses. The checks were therefore designed to protect the public from those who had taken advantage of the situation to gain an appointment by a side-wind when they did not satisfy all the requirements in the FRG.
In particular, in the case of the applicant, he was able to gain his appointment as a tax consultant although he had not taken the examination normally required. However, as the domestic courts noted, the purpose of the Tax Consultants Order of the GDR was to facilitate access to the occupation of tax consultant by nationals of the GDR having the requisite knowledge with a view to preparing for the transition to a new economic system and not to enable nationals of the FRG to gain their appointments without taking the requisite examination. The retrospective check on the lawfulness of these appointments, which were described as “provisional” in the 1990 version of the Tax Consultancy Act, amended in 1992, does not seem to be disproportionate in order to correct errors of law or abuses which occurred during the transitional period.
Further, it seems that the applicant, who moved to the GDR and acquired the nationality of that State with a view to setting up his tax consultancy there, knew or should have known that the wording of the aforementioned Order also required experience in tax matters acquired in the GDR and not in the FRG; he thus took a risk in setting up his business under those circumstances. Finally, although at the time there were isolated instances of East German civil servants who, given the general “end-of-an-era” state of the regime, made appointments based on their own interpretations of the relevant statutory provisions, this did not in any way reflect a general practice.
The Court considers that the “burden” placed on the applicant, though heavy, must be weighed against the general interest of the community, taking into account the exceptional circumstances in which both the appointment and the revocation took place. In this context, the States enjoy a wide margin of appreciation (see, mutatis mutandis, the Tre Traktörer judgment cited above, p. 24, § 62).
Moreover, the applicant could have taken the necessary examination for tax consultants at any time and thereby gain access to the occupation, like everyone from the FRG.
Taking all those factors into consideration, and especially the exceptional circumstances of German reunification, the Court holds that the respondent State did not go beyond its margin of appreciation and, regard being had to the legitimate aims, did not fail to strike a “fair balance” between the applicant’s economic interests and the general interest of German society.
It follows that this complaint is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.
2. The applicant also maintained that the decisions complained of infringed his right to equal treatment in respect of his right to the peaceful enjoyment of his possessions and that those decisions were therefore contrary to Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1.
Article 14 of the Convention reads:
“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
According to the applicant, the revocation of his appointment on the ground that his experience in tax matters had not been acquired in the GDR resulted in a retrospective validation of the discrimination between the citizens of the GDR and the FRG provided for in the Tax Consultants Order and was not based on any objective and reasonable justification.
The Court reiterates that in accordance with its settled case-law, Article 14 of the Convention complements other substantive provisions of the Convention and the Protocols. It has no independent existence since it has effect solely in relation to “the enjoyment of the rights and freedoms” safeguarded by those provisions. Although the application of Article 14 does not presuppose a breach of those provisions – and to this extent it is autonomous –, there can be no room for its application unless the facts at issue fall within the ambit of one or more of the latter (see, in particular, the Karlheinz Schmidt v. Germany judgment of 18 July 1994, Series A no. 291‑B, p. 32, § 22, and the Gaygusuz v. Austria judgment of 16 September 1996, Reports of Judgments and Decisions 1996-IV, p. 1141, § 36).
Further, different treatment is discriminatory, for the purposes of Article 14, if it “has no objective and reasonable justification”, that is if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised”. The Contracting States enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment (see the Gaygusuz judgment cited above, p. 1142, § 42).
The Court notes, firstly, that it is not required to consider the discriminatory nature of the GDR’s Tax Consultants Order as such, given that the Order was issued by a State to which the Convention did not apply. The Court must, however, rule on whether the revocation of the applicant’s appointment – based on section 46(1) of the FRG’s Tax Consultants Act 1992 and on the German courts’ retrospective interpretation of the Order – complied with Article 14 of the Convention read in conjunction with Article 1 of Protocol No. 1.
In this connection, the Court considers that persons who had acquired their experience in tax matters in the GDR and those who had acquired it in the FRG and who were in other respects in a comparable position were indirectly treated differently.
However, as the Court has already set forth at length, the applicant’s appointment was revoked as part of a general check on appointments undertaken by the German authorities in the general interest after reunification.
Furthermore, this difference of treatment occurred in entirely exceptional circumstances associated with the reunification of a country formed from two States with opposed political and economic systems and the State unquestionably enjoyed a margin of appreciation.
Having regard to all those factors and, in particular, the circumstances of Germany’s reunification, the Court considers that the respondent State did not go beyond its margin of appreciation and that the difference of treatment was based on an objective and reasonable justification.
It follows that this complaint is likewise manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.
For these reasons, the Court unanimously,
Declares the application inadmissible.
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