SECOND SECTION
DECISION
Application no. 67415/14
Anton REZAR
against Slovenia
The European Court of Human Rights (Second Section), sitting on 28 May 2019 as a Committee composed of:
Valeriu Griţco, President,
Egidijus Kūris,
Darian Pavli, judges,
and Hasan Bakırcı, Deputy Section Registrar,
Having regard to the above application lodged on 9 October 2014,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr Anton Rezar, is a Slovenian national who was born in 1955 and lives in Ljubljana. He was represented before the Court by Mr B. Verstovšek, a lawyer practising in Celje.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
3. The applicant was the only shareholder and director of a limited liability company, A.
1. Enforcement proceedings against the company
4. On 22 April 2004 the Maribor District Court, on the basis of A.’s explicit admission of the claimant’s (hereinafter “the creditor”) claim, issued a judgment ordering the company to pay the sums admitted plus statutory default interest. No appeal was lodged, so the judgment became final.
5. Following an application by the creditor, on 5 July 2004 the Ljubljana Local Court allowed the enforcement of the claim against the company, and issued a writ of execution.
2. Strike-off of the company from the court register
6. On 22 May 2006 the Ljubljana District Court issued a decision to strike the company off from the court register, in accordance with the Financial Operations of Companies Act 1999 (hereinafter “the FOCA”, see paragraph 15 below). Neither the company nor the applicant appealed against the decision, which became final on 26 June 2006. On 29 June 2006 the company was struck off from the court register and thus ceased to exist.
3. Enforcement proceedings against the applicant
7. Meanwhile, on 2 June 2006 the creditor requested that the writ of execution be amended and that enforcement proceed against the applicant in his capacity as the sole shareholder of the struck-off company.
8. On 13 September 2006 the Ljubljana Local Court allowed the enforcement to continue against the applicant, in accordance with section 27(4) of the FOCA (see paragraph 15 below).
9. On 9 October 2006 the applicant lodged an objection to the amended writ, arguing that the creditor’s request had been unsubstantiated and premature. He also contended that part of the creditor’s claim had been paid.
10. On 18 April 2007 the court issued a decision to discontinue the enforcement proceedings against the applicant as of 7 April 2007 on the basis of an amendment made to the FOCA (see paragraph 16 below). On 4 May 2007 the court marked the decision as final.
11. On 27 September 2013 the Ljubljana Local Court granted the applicant’s objection (see paragraph 9 above) in so far as it referred to the amount that had already been paid, and dismissed the remainder. It noted that the enforcement proceedings, which had previously been suspended, were to continue in the light of the Constitutional Court’s decision of 12 April 2012 (see paragraph 19 below).
12. The applicant appealed, arguing that the enforcement proceedings could not continue because they had been discontinued by means of a final decision which had never been quashed (see paragraph 10 above).
13. On 31 March 2014 the Ljubljana Higher Court dismissed his appeal referring, inter alia, to the Constitutional Court’s decision of 2 April 2010 (see paragraph 18 below). It reiterated that section 4 of the amended FOCA had initially been suspended and later revoked by the Constitutional Court’s decision of 21 June 2007 (see paragraph 17 below). Consequently, the mere fact that the discontinuation decision at issue had become final could not prevent the enforcement proceedings from being pursued against the applicant. On 15 April 2014 the decision was served on the applicant.
14. The applicant subsequently asked the Supreme State Prosecutor to lodge a request for protection of legality. On 27 May 2014 the Supreme State Prosecutor informed the applicant that there were no grounds for her intervention in the case.
B. Relevant domestic law and practice
15. The relevant domestic law provisions are summarised in Lekić v. Slovenia ([GC], no. 36480/07, §§ 41-54, 11 December 2018).
16. On 7 April 2007 an amendment to the FOCA came into force. It provided that all pending judicial proceedings in which creditors of struck‑off companies were enforcing their claims against former shareholders of those companies were to be discontinued as of that date (section 4(1) of the amended FOCA). Under section 4(2), the courts were to issue decisions confirming the discontinuation of such proceedings within thirty days.
17. On 20 April 2007, following a number of applications for a review of the amendment’s constitutionality, the Constitutional Court suspended the implementation of that amendment for the duration of the proceedings, along with the legal effects of the discontinuation decisions that had been issued under section 4 of the amended FOCA. On 21 June 2007 the Constitutional Court revoked the impugned provisions, finding that they did not afford appropriate protection to creditors (decision U-I-117/07). It also decided that enforcement proceedings were to continue in accordance with the legislation in force prior to the adoption of the amended FOCA.
18. By decision Up-310/10 of 2 April 2010 the Constitutional Court declined to accept a constitutional complaint lodged by several creditors for consideration, but held that the discontinuation decisions had been declaratory in nature and that the fact that they had become final could not in and of itself prevent the continuation of the proceedings.
19. On 17 November 2011 the Liability for Corporate Obligations Act came into force. It relieved former shareholders of struck-off companies from personal liability for the debts of such companies and determined that all pending judicial proceedings were to be suspended. The Constitutional Court later revoked those provisions because there were no constitutionally admissible reasons for interfering with the rights of the creditors (decision U-I-307/11 of 12 April 2012). The suspended judicial proceedings were to continue pursuant to the legislation under which they had commenced.
COMPLAINTS
20. The applicant complained that the enforcement proceedings against him had unlawfully and disproportionately interfered with his possessions. He relied on Article 6 § 1 and Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention.
21. Moreover, under Article 1 of Protocol No. 12 to the Convention he complained of the unjustified differential treatment of the shareholders of companies struck off after 17 November 2011 (see Lekić, cited above, § 54).
THE LAW
22. Relying on Article 6 § 1 and Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention, the applicant complained about the decision allowing enforcement to proceed against him and of the manner in which the domestic courts dealt with his related complaints (see paragraph 20 above). The Court, which is master of the characterisation to be given in law to the facts of the case (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, §§ 114 and 126, 20 March 2018), will examine these complaints from the standpoint of Article 1 of Protocol No. 1 alone, which reads as follows:
Article 1 of Protocol No. 1
“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.”
23. The applicant further complained of unjustified differential treatment (see paragraph 21 above) under Article 1 of Protocol No. 12 to the Convention, which provides as follows:
Article 1 of Protocol No. 12
“1. The enjoyment of any right set forth by law 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.
2. No one shall be discriminated against by any public authority on any ground such as those mentioned in paragraph 1.”
24. The applicant argued that the domestic courts had not addressed his arguments and had only protected creditors. He further argued that the enforcement proceedings against him had been arbitrary and violated the principle of legal certainty because the creditor in his case had never requested that the enforcement proceedings continue and because the proceedings had been continued of the courts’ own motion more than six years after they had previously been discontinued by a final court decision. In connection with this complaint, the applicant contended that a constitutional complaint would not have had any reasonable prospects of success because the Constitutional Court had previously afforded priority to creditors’ property rights over the rights of shareholders stemming from the finality of the discontinuation decisions delivered in accordance with the provisions of the amended FOCA. In that regard he referred to the two decisions of the Constitutional Court that had been cited by the lower courts in the enforcement proceedings against him (see paragraphs 18 and 19 above).
25. The Court reiterates that States do not have to answer for their acts before an international body until they have had an opportunity to put matters right through their own legal system, and those who wish to invoke the supervisory jurisdiction of the Court in respect of their complaints against a State are thus obliged to first use the remedies provided by the national legal system (see Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, § 70, 25 March 2014).
26. Nevertheless, the only remedies which Article 35 of the Convention requires to be exhausted are those that are available and sufficient to afford redress in respect of the breaches alleged. The existence of such remedies must be sufficiently certain not only in theory but also in practice, failing which they will lack the requisite accessibility and effectiveness (see Akdivar and Others v. Turkey, 16 September 1996, § 66, Reports of Judgments and Decisions 1996-IV). In addition, in accordance with the “generally recognised principles of international law”, there may be special circumstances which absolve the applicant from the obligation to exhaust the domestic remedies at his or her disposal (see Selmouni v. France [GC], no. 25803/94, § 75, ECHR 1999‑V).
27. The threshold for a “special circumstances” dispensation is high. It is an established principle that in a legal system providing constitutional protection for fundamental rights it is incumbent on the aggrieved individual to test the extent of that protection and allow the domestic courts to develop those rights by way of interpretation (see Vučković and Others, cited above, § 84). Consequently, when deciding whether an applicant should be required to exhaust a particular remedy, the Court has held that the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust domestic remedies (see Akdivar and Others, cited above, § 71, and Vučković and Others, cited above, § 74).
28. Turning to the present case, the Court notes that the applicant lodged his application with the Court after his appeal against the decision to dismiss his objection concerning the enforcement proceedings had been dismissed by the Ljubljana Higher Court (see paragraph 13 above). He has not lodged a constitutional complaint.
29. The Court further notes that, as regards applications lodged against Slovenia, applicants are in principle required to lodge a constitutional complaint as part of the process of exhaustion of domestic remedies (see Knežević and Others v. Slovenia (dec.), no. 51388/13, § 27, 19 September 2017, and Kurić and Others v. Slovenia [GC], no. 26828/06, § 296, ECHR 2012 (extracts)).
30. In so far as the applicant seems to argue that the constitutional complaint would have had no prospects of success in relation to one of his complaints (see paragraph 24 above), the Court observes that in the decisions referred to by the applicant (ibid.) the Constitutional Court was not called on to examine the arguments raised by the applicant in the present application. In particular, the Constitutional Court has not had the chance to address the applicant’s complaints relating to the fact that the enforcement proceedings against him were continued of the courts’ own motion after having been discontinued for a substantial period of time (ibid.).
31. Bearing in mind that the existence of mere doubts as to the prospects of success of a particular remedy which is not obviously futile is not a valid reason for failing to exhaust that avenue of redress (see paragraph 27 above) and having due regard to the Constitutional Court’s case-law as provided by the applicant, in the present case the Court finds no special circumstances absolving the applicant from his obligation to avail himself of a constitutional complaint (see paragraph 29 above).
32. The application must therefore be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 20 June 2019.
Hasan BakırcıValeriu Griţco
Deputy RegistrarPresident
Full & Egal Universal Law Academy