Communicated on 30 November 2016
FOURTH SECTION
Applications nos. 12096/14 and 39335/16
Štefan ROLA against Slovenia
lodged on 4 February 2014 and 4 July 2016 respectively
STATEMENT OF FACTS
1. The applicant, Mr Štefan Rola, is a Slovenian national, who was born in 1960 and lives in Zgornja Korena.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
1. Granting of the liquidator licence and its revocation
3. On 9 April 2004 the applicant was granted a licence to work as a liquidator in insolvency proceedings under the then in force Compulsory Composition, Bankruptcy and Liquidation Act (hereinafter “the Bankruptcy Act”). His name was entered in the Register of Liquidators maintained by the Ministry of Justice. At the time of his appointment the Bankruptcy Act regulated the conditions under which the licence could be granted and revoked (see paragraph 21 below).
4. In 2003 or 2004 the applicant committed the criminal offence of violent conduct, which was an indictable offence, and eventually, on an unspecified date, he was convicted by the Maribor Local Court. He was given a suspended prison sentence.
5. On 1 October 2008 a new Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (hereinafter “the Financial Operations Act”) came into force, replacing the Bankruptcy Act (see paragraph 22 below).
6. On 21 June 2011 the Maribor Local Court informed the Ministry of Justice that the applicant’s conviction for the criminal offence committed in 2003 or 2004 had become final. Accordingly, on 27 June 2011 the Ministry of Justice revoked the applicant’s licence pursuant to section 109 of the Financial Operations Act. It stated that pursuant to that provision the applicant, having been convicted of an indictable offence committed with intent, had to be divested of his licence.
7. On 25 July 2011 the applicant lodged an administrative action against the decision revoking his licence. He argued that at the time he had committed the criminal offence he could not have foreseen that it would have entailed such a sanction and that section 109 of the Financial Operations Act should not have been applied retrospectively – an issue which in his view had been entirely disregarded by the Ministry of Justice. The applicant also emphasised that at the time he had acquired the licence the law had not provided for the measure of revocation in a case of conviction for a criminal offence. Accordingly, he could have not been expected to anticipate that such legal consequences would arise from his actions which, furthermore, had no bearing on the performance of his duties as a liquidator. He argued that over the years in this profession, he had gained extensive experience and had built up his reputation. His job as a liquidator had constituted his only source of income and he and his family had thus suffered a grave and unexpected loss of earnings following the revocation of his licence.
8. On 7 November 2012 the Administrative Court dismissed the applicant’s action. It found that that the revocation had been entirely lawful.
9. On 21 December 2012 the applicant lodged an appeal on points of law, reiterating the argument that his licence should not have been revoked on the basis of legislation that had only been enacted after he had been granted the licence and after he had committed the criminal offence in question. He further alleged that the Administrative Court had failed to address this key argument and to provide a reasoned response to his complaints. Moreover, the applicant was of the view that, assuming that the Administrative Court had correctly interpreted the relevant provisions of the Financial Operations Act, those provisions were inconsistent with the Constitution.
10. On 13 February 2013 the Supreme Court rejected the applicant’s appeal on points of law as inadmissible, holding that the question raised by the applicant did not meet the standard of “an important legal question” which should be resolved by the Supreme Court. The Supreme Court stated that the relevant provision of section 109 of the Financial Operations Act was unambiguous and did not require any particular interpretation; it was clear from its wording that it applied equally to those liquidators who had acquired their licence prior to the enactment of the Financial Operations Act as well as to those who acquired it after the new Act came into force. Moreover, the Act did not specifically provide that the measure in question only applied to convictions for criminal offences committed after it entered into force. Lastly, the Supreme Court held that the applicant had failed to substantiate that the revocation of his license had had particularly harmful consequences for him.
11. On 19 April 2013 the applicant lodged a constitutional complaint, relying on several constitutional provisions including those enshrining equal protection of rights, the right to judicial protection and freedom of work. He complained that the lower courts’ decisions had been very brief and had not answered his arguments and that no evidence concerning, inter alia, his financial situation had been assessed. He continued to aver that when given the licence he had complied with all the pertinent criteria and that the relevant provisions of the Financial Operations Act were unconstitutional. He further argued that the courts had not applied the more lenient law, which had been the old Bankruptcy Act. Moreover, the courts had disregarded the fact that only a suspended prison sentence had been imposed on him and that the legal distinction to include all criminal offences committed with intent was arbitrary and not relevant to the aim of maintaining public confidence in the profession at issue.
12. On 6 November 2013 the Constitutional Court rejected the applicant’s constitutional complaint as inadmissible, relying on the second paragraph of section 55(b) of the Constitutional Court Act (see paragraph 23 below).
2. Refusal to grant the applicant a new liquidator licence
13. On 8 April 2013 the applicant applied for a new liquidator licence.
14. On 29 May 2013 the Ministry of Justice rejected his application relying on the Financial Operations Act’s provision, pursuant to which a licence could not be granted once it had been revoked (point 2, paragraph 4 of section 108 of the Financial Operations Act – see paragraph 22 below) and noting that the applicant’s licence had been revoked on 27 June 2011.
15. On 27 June 2013 the applicant lodged an administrative action against the above decision. He argued that the sanction of permanent revocation was absolutely disproportionate and that neither judges nor lawyers were subject to such strict conditions as both were able to reapply for a licence after it had been revoked. The applicant further submitted that he had lost his job virtually overnight and that the companies which had provided support services to him, such as accounting, were also seriously affected by the measure. He also explained that he was unemployed and found it difficult to provide for his children who were in his sole custody.
16. On 12 March 2014 the Administrative Court dismissed the applicant’s action. It found that that refusal to grant a licence was based on a valid law and that there was no doubt that the applicant’s previous licence had been revoked.
17. On 5 January 2014 the applicant lodged an appeal on points of law challenging the lower court’s judgment, arguing that the question raised had not yet been resolved in the case-law and that he had as a result suffered financially. He also referred to a judgment issued in criminal proceedings unconnected to the present case. In that judgment a higher court explained to the accused, who had previously been a liquidator but had been banned from the profession as a preventive measure imposed by the criminal court, that under the Financial Operations Act he could, in the absence of such a measure, resume his job after the conviction had been expunged from his criminal record.
18. On 10 March 2015 the Supreme Court dismissed the applicant’s appeal on points of law on the grounds that he had failed to demonstrate that there was an important legal question, he had not pointed to any inconsistencies in the case-law and he had not shown that he had suffered very severe consequences as a result of the impugned measure, which the court pointed out was a refusal to grant him a licence and not the earlier revocation.
19. On 27 May 2015 the applicant lodged a constitutional appeal, relying on several provisions of the Constitution including equal protection of rights, the right to judicial protection, freedom of work, as well as Articles 6, 7 and 14 of the Convention. He argued that his case was an important one and that if the current position of the courts remained in force, he would never be able to work as a liquidator again. The applicant disputed the Supreme Court’s decision which had required him to show that there had been inconsistencies in the case-law. The Supreme Court ignored his argument to the effect that the relevant provisions were unconstitutional and instead took a position that only a departure from case-law would merit the examination of his appeal. The applicant furthermore referred to the aforementioned higher court’s judgment (see paragraph 17 above) in an attempt to show that the interpretation of the relevant legislation had not yet been settled.
20. On 14 December 2015 the Constitutional Court rejected the applicant’s constitutional complaint as inadmissible, citing the second paragraph of section 55(b) of the Constitutional Court Act (see paragraph 23 below). The decision was served on the applicant on 4 January 2016.
B. Relevant domestic law
21. Pursuant to section 78(c) of the Bankruptcy Act, in force until 1 October 2008, the Minister of Justice had to revoke a liquidator licence in serious cases of failure to comply with obligations, or in cases of abuse of liquidators’ powers committed with the intent of providing advantages to particular creditors or of harming creditors or debtors.
22. On 1 October 2008 the Financial Operations Act came into force, replacing the Bankruptcy Act. The Financial Operations Act introduced, in its section 108, paragraph 3, certain new conditions for the performance of the role of liquidator. Notably, a person is not considered worthy of public confidence to perform such a role if, inter alia, he or she has been lawfully convicted of an indictable criminal offence committed with intent and the conviction has not yet been expunged from the individual’s criminal record. In such a case, section 109 provides that the Minister of Justice must revoke the individual’s licence. Pursuant to point 2 of paragraph 4 of section 108 of the Financial Operations Act, the Minister of Justice must reject an application for a liquidator licence if the applicant’s licence has previously been revoked.
23. The second paragraph of section 55(b) of the Constitutional Court Act in force at the material time reads:
“(2) A constitutional appeal shall be considered:
- if there has been a violation of human rights or fundamental freedoms which has had significant consequences for the complainant; or
- if it concerns an important constitutional question which goes beyond the importance of the actual case.”
COMPLAINTS
Application no. 12096/14
24. The applicant complains under Article 7 of the Convention that the revocation of his licence constituted a form of oppression which stemmed from the conviction. He therefore had a penalty retroactively imposed on him, which had not been provided in law at the time of the offence.
25. The applicant also complains in substance under Article 1 of Protocol No. 1 to the Convention about the revocation of his licence which he argues was a disproportionate measure. He submits in this connection that the measure was unrelated to the performance of his duties as a liquidator, was harsher than the sanctions applied to judges and lawyers in similar situations and had worse consequences than those provided in criminal law. In particular, criminal law allowed for rehabilitation whereas the revocation of his licence appeared to be for life.
26. The applicant complains, in substance under both of the above provisions, that as his prison sentence was suspended it should have not entailed any legal consequences.
27. The applicant furthermore complains under Article 4 of Protocol No. 7 to the Convention that the revocation of his license following his conviction for the criminal offence of violent conduct constituted double jeopardy in breach of that provision.
Application no. 39335/16
28. Building on his above complaint (see paragraph 25 above), the applicant complains in substance under Article 1 of Protocol No. 1 to the Convention about being unable to successfully reapply for a liquidator licence. He points out that someone applying for the first time for a licence can get it even if he or she has previously been convicted, provided that his or her criminal record has been cleared, but the applicant, who has had his licence revoked, can never get it back.
QUESTIONS TO THE PARTIES
1. Did the Ministry of Justice’s decision of 27 June 2011, finding that the applicant’s licence to work as a liquidator should be revoked on the basis of section 109 of the Financial Operations Act, violate his right not to be punished without law under Article 7 of the Convention? In particular, did the Ministry of Justice’s decision constitute a “penalty” within the meaning of Article 7, and if so, was that penalty applied retroactively in the applicant’s case?
2. Has there been an interference with the applicant’s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1? In particular, does the present case concern existing possessions or a legitimate expectation of acquiring possessions?
If so, was the interference in the public interest and in accordance with the conditions provided for by law, within the meaning of Article 1 of Protocol No. 1? Did it impose an excessive individual burden on the applicant?
3. Has there been a violation of Article 7 of the Convention and/or Article 1 of Protocol No. 1 to the Convention on account of the fact that the applicant’s license was revoked despite his prison sentence being suspended?
4. Could the proceedings relating to the revocation of the applicant’s licence be regarded as “criminal” in the context of Article 4 of Protocol No. 7 to the Convention (see A and B v. Norway [GC], nos. 24130/11 and 29758/11, §§ 105-107, 15 November 2016)?
Having regard to the criteria set out in A and B v. Norway (cited above, §§ 130-134), has there been a violation of Article 4 of Protocol No. 7 to the Convention in the present case?
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