THIRD SECTION
DECISION
Application no. 23106/02
by Amelia and Einar RIIS
against Norway
The European Court of Human Rights (Third Section), sitting on 8 July 2004 as a Chamber composed of:
MrG. Ress, President,
MrI. Cabral Barreto,
MrL. Caflisch,
MrR. Türmen,
MrJ. Hedigan,
MrsH.S. Greve,
MrK. Traja, judges,
and Mr V. Berger, Section Registrar,
Having regard to the above application lodged on 4 June 2002,
Having regard to the decision to apply Article 29 § 3 of the Convention and examine the admissibility and merits of the case together.
Having regard to the decision to grant priority to the above application under Rule 41 of the Rules of Court.
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,
Having deliberated, decides as follows:
THE FACTS
The applicants, Mrs Amelia and Mr Einar Riis, are Norwegian nationals, who were born in 1930 and 1922 respectively and live in Oslo, Norway. They are represented before the Court by Mr H.J. Berge, a lawyer practising in Oslo.
The facts of the case, as submitted by the applicants, may be summarised as follows.
The first applicant is the daughter of a merchant ship owner, the late Mr Kristoffer Olsen (Senior), who died in 1948, and of Mrs Dagny Marie Olsen, who died in 1970. Following her death, the parents’ joint estate was subjected to public division (offentlig skifte) by the Oslo Probate Court (skifterett), as the heirs did not take over the estate’s debts. The first applicant was one of three heirs to the estate, which comprised major shareholding positions in Luksefjell Ltd and, indirectly, in Dovrefjell Ltd., the family’s two principal companies. These formed part of the Olsen & Ugelstad Ltd Shipping Company (founded in 1915 by the first applicant’s father and by Mr Rudolf Ugelstad). One of the other heirs, the first applicant’s brother, Mr Kristoffer Olsen (Junior) was, under powers delegated to him in 1951 by his mother, the only member of the Olsen family taking part in the leadership of the Shipping Company.
The division of the estate was conducted by the Probate Court’s President and an assistant judge (both of whom deceased before the compensation proceedings below were adjudicated). This exercise involved severe disputes between the applicant and her brother and had not been completed in May 1978, when another judge of the Probate Court took over.
On 28 June 1978 the first applicant instituted proceedings against the State before the Oslo City Court (byrett) requesting compensation for loss of inheritance caused by the manner in which the Probate Court had administered the estate. She maintained inter alia that, while in the early 1970s the family’s two companies were worth over NOK 40,000,000 each, in 1975 the companies’ net values had been reduced to the point of de facto bankruptcy. Enormous losses had allegedly been caused by some extremely risky dispositions taken by her brother in running the family business. Although aware at an early stage of this state of affairs and of the sharp disagreement among the heirs in these matters, the Probate Court had failed to use its powers to intervene in order to preserve the estate’s values.
Since October 1973 the international tanker market had seen a deep recession. By June 1978 all of the Shipping Company’s ships had been sold, only an oilrig remained and, according to a deed of arrangement, all revenues derived therefrom should benefit the creditors. In 1983 the Luksefjell and Dovrefjell companies went bankrupt.
The present application is the third application brought by the applicants under the Convention in relation to the same case complex. The first and the second applications (nos. 11201/84 and 23192/94), which concerned a variety of allegations of substantive and procedural violations in relation to losses sustained by the first applicant in the inheritance succession from her father, were declared inadmissible by the European Commission of Human Rights respectively on 6 October 1986 and 23 February 1995. The third application, which is now under consideration, is limited to a complaint under Article 6 § 1 of the Convention about the length of the proceedings lodged with the City Court on 28 June 1978. In this regard, the following information may be found in the City Court’s judgment referred to below.
The City Court registered the case on 24 July 1978, after an advance payment had been made on judicial fees. Subsequently, lengthy written preparatory proceedings took place, in the course of which the first applicant was requested under section 136 of the Administration of Courts Act (domstolloven) to supply translations into Norwegian of the case documents submitted in English. However, as she lacked the necessary financial means, she did not do so.
In the autumn of 1982 the first applicant requested the City Court to fix a date for the opening of the main hearing in the case. However, the Attorney General’s Office (Civil Matters) objected, invoking in part that the translations had not yet been provided, in part that one did not yet have a full view of the case. Accordingly, no hearing was scheduled.
On 28 February 1984 the first applicant renewed her request that a date be fixed for the opening of the hearing. Again the Attorney General’s Office objected, giving the same reasons as above.
Following further exchanges in 1985 concerning the translation issue, the proceedings were at a standstill until 1990, when the first applicant informed that negotiations for conciliation were under way. However, no conciliation materialised in October 1992 and her counsel withdrew. Thereafter the second applicant represented the first applicant, until she was granted free legal aid in April 1998.
A number of different judges of the City Court have been in charge of the case. In the autumn of 1999 the Presiding judge took over and fixed a date for the opening of the main hearing.
The main hearing was held between 12 September and 5 December 2000. At the first applicant’s request, the City Court sat with two lay judges and one substitute lay judge (who took part in the hearing but was dispensed before the vote). The applicants were present throughout the hearing but no representative of the State was present. The City Court heard the first applicant and 13 witnesses and took other evidence.
In its judgment of 28 February 2001, which ran over some 150 pages, the City Court observed that the case was both extensive and complex and that the written preparatory stage of the proceedings had taken regrettably long.
The City Court examined the matter under section 2-1 of the 1969 Damage Compensation Act (skadeserstatningsloven), which governed the civil liability of an employer (in this instance the State) for damage caused with intent or by negligence by an employee in the performance of his or her duties. The City Court found that, already by a letter addressed to it on 18 May 1971, the Probate Court had been warned that there was a dispute between the first applicant and her brother. The City Court then went on to consider whether there was a causal link between each of the alleged instances of negligent failure on the part of the Probate Court to intervene and the losses generated by transactions and projects carried out by the family companies during the relevant period.
While rejecting several of the first applicant’s claims, including one of abuse of power, the City Court found that the Probate Court had displayed negligence in failing to prevent losses by intervening in certain transactions, notably those referred to as “Vardefjell”, “Falkefjell” and “Fagerfjell”, and various investment projects in the oil sector. Such intervention could have averted bankruptcy of the Dovrefjell and Luksefjell companies. The Probate Court had been warned many times, had repeatedly been requested to intervene and its attention had been drawn to suspicion that the family business was not run in a manner consistent with the interests of the estate and those of every heir. The Probate Court had further been aware of the hostility between the first applicant and her brother and that the latter had previously tried to prevent that she inherit from her parents. It could not be excluded that the way in which he ran the family business during the inheritance succession was motivated by a desire to reduce as far as possible the first applicant’s inheritance. The Probate Court had failed to appreciate its responsibility for protecting the heir who was in the weakest position and had made a serious error in not having had due regard to her situation.
The City Court observed that, according to certain agreements between the first applicant and her brother, he had the understanding that she should receive at least NOK 45-50,000,000 as late as in the spring of 1974. However, the City Court found it most likely that the division of the estate could not have been effected until a later stage, when values would have been considerably depreciated by the international shipping crisis. Making an assessment on a discretionary basis, the City Court unanimously ordered the State to pay the first applicant NOK 10,000,000 in compensation, plus default interest from 28 June 1978, when the case was brought before the City Court, until the date of payment, at rates varying between 10 and 18 % for specific periods, to reimburse the first applicant’s legal costs amounting to approximately NOK 2,000,000, plus interest. The City Court unreservedly agreed with the first applicant that she had to wait for far too long to have the case decided and was entitled to default interest at the ordinary rate. However, it did not find that the mere delay could justify granting her additional compound interest, as she had not adduced evidence to show that she had incurred real losses that exceed the ordinary default interest. Also, she was to some extent responsible for the delay.
According to the applicants’ own calculations, the above sums totalled approximately NOK 43,000,000.
The State lodged an appeal against the City Court’s judgment before the Borgarting High Court (lagmannsrett).
On 13 June 2003 the Registrar received from the applicants’ lawyer a letter dated 7 June 2003 enclosing the following friendly settlement between the first applicant and the Government, while pointing out that it did not affect their application in the present case:
“SETTLEMENT AGREEMENT BETWEEN AMELIA RIIS AND THE STATE (MINISTRY OF JUSTICE)
In connection with High Court case, no. 01-01638 A/02, of the State (Ministry of Justice) v Amelia Riis and case no. 01-01639 A/02, of Amelia Riis v the State (Ministry of Justice), the following settlement is concluded between the parties:
1. The State (Ministry of Justice) shall pay to Amelia Riis the amount awarded in the Oslo City Court’s judgment of 28 February 2001 in case no. 90-01825 A/23 under points 1, 2, 3 and 5 of the operative part of the judgment, though with interest calculated up to the date of the delivery of judgment. In addition, the State (Ministry of Justice) shall pay Amelia Riis 12 per cent interest on the above-mentioned amount from the date of the delivery of judgment until payment takes place pursuant to this agreement.
2. The State (Ministry of Justice) shall pay the share of accrued costs for the High Court examination of this case paid by Amelia Riis to the public authorities in court fees pursuant to the rules on legal aid, with the addition of 12 per cent interest from the date of payment by Amelia Riis until payment is made under this agreement.
3. This settlement does not constitute an admission of responsibility by the State.
4. The Borgarting High Court case, no. 01-01638 A/02, of the State (Ministry of Justice) v. Amelia Riis and the case, no. 01-01639 A/02, of Amelia Riis v. the State (Ministry of Justice) shall be terminated as settled. The Oslo City Court’s judgment of 28 February 2001 is hereby made legally enforceable.
5. The settlement also covers any claims that Amelia Riis may have in relation to court proceedings in the above case. However, the settlement shall not preclude review of whether the European Convention on Human Rights has been violated.
6. The amount shall be paid by cheque in Norway on today’s date.
7. This settlement agreement is contingent upon subsequent approval by the Ministry of Finance.
8. The settlement agreement is drawn up in two copies.
Oslo 5 June 2003Oslo 5 June 2003
Amelia RiisThe State (Ministry of Justice)”
Pursuant to the above settlement the first applicant was paid NOK 55,000,000, of which approximately NOK 45,000,000 were for default interest.
Subsequently, the applicants opted to pursue their initial complaint to the Court under Article 6 § 1 of the Convention about the length of the compensation proceedings instated before the City Court on 28 June 1978. In this connection they submitted the second page of a letter, which they say was dated 17 April 2002 and was addressed by the Minister of Justice to them, in which he stated inter alia:
“The settlement does not however hinder review, for instance by the ... Court in Strasbourg, of whether the ... Convention ... has been violated. However, I could not accept that the case should not be regarded as settled if it should later turn out that there has been a violation of the ... Convention and that in such case there should be a renegotiation. A possible violation of the ... Convention would not concern the substantive aspect of the case, which would be finally concluded by a settlement agreement. It would therefore not be normal if the settlement were later affected by any subsequent review of those questions. Another matter is that the violation could as such constitute a ground for a compensation claim. Such a claim would not be regarded as settled by an eventual settlement agreement.”
THE LAW
A. The Government’s invitation to the Court to strike the case out and the applicants’ objections thereto
On 6 August 2003 the Government maintained that, although the length of the proceedings had been largely attributable to the applicants’ own conduct, they conceded that the competent authorities had failed to make sufficient efforts to expedite the proceedings and that their duration entailed a violation of Article 6 § 1 of the Convention. However, in the view of the Government, that violation ought to be considered adequately redressed by the settlement of 5 June 2003. In the event that the applicants were not prepared to settle the case before the Court along the lines of the 5 June 2003 agreement, the Government invited it to strike the case out under Article 37 § 1 ( c) of the Convention. In so far as relevant this provision reads:
“1. The Court 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
(a) the applicant does not intend to pursue his application; or
(b) the matter has been resolved; or
(c) for any other reason established by the Court, it is no longer justified to continue the examination of the application.
However, the Court shall continue the examination of the application if respect for human rights as defined in the Convention and the Protocols thereto so requires.”
1. The applicants’ submissions
While agreeing with the Government that the Convention had been violated, the applicants maintained that it remained for the Court to make an award of compensation. The applicants denied all responsibility for the delay that had occurred in the national proceedings and requested the Court to make an award of punitive damages in order to prevent the reoccurrence of such conduct by the authorities. The applicants claimed 1.45 billion US dollars (USD) in respect of loss of inheritance, which included 14 million USD for the loss incurred in 1975 and 18% interests and compound interest on this amount over 28 years. They further requested compensation for their loss of earnings, arguing that, had they received the USD 14 million, this amount would have been immediately invested in 6 Boeing aircrafts and should have enabled them subsequently to build up a fleet of 40 to 50 aircrafts worth NOK 10.5 billion.
The applicants asked the Court to reject the Government’s request to strike their application out under Article 37 § 1 (c). The latter’s suggestion that the applicants had been compensated for not only the loss of the capital to which they were entitled but also the length of the proceedings against the State had been based on an erroneous interpretation of the friendly settlement agreement of 5 June 2003. The ordinary default interest, which had its basis in the law of contract, not in the law of tort, had never been intended to constitute a remedy against the deliberate obstruction or protraction of court proceedings such as here. Nor would it have the necessary preventive effect.
The friendly settlement agreement of 5 June 2003 neither determined nor terminated the dispute between the State and the applicants as to whether their Convention rights had been violated. The first applicant argued that, in a letter of 17 April 2002 concerning the friendly settlement, the Minister of Justice had emphasised that a possible violation could constitute a ground for compensation and that such a claim could not be regarded as settled by virtue of an eventual settlement agreement. Thus, the payment by the State of any amount stipulated in the agreement could not be deemed to relate to or reflect any redress for the violation. Even the City Court seemed to have proceeded on the understanding that, had a violation by the State been established or had the State conceded that a violation had occurred, the applicants would have been granted compound interest.
It was therefore meaningless, and even contrary to the dispositions taken by the Minister of Justice, for the Agent of the Government suddenly to request the Court to strike the case off its list on the ground that redress had been provided for something that they until August 2003 denied had occurred. It was obvious that the Government could not first argue before the City Court that no violation had occurred and then, after the case had been settled, change their stance by submitting that the applicants’ Convention rights had been violated and that the violation had been redressed in proceedings in which they had previously denied that any violation had occurred.
2. The Government’s submissions
In response to the above, the Government reiterated their unilateral declaration that the length of the proceedings in the compensation case had been excessive and that the applicants’ rights under Article 6 § 1 had accordingly been violated. Contrary to what the applicants suggest, this did not contradict any pleadings by the State before the Oslo City Court, which had not addressed the length issue under Article 6. Furthermore, they were prepared to cover the applicants’ legal expenses in the Strasbourg proceedings in so far as they had been necessarily incurred, in an amount which was not to exceed 5,000 euros (EUR).
As regards the applicants’ claim for pecuniary damage under Article 41 of the Convention, the Government had several objections. Firstly, the claims largely were the same as those brought before the Oslo City Court in the compensation case against the State, which was finally settled between the parties in July 2003. While the amounts had been enlarged, the claims all seemed to have the same factual basis, namely that Mrs Riis, by reason of the allegedly negligent omissions by the domestic courts, had been deprived of an inheritance allegedly worth USD 14 million in 1975. Although the settlement agreement between the parties did not include a withdrawal of the applicants’ complaints to the European Court, the settlement of their financial claims should still be considered final. The applicants could not revitalise those claims at this stage. By so doing the applicants had de facto invited to Court to re-evaluate the City Court’s findings in a case that the applicants had opted to settle. There was no ground for the Court to entertain those claims. Should the Court nonetheless do so, the Government submitted that neither the courts nor any State agency had acted in a manner which could justify the claims.
Secondly, the Government submitted, the applicants’ claims for pecuniary damage were all unsubstantiated, largely contradictory, and highly speculative. In any event, there was no causal link between the claims for pecuniary damage and the violation of the reasonable length requirement in Article 6. Whereas the applicants claimed that their losses in 1975 had amounted to USD 14 million the Oslo City Court awarded them NOK 10 million in compensation. The Government had paid that compensation as part of the settlement of July 2003. It could not be held that the domestic courts would have reached a different conclusion had the case been dealt with earlier. The length of the proceedings therefore could not have caused any losses exceeding those that had already been paid.
Furthermore, the Court should note that the Oslo City Court not only awarded NOK 10 million in compensation, but also interest from 1978 onwards in accordance with the 1976 Act on Interest on Overdue Payments etc. The Government, as part of the settlement of July 2003, paid those interests, which totalled some NOK 45 million. In the view of the Government, that interest compensated all such losses that the applicants could reasonably be considered to have suffered on account of the lapse of time until payment.
As regards the applicants’ claims for non-pecuniary damage, the Government submitted that the applicants, through the high interest rate provided for by the 1976 Act, have been compensated not only for their pecuniary losses caused by the excessive length of proceedings, but also for any frustration or distress suffered on the same ground. As explained in the Government’s submission of 6 August 2003, the high interest rates awarded under the 1976 Act at all times considerably exceeded the general level of interest. The interest in question was not only meant to redress the disadvantages suffered by the creditor due to the default but also to act as an effective deterrent. There was no basis for awarding further damages than those paid through the settlement of July 2003.
B. The Court’s assessment
The Court notes from the outset that the second applicant, Mr Einar Riis, was not a party either to the domestic judicial proceedings initiated by the first applicant, Mrs Amelia Riis, or to the friendly settlement concluded by her and the State on 5 June 2003. He has therefore not exhausted domestic remedies under Article 35 § 1 of the Convention. In so far as this applicant is concerned, the Court declares the application inadmissible under Article 35 § 4 of the Convention.
It remains to consider the application in respect of the first applicant. In its examination of the Government’s request to strike the case out under Article 37 § 1 (c ) on the basis of their unilateral declaration, the Court will have regard to the (non-exhaustive) principles stated in the Tahsin Acar v. Turkey judgment (Preliminary issue) [GC], no. 26307/95, ECHR 2003- (6.5.03), §§ 75-77).
The Court observes that the first applicant’s submission that, in the relevant proceedings, the State had pleaded, and the City Court had found, that the duration of those proceedings entailed no violation of Article 6 of the Convention appears inaccurate. Whereas the pleadings referred to by the first applicant did not specifically deal with the issue in relation to the present case, the City Court, in its judgment of 28 February 2001, clearly acknowledged that the length had been excessive. It did not find the respondent party, the State, responsible, but reiterated the court’s responsibility under the Code of Civil Procedure for ensuring that pending cases be concluded within a reasonable time. It held that the loss incurred by the plaintiff as a result of the length of the proceedings could be adequately redressed by an award of default interest at an ordinary level, which was higher than the rate of inflation. Accordingly, the City Court awarded the first applicant default interest, varying between 10 and 18 per cent throughout the period, from the institution of the proceedings on 28 June 1978 until payment of the award of NOK 10,000,000 (currently corresponding to around EUR 1,210,000).
It is further to be noted that, after having first appealed against the City Court’s judgment of 28 February 2001, the State was minded to settle the case and reached on 5 June 2003 a friendly settlement with the first applicant, under which it was obliged to pay her the award made by the City Court. The settlement agreement neither confirms nor negates (see clause 3) the City Court’s reasoning and conclusion on compensation, including its recognition that the proceedings before it had been excessively long and that its award would constitute adequate redress for consequent losses. Under clause 4 of the settlement, the appeal before the High Court was to be discontinued so as to make the City Court’s judgment res judicata.
However, while the settlement did not entail an admission of responsibility by the State (see clause 3), it did not bar the first applicant from pursuing her case under the Convention later (clause 5), which she did. Nor did it hinder the Government from defending their case, should the first applicant pursue her application before the Court. In the context of such pursuit the Government made a unilateral declaration that the Article 6 § 1 requirement as to reasonableness of the length of proceedings had been violated in the first applicant’s case. Their declaration was unequivocal and plain.
The Court further notes the payment by the Government, under the terms of the settlement agreement of 5 June 2003, of the amounts that had previously been awarded by the City Court on 28 February 2001, inter alia on grounds of the excessive delay. Thus the first applicant was paid approximately NOK 55,000,000, of which around NOK 45,000,000 (currently corresponding to approximately EUR 1,210,000) represented default interest. In view of their sheer size and proportion to the compensation award, the Court finds it abundantly clear that the amounts paid in respect of default interest constitute adequate redress for the first applicant’s length complaint.
The Court moreover takes note of the Government’s commitment to pay the first applicant an amount corresponding to EUR 5,000 (presumably inclusive of Value Added Tax) in respect of legal costs incurred in the Strasbourg proceedings.
Against this background, the Court considers it no longer justified in the sense of Article 37 § 1 (c) to continue the examination of the application in respect of the first applicant and finds no reasons of a general character, as defined in Article 37 § 1 in fine, which would require the examination of the application by virtue of that Article.
Accordingly, the application to the case of Article 29 § 3 of the Convention should be discontinued and the case struck out of the list.
For these reasons, the Court unanimously
Declares the application inadmissible in respect of the second applicant;
Decides to strike the application out of its list of cases in respect of the first applicant.
Vincent BergerGeorg Ress
RegistrarPresident
Full & Egal Universal Law Academy