THE ESTATE OF NITSCHKE v. SWEDEN

Avrupa İnsan Hakları Mahkemesi

Karar Metni

SECOND SECTION

PARTIAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 6301/05
by THE ESTATE OF NITSCHKE
against Sweden

The European Court of Human Rights (Second Section), sitting on 6 June 2006 as a Chamber composed of:

MrJ.-P. Costa, President,
MrA.B. Baka,
MrR. Türmen,
MrM. Ugrekhelidze,
MrsE. Fura-Sandström,
MsD. Jočienė,
MrD. Popović, judges,
and Mrs S. Dollé, Section Registrar,

Having regard to the above application lodged on 16 February 2005,

Having deliberated, decides as follows:

THE FACTS

The application is brought by the estate of a Swedish national, Mr. Alfred Nitschke, who was born in 1940 and died on 13 January 2003. The estate is represented by the widow, Mrs Britt-Marie Nitschke, who herself is represented before the Court by Mr J. Thörnhammar, a lawyer practising in Stockholm.

A. The circumstances of the case

The facts of the case, as submitted by the applicant (the estate), may be summarised as follows.

From 1988 until its bankruptcy in 1997, Mr Nitschke owned 49 % of the company Restaurang Takåsen AB (hereinafter referred to as “the company”). He was a member of the board of directors and authorised to sign for the company as well as being responsible for the daily functioning of the company. The other shares (51%) were owned by Stockholms företagskrogar AB.

On 3 November 1994 the Tax Authority (skattemyndigheten) of the County of Stockholm sent an audit report (granskningspromemoria) to Mr. Nitschke, informing him that, following a tax audit of the company, it was considering altering the tax returns for the tax assessment years 1993 and 1994 for the company, as well as for Mr. Nitschke, and imposing tax surcharges on them. On the basis of information from the audit, the Tax Authority concluded that Mr. Nitschke had to be considered the executive of the company, due to his influence therein, and that his taxable income for both years should be increased because he had omitted to inform the Tax Authority about certain income from the company in the form of salary payments and benefits involving free lunches and the free use of a company car. Moreover, the Tax Authority had found that Mr. Nitschke had let the company pay for a boat mooring at a marina, as well as for a computer and stereo which he had bought for private use and kept in his home.

Mr. Nitschke replied to the Tax Authority, disputing its findings and demanding that he be taxed in accordance with his tax returns and that the tax surcharges be remitted. He stated that he was not the executive of the company, as he was minority owner, but that it was the executive of Stockholms företagskrogar AB who controlled the company and that the book-keeping was carried out by that company’s accountant. He further claimed that he had never eaten lunch at the restaurant since he was too busy serving lunches to the guests. Moreover, he only used the company car for carrying out work-related matters as he owned a car for private use. The mooring had been rented for the company to cater for islands in the archipelago, and he underlined that he did not own a boat himself. Also, as the company did not have proper office space, he kept the computer and stereo in a room of his house which he only used as an office. The stereo was used in the restaurant and when the company organised parties, and the computer was used to produce lunch menus, price lists, etc.

On 8 December 1994 the Tax Authority upheld its findings in the audit report for the tax assessment year 1993. It increased Mr. Nitschke’s income assessment to SEK 240,363 and imposed tax surcharges amounting to 40 % of the tax liability on that sum (SEK 34,735). Further, on 23 December 1994, it increased Mr. Nitschke’s income assessment for the tax year 1994 to SEK 70,260 and imposed tax surcharges on him amounting to SEK 12,992, again on the basis of the findings in the audit report.

On 20 February 1995 Mr. Nitschke requested the Tax Authority to reassess its decision as he maintained that his tax returns were correct and that he should be taxed in accordance with them. He further developed his reasons for disputing the Tax Authority’s findings on each of the points where his income had been altered.

On 21 April 1997 the Tax Authority maintained its decision concerning the tax year 1994 but lowered Mr. Nitschke’s income assessment to SEK 10,500 for the tax year 1993, as it had been confirmed that Mr. Nitschke did not own a boat and that the mooring had been rented for company purposes. As a consequence, the tax surcharges were lowered to SEK 32,698.

On 9 May 1997 the company was declared bankrupt.

On 26 June 1997 Mr. Nitschke appealed against the decisions and requested a stay of payment for the additional taxes for the tax year 1993. This request was rejected on 18 August 1997 by the Tax Authority, and Mr. Nitschke immediately appealed against it to the County Administrative Court (länsrätten) of the County of Stockholm. However, the court, with presiding judge P. Grivenfeldt, rejected the appeal on 23 October 1997, as it found that the prerequisites for granting a stay of payment were not fulfilled. Apparently, Mr. Nitschke did not appeal against this judgment and, in the beginning of 1998, he paid the taxes and the tax surcharges to avoid seizure by the Enforcement Office (kronofogdemyndigheten).

In the meantime, the Tax Authority invited Mr. Nitschke to an information meeting with the responsible officials, which took place on 24 October 1997. Mr. Nitschke was given the opportunity to ask questions about the audit report and to discuss the changes to his tax returns.

On 5 March 1998 the Tax Authority made the obligatory re-assessment of its decisions of 21 April 1997 but decided not to change them. Following this, it forwarded the appeals to the County Administrative Court.

Mr. Nitschke then submitted a very detailed account (79 pages) of the company, its structure, business areas, its plans for the future, etc., which could be of relevance for the case, and to clarify his views on the contentious issues. He still maintained that he should be taxed in accordance with his tax returns and that the tax surcharges should be remitted, if on no other grounds, then at least because the proceedings before the Tax Authority had been of excessive length, which had caused the interest on the added taxes to augment his debt to the Swedish State.

In its reply, the Tax Authority, on 5 February 1999, maintained its stance, except as concerned the lunch benefits, which it agreed to remove for both tax assessment years. As a consequence, it also agreed that the tax surcharges should be lowered, but it objected to them being remitted completely as it did not consider that the proceedings had been unreasonable long or that there were any other reasons on which to remit them.

On 9 February 2000 the County Administrative Court, with presiding judge M.L. Diurson, granted the appeal in so far as it related to the lunch benefits and the tax surcharges based on these costs, but rejected the remainder of the appeal. As concerned the remaining part of the tax surcharges, the court found that no reasons for remission had been shown.

Mr. Nitschke appealed against the judgment to the Administrative Court of Appeal (kammarrätten) in Stockholm and stated that he would submit supplementary information. However, no further material was received by the court, despite reminders. Thus, in September 2000, it formally ordered Mr. Nitschke to submit all further material which he wanted to invoke before the court, within three weeks from the date that he received the decision. Apparently, Mr. Nitschke asked for further extensions of the time-limit but did not submit any more material. Therefore, in September 2002, the court renewed its order and warned Mr. Nitschke that the case could be decided even if he did not submit any material within the three weeks time-limit. Due to illness, Mr. Nitschke hired a lawyer to represent him, who asked for a respite of four weeks to submit the supplementary information and material.

On 13 January 2003 Mr. Nitschke died. However, his estate pursued his appeal concerning both tax assessment years.

On 30 September 2003 the Administrative Court of Appeal upheld the lower court’s judgment in full without giving any reasoning of its own. The court simply stated that:

“What has emerged in the case does not lead the Administrative Court of Appeal to make an evaluation other than that made by the County Administrative Court.”

On 29 June 2004 the applicant appealed to the Supreme Administrative Court (Regeringsrätten), invoking Article 6 of the Convention. It claimed that the proceedings had been of excessive length and that the accumulated respite interest should therefore be remitted. Moreover, it alleged that the proceedings had been flawed in several ways, inter alia, by ignoring the evidence and by the Administrative Court of Appeal’s failure to give any reasons for its judgment. Moreover, as Mr Nitschke had died before the appellate court’s judgment, the tax surcharges should have been remitted in accordance with the Taxation Act, as they were a penalty falling within the criminal sphere.

On 17 August 2004 the Supreme Administrative Court refused leave to appeal.

COMPLAINTSThe applicant complains under Article 6 § 1 of the Convention that the national proceedings were of excessive length, lasting almost ten years.Under the same provision, the applicant also complains that the Administrative Court of Appeal’s judgment lacked reasoning.It further complains that the same judge in the County Administrative Court presided in the case concerning the stay of payment (judgment of 23 October 1997) and in the actual tax case (judgment of 9 February 2000) making him biased and violating Mr. Nitschke’s right to an impartial tribunal under Article 6 § 1 of the Convention.Invoking Article 6 §§ 1 and 3(a) of the Convention, the applicant claims that the Tax Authority and the national courts did not examine all aspects of Mr. Nitschke’s case correctly and in such detail that the requirements of a fair and impartial trial were fulfilled. In particular, the national courts did not verify Mr. Nitschke’s explanations and submissions or offer him an interpreter, even though his knowledge of Swedish was clearly not sufficient to defend himself.Lastly, the applicant alleges that Article 6 § 2 of the Convention was violated in that the tax surcharges were not remitted when Mr Nitschke died during the proceedings before the Administrative Court of Appeal. Since the tax surcharges are to be considered a penalty within the criminal sphere, they should not have been transferred to the estate after Mr Nitschke’s death.

THE LAW

The applicant makes various complaints under Article 6 § 1 of the Convention which, in relevant parts, reads:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal established by law.”

1. The applicant complains that the length of the proceedings was excessive as they lasted almost ten years.

The Court considers that it cannot, on the basis of the case file, determine the admissibility of this complaint and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.

2. Further the applicant claims that the Administrative Court of Appeal’s judgment lacked reasoning which made it impossible for it to know how to properly formulate its appeal to the Supreme Administrative Court.

3. The applicant also complains that the judge in the County Administrative Court was biased as he formed a negative opinion of the case already when he had rejected Mr. Nitschke’s request for a stay of payment. He should not therefore have presided in the tax case as well.

The Court observes that it was not the same judge who presided in the two cases. The judge who rejected the Mr. Nitschke’s request for a stay of payment in October 1997 was Judge P. Grivenfeldt, whereas it was Judge M.L. Diurson who presided in the applicant’s tax case.

Thus, no issue arises under Article 6 § 1 of the Convention in respect of this complaint which, consequently, is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

4. Under Article 6 §§ 1 and 3(a) of the Convention, the applicant further claims that the national proceedings were not fair or impartial, in that the authorities did not properly examine Mr. Nitschke’s case or investigate the reality of the contentious issues. In particular, the national courts favoured the Tax Authority by not verifying the Mr. Nitschke’s submissions or offering him an interpreter, despite his inadequate knowledge of Swedish. Article 6 § 3(a) of the Convention reads as follows:

“Everyone charged with a criminal offence has the following minimum rights:

(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him; ...”

The Court reiterates that it is not its function to deal with an application alleging that errors of law or fact have been committed by national courts unless and in so far as they may have infringed rights and freedoms protected by the Convention. Moreover, while Article 6 of the Convention guarantees the right to a fair hearing, it does not lay down any rules on the admissibility of evidence or the way it should be assessed, which are therefore primarily matters for regulation by national law and the national courts (see, among other authorities, García Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I).

Noting that these complaints partly concern the administrative courts’ evaluation of facts and evidence, the Court finds that the present case does not disclose any elements of arbitrariness and that Mr. Nitschke had a full opportunity to put forward his arguments and to submit all pertinent evidence. Moreover, Mr. Nitschke met with the representatives for the Tax Authority to discuss his case and he was granted extra time to submit arguments and documents to the national courts. The Court further observes that Mr. Nitschke was partly successful in his argumentation as the Tax Authority agreed to cancel the benefits accruing from purported free lunches and a boat mooring, thereby lowering the tax surcharges. Accordingly, in this respect no appearance of a violation of the Convention has been shown.

With regard to the applicant’s allegation that Mr. Nitschke should have been offered an interpreter, the Court observes that he never requested one. Moreover, he had lived and worked in Sweden since the 1960’s and had effectively run the company since 1988. It further appears from the case file that Mr. Nitschke was quite capable of understanding and expressing himself in Swedish. Thus, the Court considers that the Tax Authority and the national courts were not obliged to offer an interpreter during the national proceedings.

It follows that these complaints must also be rejected as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.

5. Lastly, the applicant complains that the appellate courts violated Article 6 § 2 of the Convention when they did not remit the tax surcharges after Mr Nitschke’s death but transferred the tax surcharges to his estate. This provision reads as follows:

“Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.”

For these reasons, the Court unanimously

Decides to adjourn the examination of the applicant’s complaints concerning the length of the proceedings, the lack of reasoning in the Administrative Court of Appeal’s judgment and the failure of the appellate courts to remit the tax surcharges after Mr Nitschke’s death;

Declares the remainder of the application inadmissible.

S. DolléJ.-P. Costa
RegistrarPresident

Full & Egal Universal Law Academy