FOURTH SECTION
Application no. 69019/11
Ilona ZIRNĪTE
against Latvia
lodged on 7 November 2011
STATEMENT OF FACTS
The applicant, Ms Ilona Zirnīte, is a Latvian national, who was born in 1977 and lives in Rīga. She is represented before the Court by Mr S. Vārpiņš, a lawyer practising in Rīga.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
1. The background
The applicant was the sole owner of a limited-liability company SIA “Raiņa bulvāra nams”, which in turn was the owner of an apartment building in central Rīga. In 2005 the applicant decided to sell the building to M.R. and decided to do so by selling the company.
However, in view of the fact that M.R. experienced delays in securing bank financing for the proposed deal and that the applicant had planned to use part of the revenue to finance the purchase of real estate in France, the applicant decided to seek a short-term (one month) loan of 210,000 euros from a bank.
The money was paid by the bank into the account of the applicant’s company. The applicant’s plan was to use the money to pay for the purchase of the real estate in France and then use the money obtained from M.R. to repay the loan to the bank. In pursuance of that plan, on 3 October 2005 the applicant, acting as a representative of her company, asked the bank to transfer EUR 208,000 to her private bank account, which was done on the following day.
On 17 October 2005 the formalities relating to the sale of the company were completed and the purchase price, minus the money owed by the applicant to the bank, was transferred to the applicant’s private bank account.
2. Civil proceedings
On 22 February 2006 SIA “Raiņa bulvāra nams”, at that time already owned by M.R., brought civil proceedings against the applicant, requesting her to repay EUR 208,000, namely, the money that on 4 October 2005 had been transferred from the bank account of the company to the applicant’s private account. The applicant submitted a counterclaim, believing that she had already repaid the loan on 17 October 2005. The case was examined by three levels of domestic courts which all were in agreement that the claim against the applicant was to be upheld, while her counterclaim was to be dismissed. The applicant was ordered to repay the company the equivalent of EUR 208,000 in Latvian lati and to compensate the company’s costs and expenses. The final decision in that regard was adopted by the Senate of the Supreme Court on 11 June 2008. The applicant has complied with the court decisions and has paid the required sum to the company.
3. Criminal proceedings
On the basis of the same chain of transactions on 29 October 2007 the applicant was charged with large-scale misappropriation and money-laundering. During the pre-trial investigation the applicant was confronted with M.R.
On 19 August 2009 the Rīga Regional Court, after having heard a number of witnesses including M.R., found the applicant not guilty.
The victim company and the prosecutor appealed.
The Supreme Court heard M.R.’s husband who answered the court’s questions in the capacity of the victim’s representative and the applicant. The court did not hear M.R. herself, even though the applicant’s counsel had explicitly requested that she and two other witnesses be heard. The Supreme Court refused the request of the applicant’s counsel because it did not doubt that the first-instance court had fully questioned the requested witnesses about the circumstances relevant to the case.
On 26 November 2010 the Supreme Court quashed the judgment of the first-instance court and adopted a new judgment, by which it found the applicant guilty of both offences. The Supreme Court took into account, in particular, the fact that M.R., along with other witnesses, had consistently testified that the purchase price of the company had been raised from EUR 5.2 million to EUR 5.4 million at the last moment on the understanding that after the completion of the sale there would be EUR 210,000 in the bank account of the company. The applicant asserted that the price had always been set at EUR 5.4 million.
After finding that there were no mitigating or extenuating circumstances, the Supreme Court decided to impose a suspended prison term of six years. The suspension of the prison sentence was motivated by the fact that during the five years that had elapsed after the crime had been committed the applicant had not committed any further offences, the fact that she had paid the damages awarded to the victim, and the fact that she cared for two underage children.
The Supreme Court decided to order a partial confiscation of the applicant’s property. That decision was motivated in the following manner: “Taking into account that the damages have been compensated and that two underage children are under I. Zirnīte’s care, the [Supreme Court] finds that a partial confiscation of property is to be applied to I. Zirnīte, directing the confiscation against the property over which charge had been issued [kuram uzlikts arests] in the course of the criminal proceedings”.
The property to be confiscated was the land and buildings known as “Bramberģes pils” (Bramberģe castle), a cultural monument built in the 17th century, the value of which, according to an assessment carried out on 20 November 2007, had been assessed at approximately 421,000 Latvian lati (approximately EUR 600,000).
On 10 May 2011 the Senate of the Supreme Court adopted the final decision in the case, dismissing the applicant’s appeal on points of law. The applicant’s conviction thus became final and the property in question was confiscated. As to the applicant’s complaint that the Supreme Court had refused to summon and hear M.R., the Senate found that this refusal had not constituted a violation of, inter alia, Article 6 of the Convention because according to the Law of Criminal Procedure “a court has an obligation to examine and decide requests submitted by parties to proceedings but it does not have an obligation to grant such requests”.
B. Relevant domestic law
Article 105 of the Latvian Constitution (Satversme), in so far as it is relevant, provides as follows:
“Everyone shall have a right to property. Property may not be used for purposes contrary to the interests of society. Property rights may be restricted only as provided by law. ...”
The sanction for large-scale misappropriation and money-laundering provided for in sections 179 (3) and 195 (3) of the Criminal Law respectively includes confiscation of property, in addition to a prison sentence with respect to both crimes and mandatory police supervision with respect of the latter.
Section 42 of the Criminal Law, as in force when it was applied in the applicant’s criminal case and in so far as it is relevant here, provided as follows:
“Section 42. Confiscation of property
(1) Confiscation of property is compulsory transfer to the State without compensation of the entirety or part of a convicted person’s property. Confiscation of property may be ordered either as the principal sanction or as an additional sanction. It is also permissible to confiscate the convicted person’s property which has been transferred to another physical or legal person.
(2) Confiscation of property may only be ordered in cases provided for in the special part of this Law.
(3) When ordering a partial confiscation of property, the court shall specifically identify the property to be confiscated. ...
(4) The property indispensable to the convicted person or to persons under his care shall be specified by law.”
The “law” mentioned in section 42 (4) has not been adopted.
Section 49 of the Criminal Law provides that if two or more mitigating circumstances are found to be present and there are no extenuating circumstances, the competent court may impose a more lenient sanction than the one provided by law. On the same grounds the court may choose not to impose an additional sanction, the imposition of which is mandatory according to the law. This regulation is also applicable to the orders for confiscation of property.
Section 144 of the Sentence Enforcement Code provides as follows in respect of the confiscation of property:
“The property to be confiscated shall be indicated in a judgment of a court and included in the property inventory [mantas aprakstes akts] as property belonging to the convicted person. ...
The basic necessity goods and sustenance [uzturlīdzekļi] belonging to the convicted person and his dependants shall not be confiscated.”
COMPLAINTS
The applicant complains under Article 6 §§ 1 and 3 (c) of the Convention that the Senate of the Supreme Court adopted its decision in a written procedure, despite her representative’s explicit request to have an oral hearing.
The applicant complains under Article 6 §§ 1 and 3 (d) that the principal witness in the case, M.R., was only heard by the first-instance court, which eventually found the applicant not guilty, and not by the appeal court, despite an explicit request to that effect by the applicant’s lawyer. This was particularly relevant because the appeal court (which eventually found the applicant guilty) had in its possession only the transcript of M.R.’s testimony before the first-instance court and not her statements given during the pre-trial investigation, and there existed significant discrepancies between those testimonies. In the applicant’s view that omission also violated the principle of equality of arms.
The applicant further claims that, by stating that it had no doubts that M.R. had been fully questioned by the first-instance court, the Supreme Court violated her right to be presumed innocent, guaranteed by Article 6 § 2 of the Convention.
The applicant complains under Article 6 § 1 that the domestic courts ignored and did not reflect in their decisions many of the arguments submitted by the defence and that the proceedings were unfair in general.
The applicant also complains that when the Senate of the Supreme Court did not carry out a full re-assessment of the arguments of the parties and of the evidence in the case her right guaranteed by Article 2 § 1 of Protocol No. 7 was violated.
The applicant complains that the decision to confiscate her property violated Article 1 of Protocol No. 1.
QUESTIONS TO THE PARTIES
1. Was the applicant able to examine witnesses against her, in particular the witness M.R., as required by Article 6 § 3 (d) of the Convention? Has there been a violation of Article 6 § 1 of the Convention in conjunction with Article 6 § 3 (d)?
2. Has there been an interference with the applicant’s right to peaceful enjoyment of property within the meaning of Article 1 of Protocol No. 1?
3. Has she been deprived of her possessions in the public interest, and in accordance with the conditions provided for by law, within the meaning of the second sentence of the first paragraph of Article 1 of Protocol No. 1 (see Waldemar Nowakowski v. Poland, no. 55167/11, § 46, 24 July 2012)?
4. Alternatively, was the interference 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 within the meaning of the second paragraph of Article 1 of Protocol No. 1?
5. With regard to the confiscation of the applicant’s property, has the applicant exhausted all effective domestic remedies, as required by Article 35 § 1 of the Convention? In particular, was she required to challenge the constitutionality of the sanction contained in sections 179 (3) and 195 (3) of the Criminal Law before the Constitutional Court?
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