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SECOND
SECTION
CASE OF LILJA v. SWEDEN
(Application
no. 36689/02)
JUDGMENT
STRASBOURG
23
January 2007
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Lilja v. Sweden,
The
European Court of Human Rights (Second Section), sitting as a Chamber
composed of:
Mr J.-P. Costa, President,
Mr A.B.
Baka,
Mr I. Cabral Barreto,
Mr R. Türmen,
Mrs A.
Mularoni,
Mrs E. Fura-Sandström,
Mr D. Popović,
judges,
and Mrs S. Dollé, Section Registrar,
Having
deliberated in private on 4 January 2007,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application
(no. 36689/02) against the
Kingdom of Sweden lodged with the Court
under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”)
by a Swedish national, Mr Lasse Lilja
(“the applicant”), on 20 September 2002.
- The
applicant was represented by Ms E.-L. Kiiski, a lawyer practising in
Sundbyberg. The Swedish Government (“the
Government”) were represented by their Agent, Mr M. Falk,
Ministry for Foreign Affairs.
- On
6 September 2005 the
Court declared the application partly inadmissible and decided to
communicate the complaint concerning the length of the proceedings to
the Government. Applying Article 29 § 3 of the Convention, it
decided to rule on the admissibility and merits of the application at
the same time.
THE FACTS
THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1948 and lives in Norsborg.
A. Criminal proceedings
- On
21 October 1996 the applicant was arrested on suspicion of aggravated
tax fraud and an aggravated bookkeeping offence in relation to the
declaration of value-added tax and employers’ contributions for
the period July 1994 – September 1996 by Latem AB, a building
company wholly owned by him. He was detained by a decision of the
District Court (tingsrätten) of Stockholm on 23 October
1996 and released from detention on 3 December 1996.
- The
applicant was interrogated on several occasions in 1996 and 1997. The
preliminary investigation, which concerned 20 companies, was
concluded on 25 April 1998. The applicant was notified of the
investigation report which covered 7,000 pages. Following submissions
by the various suspects, the public prosecutor declared in June 1999
that he expected to bring indictments in the autumn of 1999.
- On
51 occasions thereafter, the public prosecutor requested and the
District Court granted extensions of the time-limit for bringing
indictments. Eventually, on 28 October 2002 the applicant, together
with 16 other suspects, was indicted for aggravated tax fraud and an
aggravated bookkeeping offence. The trial commenced on 2 September
2003.
- By
a partial judgment of 4 December 2003, the District Court acquitted
the applicant of certain charges. By a further judgment of 27
February 2004 the District Court acquitted him of the remaining
charges. In the absence of an appeal from the prosecutor, the latter
judgment acquired legal force on 19 March 2004.
B. Tax proceedings
- On
22 October 1996 the Tax Authority (skattemyndigheten) of the
County of Stockholm initiated an audit of Latem AB’s liability
for value-added tax and employers’ contributions concerning the
above-mentioned period. On 24 June 1997 the County Administrative
Court (länsrätten) of the County of Stockholm, at
the request of the Tax Authority, issued an order that assets
belonging to the company could be claimed in security for unpaid
value-added tax (but not for any tax surcharges that might be imposed
on the company). On 5 December 1997 the Tax Authority completed its
audit report. By its communication to the company the same day, the
company was informed that the Tax Authority was considering, inter
alia, imposing tax surcharges on it.
- On
the basis of the findings of the audit, the Tax Authority, by
decisions of 18 December 1997 and 26 March and 1 April 1998, revised
upwards the taxation bases for calculating the relevant taxes by a
total of approximately 3 million Swedish kronor (SEK) (value-added
tax) and approximately SEK 14.6 million (employers’
contributions). In addition, Latem AB was considered responsible for
employees’ taxes based on a total salary amount of
approximately SEK 10.6 million. Moreover, as the information supplied
by the company in its tax returns was found to be incorrect, the Tax
Authority ordered it to pay tax surcharges (skattetillägg,
avgiftstillägg) amounting to 20% of the increased tax
liability for value-added tax and employers’ contributions.
- The
company appealed to the County Administrative Court. Following an
oral hearing on 11 November 1999, the court, by six judgments of 29
November 1999, upheld the Tax Authority’s decisions, save for a
minor reduction of the taxation base for employers’
contributions for one year.
- On
4 February 2000 the company appealed to the Administrative Court of
Appeal (kammarrätten) in Stockholm. On 12 February 2003,
the appellate court held an oral hearing and, by a judgment of 10
March 2003, it upheld the County Administrative Court’s
judgments.
- On
2 October 2003 the Supreme Administrative Court (Regerings-rätten)
refused leave to appeal.
C. Other proceedings
- On
15 February 2002 the applicant complained to the Parliamentary
Ombudsman (Justitieombudsmannen) about the preliminary
investigation against him. The matter was referred to the Director
General of the National Economic Crimes Bureau.
- In
a decision of 22 November 2002, the Director General criticised the
responsible prosecutor for the delays in the preliminary
investigation. He found that the prosecutor should have decided
whether to bring an indictment at the latest during the autumn of
1999 and thus disagreed with the prosecutor’s opinion that he
had to await the outcome of the tax proceedings. The Director General
further stated that, whatever reasons there might have been for the
delay, it was unacceptable for a suspect to have to wait more than
four years after a completed preliminary investigation for a decision
whether he would be indicted for offences dating back even further.
The Director General was also astonished that the District Court had
repeatedly extended the time-limit set for bringing an indictment.
Noting that the prosecutor had not given any information on the state
of the investigation when requesting extensions and that the court
had not asked for such information, he pointed out that the court’s
task when examining such requests was to determine whether the
seizure of property should remain, to keep itself informed of the
state of the investigation and to see to it that the investigation
proceeded with appropriate speed.
- The
applicant further requested compensation for suffering caused by his
detention in 1996. On 2 June 2004 the Chancellor of Justice, pursuant
to the Act on Compensation for Deprivations of Liberty (Lagen om
ersättning vid frihetsinskränkning, 1974:515), awarded
him SEK 35,000 for suffering and SEK 2,500 for legal costs.
- Upon
application by the Enforcement Office (kronofogde-myndigheten)
representing the State, the District Court, on 18 December 2003,
declared Latem AB bankrupt on the basis of unpaid taxes and
surcharges totalling approximately SEK 10.7 million which were due as
a consequence of the above tax decisions.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the length of the proceedings had been
incompatible with the “reasonable time” requirement, laid
down in Article 6 § 1 of the Convention, which reads as follows:
“In the determination of ... any criminal charge
against him, everyone is entitled to a ... hearing within a
reasonable time by [a] ... tribunal...”
- The
Government left it to the Court to decide whether the relevant
proceedings had been concluded within a reasonable time.
- The
period to be taken into consideration in respect of the criminal
proceedings began on 21 October 1996 and ended on 19 March 2004. It
thus lasted seven years and five months for one level of
jurisdiction. The corresponding period concerning the tax proceedings
began on 5 December 1997 and ended on 2 October 2003 and thus lasted
five years and ten months for three levels of jurisdiction.
A. Admissibility
- The
Government questioned whether the applicant could be considered a
victim in so far as his complaint concerned the tax proceedings. They
referred to the fact that the relevant taxes, contributions and
surcharges had been levied not on the applicant himself but on his
company and that, similarly, the company had been the party to the
proceedings.
- The
Government further submitted that the applicant had failed to exhaust
the domestic remedies available to him since he had not sued the
Swedish State for damages on account of the length of the
proceedings. They relied on a judgment of the Supreme Court (Högsta
domstolen), pronounced on 9 June 2005, where a plaintiff had been
granted compensation for both pecuniary and non-pecuniary damage
because of a breach of the “reasonable time” requirement
of Article 6 § 1 of the Convention in a criminal case. Thus,
according to the Government, the applicant could have tried this
avenue before complaining to the Court or, in any event, should now
do so.
- The
Court first observes that the company Latem AB was wholly owned by
the applicant and that the criminal and tax proceedings were related,
as they were both based on the submission of incorrect tax
declarations. In these circumstances, the Court finds that the
applicant may claim to be a victim of the length of the tax
proceedings and that, in the examination of his complaint, the two
sets of proceedings are to be considered together. In this
connection, it reiterates that Article 6 § 1, under its criminal
head, is applicable to the tax proceedings, in so far as they
concerned tax surcharges (see, among other authorities, Janosevic
v. Sweden, no. 34619/97, § 71, ECHR 2002-VII).
The
Court further notes that the judgment of the Supreme Court referred
to by the Government was pronounced on 9 June 2005, i.e. almost three
years after the applicant lodged the present application with the
Court and about one year and three months after his acquittal by the
District Court acquired legal force. Thus, the Court considers that
the applicant cannot now be required to lodge a compensation claim
before the national courts, nor could he have been expected to have
done so in March 2004 since, at that time, there were no indications
that it would have been an effective remedy. In this respect, the
Court notes that the applicant, during the proceedings before the
District Court, did complain to the Chancellor of Justice that the
proceedings were taking too long.
- The
Government’s objections must accordingly be dismissed. The
Court further notes that the applicant’s complaint is not
manifestly ill-founded within the meaning of Article 35 § 3 of
the Convention. It also finds that it is not inadmissible on any
other grounds. It must therefore be declared admissible.
B. Merits
- The
Court reiterates that the reasonableness of the length of proceedings
must be assessed in the light of the circumstances of the case and
with reference to the following criteria: the complexity of the case,
the conduct of the applicant and that of the relevant authorities
(see, among many other authorities, Pélissier and Sassi v.
France [GC], no. 25444/94, § 67, ECHR 1999-II).
- The
Court has frequently found violations of Article 6 § 1 of the
Convention in cases raising issues similar to the one in the present
case (see Pélissier and Sassi, cited above).
- The
Government claimed that both the criminal and the tax proceedings had
concerned matters of some complexity and had involved extensive
investigations regarding many different suspects and companies. In
regard to the criminal case, they emphasised that the applicant had
on most occasions consented to the prosecutor’s requests for
extensions of the time-limits for bringing an indictment. As far as
the tax case was concerned, they pointed out that the applicant had
made several requests for extensions of time-limits, which had been
granted by the courts.
- While
the Court acknowledges that the two related sets of proceedings at
issue were of a complex nature, both as regards the subject matter
and the number of suspects and companies involved, it notes that the
Director General of the National Economic Crimes Bureau, in his
decision of 22 November 2002, found that there had been no reason for
the public prosecutor in the criminal case to await the outcome of
the tax proceedings and that it had been unacceptable for the
applicant to have to wait more than four years from the completion of
the preliminary investigation to the bringing of the indictment. The
Court fully agrees with that opinion; whether or not the applicant
consented to many of the prosecutor’s requests for extensions
of time-limits, it was for the District Court to ensure that the case
proceeded with appropriate speed. Having regard to the aforementioned
four-year period as well as the total length of more than seven
years, involving only one judicial instance, it is clear that the
criminal proceedings were not conducted with the promptness required
by Article 6 § 1. In regard to the tax proceedings, the
Court notes that the appeal of the applicant’s company against
the County Administrative Court’s judgment was pending before
the Administrative Court of Appeal for more than three years. This
period must also be considered unreasonable.
- Thus,
in the light of the criteria laid down in its case-law and having
regard to all the circumstances of the case, the Court considers that
the overall length of the proceedings at issue in the present case
was excessive and failed to meet the “reasonable time”
requirement.
There
has accordingly been a breach of Article 6 § 1.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article
41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- The
applicant claimed 15,500 euros (EUR) in respect of non-pecuniary
damage and a total of SEK 10,819,934 (approximately EUR 1,200,000)
in respect of pecuniary damage.
- The
Government considered that compensation for non-pecuniary damage
should not exceed EUR 9,000. They contested the claim for pecuniary
damage.
- The
Court does not discern any causal link between the violation found
and the pecuniary damage alleged; it therefore rejects this claim.
However, it considers that the applicant must have sustained some
non-pecuniary damage because of the excessive length of the domestic
proceedings. Ruling on an equitable basis, it awards him EUR 10,000
under that head.
B. Costs and expenses
- The
applicant also claimed more than SEK 850,000 for costs and expenses,
of which he specified that SEK 183,933 (approximately EUR 20,000)
had been incurred before the Court.
- The
Government contested the claim in so far as it concerned the domestic
proceedings.
- According
to the Court’s case-law, an applicant is entitled to
reimbursement of his costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and were
reasonable as to quantum. In the present case, regard being had to
the information in its possession and the above criteria, the Court
rejects the claim for costs and expenses in the domestic proceedings
and considers it reasonable to award the sum of EUR 2,000 for the
proceedings before the Court.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the remainder of the application
admissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention;
- Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following
amounts, to be converted into Swedish kronor at the rate applicable
at the date of settlement:
(i) EUR
10,000 (ten thousand euros) in respect of non-pecuniary damage;
(ii) EUR
2,000 (two thousand euros) in respect of costs and expenses;
(iii) any
tax that may be chargeable on the above amounts;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 23 January 2007, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
S. Dollé J.-P. Costa
Registrar President
