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FOURTH
SECTION
CASE OF PETIKON OY AND PARVIAINEN v. FINLAND
(Application
no. 26189/06)
JUDGMENT
STRASBOURG
27
January 2009
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 Petikon Oy and Parviainen v. Finland,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza,
President,
Giovanni Bonello,
David Thór
Björgvinsson,
Ján Šikuta,
Päivi
Hirvelä,
Ledi Bianku,
Nebojša
Vučinić, judges,
and Fatoş Aracı,
Deputy Section
Registrar,
Having
deliberated in private on 6 January 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application
(no. 26189/06) against the
Republic of Finland lodged with the Court
under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”)
by a Finnish limited liability company, Petikon Oy, and a Finnish
national, Mr Tomi Parviainen, (“the applicants”), on
25 March 2006.
- The
applicants were represented by Mr Johan Bützow, a lawyer
practising in Helsinki. The Finnish Government (“the
Government”) were represented by their Agent, Mr Arto Kosonen
of the Ministry for Foreign Affairs.
- On
20 December 2007 the
President of the Fourth Section decided to communicate the
application. It was also decided to rule on the admissibility and
merits of the application at the same time (Article 29 § 3).
THE FACTS
THE CIRCUMSTANCES OF THE CASE
- The
second applicant was born in 1947 and lives in Espoo.
- The
applicant company, which is wholly owned and administered by the
second applicant, bought shares in a housing corporation on
18 June 1992. Later the applicants found out that the same
shares had been given as security by company X. which had been
declared bankrupt. They also found out that the whole of the real
estate had been placed under an interdiction against sale or
dispersal.
- On
23 August 1993 the applicant company initiated an action for damages
in the Espoo District Court (käräjäoikeus,
tingsrätten) against the bank and the bank director
responsible for selling the shares, claiming compensation for the
loss of the shares. On 25 October 1993 the District Court dismissed
the claim as premature without considering the merits.
- On
23 December 1993 the applicant company initiated, together with the
other share holders, a new action for damages against the bank as the
rules on civil procedure had changed in the meantime. The company
claimed that the damage had been caused by a bank manager and that
the bank as employer was liable for its employees. Allegedly, the
bank manager had given incorrect information, had not acted
diligently but in breach of good banking practice and was guilty of
criminal conduct. The company claimed that the bank was obliged to
compensate, inter alia, by reimbursing the purchase price of
the shares, the condominium charges paid to the housing corporation
and the company's legal expenses incurred in the criminal case.
- The
case was postponed pending the outcome of other civil proceedings
related to the present case. The final judgment in those proceedings
was rendered on 7 December 1995.
- After
the conclusion of the above-mentioned civil proceedings, the present
case was postponed once more pending the outcome of criminal
proceedings which had been brought against the representatives of the
bank and which concerned the same sale of shares. The Helsinki
District Court judgment in the criminal proceedings was issued on
19 December 1997.
- In
letters dated 14 January and 2 April 1998 and addressed to the Espoo
District Court, the applicant company requested that, despite the
pending appeal against the judgment in the criminal case, the
consideration of the present case be resumed.
- On
2 April 1998 the applicant company also informed the Espoo District
Court that the shares in the housing corporation had been declared
part of the bankruptcy estate of company X. pursuant to the
above-mentioned final judgment of 7 December 1995. The shares were
thus worthless since the housing company was de facto
bankrupt.
- On
18 June 1998 the defendant bank requested that the proceedings remain
adjourned pending the outcome of criminal proceedings since the
proceedings were still pending on appeal.
- On
6 November 1998 the Espoo District Court held a preparatory meeting.
On 4 March 1999 it decided to adjourn the proceedings pending the
final outcome of the criminal proceedings. According to the court, it
was important to await that outcome as the question of criminal
liability formed the basis of the civil proceedings and the cases
partly overlapped.
- On
8 March 1999 the applicant company lodged an appeal with the Helsinki
Appeal Court (hovioikeus, hovrätten), requesting that the
Espoo District Court decision of 4 March 1999 be annulled and that
the civil proceedings be immediately resumed. It claimed that, due to
the adjournment, the proceedings would necessarily last over ten
years and that, as a result, the excessive length of the proceedings
would violate its rights under Article 6 of the Convention. It
requested that the proceedings in the Appeal Court be examined
urgently.
- On
6 May 1999 the Appeal Court found that the applicant company's appeal
did not give reason to take any action.
- By
an appeal dated 21 June 1999 the applicant company appealed
against this decision to the Supreme Court (korkein oikeus, högsta
domstolen), which refused leave to appeal on 10 December 1999.
- The
applicant company filed a written statement dated 31 July 2001
informing the Espoo District Court that the criminal proceedings had
been terminated by a final judgment given on 9 March 2001 and
requesting the resumption of the civil proceedings.
- On
27 November 2001 the second applicant lodged a request to intervene
in his own name in the proceedings before the Espoo District Court
and claimed compensation. The applicants presented as written
evidence a deed of sale with which the second applicant had purchased
the said shares of the housing corporation from the applicant company
on 1 December 1992 and with which the claim for compensation had
been transferred to the second applicant.
- The
court held an oral hearing in the case on 3 and 7 May 2002.
- By
a judgment of 10 July 2002, the Espoo District Court first rejected
the second applicant's request to intervene and found that the first
applicant was the correct plaintiff. The court rejected the remainder
of the complaints and considered that the circumstances of the sale
of the shares and the documents relating to it were so obscure that
the risk involved in the purchase had been apparent. Moreover, the
court found no causal link between the acts of the defendant bank and
the damage suffered by the first applicant.
- By
an appeal dated 2 September 2002, the applicants appealed to the
Appeal Court, requesting that the Espoo District Court judgment be
quashed. By a letter dated 6 August 2003, the applicants asked the
appellate court to accelerate the proceedings.
- On
1 February 2005 the Appeal Court found that the rightful owner of the
shares was the second applicant and that, consequently, only the
second applicant could claim damages. The court noted, however, that
the defendant bank had already paid compensation and interest due
from 6 February 1996 onwards. Since the second applicant had
claimed damages in his own name only on 27 November 2001, he no
longer had any claims against the bank. The Appeal Court thus
rejected the applicants' appeal.
- On
4 April 2005 the defendant bank appealed to the Supreme Court,
complaining about the partial rejection by the Appeal Court of its
claim for costs and expenses. On 18 January 2006 the Supreme
Court refused leave to appeal.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicants 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 his civil rights and
obligations ..., everyone is entitled to a ... hearing within a
reasonable time by [a] ... tribunal...”
- The
Government contested that argument.
A. Admissibility
- The
Court notes that the application is not manifestly ill-founded within
the meaning of Article 35 § 3 of the Convention. It further
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
1. The applicant company
- As
regards the applicant company, the period to be taken into
consideration began on 23 December 1993 when it initiated an action
for damages and ended on 18 January 2006 when the Supreme Court
refused leave to appeal. It thus lasted almost twelve years and one
month for three levels of jurisdiction, of which two levels twice.
- 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 applicants and the relevant authorities and what
was at stake for the applicants in the dispute (see, among many other
authorities, Frydlender v. France [GC], no. 30979/96, §
43, ECHR 2000-VII).
- The
Government maintained that the case was postponed twice, with the
applicants' consent, pending the outcome of other proceedings. It was
only after the District Court judgment of 19 December 1997 that the
parties disagreed on the further suspension of the case. The criminal
case was so closely connected to the present case that the
adjournment of the latter, pending the final judgment in the criminal
proceedings, was justified. The Government also argued that the
applicants had considered the criminal case to have factual
significance for the outcome of the present case. There had thus been
an acceptable reason for adjourning the case. The case had been
considered expeditiously by the courts and there had been no periods
of unnecessary delay.
- The
Government further pointed out that the case had already been pending
for eight years when the second applicant entered the trial and
presented the deed of sale with which he had purchased the shares in
the housing corporation from the applicant company on 1 December
1992. He could have brought an action in his own name in the first
place and thus avoided all confusion as to the correct recipient of
the compensation. Had the applicants not caused this confusion by
their own actions, it would probably have been unnecessary to resume
consideration of the present case after the judgment by the Appeal
Court in the criminal case on 29 June 2000. Moreover, the
applicants had submitted at least seven additional written statements
in the case, amending or supplementing their earlier statements made
in the District Court. The applicants had thus contributed
significantly to the length of the proceedings.
- As
to the complexity, the Government maintained that the case was not
particularly complex but that it involved several parties, a fairly
large amount of written evidence and the hearing of at least nine
witnesses. The mere question of identifying the correct plaintiff had
added to the complexity of the case.
- The
applicants claimed that the charges in the criminal case were brought
only in September 1995 and the applicants could thus not have known
about them in December 1993 when they brought their action for
compensation. There had been no reason to adjourn the present case
prior to September 1995. The applicants accepted that they had
consented to the adjournment pending the outcome of the criminal case
in the District Court and that this period of less than two years
could be deducted from the total time. However, they claimed that the
decision by the District Court on 4 March 1999 to adjourn the
proceedings pending the final outcome of the criminal proceedings had
clearly been incorrect and the main reason for the delay.
- With
regard to their own conduct, the applicants stated that it had been
correct to bring the action in the applicant company's name. In any
event, the applicants had had the right to initiate separate
compensation proceedings. The intervention of the second applicant in
the proceedings had not caused any delay. As to the complexity of the
case, the applicants agreed that the case had not been very complex
but that its outcome had very much depended on the hearing of
witnesses. The applicants had tried to expedite the proceedings as
much as possible.
- The
Court observes that the proceedings before the District Court lasted
more than eight years and six months, the appeal procedure before the
Appeal Court two years and five months, and the proceedings before
the Supreme Court some nine months. The bulk of the time was
accordingly taken up at first instance. The case was adjourned
pending the outcome of two other sets of proceedings, in total for
more than seven years and two months, of which some two years with
the consent of the applicants. After the case was resumed, the
proceedings continued relatively swiftly.
- The Court sees no indication that the applicants
contributed to the length before the first-instance court. No
reproach can be levelled against the applicants for having made full
use of the remedies available under domestic law, that is, for having
instituted separate compensation proceedings in the first place or
for having appealed against the District Court's decision of 4 March
1999 to adjourn the proceedings. In fact, the applicants made several
requests after 19 December 1997 that the case be resumed and the
proceedings accelerated. Even though the applicants lodged additional
submissions to the District Court, there is no evidence to
demonstrate that the applicants were, at any stage of the
proceedings, guilty of dilatory conduct or that they otherwise upset
the proper running of the proceedings. Therefore, and taking into
consideration that the case was not even particularly complex, the
Court does not consider that the applicants' conduct explains the
length of the proceedings.
- Having regard to its case-law on the subject, the
Court considers that, in this respect, the length of the proceedings
was excessive and failed to meet the “reasonable time”
requirement.
- There has accordingly been a violation of Article 6 §
1 in respect of the applicant company.
2. The second applicant
- As
regards the second applicant, the parties disagree as to the date
when the proceedings started. The applicants took the view that the
proceedings in respect of the second applicant began also on
23 December 1993, when the applicant company initiated an
action for damages, whereas the Government submitted that the period
to be taken into consideration began on 27 November 2001 when he
entered the proceedings as an intervener. The Court does not find any
substantiation of the applicants' allegation that the second
applicant had been individually and substantially affected by the
compensation proceedings before 27 November 2001.
Therefore, it finds that the period to be taken into consideration
began on that date. It ended on 18 January 2006, when the
Supreme Court refused leave to appeal. Consequently, the proceedings
lasted almost four years and two months for three levels of
jurisdiction, of which two levels twice.
- Having
regard to its case-law on the subject, the Court considers that, in
this respect, the length of the proceedings was not excessive and
that it did meet the “reasonable time” requirement.
- There
has accordingly been no violation of Article 6 § 1 in respect of
the second applicant.
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
applicants claimed EUR 1,772.36 as pecuniary damages for the costs
and expenses incurred before the domestic courts. These costs and
expenses – 7,900 Finnish Marks (FIM) for counsel's fees plus
value-added tax and FIM 900 for the court fees – related only
to that part of the domestic proceedings which started with the
applicants' appeal of 8 March 1999 against the District Court's
decision of 4 March 1999 to adjourn the case and ended with the
applicants' appeal to the Supreme Court on 21 June 1999.
- The
Government contested the claim, arguing that the present case
concerned the length of the proceedings and not the substance of the
proceedings before the domestic courts. In their view, there was no
causal link between the violation found and the pecuniary damage
alleged.
- The
applicants also claimed 20,000 euros (EUR) in respect of
non-pecuniary damage.
- The
Government contested this claim, considering that it was excessive as
to quantum. In their view, the finding of a violation of
Article 6 constituted sufficient just satisfaction as far as the
applicant company was concerned.
- The Court does not discern any causal link between the
violation found and the pecuniary damage alleged; it therefore
rejects this claim. On the other hand, the Court considers that the
fact that the proceedings in issue continued beyond a reasonable time
must have caused the applicant company, its directors and
shareholders considerable inconvenience and prolonged uncertainty. It
is therefore legitimate to consider that the applicant company must
have sustained non-pecuniary damage which is not sufficiently
compensated by the finding of a violation of the Convention. Ruling
on an equitable basis, it awards the applicant company EUR 8,000
under that head.
B. Costs and expenses
- The
applicants also claimed EUR 2,090 for the costs and expenses
incurred before the Court. The costs consisted of postage and copying
costs of EUR 260 and of counsel's fees of EUR 1,830 (including
value-added tax).
- The
Government contested the claim as the costs and expenses were not
itemized nor supported by relevant documents. Were the Court to have
another opinion, the Government considered the applicants' claim for
counsel's fees reasonable as to quantum. However, the postage
and copying costs should not be separately compensated but included
in the fees. In any event, the Government considered the applicants'
claim for postage and copying costs excessive as to quantum,
stating that the award in that respect should not exceed EUR 50.
- According
to the Court's case-law, an applicant is entitled to the
reimbursement of 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 (see, among other authorities, Pammel v.
Germany, 1 July 1997, § 82, Reports of
Judgments and Decisions 1997 IV). In the present case,
regard being had to the information in its possession, the above
criteria, the Court considers it reasonable to award the applicant
company the sum of EUR 1,000 (including any value-added tax)
under this head.
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 application admissible;
- Holds
that there has been a violation of Article 6 § 1 of the
Convention in respect of the applicant company;
- Holds
that there has been no violation of Article 6 § 1 of the
Convention in respect of the second applicant;
- Holds
(a) that
the respondent State is to pay the applicant company, within three
months from the date on which the judgment becomes final in
accordance with Article 44 § 2 of the Convention,
the following amounts:
(i) EUR
8,000 (eight thousand euros), plus any tax that may be chargeable, in
respect of non-pecuniary damage;
(ii) EUR
1,000 (one thousand euros), plus any tax that may be chargeable to
the applicant company, in respect of costs and expenses;
(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 applicants' claim
for just satisfaction.
Done in English, and notified in writing on 27 January 2009, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Nicolas Bratza
Deputy Registrar President
