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FOURTH
SECTION
CASE OF MERCIECA AND OTHERS v. MALTA
(Application
no. 21974/07)
JUDGMENT
STRASBOURG
14 June
2011
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 Mercieca and Others
v. Malta,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Ljiljana Mijović,
Päivi
Hirvelä,
Ledi Bianku,
Zdravka Kalaydjieva,
judges,
David Scicluna, ad hoc judge,
and
Lawrence Early, Section
Registrar,
Having
deliberated in private on 24 May 2011,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 21974/07) against Malta lodged
with the Court under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”)
by Paul Mercieca, Andrew Manduca, Raphael Aloisio, Steve Cachia,
Stephen Paris, Malcolm Booker and Edward Camilleri, Maltese
nationals, (“the applicants”), on 22 May 2007.
- The
applicants were represented by Dr Stefan Frendo, Ganado &
Associates, and Dr Tonio Azzopardi, lawyers practising in Valletta.
The Maltese Government (“the Government”) were
represented by their Agent, Dr Silvio Camilleri.
- The
applicants alleged that the Court of Appeal’s restrictive
interpretation had deprived them of access to court by denying their
appeal.
- On
17 December 2009 the President of the Fourth Section decided to give
notice of the application to the Government. It was also decided to
rule on the admissibility and merits of the application at the same
time (Article 29 § 1).
- Mr V. De Gaetano, the judge elected in respect of
Malta, was unable to sit in the case (Rule 28 of the Rules of Court).
The President of the Chamber accordingly appointed Mr David Scicluna
to sit as an ad hoc judge (Rule 29 § 1(b)).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicants were born in 1952, 1954, 1961, 1960, 1964, 1963 and 1945
respectively and live in Malta. They are certified public accountants
acting personally and in their capacity as partners of the
partnership Deloitte & Touche Certified Public Auditors &
Accountants.
A. Background of the case
- On
an unspecified date the applicants were sued, personally and in their
capacity as partners of the partnership Deloitte & Touche
Certified Public Auditors & Accountants, as auditors of PCO Ltd,
in a civil action by a company, V. The latter claimed that the
applicants’ audit firm had acted negligently and fraudulently
in its drawing up of PCO Ltd’s audit report/financial
statements, and was therefore liable for the losses sustained by V as
a result of its reliance on those documents.
- During
the proceedings the applicants raised a preliminary plea to the
effect that reliance by V. on the audit report when taking a
particular credit decision, and knowledge on the part of the
applicants of such reliance when taking that decision, were lacking.
These requirements were fundamental to this type of action.
- On
1 December 2003 the Civil Court dismissed this plea in a preliminary
judgment.
- On
3 December 2003 the applicants requested special leave to appeal the
preliminary judgment under Article 231 (1) of the Code of
Organisation and Civil Procedure (“COCP”). On 12 December
2003, the Civil Court in its ordinary jurisdiction granted leave to
appeal.
- On
29 December 2003 the applicants lodged an appeal.
- On
8 June 2004, having heard the parties’ arguments, the Court of
Appeal dismissed the appeal as out of time. It noted that while the
legislator had clearly established that the time-limit for lodging an
appeal against an interlocutory decree ran from the date of
authorisation to appeal, in respect of an appeal against a “judgment”
the legislator had made no distinction between a “judgment”
and a “partial judgment” (sentenża parżjali).
It followed that the twenty-day time-limit which ran from the date of
delivery of a judgment according to Article 226 (1) of the COCP
applied also to appeals necessitating prior leave to appeal.
B. The constitutional redress proceedings
- On
17 September 2004 the applicants instituted constitutional redress
proceedings before the Civil Court in its constitutional
jurisdiction, claiming that such an erroneous interpretation by the
Court of Appeal deprived them of access to court.
- On
15 November 2006 the Civil Court upheld the applicants’ claims,
finding that a right to appeal could not arise before leave to appeal
had been given. Moreover, an appellant did not have to tolerate the
delays of a court in giving leave to appeal. The Court of Appeal’s
interpretation had therefore deprived the applicants of access to
court in violation of Article 6 of the Convention. It declared the
Court of Appeal’s judgment null and void.
- On
2 March 2007 the Constitutional Court, on appeal by the Attorney
General, acknowledged that the interpretation given to the law had
been erroneous, thereby depriving the applicants of their right to
appeal at an early stage. Nevertheless, it did not uphold the
first-instance judgment, since a wrong interpretation did not suffice
to lead to a violation of the Convention. While reiterating that an
appeal could be heard before the Court of Appeal only once, it
considered that the applicants had the opportunity to appeal in the
civil case after the final judgment. Thus, given that a defect in
first-instance proceedings could be remedied on appeal, the right to
a fair hearing would similarly not be violated if a remedy which had
been inappropriately denied became available at a later stage of the
proceedings.
II. RELEVANT DOMESTIC LAW
- Article
231 (1) of the Code of Organisation and Civil Procedure (“COCP”)
(Chapter 12 of the Laws of Malta), at the relevant time, read as
follows:
“Where several issues in an action have been
determined by separate judgments, appeal from any such judgments may
only be entered after the final judgment and within the prescribed
time, to be reckoned from the date of such final judgment; and in
such an appeal express mention of the judgment or judgments appealed
from shall be made:
Provided that an appeal from such separate judgments may
be entered before the final judgment only by leave of court to be
read out in open court; such request for leave to appeal shall be
made either orally immediately after the delivery of such judgment or
by application within six days from such judgment.”
- The
Article was amended in 2005, whereby the following phrase was added
to the proviso:
“and when such leave to appeal from such separate
judgments is granted the time for the filing of the appeal in respect
thereof shall commence to run from the day on which the said leave is
read out in open court.”
- Article
226 (1) of the COCP reads as follows:
“An appeal is entered by means of an application
to be filed with the registry of the Court of Appeal within twenty
days from the date of the judgment.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicants complained that the judgment of the Court of Appeal was
based on an erroneous interpretation of the law and deprived them of
access to court as provided 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 fair ... hearing ... by [a]
... tribunal ...”
- The
Government contested that argument.
A. Admissibility
1. The Government’s objection based on lack of victim status
- The
Government submitted that the applicants could not claim to be
victims under the Convention as they had had access to court and were
currently parties to the civil proceedings. Moreover, they had two
opportunities to appeal. They forfeited one such opportunity by
missing the statutory time-limit. The other opportunity would be
available to them at the end of the proceedings, after the
determination of the claim at first instance.
- The
applicants submitted that the law granted a right of appeal at that
stage of the proceedings, which was confirmed by their successful
request for leave to appeal. It was the fact that their appeal was
eventually dismissed as a consequence of a wrong and restrictive
interpretation of procedural rules that rendered them victims of a
violation of Article 6. They recalled that justice delayed was
justice denied also in such a context.
- The
Court reiterates that a decision or measure favourable to the
applicant is not in principle sufficient to deprive him of his status
as a “victim” unless the national authorities have
acknowledged, either expressly or in substance, and then afforded
redress for, the breach of the Convention (see, for example, Dalban
v. Romania [GC], no. 28114/95, § 44, ECHR 1999-VI, and
Jensen v. Denmark (dec.), no. 48470/99, 20 September
2001, ECHR 2001-X).
- The
Court notes that the basis of the alleged violation is the Court of
Appeal’s dismissal of the applicants’ appeal on 8 June
2004. It observes that the Constitutional Court, although
acknowledging that the interpretation of the Court of Appeal had been
erroneous, did not find a violation of the Convention. In such
circumstances the Court finds no reason to doubt the applicants’
victim status.
- In
consequence, the Court rejects the Government’s preliminary
objection.
2. The Government’s objection based on non-exhaustion of
domestic remedies
- The
Government submitted that the applicants could still appeal against
the partial judgment of 1 December 2003 after the delivery of the
first-instance judgment determining the merits of the case. They had
not, therefore, exhausted domestic remedies. Similarly, since the
first-instance proceedings were still in progress, the application
was premature.
- The
applicants submitted that even assuming that it were possible to
appeal the first-instance judgment when delivered, this could not
remedy the fact that they had been denied the right to appeal at the
preliminary stage.
- In
accordance with Article 35 § 1 of the Convention, the Court may
only deal with an issue after all domestic remedies have been
exhausted. The purpose of this rule is to afford the Contracting
States the opportunity of preventing or putting right the violations
alleged against them before those allegations are submitted to the
Court (see, among other authorities, Selmouni v. France [GC],
no. 25803/94, § 74, ECHR 1999-V). Thus, the complaint submitted
to the Court must first have been made to the appropriate national
courts, at least in substance, in accordance with the formal
requirements of domestic law and within the prescribed time-limits
(see Micallef v. Malta [GC], no. 17056/06, § 55, ECHR
2009 ...).
- The
Court notes that, following the impugned decision, the applicants
instituted constitutional redress proceedings before the Civil Court
(First Hall) alleging a breach of the right to a fair trial as
guaranteed by Article 6 of the Convention in view of the Court of
Appeal’s decision allegedly depriving them of access to court.
The Civil Court (First Hall) upheld their claims. The Government
subsequently appealed and the Constitutional Court reversed the
first-instance judgment on the merits. The Court considers that, in
raising this plea before the domestic constitutional jurisdictions,
which did not reject the claim on procedural grounds but examined the
substance of it, the applicants made normal use of the remedies which
were accessible to them and which related, in substance, to the facts
complained of at the European level (see, Micallef, cited
above § 57).
- It
follows, that the Government’s preliminary objection as to
exhaustion of domestic remedies must be dismissed. The other
considerations mentioned by the Government in their submissions under
this heading are more appropriately addressed on the merits.
3. The Government’s objection ratione materiae
- The
Government submitted that Article 6 was not applicable as the
applicants were not seeking the determination of a civil right or
obligation but trying to avoid such a determination. Moreover, the
issues raised in the appeal were formal and procedural in nature.
Furthermore, the applicants could not rely on Article 6 because that
provision did not guarantee a right of appeal.
- The
applicants submitted that Article 6 was applicable as the proceedings
concerned a civil case for damages arising out of the negligence of
auditors in the exercise of their profession. They argued that
Article 6 safeguards should also apply outside the context of final
decisions.
- The
Court reiterates that Article 6 in its civil “limb”
applies only to proceedings determining civil rights or obligations.
It notes that in the recent Micallef judgment (cited above, §§
79-80), the Grand Chamber held that the exclusion of interim measures
from the ambit of Article 6 was no longer justified by the fact that
they do not in principle determine civil rights and obligations. The
Grand Chamber considered that in circumstances where many Contracting
States faced considerable backlogs in their overburdened justice
systems, leading to excessively long proceedings, a judge’s
decision on an injunction would often be tantamount to a decision on
the merits of the claim for a substantial period of time, even
permanently in exceptional cases. It followed that, frequently,
interim and main proceedings decided the same “civil rights or
obligations” and had the same resulting long-lasting or
permanent effects.
- The
Grand Chamber, however, considered that not all interim measures
determined such rights and obligations and the applicability of
Article 6 would depend on whether certain conditions were fulfilled
(ibid § 83). First, the right at stake in both the
main and the injunction proceedings should be “civil”
within the autonomous meaning of that notion under Article 6 of the
Convention. Second, the nature of the interim measure, its object and
purpose as well as its effects on the right in question should be
scrutinised. Whenever an interim measure could be considered
effectively to determine the civil right or obligation at stake,
notwithstanding the length of time it is in force, Article 6 was
applicable. However, the Court accepted that in exceptional cases -
where, for example, the effectiveness of the measure sought depended
upon a rapid decision-making process - it might not be possible
immediately to comply with all of the requirements of Article 6 (see
Micallef, cited above, §§ 84-86).
- The
Court notes that in the present case the applicants complained that
they were denied an interlocutory appeal against a preliminary
judgment. The latter can be equated to interim or provisional
measures and proceedings. Thus, the same criteria are relevant to
determine whether Article 6 is applicable. In the present case, the
main proceedings dealt with civil liability and therefore the first
requirement is satisfied. Had the Civil Court upheld the applicants’
pleas in its preliminary judgment, there would have been no scope for
a further determination, since the applicants’ liability would
have been excluded at that stage. The interlocutory appeal would,
therefore, have determined the same civil rights and obligations at
issue in the main proceedings. It follows that the second requirement
is also met and Article 6 is in principle applicable to the present
case.
- The Government argued that Article 6 was not
applicable to appeal proceedings because the Convention did not
guarantee a right of appeal. The Court acknowledges that Article 6
§ 1 does not guarantee a right to appeal from a decision of
first-instance. Where, however, domestic law provides for a right of
appeal, the appeal proceedings will be treated as an extension of the
trial process and accordingly will be subject to Article 6 (see
Delcourt v. Belgium,
17 January 1970, Series A no. 11, § 25). The Court
notes that no other reasons have been established by the Government
to limit the scope of the application of Article 6 in any respect in
view of the interlocutory nature of the proceedings at issue.
-
It follows that Article 6 is applicable to the proceedings
complained of and the Government’s objection must therefore be
dismissed.
4. 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 parties’ observations
- The
applicants submitted that the law was interpreted erroneously by the
Court of Appeal, and that the judgment of the Constitutional Court
acknowledging the latter but not annulling the said judgment deprived
them of access to court. Their appeal had been rejected without any
examination of the merits, notwithstanding that they had been granted
leave to appeal, which had given them a legitimate expectation that
their appeal would be heard. They argued that the domestic courts’
legal interpretation of the relevant provision was erroneous, as
confirmed by the Constitutional Court, thereby reducing their time
for lodging an appeal and denying them access to court at that
particular stage of the proceedings. The fact that it was not the
first time that the court had interpreted the provision along those
lines did not detract from the violation. The applicants made
reference to Miragall Escolano and Others v. Spain (nos.
38366/97, 38688/97, 40777/98, 40843/98, 41015/98, 41400/98, 41446/98,
41484/98, 41487/98 and 41509/98, ECHR 2000 I) where the Court
held that parties must be able to avail themselves of the right to
bring an action or to lodge an appeal from the moment they
effectively apprise themselves of the relevant court decisions. In
relation to the application of time-limits, the Court found in
Escolano that the domestic courts’ particularly strict
interpretation of a procedural rule deprived the applicants of the
right of access to a court.
- The
applicants argued that once the law provided for an appeal at an
early stage of the proceedings which could have concluded the
determination of their claims, and the consideration of that appeal
was then thwarted, a further appeal at the end of the main
proceedings could not compensate for that defect. Furthermore,
the fact that proceedings were still pending could not cancel out the
violation that had already occurred. Had their appeal not been
rejected there was a chance that the proceedings would have ended
much sooner.
- Moreover,
the applicants expressed doubt as to whether a future appeal would be
examined. They submitted that once an appeal had been decided no
further appeal could be lodged on the same issue.
- The
Government submitted that to determine whether there had been a
breach of fair trial guarantees the proceedings had to be seen as a
whole. However, that was impossible at this stage of the proceedings
and it could not be said that the incident complained of was so
prominent as to be decisive for the outcome of the proceedings as a
whole. They stated that the right of access to court implied the
right to commence proceedings and to rebut the claims at issue, but
did not imply a right to an appeal after the adoption of a judgment,
whether final or partial, at first-instance.
- Nevertheless,
as held by the Constitutional Court, the applicants would still have
access to an appeal when the judgment of the first-instance court was
delivered. This right was not prejudiced when the issues raised by
them had not yet been debated and had not formed part of the subject
matter of a determination by the Court of Appeal. According to the
law, when a preliminary judgment was declared null and void by the
Court of Appeal the party concerned could still appeal against that
preliminary judgment together with an appeal against the final
judgment. Thus, the only thing the applicants had lost was the
opportunity to avail themselves of the available remedies at an
earlier stage of the case, an opportunity which did not give rise to
a legitimate expectation.
- The
loss of this opportunity was due to the applicants’ negligence
as they had missed the statutory deadline, although they still had
nine days within which to appeal after the judgment confirming their
leave to appeal had been delivered. The Government submitted that
there was nothing extraordinary in the way the domestic court had
interpreted and applied the legal provision. A judgment along the
same lines had already been delivered by the same court and the
applicants could have expected the same outcome. They reiterated that
requirements such as time-limits for lodging appeals established a
balance between the parties to the proceedings and the right to a
fair hearing within a reasonable time. They further submitted that
the present case could not be compared to Escolano and Beles
where the first-instance judgment had already been pronounced. In the
present case the applicants could still have their claims heard on
the merits in the context of an appeal at a future date. Thus, the
consequences of the judgment of 8 June 2004 did not deny the
applicants access to an appeal, but only delayed such a right.
1. The Court’s assessment
- The
“right to a court”, of which the right of access is one
aspect, is not absolute; it is subject to limitations permitted by
implication, in particular where the conditions of admissibility of
an appeal are concerned, since by its very nature it calls for
regulation by the State, which enjoys a certain margin of
appreciation in this regard. However, these limitations must not
restrict or reduce a person’s access in such a way or to such
an extent that the very essence of the right is impaired; lastly,
such limitations will not be compatible with Article 6 § 1 if
they do not pursue a legitimate aim or if there is not a reasonable
relationship of proportionality between the means employed and the
aim sought to be achieved (see, among other authorities, Brualla
Gómez de la Torre v. Spain, 19 December 1997, § 33,
Reports of Judgments and Decisions 1997 VIII and
Edificaciones March Gallego S.A. v. Spain, 19 February 1998, §
34, Reports 1998 I).
- The
rules on time-limits for appeals are undoubtedly designed to ensure
the proper administration of justice and compliance with, in
particular, the principle of legal certainty. Those concerned must
expect those rules to be applied. However, the rules in question, or
the application of them, should not prevent litigants from making use
of an available remedy (see Osu v. Italy, no.
36534/97, § 32, 11 July 2002).
- Thus,
while time-limits are in principle legitimate limitations on the
right to a court, the manner in which they are applied in a
particular case may give rise to a breach of Article 6 § 1 of
the Convention. It is not the Court’s task to resolve problems
of interpretation of domestic legislation but to verify whether the
effects of such interpretation are compatible with the Convention
(see Miragall Escolano and Others v. Spain, no. 38366/97, §§
33-39, ECHR 2000-I, and Maresti v. Croatia, no. 55759/07, §§
36-38, 25 June 2009).
- In
the present case, the applicants’ time to appeal was reduced
from twenty days to nine days. While it is true that the applicants
could have lodged their appeal within those nine days, the
Constitutional Court specifically acknowledged that the law had been
wrongly applied by the Court of Appeal, with the consequence that the
applicants’ appeal had been unfairly rejected (see paragraph 15
above). In these circumstances, notwithstanding the Government’s
argument, the Court finds no reason to second guess this decision.
Thus, in the present case, the applicable rules were construed in
such a way as to prevent the applicants’ appeal being examined
on the merits, with the consequence that their right under domestic
law of access to the Court of Appeal at that point in time was
impaired.
- However, the Constitutional Court considered that
there had not been a violation of Article 6 of the Convention
since the applicants could avail themselves of an appeal at a
later stage of the proceedings. The Court points out that in certain
cases the Convention organs have found that the possibility exists
that a higher or the highest tribunal may, in certain circumstances,
make reparation for an initial violation of one of the Convention
provisions (see, for example, De Cubber v. Belgium
26 October 1984, Series A no. 86, § 33, and
De Haan v. the Netherlands, 26 August 1997, § 54,
Reports of 1997 IV, in respect of impartiality). However,
in the recent Micallef judgment the Grand Chamber was not
convinced that a defect in civil interim proceedings could
necessarily be remedied at a later stage, namely in proceedings on
the merits governed by Article 6, since any prejudice suffered in the
meantime might by then have become irreversible (§ 80).
- In
the present case, it has not been disputed that the proceedings in
issue would have ended at that stage had the applicants’ appeal
been heard on the merits and upheld. That eventuality would have
avoided the applicants the expense and anxiety related to the
continuation of burdensome court proceedings. In consequence, the
Court is of the view that an appeal at the end of proceedings on the
merits, even if this could be guaranteed under domestic law and
practice (a matter which remains hypothetical for the reasons argued
by the parties), would not have sufficed to annul the consequences
suffered by the applicants as a result of the wrongful dismissal of
their appeal at an earlier stage.
- It
follows, that in the present circumstances, the domestic courts’
restrictive interpretation of the relevant procedural rules denied
the applicants the right to lodge an appeal permitted by law. There
has therefore been a violation of Article 6 of the Convention.
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 1,150 euros (EUR), supported by a taxed bill of
costs, representing the sum incurred by the applicants in connection
with the rejected appeal, in respect of pecuniary damage.
- The
Government submitted that these claims were not a direct consequence
of the violation complained of.
- The
Court does not discern any causal link between the violation found
and the pecuniary damage alleged, as it cannot speculate on what the
outcome would have been had the Court of Appeal declared the
applicants’ appeal admissible and proceeded to hear it.
Accordingly, the Court rejects this claim.
B. Costs and expenses
- The
applicants also claimed EUR 6,169.54, vouched by an attached bill of
costs, for the costs and expenses incurred before the domestic courts
and EUR 14,320 (EUR 7,190 + EUR 7,130) in lawyers’ fees
incurred before the Court.
- The
Government submitted that the costs of the domestic proceedings
claimed by the applicants included the costs of the Attorney General
(EUR 2,261) which had not been claimed by the latter and would not be
claimed by the latter in the event that the Court were to find a
violation in the present case. As to the claims for proceedings
before this Court, the Government submitted that they were grossly
exaggerated and that there was no justification for doubling the fees
on account of the fact that two lawyers were consulted about the
proceedings. In their view, it was appropriate to award EUR 2,000.
- 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 are
reasonable as to quantum. In the present case, the Court considers
the amounts claimed for legal fees to be excessive. Regard being had
to the documents in its possession and the above criteria, notably
the absence of details as to the number of hours worked and the rate
charged per hour, and noting that the costs of the Attorney General
in the domestic proceedings will not be claimed and are therefore to
be deducted from this award, the Court considers it reasonable to
award the sum of EUR 6,000 covering costs under all heads.
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;
- Holds
(a) that
the respondent State is to pay the applicants, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, EUR 6,000
(six-thousand euros), plus any tax that may be chargeable to the
applicants, 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 amount 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 14 June 2011, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza Registrar President
