FIRST SECTION
CASE OF
JULIUS KLOIBER SCHLACHTHOF GMBH AND OTHERS v. AUSTRIA
(Applications nos.
21565/07, 21572/07, 21575/07 and 21580/07)
JUDGMENT
STRASBOURG
4 April 2013
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 Julius Kloiber Schlachthof GmbH and Others v. Austria,
The European Court of Human Rights (First Section), sitting as
a Chamber composed of:
Isabelle Berro-Lefèvre, President,
Elisabeth Steiner,
Khanlar Hajiyev,
Mirjana Lazarova Trajkovska,
Julia Laffranque,
Linos-Alexandre Sicilianos,
Erik Møse, judges,
and Søren Nielsen, Section Registrar,
Having deliberated in private on 12 March 2013,
Delivers the following judgment, which was adopted on that
date:
PROCEDURE
The cases originated in four applications (nos. 21565/07,
21572/07, 21575/07 and 21580/07) against the Republic of Austria lodged with
the Court under Article 34 of the Convention for the Protection of Human Rights
and Fundamental Freedoms (“the Convention”) by four companies registered in Austria,
namely Julius Kloiber Schlachthof GmbH (“the first applicant company”), Fa.
Pöll Günter (“the second applicant company”), Pöll-Fleisch GmbH (“the third applicant
company”) and Schweinespezialbetrieb Innviertel GmbH (“the fourth applicant
company”), on 3 and 8 May 2007.
The applicants were represented by Mr J. Hofer
and Mr T. Humer, lawyers practising in Wels. The Austrian Government (“the
Government”) were represented by their Agent, Ambassador H. Tichy, Head of the
International Law Department at the Federal Ministry for European and
International Affairs.
The applicant companies complained in particular that
proceedings concerning the imposition of surcharges on unpaid contributions by
the national agricultural marketing association, Agrarmarkt Austria, had not been decided by a tribunal within the meaning of Article 6 § 1 of the
Convention.
On 23 October 2008 the applications were
communicated to the Government. It was also decided to rule on the
admissibility and merits of the applications at the same time (Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The applicant companies carry out the slaughter
of cattle and pigs, which makes them liable under the Agricultural Market Act (Agrarmarktgesetz)
to pay agricultural marketing charges, calculated on the basis of the number of
animals slaughtered, to Agrarmarkt Austria (“AMA”), the national agricultural
marketing board.
In 2006 AMA issued payment orders against the
applicant companies. On 5 July 2006 it ordered the first applicant company to
pay outstanding contributions for the years 2003 and 2004 in the amount of 56,573.62 euros
(EUR) and, in addition, imposed a surcharge for failure to pay, amounting to 10%
of the unpaid contributions. On 30 May 2006 it ordered the second applicant
company to pay outstanding contributions for the years 2004 and 2005 in the
amount of EUR 12,556.43 and imposed a surcharge of 10%. On the same date it
ordered the third applicant company to pay outstanding contributions for the
years 2005 and 2006 in the amount of EUR 5,936.01, imposing a surcharge of 10%,
and ordered the fourth applicant company to pay outstanding contributions for
the years 2005 and 2006 in the amount of EUR 96,050.48, imposing a
surcharge of 60%.
The applicant companies appealed against these
orders. They argued that the above system was contrary to European Union rules on
state aid. They also asked for oral hearings to be held in their appeals.
The Federal Minister of Agriculture, Forestry, the
Environment and Water (Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft), acting as the appeal authority,
dismissed the applicant companies’ appeals on 17 July 2006 without
holding a hearing.
The applicant companies argued that AMA
contributions were levied for financing activities, such as AMA’s quality
programme, which were not in compliance with EU law. However, the Federal
Minister found that, after a decision of the European Commission of 30 June 2004
(C(2004)2037), the applicant companies had been in a position to know precisely
which charges they had to pay. In that decision, the European Commission had stated
that it had no objection to AMA’s quality assurance scheme and quality mark,
registered as state aid under notification number NN 34A/2000 (“Qualitätsprogramme
und das AMA-Biozeichen und das AMA-Gütesiegel”), because that state aid was
in accordance with the Common Market provided for in the Treaty establishing
the European Community (“the EC Treaty”). The Federal Minister referred further
to the Administrative Court’s decision no. 2005/17/230 of 20 March 2006, in
which the court had also found that the levying of AMA contributions was in compliance
with the relevant provisions of EU law. The Federal Minister further held that
it had not been necessary to hold a hearing, because a hearing was only held if
a decision had been taken by a panel on an appeal against the decision of a tax
office or a regional directorate of finance, which was not the case here.
Thereupon, the applicant companies lodged
complaints with the Constitutional Court and the Administrative Court against
the Federal Minister’s decision. Before the Constitutional Court they
complained that the surcharges imposed had violated their constitutional right
to property. Before the Administrative Court, they complained that the appeal
authority had not been a court within the meaning of the case-law of the
European Court of Justice, with the result that they had been prevented from
having the lawfulness of the European Commission’s decision of 30 June 2004
reviewed by the European Court of Justice in proceedings under Article 234
of the EC Treaty. As regards the imposition of the surcharges, the applicant
companies complained that the findings of fact made by the authorities in
imposing those surcharges had been insufficient. In particular the authorities had
failed to establish whether the objective and subjective elements of the
offence (objektiven und subjektiven Tatbildvoraussetzungen) had been
met. Relying on Article 6 of the Convention, they further complained that there
had not been a public hearing and that the criminal charges against them had
not been decided by an impartial tribunal established by law (“es ist kein
unparteiisches, auf Gesetz beruhendes Gericht über den erhobenen strafrechtlichen
Vorwurf eingeschritten”). As the authorities imposing the surcharges had
failed to hold an oral hearing, the applicant companies asked the Administrative Court for a public hearing.
On 25 September 2006 the Constitutional Court
declined to deal with the applicant companies’ complaints under Article 144 of
the Federal Constitution for lack of prospects of success.
The Administrative Court dismissed the applicant
companies’ complaints on 30 January 2007 in separate decisions and held as
follows:
“The present case does not differ in [substance] to the [case] decided
by the Administrative Court on 20 March 2006, no. 2005/17/230. Pursuant to
Section 43(2) of the Administrative Court Act reference is made to it.
For the reasons set out in that decision, the breach of law
complained of by the applicant company also does not exist in the present case,
for which reason it can be dismissed without further proceedings in camera.
For the reasons set out in the decision referred to, Article 6
of the Convention is also of no relevance here.”
II. RELEVANT DOMESTIC LAW
The relevant provisions of the Federal Act Establishing
the Market Regulation Institution “Agrarmarkt Austria”, Federal Law Gazette 376/1992
(Bundesgesetz über die Errichtung der Marktordnungsstelle “Agrarmarkt
Austria”, BGBl 276/1992 - “the AMA Act”), the Administrative Court Act
(Verwaltungsgerichtshofgesetz), a summary of the Administrative Court’s
decision no. 2005/17/230 of 20 March 2006, to which reference is made in the
present judgment, and an abstract of the Constitutional Court’s judgment G 181/86
of 14 October 1987 are reproduced in the Court’s judgment in the case of Steininger
v. Austria, no. 21539/07, §§
13-28, 17 April 2012.
THE LAW
I. JOINDER OF THE APPLICATIONS
Given that these four applications concern
similar facts and raise essentially identical issues under the Convention, the
Court shall consider them together and render a single judgment, in accordance
with Rule 42 § 1 of the Rules of Court.
II. ALLEGED
VIOLATION OF ARTICLE 6 OF THE CONVENTION AS REGARDS THE LACK OF A TRIBUNAL
The applicant companies, which complained solely
about the proceedings concerning the surcharges that they had been required to
pay in excess of the contributions due, submitted that those proceedings had
not been decided by a tribunal. They relied on Article 6 § 1 of the Convention,
which, in so far as relevant, reads as follows:
“1. In the determination of his civil rights and
obligations or of any criminal charge against him, everyone is entitled to a
fair and public hearing ... by an independent and impartial tribunal
established by law. ...”
A. Admissibility
1. Applicability of Article 6 of the Convention
The Government argued that the complaint was
incompatible ratione materiae with the provisions of the Convention
because Article 6 had not applied to the proceedings in question. The
imposition of parafiscal charges, such as the marketing contributions levied by
AMA and surcharges in the event of non-payment, had not concerned the
determination of civil rights and obligations within the meaning of Article 6 §
1. The Government maintained that proceedings concerning surcharges could only
be regarded as criminal proceedings within the meaning of Article 6 § 1 in
certain circumstances, as the Court had found in the case of Jussila
v. Finland [GC], no. 73053/01, ECHR 2006-XIII. According to this
judgment, the test for qualifying proceedings as criminal within the meaning of
Article 6 was based on three elements, namely the qualification of the
provision in domestic law as criminal, the character of the offence and the
severity of the penalty the person concerned risked.
The Government maintained, however, that the
first condition had not been met, because the imposition of a surcharge under
domestic law was part of ordinary administrative law. Moreover, the AMA Act contained
a different provision providing for a criminal sanction, namely section 21l of
the AMA Act. As regards the nature of the surcharges, the relevant provisions
of the AMA Act showed, in the Government’s view, that a surcharge was primarily
a lump-sum payment intended to cover the cost of the additional work that had to
be performed by AMA upon non-payment of a contribution, namely conducting
formal administrative proceedings, and could not therefore be regarded as a
penalty. In addition, the third criterion had not been met. Considering that
the amounts imposed had not exceeded 60% of the unpaid contributions, the
Government argued that the sanction could not be considered particularly
severe.
The applicant companies argued that Article 6 had
applied to the proceedings in question because the surcharges imposed by AMA
under section 21g of the AMA Act had clearly had a punitive element, with
the result that the proceedings had concerned the determination of a criminal
charge.
The Court observes that the applicant companies were
ordered by AMA to pay surcharges, as they had failed to pay marketing contributions,
which are parafiscal contributions.
In the case of Steininger (cited above),
the Court, referring to the Jussila case (also cited above), found
that Article 6 under its criminal head applied to proceedings concerning the
imposition of surcharges for taxes such as the contributions levied by AMA (see
Steininger, cited above, §§ 34-37). The Court sees no reason to
come to a different conclusion in the present cases and therefore concludes
that Article 6 applies under its criminal head.
Thus, the Government’s objection that the
applicant companies’ claims were incompatible ratione materiae with the
provisions of the Convention has to be dismissed.
2. Exhaustion of domestic remedies
The Government submitted that the applicant
companies had not exhausted domestic remedies as regards their complaint under
Article 6 of the Convention, as they had failed to argue during the domestic
proceedings that those proceedings were not being decided by a tribunal within
the meaning of Article 6.
This was disputed by the applicant companies,
which claimed that they had made use of all available domestic remedies.
The Court observes that the applicant companies
argued in their complaints to the Administrative Court that the criminal charges
against them had not been decided by an impartial tribunal established by law,
and relied in this respect on Article 6 of the Convention. The Court therefore considers
that this matter was brought sufficiently to the attention of the domestic
authorities and thus rejects the argument that the applicants failed to exhaust
domestic remedies.
The Court further finds that this complaint is
not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the
Convention and notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
1. The parties’ submissions
The Government argued that, even if Article 6 had
applied to the proceedings in question, there had not been a breach of this
provision. They submitted that, according to the settled case-law of the Court,
the requirements for a body to be characterised as a tribunal under Article 6 § 1
of the Convention would be fulfilled if the body had full jurisdiction to
review all questions of law and fact relevant to the legal dispute at issue. In
the present case, the Administrative Court had issued the decision in the
surcharge proceedings. As it had considered the applicant companies’ complaints
on the merits, point by point, without ever having to decline jurisdiction when
replying to them, that court had qualified as a tribunal for the purposes of
Article 6 § 1 (relying on Zumtobel v. Austria, 21 September 1993, §
32, Series A no. 268-A).
The applicant companies did not comment on this
point.
2. The Court’s assessment
The Court reiterates that Article 6 § 1 of the
Convention guarantees a right to a public hearing by an independent and
impartial tribunal established by law. According to the Court’s case-law, a
"tribunal" is characterised in the substantive sense of the term by
its judicial function, that is to say determining matters within its competence
applying the law and after proceedings conducted in a prescribed manner. It
must also satisfy a series of further requirements: independence, in particular
of the executive; impartiality; the duration of its members’ terms of office; and
the guarantees afforded by its procedure - several of which appear in the text
of Article 6 § 1 itself (see Belilos v. Switzerland, 29 April 1988,
§ 64, Series A no. 132). Where a penalty is criminal in nature there
must be the possibility of review by a court which satisfies the requirements
of Article 6 § 1, even though it is not inconsistent with the Convention for
the prosecution and punishment of minor offences to be primarily a matter for
the administrative authorities (see Baischer v. Austria, no. 32381/96, §
23, 20 December 2001, and Malige v. France, 23 September 1998, § 45, Reports
of Judgments and Decisions 1998-VII).
The Court reiterates further that decisions
taken by administrative authorities which do not themselves satisfy the
requirements of Article 6 § 1 of the Convention must be subject to
subsequent review by a "judicial body that has full jurisdiction"
(see Umlauft v. Austria, 23 October 1995, § 37, Series A no. 328-B,
with further references).
In the present case, AMA ordered the applicant
companies to pay surcharges, and the Federal Minister of Agriculture, Forestry,
the Environment and Water, acting as an appeal authority, decided on their
appeal against the payment orders. While the former is a public law body in
which some administrative powers are vested, the latter is an administrative
and governmental authority. Neither of them qualifies as a tribunal.
In the Steininger case (cited above), the
Court found that neither the Administrative Court nor the Constitutional Court
qualified as a tribunal. As regards the Constitutional Court, it held in § 48
of its judgment as follows:
“The Constitutional Court, which did not to entertain the
applicant company’s complaint for lack of prospect of success, cannot be considered a
“judicial body that has full jurisdiction” for the purposes of the present
proceedings, which are criminal in nature (see Umlauft,
cited above, § 38), even though it has on occasions been considered a tribunal
in relation to civil claims (see Pauger v. Austria, 28 May 1997, § 59,
Reports of Judgments and Decisions 1997-III, and Kugler v.
Austria, no. 65631/01,
§ 50, 14 October
2010).”
As regards the Administrative Court, the Court,
after having outlined its case-law on the matter, concluded in § 56 of its
judgment as follows:
“In the present case, however, the power of review of the Administrative Court is limited (...) and has already been found by the Court insufficient
for regarding it a tribunal within the meaning of the Convention in respect of proceedings
that were of a criminal nature for the purposes of the Convention. In this
respect the Court cannot overlook that the Austrian Constitutional Court itself
has considered that the limited review (die (bloß) nachprüfende Kontrolle)
carried out by the Administrative Court was insufficient in respect of criminal
penalties within the meaning of the Convention (...).”
It concluded that the review by Administrative Court could not
be qualified as adequate “full review” of the applicant company’s criminal
conviction by an administrative authority.
The Court considers that in view of the
similarities of the facts of the case and of the complaint raised by the
applicant companies, these findings also apply in the present case. It finds,
therefore, that in the proceedings in question, which were criminal in nature,
the applicant companies did not have access to a tribunal within the meaning of
Article 6 § 1.
There has accordingly been a violation of
Article 6 of the Convention.
III. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION
AS REGARDS THE LACK OF A HEARING
The applicant companies complained further under
Article 6 § 1 of the Convention that there had not been a public hearing in the
surcharge proceedings.
The Government contested that argument.
The Court notes that this complaint is linked to
the one examined above and must therefore likewise be declared admissible.
Having regard to the conclusions above, namely
that the surcharge proceedings were not conducted before a tribunal within the
meaning of Article 6 § 1 of the Convention, the Court considers that it is
not necessary to examine whether there has been a violation of Article 6 on
account of the lack of a public hearing, because only a hearing before a body
which qualifies as a tribunal would have served a meaningful purpose (see Alge
v. Austria, no. 38185/97, § 29, 22 January 2004).
IV. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL
No. 1
Admissibility
The applicant companies also complained under
Article 1 of Protocol No. 1 to the Convention that the surcharges had
not been proportionate to the aim sought. Article 1 of Protocol No.1 reads as
follows:
“Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his possessions
except in the public interest and subject to the conditions provided for by law
and by the general principles of international law.
The preceding provisions shall not, however, in any way impair
the right of a State to enforce such laws as it deems 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.”
The Government argued that the applicant companies
had not exhausted domestic remedies, as in the proceedings before
Constitutional Court they had merely mentioned that their “fundamental right to
the protection of their property” had been violated without, however, making any
substantive arguments in this respect. In any event, there had not been a
breach of Article 1 Protocol No. 1, as the Contracting States have a wide
margin of appreciation as regards the levying of taxes and other contributions
and the interference with the applicant companies’ rights, if any, had been
proportionate, as no excessive burden had been imposed on them.
This was disputed by the applicant companies,
which maintained that they had properly exhausted domestic remedies. They also
argued that the surcharges imposed on them had been excessive, because, given
their amount, they could not be considered as merely covering additional
administrative costs incurred as a result of the non-payment of the
contributions.
The Court observes first that in the proceedings
before the Constitutional Court the applicant companies merely mentioned that their
“fundamental right to the protection of their property” had been violated,
without giving any further details. However, it need not examine whether this
constituted proper exhaustion of domestic remedies, as this complaint is in any
event inadmissible for the following reasons.
The Court reiterates that as regards the right
of States to enact such laws as they deem necessary for the purpose of
"securing the payment of taxes", provided for in Article 1 of
Protocol No.1, the legislature must be allowed a wide margin of appreciation (see
Gasus Dosier- und Fördertechnik GmbH v. the Netherlands, 23 February
1995, § 60, Series A no. 306-B). According to the Court’s
well-established case-law, the second paragraph of Article 1 of Protocol No. 1 must
be construed in the light of the principle laid down in the Article’s first
sentence. Consequently, an interference must achieve a "fair balance"
between the demands of the general interest of the community and the
requirements of the protection of the individual’s fundamental rights. The
concern to achieve this balance is reflected in the structure of Article 1 as a
whole, including the second paragraph: there must therefore be a reasonable
relationship of proportionality between the means employed and the aim pursued
(ibid, § 62). That balance will be lacking where the person concerned has
to bear an individual and excessive burden (see
Wieczorek v. Poland, no. 18176/05,
§ 59, 8 December 2009).
In the present case, the first to third applicant
companies had to pay surcharges in the amount of 10% of the unpaid contributions
and the fourth applicant company 60%. Considering the wide margin of discretion
afforded to the Contracting States and the amounts involved, the Court cannot
find that these amounts constituted individual and excessive burdens imposed on
the applicant companies.
It follows that this part of the application is
manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3
(a) and 4 of the Convention.
V. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
Lastly, the applicant companies complained under
Article 6 § 3 (a) of the Convention that they had not been informed in
detail of the duty to pay contributions. Under Article 7 of the Convention they
complained that, despite the decision of the European Commission of 30 June
2004, the extent to which contributions had to be paid had remained unclear,
and the relevant provision of the AMA Act and the payment orders based on it
had therefore lacked legal certainty. Under Article 13 they complained that they
could only have avoided paying the surcharges by paying the allegedly illegal contributions
and therefore that they had not had an effective remedy at their disposal. Under
Article 14 read in conjunction with Article 1 of Protocol No. 1 they
complained of discrimination because the same penalty could apply irrespective
of the amount of contributions that had gone unpaid.
However, in the light of all the material in its
possession, and in so far as the matters complained of are within its
competence, the Court finds that these complaints do not disclose any
appearance of a violation of the rights and freedoms set out in the Convention
or its Protocols.
It follows that this
part of the application is manifestly ill-founded and must be rejected in
accordance with Article 35 §§ 3 (a) and 4 of the Convention.
VI. 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 companies claimed compensation for
pecuniary damage, consisting of the amount of the surcharges they had had to
pay.
The Government commented that there was no
causal link between the violation alleged and the pecuniary damage claimed by
the applicant companies. It was by no means certain that the applicant companies
would not have had to pay surcharges, had the procedural guarantees considered
to have been violated been complied with.
The Court agrees with the Government that there
is no causal link between the violation of the Convention and the pecuniary
damage claimed by the applicant companies. Consequently, it makes no award
under this head.
B. Costs and expenses
As regards costs and expenses incurred in the
domestic proceedings, the first applicant company claimed 2,673.44 euros (EUR),
the second applicant company EUR 2,396.32, the third applicant company EUR 2,257.76
and the fourth applicant company EUR 4,498.20. All applicant companies further
claimed EUR 1,006 each for costs incurred in the proceedings before the Court.
All these amounts do not include value-added tax (VAT).
The Government argued that the costs claimed for
the domestic proceedings were excessive.
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.
The Court considers that the costs claimed both
in respect of the domestic proceedings and the proceedings before the Court
were necessary and reasonable as to quantum and awards them in
full. It therefore awards the following amounts to the applicant companies for
costs and expenses, plus any tax that may be chargeable to the applicant
companies on this amount: the first applicant company EUR 3,679.44, the second
applicant company EUR 3,402.32, the third applicant company EUR 3,263.76 and
the fourth applicant company EUR 5,504.20.
C. Default interest
The Court considers it appropriate that the
default interest rate 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
1. Decides to join the applications;
2. Declares the complaint that the surcharge
proceedings were not decided by a tribunal and the lack of a public hearing
admissible and the remainder of the application inadmissible;
3. Holds that there has been a violation of
Article 6 § 1 of the Convention as regards the complaint that the surcharge
proceedings were not decided by a tribunal;
4. Holds that there is no need to examine the
complaint under Article 6 § 1 of the Convention as regards the complaint
concerning the lack of a public hearing during the surcharge proceedings;
5. Holds
(a) that the respondent State is to pay to the applicant
companies, within three months of the date on which the judgment becomes final,
in accordance with Article 44 § 2 of the Convention, the following amounts, plus
any tax that may be chargeable to the applicant companies, in respect of costs
and expenses:
(i) the first applicant company EUR 3,679.44 (three
thousand six hundred seventy nine euros and forty four cents),
(ii) the second applicant company EUR 3,402.32 (three
thousand four hundred two euros and thirty two cents),
(iii) the third applicant company EUR 3,263.76 (three
thousand two hundred sixty three euros and seventy six cents),
(iv) the fourth applicant company EUR 5,504.20 (five
thousand five hundred four euros and twenty cents);
(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;
6. Dismisses the remainder of the applicant
companies’ claim for just satisfaction.
Done in English, and notified in writing on 4 April 2013,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Søren Nielsen Isabelle Berro-Lefèvre
Registrar President
