CEDH · CASELAW;DECISIONS;DECCOMMISSION;ENG — 10 septembre 1997

.sDD6737AE { font-size:11pt } .s211D6B00 { margin-top:0pt; margin-bottom:0pt; line-height:normal; widows:0; orphans:0; font-size:8.5pt } .sBB9EE52A { font-family:Arial }                          AS TO THE ADMISSIBILITY OF                         Application No. 31717/96                       by Frans KEVELING and Margaretha Th. A. LEGERSTEE                       against the Netherlands          The European Commission of Human Rights (Second Chamber) sitting in private on 10 September 1997, the following members being present:              Mrs.   G.H. THUNE, President            MM.    J.-C. GEUS                  A. GÖZÜBÜYÜK                  J.-C. SOYER                  H. DANELIUS                  F. MARTINEZ                  M.A. NOWICKI                  I. CABRAL BARRETO                  J. MUCHA                  D. SVÁBY                  P. LORENZEN                  E. BIELIUNAS                  E.A. ALKEMA                  A. ARABADJIEV              Ms.    M.-T. SCHOEPFER, Secretary to the Chamber          Having regard to Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms;        Having regard to the application introduced on 15 December 1995 by Frans KEVELING and Margaretha Th. A. LEGERSTEE against the Netherlands and registered on 4 June 1996 under file No. 31717/96;        Having regard to the report provided for in Rule 47 of the Rules of Procedure of the Commission;          Having deliberated;        Decides as follows:   THE FACTS        The applicants are two Dutch citizens, born in 1959 and 1962 respectively. They are an unmarried cohabiting couple residing in The Hague. Before the Commission they are represented by Mr. M. Zegers, a lawyer, practising in Volendam, the Netherlands.        The facts of the case, as submitted by the applicants, may be summarised as follows:   a.    Particular circumstances of the present case        On 16 March 1994 the first applicant, who was running a shop selling comics as a sole trader (eenmanszaak), requested the President of the Bankruptcy Chamber (Faillissementskamer) of the Regional Court (Arrondissementsrechtbank) of The Hague to grant him a moratorium (surséance van betaling).        On 18 March 1994 the Regional Court granted a moratorium. It appointed Judge H. as investigating judge (rechter-commissaris) and Mr J. as administrator (bewindvoerder).        On 6 May 1994, after an analysis of the first applicant's financial situation, the investigating judge H. requested the Regional Court to withdraw the moratorium for lack of prospects.        On 25 May 1994 the Regional Court of The Hague, i.e. Judge P. sitting as a single judge, withdrew the moratorium and declared the first applicant bankrupt and appointed Judge H. as investigating judge (rechter-commissaris) and J. as receiver in bankruptcy (curator).        On 23 January 1995, both applicants requested the investigating judge, pursuant to Section 69 of the Bankruptcy Act (Faillissements- wet), to close the bankruptcy proceedings (opheffing faillissement). They further requested, inter alia, that pending the preparation of this closure no actions would be undertaken as regards the selling of their home or goods falling in the bankrupt estate (boedelgoederen).        On 27 January the investigating judge H. partially rejected the requests. As regards the selling of the house which the applicants jointly own and in which they and their child live, he held that the first applicant's ownership part in this house should, in principle, be sold. Given the value of the real estate as stated by the applicants and the outstanding mortgage, H. considered the selling of the first applicant's part of the house to be worth while. A number of other requests were granted.        On 31 January 1995 the applicants filed an appeal against the decision of 27 January 1995.        In its decision of 2 March 1995, the full bench of the Regional Court of The Hague, presided over by Judge P., declared the second applicant's appeal inadmissible, holding that she could not be considered as a creditor in the bankruptcy proceedings in that she had not filed any claim with the receiver. It further rejected the first applicant's appeal, partly for being inadmissible and partly for being ill-founded.        As regards the request to close the bankruptcy proceedings, the Regional Court held:   <Translation>      "Pursuant to Article 16 of the Bankruptcy Act, the Regional Court      may, upon a proposal of the investigating judge, decide to      pronounce the closure of the bankruptcy, where the situation of      the estate would give rise to such a decision. As indicated by      the investigating judge in his decision of 27 January 1995, this      is not possible as long as there are assets of the debtor in the      estate. These assets need to be sold for the benefit of the joint      creditors. At the hearing, the bankrupt has in fact acknowledged      that there are net assets (netto-actief), as the indicated value      <of the house> amounts to NLG. 100.000 whereas the pro resto      mortgage debt amounts to about NLG. 60.000. It is thus      established that the net assets amount to about NLG. 40.000, half      of which fall in the estate. The Court finds that, given such      assets, it cannot be held that, if these are sold, the interests      of the bankrupt are harmed disproportionately, even taking into      account the housing situation in The Hague."        On 9 March 1995, the applicants filed an appeal in cassation with the Supreme Court (Hoge Raad).        On 16 June 1995, the Supreme Court rejected the appeal in cassation. Insofar as the applicants complained under Article 6 para. 1 of the Convention that Judge P. could not be regarded as objectively impartial, as he decided both on the bankruptcy and the appeal against the decision of the investigating judge, the Supreme Court held that the questions which Judge P. had to determine in the present proceedings were completely different from those dealt with in his previous decision to declare the first applicant in state of bankruptcy.        As regards the applicants' complaint that the compulsory sale of the first applicant's ownership part of the house at issue is contrary to the second applicant's rights under Article 8 of the Convention, the Supreme Court accepted the Regional Court's balancing of the interests involved and found that in this balancing the Regional Court had included the interests of the estate's creditors. Consequently, the Supreme Court upheld the Regional Court's decision.   b.    Relevant domestic law        Pursuant to the Bankruptcy Act, the Regional Court may declare a person in a state of bankruptcy where there are facts and circumstances from which it appears prima facie that this person has ceased to pay his or her creditors. When it declares a person in a state of bankruptcy, the Regional Court shall appoint an investigating judge, responsible for the administration and winding up of the estate, and one or more receivers, who as representatives of both the bankrupt and the joint creditors, are also responsible for the administration and winding up of the estate.        As consequence of a bankruptcy, all assets a bankrupt holds on the day of the pronouncement of bankruptcy are frozen and henceforth administered by the investigating judge assisted by the receiver. This is a safeguard against fraudulent conversion, concealment of assets and other similar manoeuvres so long as the bankruptcy continues. A declaration of bankruptcy further entails that measures taken by creditors in order to recover their debts, such as for instance conservatory seizures, are lifted. A bankruptcy is published and all creditors are invited to deposit their claims with the receiver for verification and acceptance. The receiver shall draw up a final list of all assets and debts, shall liquidate the assets and divide the proceeds thereof, if any, amongst the accepted creditors.        A receiver acts under the responsibility of the appointed investigating judge. Pursuant to Article 67 para. 1 of the Bankruptcy Act an appeal against decisions taken by the investigating judge lies with the Regional Court.        In a situation where a receiver has found that a bankrupt's debts exceed the assets and has reported this finding to the investigating judge, the Regional Court, upon a proposal by the investigating judge, may decide to close the bankruptcy proceedings for lack of prospects (opheffing bij gebrek aan baten).        It is further possible that the Regional Court decides to close the bankruptcy proceedings after the proceeds of liquidated assets have been distributed amongst the creditors on the basis of a final distribution list (slotuitdelingslijst).        Following the closure of bankruptcy proceedings, the right of accepted creditors to recover their unpaid debts, in principle, revives in full, although in practice this has little significance given the financial position of a person whose bankruptcy has been closed.     COMPLAINTS   1.    The applicants invoke Article 6 para. 1 of the Convention. They submit that their civil rights and obligations have not been determined by an impartial judge.   2.    The applicants further complain that a declaration of bankruptcy in itself already constitutes an unjustified interference with their rights under Article 8 of the Convention and that to maintain the bankruptcy constitutes a further violation of their rights under this provision, in particular the compulsory sale of their house.   3.    Finally, the applicants invoke Article 1 of Protocol No. 1. They submit that a declaration of bankruptcy in itself already constitutes a serious interference with their rights under Article 1 of Protocol No. 1 and that to maintain the bankruptcy constitutes a further violation of their rights under this provision.     THE LAW   1.    The applicants complain that their case was not heard by an impartial tribunal within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention, which, in so far as relevant, provides:        "In the determination of his civil rights and obligations ...      everyone is entitled to a ... hearing ... by an ... impartial      tribunal..."        Insofar as the proceedings at issue could be regarded as constituting a determination of the applicants' civil rights and obligations within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention (cf. No. 8988/80, Dec. 10.3.81, D.R. 24, p. 198), the Commission recalls that the existence of impartiality for the purposes of Article 6 para. 1 (Art. 6-1) of the Convention must be determined according to a subjective test, that is on the basis of the personal conviction and behaviour of a particular judge in a given case, and also according to an objective test, that is ascertaining whether the judge offered guarantees sufficient to exclude any legitimate doubt in this respect. Under the objective test, it must be determined whether, quite apart from the judge's personal conduct, there are ascertainable facts which may raise doubts as to a judge's impartiality. In this respect even appearances may be of a certain importance. What is at stake is the confidence which the courts in a democratic society must inspire in the public. The standpoint of the complaining party is important but not decisive. What is decisive is whether the fear that a particular judge lacks impartiality can be held objectively justified (cf. Eur. Court HR, De Cubber v. Belgium judgment of 26 October 1984, Series A no. 86, pp. 13-14, paras. 24-26; Ferrantelli and Santangelo v. Italy judgment of 7 August 1996, Reports 1996-III, No. 12, paras. 56-58; and No. 17722/91, Dec. 8.4.91, D.R. 69, p. 345).        As to the subjective test, the personal impartiality of a judge must be presumed until there is a proof to the contrary. The applicants have not shown that the judge concerned acted with personal bias.        As to the objective test, the Commission observes that the fear of lack of impartiality in the present case is based on the fact that the President of the Regional Court, which determined the applicants' appeal against the investigating judge's refusal to close the bankruptcy, had previously decided to declare the first applicant bankrupt.        The Commission notes that Judge P., when declaring the first applicant bankrupt, had to determine whether there were facts and circumstances from which it appeared prima facie that the first applicant had ceased to pay his creditors. As Judge P. found the answer to this question to be affirmative, the first applicant was declared bankrupt.        The question which Judge P., as President of the Regional Court, and two other judges had to answer in the appeal lodged by the applicants was a different one, namely whether or not the bankruptcy proceedings could be closed without liquidating all assets held by the first applicant. In view of the stated value of these assets, the Regional Court replied to this question negatively and, consequently, rejected the applicants' appeal.        Noting that the rejection of the applicants' appeal ocurred in the course of one set of bankruptcy proceedings pending before the Regional Court, whose task was to decide when to open and close such proceedings and determine any interim issues which might arise in such proceedings, the Commission cannot find that, in these circumstances, the applicants' fear as regards the impartiality of Judge P. can reasonably be regarded as objectively justified.        It follows that this part of the application is manifestly ill- founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.   2.    The applicants invoke a violation of Article 8 (Art. 8) of the Convention. They submit that a declaration of bankruptcy in itself already constitutes a serious interference with their rights under Article 8 (Art. 8) and that to maintain the bankruptcy constitutes a further violation of their rights under this provision. They complain about the obligation to sell the first applicant's part in their jointly owned house where they live together with their child.        Article 8 (Art. 8) of the Convention provides, insofar as relevant, as follows:        "1.    Everyone has the right to respect for his private and      family life, his home and his correspondence.        2.     There shall be no interference by a public authority with      the exercise of this right except such as is in accordance with      the law and is necessary in a democratic society in the interests      of ... the economic well-being of the country ... or for the      protection of the rights and freedoms of others."        Insofar as the applicants complain that the continuation of the bankruptcy proceedings violated their rights under Article 8 (Art. 8) of the Convention, the Commission is of the opinion that, insofar as the continuation of these proceedings can be considered as constituting an interference with the applicants' rights under Article 8 para. 1 (Art. 8-1) of the Convention, this interference pursuant to the Bankruptcy Act can reasonably be regarded as justified under paragraph 2 of Article 8 (Art. 8) as necessary in a democratic society in the interest of the economic well-being of the country and the protection of the rights and freedoms of others.        Insofar as the applicants complain under Article 8 (Art. 8) of the Convention of the compulsory sale of the first applicant's ownership part in the house in which both applicants live, the Commission accepts that this constitutes an interference with the applicants' right to respect for their home within the meaning of this provision, in that it cannot be excluded that, when their house would be sold to a third party, the applicants could be required to vacate their home. It should, therefore, be examined whether this interference can be regarded as justified under Article 8 para. 2 (Art. 8-2) of the Convention.        The Commission notes that the compulsory selling of the applicants' house forms a part of the realisation of the first applicant's assets in order to pay his creditors in bankruptcy proceedings pursuant to the Bankruptcy Act. The Commission further notes that it has not been alleged nor appeared that the second applicant was prohibited from acquiring the first applicant's ownership part in the house at issue.        The Commission cannot find the balance struck by the domestic courts between the interests of the applicants on the one hand and the interests of the first applicant's creditors on the other to be unreasonable or arbitrary. In these circumstances the Commission finds that the interference in question can reasonably be regarded as justified under the terms of Article 8 para. 2 (Art. 8-2) of the Convention as being necessary in a democratic society in the interest of the economic well-being of the country and the protection of the rights of others.        It follows that this part of the application must be rejected as being manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.   3.    Finally, the applicants invoke Article 1 of Protocol No. 1 (P1-1). They submit that a declaration of bankruptcy in itself already constitutes a serious interference with their rights under Article 1 of Protocol No. 1 (P1-1) and that to maintain the bankruptcy constitutes a further violation of their rights under this provision.        Article 1 of Protocol No. 1 (P1-1) 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 Commission notes that, as from the moment the Regional Court declares a person in a state of bankruptcy, that person is no longer allowed to administer his or her assets and that this function is entrusted to an investigating judge assisted by a receiver. This is a safeguard against fraudulent conversion, concealment of assets and other similar manoeuvres so long as the bankruptcy continues. At this point in the proceedings, a bankrupt is not deprived of his or her possessions, but only temporarily, of the right to administer them in person.        Subsequently, insofar as possible, the assets held by a bankrupt are liquidated in order to pay, insofar as the proceeds thereof allow, those creditors whose claims have been accepted in the bankruptcy proceedings.        The Commission considers that the consequences of bankruptcy proceedings under the Netherlands Bankruptcy Act, which entail both a control of the use of property and, subsequently, a deprivation of realisable property, can reasonably be regarded as being in accordance with the public or general interest within the meaning of Article 1 of Protocol No. 1 (P1-1). The Commission cannot find that the judicial decisions taken in the proceedings at issue struck an unfair balance between the applicants' interests on the one hand and the public or general interest on the other.        It follows that this part of the application must also be rejected as being manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.        For these reasons, the Commission, unanimously,          DECLARES THE APPLICATION INADMISSIBLE.      M.-T. SCHOEPFER                               G.H. THUNE       Secretary                                   President to the Second Chamber                       of the Second Chamber