CEDH · CASELAW;DECISIONS;DECCOMMISSION;ENG — 11 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. 27917/95                       by J.W.                       against Poland           The European Commission of Human Rights sitting in private on 11 September 1997, the following members being present:              Mr.    S. TRECHSEL, President            Mrs.   G.H. THUNE            Mrs.   J. LIDDY            MM.    E. BUSUTTIL                  G. JÖRUNDSSON                  A.S. GÖZÜBÜYÜK                  A. WEITZEL                  J.-C. SOYER                  H. DANELIUS                  F. MARTINEZ                  C.L. ROZAKIS                  L. LOUCAIDES                  J.-C. GEUS                  M.P. PELLONPÄÄ                  B. MARXER                  M.A. NOWICKI                  I. CABRAL BARRETO                  N. BRATZA                  J. MUCHA                  D. SVÁBY                  G. RESS                  A. PERENIC                  C. BÎRSAN                  P. LORENZEN                  K. HERNDL                  E. BIELIUNAS                  E.A. ALKEMA            Mrs.   M. HION            MM.    R. NICOLINI                  A. ARABADJIEV              Mr.    H.C. KRÜGER, Secretary to the Commission         Having regard to Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms;         Having regard to the application introduced on 6 June 1995 by J.W. against Poland and registered on 20 July 1995 under file No. 27917/95;           Having regard to:   -      the reports provided for in Rule 47 of the Rules of Procedure of       the Commission;   -      the observations submitted by the respondent Government on       24 June 1996 and the observations in reply submitted by the       applicant on 10 September 1996;         Having deliberated;         Decides as follows:   THE FACTS           The applicant, a Polish citizen born in 1938, is a businessman residing in Nysa.   He is executive director of a limited liability company "Janwit".   Before the Commission he is represented by Mr. Leszek Kobylinski, a lawyer practising in Nysa.         The facts of the case, as submitted by the parties, may be summarised as follows:         In 1989 the applicant obtained a permission from the President of the Foreign Investment Agency to establish a limited liability company with a foreign partner.   The permission provided that the applicant would own 40 per cent of shares in the company, another shareholder W.W. 40 per cent and a third shareholder A.S. 20 per cent.         It transpires from a list of shareholders, dated 14 October 1992, submitted to the register of limited liability companies at the local court, that at the time the capital of the company was 2.176.365.000 zlotys, out of which the applicant owned shares in a sum of 1.197.000.000,   W.W. 544.092.000 zlotys and a third shareholder H.S. 435.273.000 zlotys.         On 24 June 1994 the Supreme Administrative Court (Naczelny S*d Administracyjny), Wroclaw Division, quashed the decision of the President of the Main Customs Office of 10 November 1993 as well as the preceding decisions of the Director of the Wroclaw Customs of 24 June 1991, 12 July 1991 and 27 July 1991.   The Court observed that the applicant's company had been created under the 1988 Act on Foreign Investment and by virtue of the 1989 Foreign Investment Agency's permit it had been exempted for three years from an obligation to pay customs duty on imported machinery, equipment and other supplies imported in the exercise of the company's business as set out in the 1989 permit. The 1988 Act was replaced by the 1991 Act on Foreign Investment.   The customs duty exemptions granted for three years in the permits issued under the 1988 Act remained valid even after the 1991 Act came into force.   The Court relied in this respect on the Supreme Court's resolution of 29 July 1993 (III AZP   7/93).   The Court considered that the customs duty exemption, precisely because of its exceptional character, should be interpreted neither restrictively nor extensively. The customs authorities in the decisions imposing customs duty on the applicant's company under the 1991 Act proceeded from the assumption that "other supplies needed for the company's business" referred to in Article 37 of this Act had not included imported goods meant for resale.   The Court concluded that these decisions had been unlawful as they had been based on a restrictive interpretation of the scope of the 1991 exemption as compared to the 1988 exemption.         Subsequently the President of the Central Tax Office filed a request with the Minister of Justice to have an extraordinary appeal brought on his behalf and the Minister filed such an appeal.         In the reply to the extraordinary appeal the applicant's company pointed out that the arguments submitted by the Minister of Justice disregarded entirely the Supreme Court's resolution of 1993, relied on by the Supreme Administrative Court in the impugned judgment.         It transpires from a copy of the relevant entry in the register of companies, dated 28 December 1994, that at that time the applicant held the post of executive director and that the capital of the company remained unchanged.         For 25 January 1995 two hearings were set before the Supreme Court (S*d Najwyzszy) in two cases concerning the applicant's company: one at 10 a.m. , concerning the case ARN 78/95, and the other at 10.30 a.m. in the present case ARN 79/95.         The submissions of the parties diverge at this point as to whether a hearing was held in the case.   The applicant submits that on 25 January 1995 the lawyer F.P., who represented the company in both cases, participated in the first hearing at 10.00.   The Court opened the hearing.   The judge rapporteur presented the case to the Court and heard the parties in the first case.   No hearing was held in the second case and another lawyer, also representing the company in the latter case, was not heard.         The Government submit that the Court first held a hearing in the case ARN 78/95.   Subsequently, having regard to the fact that in both cases there were the same parties and a similar factual and legal background, the President of the Court announced that the second case would be examined.   Apparently the Court later held deliberations jointly for both cases.   The representative of the applicant's company did not object thereto.         On the same day the Supreme Court pronounced the judgment.   It found that the judgment of the Supreme Administrative Court had misconstrued the meaning of Article 37 of the 1991 Foreign Investment Act.   In its judgment the Supreme Administrative Court had unduly extended the scope of the original 1989 tax exemption to all goods imported in the exercise of the applicant's company's business, whereas the tax exemption was intended to cover only investment goods.   The Court considered that regard had to be had to the purpose of Article 37 of the 1991 Act which was a transitory provision.   The purpose of transitory provisions normally is to regulate the status of situations which originated from the preceding law in the same field.   This was also the purpose of Article 37, which dealt with the tax exemptions granted by virtue of the 1988 Act.   Consequently, this Article could not have been construed, as the Supreme Administrative Court had done, so as to grant to the companies founded under the 1988 Act more extensive tax exemptions than those already granted under this Act.         On 30 January 1995 the applicant, in his capacity of executive director of the company, complained to the Court that the judgment had been pronounced without a public hearing, contrary to the relevant provisions of the Code of Civil Procedure.   On 20 March 1995 and 18 April 1995 the applicant reiterated his complaint as the letter of 30 January 1995 remained unanswered.         Apparently on 7 June and 10 August 1995 the Registry of the Supreme Court informed the applicant that his complaints as to the lack of a hearing were unfounded as there was a practice that cases similar as to their legal and factual background were considered jointly and that a hearing had been held in the case.         In a letter of 19 October 1995 to the President of the Supreme Court the applicant complained that the provisions of the Code of Civil Procedure had been breached in that the judge rapporteur had failed to open the hearing and to present the case to the court.   The applicant's company had been   represented by one lawyer in both cases and by another lawyer in the second case.   In view of the fact that the second case was not presented to the Court, the second lawyer was not asked to participate in the hearing.   The "practice" referred to in the letters of the Registry was clearly contrary to the law.         In a letter of 27 November 1996 the Registry of the Supreme Court informed the applicant's company that in the light of the relevant legal provisions there was no remedy against the judgment of the Supreme Court issued as a result of an extraordinary appeal. Therefore his complaints could not be examined.   COMPLAINTS         The applicant complains under Article 6 of the Convention that he did not have a fair hearing as in the proceedings instituted by the extraordinary appeal of the Minister of Justice the Supreme Court did not hold a public hearing and the case was thus decided without the applicant being heard.         The applicant complains under Article 1 of Protocol No. 1 to the Convention that the impugned judgment deprived him of his property rights in that he had to pay customs duties from which he had previously been granted exemption.   He submits that the judgment was unlawful as the Supreme Court arbitrarily interpreted the relevant legal provisions, in a manner contrary to their obvious meaning.   PROCEEDINGS BEFORE THE COMMISSION         The application was introduced on 6 June 1995 and registered on 20 July 1995.         On 9 April 1996 the Commission decided to communicate the application to the respondent Government.         The Government's written observations were submitted on 24 June 1996.   The applicant replied on 10 September 1996.     THE LAW     1.     The applicant complains under Article 6 (Art. 6) of the Convention that he did not have a fair hearing as in the proceedings instituted by the   extraordinary appeal of the Minister of Justice the Supreme Court did not hold a public hearing.         The applicant further complains under Article 1 of Protocol No. 1 (P1-1) to the Convention that the impugned judgment deprived him of his property rights in that he had to pay customs duties from which he had previously been granted exemption.         Article 6 (Art. 6) of the Convention, insofar as relevant, provides:           "1.   In the determination of his civil rights and       obligations ... everyone is entitled to a fair and public       ... hearing ..."   Article 1 of Protocol No. 1 (P1-1) to the Convention reads:           "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 first address the issue of the applicability of Article 6 (Art. 6) of the Convention to the proceedings concerned.   As in the present case proceedings as to the determination of customs duties were concerned, they did not, according to the established case- law of the Convention organs, concern "civil rights and obligations" within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention (No. 9908/92, Dec. 4.5.83, D.R. 32, p. 266).   The Government conclude that Article 6 (Art. 6) of the Convention is not applicable.         The applicant submits that the Government's argument as to   the inapplicability of Article 6 (Art. 6) of the Convention to the proceedings concerned is erroneous.   The imposition of customs duty in the present case cannot be regarded as having the same character as imposition of taxes, i. e. a public administrative duty, regard being had to the fact that the applicant's company had been exempted from the customs duty.         As to the substance of the complaint under Article 6 para. 1 (Art. 6-1) of the Convention, the Government submit that the applicant's case before the Supreme Court was examined by an impartial and independent court at a public hearing, with the applicant being represented by a lawyer.   The Government conclude that, even assuming that Article 6 (Art. 6) of the Convention would be applicable to the proceedings concerned, the guarantees of this provision of the Convention were complied with.         The applicant submits that in fact the Supreme Court did not hold a hearing, but decided the present case only on the basis of analogy with the previous case.   The Government's submissions as to a hearing having been held are supposedly based on the judges' declarations, but have not been substantiated by any document.   The minutes of the Supreme Court did not reflect the actual course of events.         As regards the complaint under Article 1 of Protocol No. 1 (P1-1) to the Convention, the Government submit that the power of appreciation of the Contracting States as regards the matters of taxation is a wide one (No. 13013/87, Wasa Liv Ömsesidigt and others v. Sweden, Dec. 14.12.88. D.R. 58 p. 163).   Further, the applicant has not shown that the imposition on him of the tax concerned deprived him of any property right as the anticipation or expectation of being exempted from an obligation to pay customs duty cannot be regarded as a property right. Under the Supreme Court's case-law it was established that in circumstances similar to the applicant's case the relevant provisions did not guarantee any tax exemption.   Consequently, the relevant tax matters do not fall within the ambit of Article 1 of Protocol No. 1 (P1-1) to the Convention.         However, the Government continue, if the Commission considered that this was to be the case, in the present case the interference complained of was justified under Article 1 of Protocol. No. 1 (P1-1) to the Convention, second sentence.         The applicant submits that the Government's submissions in this respect are contradictory in that they first rely on the argument that the applicant had no property right which could have been interfered with by the impugned decisions, and   at the same time argue that under the margin of appreciation in   matters of taxation the decisions concerned were in compliance with Article 1 of Protocol No. 1   (P1-1) to the Convention.    Moreover, the Government failed to show that these decisions were in accordance with the law, as required by this provision.   Regard must be had in particular to the fact that the related matters gave rise to considerable interpretation difficulties in the practice of the tax authorities, the Supreme Administrative Court and the Supreme Court and that a significant body of case-law, often divergent, had been developed. Thus, the Government's argument that there is established   case-law is far from being correct.         However, the Commission is not required to examine those arguments since the application is, in any event, inadmissible for the following reasons.         The Government submit that it transpires from the documents submitted by the applicant that he owns 40 per cent of the shares in the company "JANWIT".   They emphasise that it does not transpire clearly from the application whether the applicant has lodged the application in his own name or in the name of the company.   If it was the former case, he should have clearly stated that he lodged the application in his own name as one of the shareholders.   In the latter case, he should have shown that he is authorised to act on behalf of the company.         The Government further refer to the Convention organs' case-law, according to which the word "victim", in the context of Article 25 (Art. 25) of the Convention, means the person who is personally affected by the act or omission at issue.   In reaching the conclusion that in certain cases the applicants can claim to be victims of a violation, the Commission took into account the number of shares possessed by them, in principle rejecting those applications in which the applicants were minority shareholders.   This aspect provides an important, objective indication, but other considerations may also be relevant, regard being had to the specific circumstances of each case.           The Government further submit that the present case is identical to these cases.   They state that the judgment concerned did not oblige the applicant to pay the customs duty himself.   Consequently, he cannot claim to be a victim of a breach of the Convention or its Protocols. Furthermore, the applicant has not shown that he sustained any financial prejudice as a result of the impugned judgment. The latter argument applies with all the more force as the applicant has not shown that the value of his shares diminished.         The Government further submit that it should not be disregarded that the applicant and the limited liability company "Janwit" constitute separate legal entities.   The rights guaranteed by the Convention and its Protocols which were allegedly breached in the proceedings concerned were the rights of the company, not those of the applicant.   Likewise, the proceedings before the Supreme Court concerned the company and not the applicant, who was not a party thereto.   Moreover, the applicant has not shown that as a result of the impugned decisions he suffered a financial loss so severe that it could fall within the ambit of Article 1 of Protocol No. 1 (P1-1) to the Convention.         The Government conclude that the application should be declared inadmissible for being incompatible ratione personae with the Convention.         The applicant submits that he has lodged the application in his own name and also as the company's executive   director being the only person competent to represent it and to act on its behalf.   The property structure of the company and the actual ownership of the shares are of no significance for the case.   The applicant's counsel represents both the company and the applicant himself.         The applicant further submits that he is personally affected by the decisions concerned as it is his personal property which constitutes the basis of the company's capital.   The applicant is prepared to demonstrate the exact extent of pecuniary loss suffered by him as a result of the decisions concerned.   Regard must be had to the fact that under Polish law the applicant is liable with his entire personal property for the customs   obligations of the company.   The Government's statement that the applicant is a minority shareholder is erroneous.         The Commission recalls that as regards the locus standi of shareholders of limited liability companies before the Convention organs, in particular in respect of complaints under Article 1 of Protocol No. 1   (P1-1) to the Convention, the Court held that the fall in the value of the shares cannot be automatically considered as conferring locus standi on the shareholders.   To adopt such position would be to run the risk of creating difficulties in determining who is entitled to apply to the Strasbourg institutions, regard being had to possible differences of positions and interests between the shareholders.   This would also engender considerable problems concerning the requirement of exhaustion of domestic remedies. Concerned to reduce such risks and difficulties the Court considered that the piercing of the corporate veil or the disregarding of a company's legal personality would be justified only in exceptional circumstances, in particular where it was clearly established that it was impossible for the company to apply to the Convention institutions through the organs set up under its articles of incorporation (Eur. Court HR, Agrotexim and others v. Greece judgment of 24 October 1996, paras. 65-66).         The Commission observes that it is true in the light of documents pertaining to the company's legal status that the applicant is the executive director of the company, competent to act on its behalf. However, his intention to act in the present case in the name of the company has not been established with sufficient clarity.   In his first letter to the Commission the applicant has clearly stated that he has lodged the application in his own name.   Further, in his letters of 30 October 1995 and 10 December 1995 he referred to the case under his own name.   It was only in his reply of 10 September 1996   to the Government's observations that he referred to the case jointly under his own name and that of the company.   The Commission thus considers that it clearly transpires therefrom that the applicant has lodged the application in his own name and added on the name of the company only after it became apparent that the issue of whether he can claim to be a victim of the alleged violations emerged in the course of the proceedings.   The Commission further considers that the applicant was not a party to the proceedings before the Supreme Court, but the company was.   Further, he   has not shown that either he or the company sustained an excessive financial prejudice as a result of the decisions concerned, in particular in that the value of the company's capital has decreased.         The Commission concludes therefore that under Article 25 (Art. 25) of the Convention the applicant cannot claim to be a victim of a violation of the Convention.   It follows that the application must be rejected in accordance with Article 27 para. 2   (Art. 27-2) of the Convention.           For these reasons, the Commission, by a majority,           DECLARES THE APPLICATION INADMISSIBLE.                 H.C. KRÜGER                             S. TRECHSEL             Secretary                              President        to the Commission                       of the Commission