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SECOND
SECTION
CASE OF LAJOS KOVÁCS v. HUNGARY
(Application
no. 8174/05)
JUDGMENT
STRASBOURG
17
July 2008
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 Lajos Kovács v. Hungary,
The
European Court of Human Rights (Second Section), sitting as a Chamber
composed of:
Françoise
Tulkens,
President,
Ireneu
Cabral Barreto,
Vladimiro
Zagrebelsky,
Danutė
Jočienė,
Dragoljub
Popović,
András
Sajó,
Nona
Tsotsoria,
judges,
and Sally
Dollé, Section
Registrar,
Having
deliberated in private on 24 June 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application
(no. 8174/05) against the
Republic of Hungary lodged with the Court
under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”)
by a Hungarian national, Mr Lajos
Kovács
(“the applicant”), on 5 January 2005.
- The
Hungarian Government (“the Government”) were represented
by Mr L. Höltzl, Agent, Ministry of Justice and Law Enforcement.
- On
10 March 2008 the Court
decided to give notice of the application to the Government. It
also decided to examine the merits of the application at the same
time as its admissibility (Article 29 § 3).
THE FACTS
THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1951 and lives in Veszprém-Kádárta.
- In
the context of an inquiry, the Bács-Kiskun County Directorate
of the Hungarian Tax Authority established that the applicant had
failed to pay 2,339,604 Hungarian Forints (approximately 9,167
euros). It ordered him to pay the outstanding tax plus a fine of HUF
1,119,000 (approximately
4,384 euros) and HUF 1,948,000
(approximately 7,771 euros) in accrued interest.
- The
applicant appealed. On 10 August 1998 the National Tax Authority
upheld the first-instance administrative decision. It found that the
applicant had received, on a regular basis, sums from a private
company for his work but he had failed to pay taxes on this income.
The Tax Authority relied on documentary evidence.
- In
September 1998 the applicant sought judicial review of the final
administrative decision before the Bács-Kiskun County Regional
Court.
- On
28 November 2002 the Regional Court found, after having held seven
hearings, that the Tax Authority had acted in compliance with the law
and dismissed the applicant's action. The applicant appealed.
- The
Budapest Court of Appeal, after having held two hearings, upheld the
first-instance decision on 22 September 2004. The courts relied on
documentary evidence and the testimony of the parties.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant complained that the length of the proceedings had been
incompatible with the “reasonable time” requirement, laid
down in Article 6 § 1 of the Convention, which reads as follows:
“In the determination of ...any criminal charges
against him, everyone is entitled to a ... hearing within a
reasonable time by [a] ... tribunal...”
A. Admissibility
- The
Government argued that the contested proceedings could not be
regarded as a legal dispute concerning the applicant's civil rights
and obligations, since tax disputes fall outside the scope of Article
6 of the Convention. They were of the opinion that the application
should be declared incompatible ratione materiae with the
provisions of the Convention.
- The
applicant did not put forward any argument on this point.
- The
Court recalls that the assessment of tax and the imposition of
surcharges fall outside the scope of Article 6 under its civil head
(see Ferrazzini v. Italy [GC], no. 44759/98, § 29, ECHR
2001 VII). The issue therefore arises in this case whether the
proceedings were “criminal” within the autonomous meaning
of Article 6 and thus attracted the guarantees of Article 6 under
that head.
- The
Court first observes that while there is no doubt as to the
importance of tax to the effective functioning of the State, it is
not convinced that removing procedural safeguards in the imposition
of punitive penalties in the sphere of taxation is necessary to
maintain the efficacy of the fiscal system or indeed can be regarded
as consonant with the spirit and purpose of the Convention (see
Jussila v. Finland [GC], no. 73053/01,
§§
35-36, ECHR 2006 ...).
- Furthermore,
the tax surcharges in the present case were not intended as pecuniary
compensation for damage but as a punishment to deter re-offending.
Without more, the Court considers that this alone establishes the
criminal nature of the offence (see Jussila, cited above,
§ 38). Hence, Article 6 applies under its criminal head.
- It
follows that the Government preliminary objection must be dismissed.
Furthermore, the Court notes that the complaint is not manifestly
ill-founded within the meaning of Article 35§ 3 of the
Convention, and that it is not inadmissible on any other grounds. It
must therefore be declared admissible.
B. Merits
- The
Government argued that the length of the proceedings did not exceed a
reasonable time.
- The
period to be taken into consideration began on 10 August 1998 and
ended on 22 September 2004. It thus lasted six years and one month
for two administrative and two court levels of jurisdiction.
- The
Court reiterates that the reasonableness of the length of proceedings
must be assessed in the light of the circumstances of the case and
with reference to the following criteria: the complexity of the case,
the conduct of the applicant and the relevant authorities and what
was at stake for the applicant in the dispute (see, among many other
authorities, Frydlender v. France [GC], no. 30979/96, §
43, ECHR 2000-VII).
- The
Court has frequently found violations of Article 6 § 1 of the
Convention in cases raising issues similar to the one in the present
application (see Frydlender, cited above).
- Having
examined all the material submitted to it, the Court considers that
the Government have not put forward any fact or convincing argument
capable of persuading it to reach a different conclusion in the
present circumstances. Having regard to its case-law on the subject,
the Court finds that the length of the proceedings was excessive and
failed to meet the “reasonable time” requirement.
There
has accordingly been a breach of Article 6 § 1.
II. OTHER ALLEGED
VIOLATIONS OF THE CONVENTION
- The
Court observes that the applicant also complained under Article 6 of
the Convention about the outcome and the unfairness of the
proceedings. However, the Court considers that these complaints are
essentially of a fourth instance nature: there is no indication in
the case file that the domestic authorities or courts lacked
impartiality or that the proceedings were otherwise unfair or
arbitrary.
- It
follows that this part of the application is manifestly ill-founded,
within the meaning of Article 35 § 3 and must be rejected
pursuant to Article 35 § 4 of the Convention.
III. 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 claimed 114,000 euros (EUR) in respect of pecuniary and
non-pecuniary damage.
- The
Government contested these claims.
- The
Court does not discern any causal link between the violation found
and the pecuniary damage alleged; it therefore rejects this claim.
However, on an equitable basis, it awards the applicant EUR 1,200 for
non-pecuniary damages.
B. Costs and expenses
- The
applicant did not put forward any claim under this head.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
1. Declares the complaint concerning the excessive
length of the proceedings admissible and the remainder of the
application inadmissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention;
3. Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final according to
Article 44 § 2 of the Convention, EUR 1,200 (one
thousand two hundred euros), plus any tax that may be chargeable, in
respect of non-pecuniary damage, to be converted into Hungarian
forints at the rate applicable at the date of settlement;
(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 applicant's claim
for just satisfaction.
Done in English, and notified in writing on 17 July 2008, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Sally Dollé Françoise Tulkens
Registrar President
