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SECOND
SECTION
CASE OF GYÁRFÁS AND HUNAUDIT KFT. v. HUNGARY
(Application
no. 15258/06)
JUDGMENT
STRASBOURG
27 July 2010
This
judgment is final but it may be subject to editorial revision.
In the case of Gyárfás and Hunaudit Kft. v. Hungary,
The
European Court of Human Rights (Second Section), sitting as a
Committee composed of:
Dragoljub Popović,
President,
András Sajó,
Kristina
Pardalos, judges,
and Françoise Elens-Passos,
Deputy
Section Registrar,
Having
deliberated in private on 6 July 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application
(no. 15258/06) 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 Péter
Gyárfás (“the first applicant”) and a
Hungarian limited liability company, Hunaudit Kft, (“the second
applicant”), on 29 December 2003.
- Before
the Court, the second applicant was represented by the first one. The
Hungarian Government (“the Government”) were represented
by Mr L. Höltzl, Agent, Ministry of Justice and Public
Administration.
- On
19 November 2009 the
President of the Second Section decided to give notice of the
application to the Government. In accordance with Protocol No. 14,
the application was assigned to a committee of three Judges. It was
also decided to rule on the admissibility and merits of the
application at the same time (Article 29 § 1).
THE FACTS
THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1956 and lives in Budapest.
- On
28 December 1994 the predecessor of the second applicant, represented
by the first applicant, filed an action for damages against a company
before the Budapest Regional Court. On 17 October 1995 the Regional
Court ordered intermission of the proceedings for six months at the
joint request of the parties. On 11 April 1996 the plaintiff
requested continuation of the proceedings and extended its action to
involve another respondent.
- On
6 March 1997 the Regional Court delivered a judgment dismissing
the action.
- On
appeal, on 17 November 1997 the Supreme Court's appellate bench
quashed the first instance judgment and remitted the case to the
Regional Court.
- On
31 August 1998 the plaintiff extended the action to include a claim
of invalidity of a contract. On 10 November 1998 the plaintiff stated
its intention to extend the action to involve further respondents
including a company based in Japan. It was therefore instructed to
advance the costs of translation but complied with this order only on
4 November 1999.
- On
20 April 2000 the Regional Court held a hearing and delivered a
judgment dismissing the action. The plaintiff appealed on 5 June
2000.
- On
27 September 2000 the plaintiff was struck out of the register of
companies and ceased to exist as a legal entity. Its successor was
the second applicant. However, neither itself nor its attorney, the
first applicant, informed the courts or the parties of this fact.
- On
24 September 2001 the Supreme Court quashed the first instance
judgment for deficient facts and remitted the case.
- In
the resumed proceedings, a respondent notified the Regional Court on
22 May 2002 that the plaintiff had been struck out of the register of
companies. On 23 May 2002 the first applicant, representing the
second one, declared that he could not make a statement on the legal
succession of his client. He was ordered to do so within 15 days. On
17 July 2002 he informed the court that, by way of a deed of cession,
the successor of the plaintiff was his own mother, a pensioner
eligible for exemption from court fees.
- At
the hearing of 26 September 2002 the first applicant produced a
contract of 2 January 1996 by which part of the claims of the
original plaintiff had been ceded to himself. He also submitted
another document of 31 October 1998 by which he had further ceded
some of those claims to his mother. He stated that he wished to enter
the proceedings as party.
- On
15 October 2002 the Head of the Economic College of the Budapest
Regional Court informed the President of the Budapest Bar Association
of the first applicant's conduct, deemed profoundly unethical. The
applicant was subsequently reprimanded.
- On
9 September 2003 the parties were heard as to the first applicant's
claim to become a plaintiff. On 7 October 2003 the first applicant
was granted leave to become a plaintiff in the proceedings. However,
on the respondents' appeal against the leave, the Budapest Court of
Appeal quashed the order on 1 June 2004.
- On
13 July 2004 the Budapest Regional Court declared interruption of the
proceedings on the ground that the plaintiff had ceased to exist. On
30 May 2005 the court quashed this order finding that the second
applicant was the legal successor. On 28 June 2005 the first
applicant stated that he did not wish to become a party to the
proceedings. However, on
23 February 2006 he stated that he
nevertheless joined the proceedings.
- On
the same date the Budapest Regional Court delivered a judgment
dismissing the applicants' action. On appeal, the Court of Appeal
held a hearing on 5 December 2006 and delivered a judgment on
13
December 2006 upholding in essence the first-instance.
- On
12 November 2007 the Supreme Court delivered a judgment dismissing
the applicants' petition for review and upholding the judgment of the
Budapest Court of Appeal.
THE LAW
- The
applicants complained that the length of the proceedings had been
incompatible with the “reasonable time” requirement of
Article 6 § 1 of the Convention.
- The
Government contested that argument. In regard to the first applicant,
they noted that he had been party to the proceedings only between 23
February 2006 and 12 November 2007. Even if the period between
26
September 2002 and 28 June 2005 – that is, the period during
which his status as plaintiff was disputed or undecided – was
added, the proceedings in regard to him had not lasted longer than
four years and five months. In any event, his reproachable conduct in
that he had concealed the fact that he had acquired part of the
claims in question as early as in 1996 rendered his application an
abuse of the right of individual petition.
- In
respect of the second applicant, the Government submitted in
particular that – while the case had initially not been
particularly complex – the repeated extensions of the action as
well as the uncertainty as to the issues of successions had made the
legal questions arising in the case quite complicated. The second
applicant's conduct had significantly contributed to the protraction
of the proceedings: they had been intermitted between 17 October
1995 and 11 April 1996 at the joint request of the parties, causing a
delay of six months. It had caused a further delay of one year
between 10 November 1998 and 4 November 1999 by refusing timely to
comply with the court's order to advance certain costs of
translation. Moreover, a further two-year delay was caused by the
concealment of the facts concerning the original plaintiff's
succession from 27 September 2000 until at least 26 September
2002.
- Concerning
the first applicant, the Court considers that it is not necessary to
examine whether or not his application amounted to an abuse of the
right of individual petition since it is in any event inadmissible
for the following reasons. The period to be taken into consideration
in his context began at the earliest on 26 September 2002 – the
date on which he stated his intention to enter the proceedings –
and ended on 12 November 2007. It thus lasted less
than five years and two months for three levels of jurisdiction. In
the absence of any particular period of inactivity imputable to the
authorities, the overall length of the proceedings in respect of the
first applicant did not exceed a reasonable time for the purposes of
Article 6 § 1 of the Convention. 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 Articled 35 §
4 of the Convention.
- In regard to the second applicant, the period to be
taken into consideration began on 28 December 1994 and ended on 12
November 2007. The litigation thus lasted some twelve years and ten
months. Of this time, altogether three years and six months –
corresponding to the intermission of the proceedings, the belated
advancing of translation costs and the succession dispute (see
paragraphs 5, 8 and 10 to 13 above) – must be deducted as delay
caused by the second applicant. However, the remaining period still
exceeds nine years and four months for three levels of jurisdiction.
In view of such lengthy proceedings, this complaint must be declared
admissible.
- 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, among many other authorities, Frydlender v.
France [GC], no. 30979/96, § 43, ECHR 2000-VII). 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 considers 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 in regard
to the second applicant.
- The
second applicant further complained that the length of the
proceedings complained of had infringed its right to the peaceful
enjoyment of its possessions, as guaranteed by Article 1 of Protocol
No. 1. The Court notes that this complaint is linked to the one
examined above and must therefore likewise be declared admissible.
Having regard to its finding under Article 6 § 1 (see paragraph
24 above), the Court considers that it is not necessary to examine
whether, in this case, there has been a violation of Article 1 of
Protocol No. 1 (see Zanghì v. Italy, judgment of 19
February 1991, Series A no. 194-C, p. 47, § 23).
- The
applicants also complained that the decisions given amounted to a
violation of Articles 8 and 13 of the Convention and Article 1 of
Protocol No. 1. The Court considers that the application concerns a
civil-law dispute between private parties which was adjudicated by
the courts in proceedings devoid of any appearance of arbitrariness.
In these circumstances, it cannot be argued that there has been a
deprivation of property by the State bringing Article 1 of Protocol
No. 1 into play. Moreover, the applicant's submissions do not
disclose any indication of a violation of the applicants' rights
under Articles 8 or 13 of the Convention. 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 Articled 35 §
4 of the Convention.
- Relying
on Article 41 of the Convention, the second applicant claimed 100,000
euros (EUR) in respect of non-pecuniary damage. The Government
contested the claim. The Court considers that the second applicant
must have sustained some non-pecuniary damage. Ruling on an equitable
basis, it awards EUR 4,800 to the second applicant.
- The
second applicant also claimed EUR 5,000 for the costs and expenses
incurred before the domestic courts the Court. The Government
contested the claim. Regard being had to the documents in its
possession and in the light of its case-law, the Court rejects the
claim for costs and expenses in the domestic proceedings.
- 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 complaints concerning the excessive
length of the proceedings in respect of the second applicant and the
peaceful enjoyment of its possessions admissible and the remainder of
the application inadmissible;
- Holds that there has been a violation of Article
6 § 1 of the Convention in respect of the second applicant;
- Holds that it is not necessary to examine the
second applicant's complaint under Article 1 of Protocol No. 1;
- Holds
(a) that
the respondent State is to pay the second applicant, within three
months, EUR 4,800 (four thousand eight 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 second
applicant's claim for just satisfaction.
Done in English, and notified in writing on 27 July 2010, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Françoise Elens-Passos Dragoljub Popović
Deputy
Registrar President
