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FOURTH
SECTION
CASE OF FELIX BLAU SP. Z O.O. v. POLAND
(Application
no. 1783/04)
JUDGMENT
STRASBOURG
19
January 2010
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 Felix Blau SP. Z
O.O. v. Poland,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Giovanni Bonello,
Ljiljana
Mijović,
Ján Šikuta,
Mihai
Poalelungi,
Nebojša Vučinić,
judges,
and Lawrence Early,
Section Registrar,
Having
deliberated in private on 15 December 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 1783/04) against the Republic
of Poland lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by Felix Blau sp. z o.o. (“the applicant
company”), a limited liability company based in Wrocław,
Poland, represented by the president of the management board, Mr
Andrzej Flis, on 30 November 2003.
- The
applicant company was represented before the Court
by Mr M. Czarnecki, a lawyer practising in Warsaw. The
Polish Government (“the Government”) were represented by
their Agent, Mr J. Wołąsiewicz of the
Ministry of Foreign Affairs.
- The
applicant company alleged, in particular, that it had been deprived
of the right of access to a court, contrary to Article 6 of the
Convention.
- On
8 September 2008 the President of the Fourth Section of the Court
decided to give notice of the application to the Government. It was
also decided to examine the merits of the application at the same
time as its admissibility (Article 29 § 3).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant company is a limited liability company which at the
material time carried on a business of buying debts.
A. The first set of civil proceedings
- On
14 February 2002 the applicant company instituted civil proceedings
before the Wrocław Regional Court (Sąd Okręgowy)
against the Dolnyśląsk Sickness Fund (Dolnośląska
Regionalna Kasa Chorych). The applicant company had agreed to buy
from four hospitals the debts owed by the Sickness Fund to the
hospitals in the amount of 60,000,000 Polish zlotys (PLN) provided
that the company won its case against the Fund. The applicant company
sought payment of the above-mentioned sum together with interest,
which amounted to PLN 89,316,240 (approximately 22,000,000 euros
(EUR)). The hospitals claimed that the Fund should be liable for
paying the cost of medical treatment that had exceeded the contract
that every hospital had negotiated with the Fund but which had been
necessarily sustained by them in providing medical services to
insured persons.
- The
applicant company also asked for exemption from court fees,
submitting that it had been involved in several court disputes in
order to claim debts for medical services.
- On
12 March 2002 the Wrocław Regional Court partly allowed the
claim and exempted the company from court fees in excess of PLN
50,000 (EUR 12,000). The court examined the profit generated by the
company and found that the assets deposited in its bank account
amounted to PLN 50,000. Moreover, in December 2001 the president
of the board had received PLN 43,000 as payment for an unknown
service. The court thus concluded that the company had been able to
pay this amount of court fees without damaging its operation.
- On
27 September 2002 the Wrocław Regional Court dismissed the
action. The court agreed with the arguments of the defendant, who had
refused liability for costs in excess of the amounts agreed in the
contracts between the Fund and the hospitals. The court established
that the contracts had not been renegotiated and had remained valid,
which excluded the Fund's liability for expenses sustained by the
hospitals that exceeded the contracts.
- The
applicant company lodged an appeal against the judgment.
- On
4 November 2002 the Wrocław Regional Court ordered the applicant
company to pay a further PLN 50,000 in court fees for pursuing its
appeal. On 8 November 2002 the applicant company applied for
an exemption from those fees, claiming that the company had
already been exempted from fees and should not be ordered to pay any
more at the appeal stage. In its supplementary documents the
applicant company submitted that the company did not have the
required sum of money in its bank account and that previously it had
had to borrow from a private individual. The company was small and
new on the market, thus it would not be able to obtain a bank
loan. In sum it had not been possible for it to pay a further
PLN 50,000 and the refusal to exempt it from court fees would
amount to a violation of its right to court.
- On
26 November 2002 the Wrocław Regional Court dismissed the
application for exemption from the court fees. The court established
that the monthly turnover of the company had reached PLN 30,000 (EUR
7,500) although in its bank account it only had PLN 3,000. The court,
in one point of its reasoned decision, found that the company had
generated over PLN 230,000 gross income (przychód),
but it had then taken this amount to be net profit (dochód).
The court also acknowledged that the applicant company had declared
costs and expenses in the amount of about PLN 500,000, and thus
generated a net loss. In sum, the court concluded that the company
must have had other sources of revenue which would make it possible
to pay the court fees.
- The
applicant company appealed against the decision, pointing to the
difference between gross and net income. The applicant company
maintained that it had been generating no profits but high net
losses. The sum of PLN 230,000 was gross income, from which costs and
expenses should be subtracted to yield the net loss. It had been a
mistake on the part of the court to take this sum to be the net
profit.
- On
19 December 2002 the Wrocław Court of Appeal (Sąd
Apelacyjny) dismissed the applicant company's appeal. The court
considered that the applicant company had been conducting its
business activity and producing gross income. The fact that the
company declared high costs for its activity had not justified
exemption from court fees as it had freedom to spend its gross income
as it chose. The court fees should be considered as one of the
costs of its business activity.
- On
30 April 2003 the Wrocław Regional Court rejected an appeal
by the applicant company on grounds of inability to pay the
court fees. An appeal by the applicant company against this
decision was dismissed on 30 May 2003.
- On
16 April 2003 the applicant company lodged a constitutional complaint
against the provisions governing the imposition of court fees and
exemptions from them.
- On
3 September 2003 the Constitutional Court refused to hear the
constitutional complaint.
- On
4 February 2004 the Constitutional Court dismissed an appeal by the
applicant company against the above decision.
- The
applicant company made another unsuccessful attempt to challenge
the constitutionality of the provisions governing court fees.
However, on 5 May 2004, the Constitutional Court, in a final
decision, refused to hear the second constitutional complaint.
B. The second set of civil proceedings
- On
20 December 2002 the Olsztyn Regional Court dismissed a civil claim
for payment lodged by the applicant company against the National
Health Fund (Narodowy Fundusz Zdrowia). The applicant company
lodged an appeal.
- On
30 June 2003 the Bialystok Court of Appeal dismissed the applicant
company's appeal.
- On
14 January 2004 the Supreme Court dismissed a cassation appeal lodged
by the applicant company.
II. RELEVANT DOMESTIC LAW
- The
legal provisions applicable at the material time and questions of
practice are set out in paragraphs 23-33 of the judgment delivered by
the Court on 19 June 2001 in the case of Kreuz v. Poland (no.
28249/95, ECHR 2001-VI; see also Jedamski and Jedamska v.
Poland, no. 73547/01, §§ 29 39).
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE
CONVENTION
- The
applicant company complained under Article 6 § 1 that the
excessive amount of court fees required from it in order to proceed
with the appeal against the Regional Court's judgment had been in
breach of the right of access to a court for the determination of its
civil rights. The relevant part of Article 6 § 1 provides:
“In the determination of his civil rights and
obligations ..., everyone is entitled to a ... hearing ... by [a] ...
tribunal established by law. ...”
- The
Government contested that argument.
A. Admissibility
- The
Court notes that this complaint is not manifestly ill-founded within
the meaning of Article 35 § 3 of the Convention. It further
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
1. The parties' submissions
- The
applicant company maintained that the sum required from it for
proceeding with its appeal had been excessively high and
disproportionate to its means. Even after partial exemption, it had
been impossible to pay the fees since the company had declared losses
which exceeded its gross income. Moreover, the applicant company
argued that after partial exemption from court fees at the time of
bringing the claim, it could reasonably expect that no further fees
would be required at the following stages of the proceedings.
- The
applicant company also submitted that the domestic courts had
confused gross with net income and incorrectly assessed the company's
financial situation. It concluded that its right of access to a court
had been breached.
- The
Government considered that, since the applicant was a limited
liability company engaged in a commercial activity, the amount of
court fees it had been ordered to pay had not been disproportionate.
The applicant company had, to a large extent, been exempted from
court fees and finally was ordered to pay 0.055% of the value of the
claim and not 5% as would usually be the case. In their opinion, the
requested sum of PLN 50,000 had not been excessive since the
applicant company had been earning gross income and was free to
decide how to spend it.
- Moreover,
the business model of the applicant company consisted of buying
contentious debts with the purpose of instituting civil proceedings.
When bringing a civil action for PLN 89,000,000 it should have been
prepared to pay court fees and consider them as an element of the
applicant company's activity costs.
- The Government concluded that the domestic courts had
maintained a proper balance between the interest of the State in
collecting court fees for dealing with civil claims and, on the other
hand, the interest of the applicant company in pursuing its claim.
Moreover, it could not be said that the applicant company had been
totally deprived of a right of access to a court as its claim had
been examined at first instance. Finally, they argued that the
applicant company had failed to substantiate its application for
exemption from court fees.
- In sum, the Government invited the Court to find that
there had been no violation of Article 6 of the Convention.
2. The Court's assessment
(a) Principles deriving from the Court's
case-law
- The
Court observes that in its judgment in Kreuz v. Poland
(cited above, § 60) it dealt with the question whether
the requirement to pay substantial fees to civil courts in connection
with claims could be regarded as a restriction on the right of access
to a court.
- In
this connection the Court held that the amount of the fees assessed
in the light of the particular circumstances of a given case,
including the applicant's ability to pay them, and the stage of the
proceedings at which that restriction had been imposed were factors
which were material in determining whether or not a person had
enjoyed his right of access and had “a ... hearing by [a]
tribunal”.
(b) Application of the above principles to
the present case
- The
Court will now determine whether, in the particular circumstances of
the present case, the fee actually required constituted a restriction
that impaired the very essence of the applicant's right of access to
a court.
- The
Court firstly notes that the instant case concerned an action brought
by the applicant company against the National Sickness Fund over
alleged debts owed by the Fund which the applicant company had bought
from four hospitals. The business model of the applicant company
consisted of buying contested debts from hospitals on condition that
the debts were recognised as enforceable by a civil court.
Instituting civil proceedings was thus an inherent element of the
applicant company's commercial activity and its financial success
depended on their outcome. These debts were contested by the Fund and
the applicant company was apparently unsuccessful in effectively
enforcing this type of debt before the Polish courts. The present
case thus differs from the cases previously examined by the
Court where a company sustained losses resulting from a breach
of contract and had been obliged to seize a civil court to
enforce payment from another business entity (compare and contrast
Podbielski and PPU Polpure v. Poland, no. 39199/98, § 11,
26 July 2005, and Teltronic-CATV v. Poland, no. 48140/99,
§ 7, 10 January 2006).
- The Court reiterates that a claim submitted to a
tribunal for determination must be presumed to be genuine and serious
unless there are clear indications to the contrary which might
warrant the conclusion that the claim is frivolous or vexatious or
otherwise lacking in foundation (see Rolf Gustafson
v. Sweden, judgment of 1 July 1997,
Reports of Judgments and
Decisions 1997-IV, § 38).
Assuming that the dispute in the present case was
“genuine and serious” within the meaning of the Court's
case-law (see Kupiec v. Poland, no 16828/02, § 47,
3 February 2009), the Court finds that when entering into
risky litigation over contested debts amounting to almost PLN
90,000,000 the applicant company must have been aware of the
obligation to pay court fees. According to the general rule, the
amount of court fees for bringing a civil action and further appeals
is set at 5% of the value of the claim. The applicant company
obtained a substantial reduction of court fees as the amount it was
finally ordered to pay amounted to 0.055% of the value of the claim.
Nevertheless, it appears that the applicant company rather
unrealistically expected a full exemption from court fees.
- The
Court also observes that the applicant company paid the reduced
amount of court fees of PLN 50,000 for bringing the civil claim
in March 2002 (see paragraph 8 above). In November 2002, at
the appellate level, the applicant company was also partly exempted
from court fees above PLN 50,000 (see paragraph 11 above). In
this connection the Court firstly notes that there is no evidence
that the applicant company substantiated its assertion that its
financial situation had changed between March and November 2002 so
that it was no longer possible for it to pay the same amount of court
fees. Secondly, it should be noted that according to the
documents submitted by the applicant company to the court, it was
generating gross income and had a monthly turnover of PLN 30,000. The
domestic courts, in two reasoned decisions, considered that the
applicant company was free to manage its gross income and although it
had declared losses which had exceeded its gross income, the court
fees should have been considered as part of the activity costs of the
applicant company. Consequently, the courts found that it had not
been established that the applicant company would be unable to pay
the reduced fees. The Court sees no reason to contest the domestic
authorities' assessment of the applicant company's financial standing
and considers that the alleged confusion of net profit with gross
income by the court on 26 November 2002 appears to be a clerical
mistake and was not repeated by the appellate court.
- In the circumstances, regard being had to the risky
nature of the claim and to the fact that the domestic courts had
exempted the applicant company from the greater part of the
applicable court fees, the Court considers that the amount of fees
required from the applicant company in the present case cannot
be considered disproportionate.
- The
Court concludes that there has been no violation of Article 6
§ 1 of the Convention.
II. OTHER ALLEGED VIOLATIONS OF THE CONVENTION
- The
applicant further complained that the second set of civil
proceedings, which ended with the Supreme Court's judgment
of 14 January 2004, had been unfair. Moreover, in its
pleadings of 6 March 2009 it submitted that the facts
of the case disclosed a breach of Article 1 of Protocol No. 1 to
the Convention.
- The
Government contested these arguments.
- The
Court does not find that the applicant company has substantiated
in any way its contention that there had been an interference
with the peaceful enjoyment of its possessions within the meaning of
Article 1 of Protocol No. 1 to the Convention.
- Moreover,
the Court reiterates that, according to Article 19 of the Convention,
its duty is to ensure the observance of the engagements undertaken by
the Contracting Parties to the Convention. In particular, it is not
its function to deal with errors of fact or law allegedly committed
by a national court unless and in so far as they may have
infringed rights and freedoms protected by the Convention. While
Article 6 of the Convention guarantees the right to a fair hearing,
it does not lay down any rules on the admissibility of evidence or
the way it should be assessed, which are therefore primarily matters
for regulation by national law and the national courts (see García
Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I,
with further references).
- In
the present case the applicant company did not allege any particular
failure on the part of the relevant courts to respect its right to a
fair hearing. Indeed, the complaint is limited to challenging the
outcome of the proceedings. The Court finds no indication that the
impugned proceedings were conducted unfairly.
- It
follows that this part of the application is manifestly ill-founded
and must be rejected in accordance with Article 35 §§ 3
and 4 of the Convention.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint concerning lack of access
to a court admissible and the remainder of the application
inadmissible;
- Holds that there has been no violation
of Article 6 § 1 of the Convention as regards lack of
access to a court.
Done in English, and notified in writing on 19 January 2010, pursuant
to Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza
Registrar President
