European Court of Human Rights

SECOND SECTION

CASE OF JELČIĆ STEPINAC v. CROATIA

(Application no. 16087/18)

JUDGMENT
 

STRASBOURG

26 September 2023

This judgment is final but it may be subject to editorial revision.

In the case of Jelčić Stepinac v. Croatia,

The European Court of Human Rights (Second Section), sitting as a Committee composed of:

 Jovan Ilievski, President,
 Lorraine Schembri Orland,
 Diana Sârcu, judges,
and Dorothee von Arnim, Deputy Section Registrar,

Having regard to:

the application (no. 16087/18) against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention") on 3 April 2018 by a Croatian national, Ms Vera Jelčić Stepinac, born in 1943 and living in Zagreb ("the applicant"), who was represented by Mr D. Rubes, a lawyer practising in Zagreb;

the decision to give notice of the application to the Croatian Government ("the Government"), represented by their Agent, Ms Š. Stažnik;

the parties' observations;

Having deliberated in private on 5 September 2023,

Delivers the following judgment, which was adopted on that date:

SUBJECT MATTER OF THE CASE

1.  The case concerns the alleged failure of the domestic civil courts to observe the res judicata principle.

2.  In particular, the applicant instituted several sets of civil proceedings against an insurance company in which she sought various forms of compensation for a disability resulting from injuries sustained in 1992 in a road traffic accident.

1. The first AND SECOND set of proceedings

3.  In one of those proceedings (hereafter "the first set of proceedings") by a judgment of 28 February 1994 the applicant was awarded 70,000 Croatian kunas (HRK), that is, some 9,290 euros (EUR), on account of non-pecuniary damage for mental anguish caused by loss of amenities of life. That judgment became final and binding on 20 September 1994.

4.  Subsequently, in another set of such proceedings (hereafter "the second set of proceedings"), by a judgment of 12 December 2001 the Zagreb Municipal Court awarded the applicant a compensation for non-pecuniary damage in the form of a monthly annuity. The operative part of the judgment indicated that the annuity was to be paid in perpetuity. In the statement of reasons, the court indicated that this meant until the end of the applicant's life. On 12 November 2002 the Zagreb County Court dismissed an appeal by the insurance company and upheld the Municipal Court's judgment which thereby became final and binding, that is, acquired the force of res judicata under domestic law.

2. The third set of proceedings

5.  On 1 December 2003, due to a change in her personal circumstances, the applicant brought a new civil action seeking to increase the amount of the annuity she had been awarded. In those proceedings (hereafter "the third set of proceedings") the insurance company on 4 February 2005 lodged a counterclaim asking that the payment of the annuity be discontinued. It argued that the insurance sum from the applicant's insurance policy - which had been limited to HRK 10,000 (that is, some EUR 1,327) - had been exhausted.

6.  By a judgment of 12 June 2015, the Zagreb Municipal Civil Court ruled in favour of the insurance company and discontinued the applicant's right to the annuity from 4 February 2005, the date of lodging of the counterclaim. It held that the insurance sum had been exhausted already by the award of HRK 70,000 in the first set of proceedings (see paragraph 3 above).

7.  The applicant appealed, arguing that the judgment was contrary to the one adopted in the second set of proceedings and that it was thus in breach of the principles of res judicata and legal certainty. On 17 November 2015 the Zagreb County Court dismissed the applicant's appeal and upheld the first-instance judgment which thereby became final and binding. The County Court held that the applicant had erroneously believed that the operative part of the judgment of 12 December 2001 (see paragraph 4 above) meant that she would be receiving the annuity for life.

8.  The applicant then lodged an appeal on points of law against the lower courts' judgments. On 11 May 2016 the Supreme Court declared that appeal inadmissible ratione valoris in so far as the contested judgments concerned the counterclaim. It however quashed those judgments and remitted the case to the extent that they concerned the dismissal of the applicant's claim for the increase of the annuity in the period between 1 December 2003 and 4 February 2005. It held that from the judgments adopted in the first and the second set of proceedings it was not clear whether they were based on the applicant's own insurance policy or on the insurance policy of the driver who had caused the traffic accident, and that the courts in the third set of proceedings had not clarified that issue.

9.  On 4 October 2017 the Constitutional Court dismissed the applicant's subsequent constitutional complaint, and on 11 October 2017 notified her representative of its decision.

10.  Before the Court the applicant complained, under Article 6 of the Convention and Article 1 of Protocol No. 1 thereto, that the domestic courts' decisions in the third set of proceedings had been in breach of the principles of res judicata and legal certainty.

THE COURT'S ASSESSMENT

1. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION
   1. Admissibility

11.  The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

2. Merits
   1. General principles

12.  The Court reiterates that the right to a fair hearing under Article 6 § 1 of the Convention, interpreted in the light of the principles of rule of law and legal certainty, encompasses the requirement that where the courts have determined an issue with final effect, their ruling should not be called into question (see Guðmundur Andri Ástráðsson v. Iceland [GC], no. 26374/18, § 238, 1 December 2020; and Brumărescu v. Romania [GC], no. 28342/95, § 61, ECHR 1999-VII). This presupposes, in general, respect for the principle of res judicata (see Guðmundur Andri Ástráðsson, ibid.).

13.  By virtue of this principle, no party is entitled to seek a review of a final and binding judgment merely for the purpose of obtaining a rehearing and a fresh determination of the case. The review should not become an appeal in disguise. The principle of legal certainty dictates that where a civil dispute is examined on the merits by the courts, it should be decided once and for all, and a departure from that principle is justified only when made necessary by circumstances of a substantial and compelling character, such as the correction of fundamental defects or a miscarriage of justice (see, for example, Gražulevičiūtė v. Lithuania, no. 53176/17, §§ 73, 80 and 82, 14 December 2021).

14.  These principles apply not only in cases where a final judgment is quashed but also where it is deprived of legal effect on account of a decision given in separate proceedings (see, for example, Gražulevičiūtė, cited above, § 79; Şamat v. Turkey, no. 29115/07, §§ 59 et seq., 21 January 2020; and Krivtsova v. Russia, no. 35802/16, § 38, 12 July 2022). The principle of legal certainty also implies that a party relying on the assessment made by a court in a previous case on an issue also arising in the case at hand may legitimately expect the court to follow its previous ruling, unless there is a valid reason for departing from it (see, for example, Siegle v. Romania, no. 23456/04, §§ 38-39, 16 April 2013; and Rozalia Avram v. Romania, no. 19037/07, §§ 42-43, 16 September 2014).

2. Application of the above principles to the present case

15.  The Court first notes that the domestic courts in the third set of proceedings granted the insurance company's counterclaim and discontinued the annuity awarded to the applicant by the final judgment of 12 December 2001 (see paragraph 4 above) because they established that the insurance sum from her insurance policy had been exhausted.

16.  Pursuant to section 196(1) of the 1978 Obligations Act, applicable at the material time, an awarded annuity could be increased at the request of the injured party or reduced or discontinued at the request of the other party in the event the circumstances on which the court had based its earlier decision had changed substantially. This means that the judgment of 12 December 2001 could be altered under those provisions only if such circumstances occurred after its adoption.

17.  Therefore, the crucial issue in the present case is whether the insurance sum was exhausted before or after the adoption of that judgment.

18.  The courts in the third set of proceedings held that the insurance sum had been exhausted already by the award in the first set of civil proceedings which ended on 20 September 1994 (see paragraphs 3 and 6 above).

19.  For the Court this means that the insurance company could and, hence, should have raised its objection concerning the exhausted insurance sum during the second set of proceedings in which the judgment of 12 December 2001 was adopted. Against this background, it cannot but be concluded that the insurance company's counterclaim lodged in the third set of proceedings was, in fact, an appeal in disguise.

20.  By granting that counterclaim, the domestic courts in the third set of proceedings provided the insurance company with a "second chance" for obtaining an examination of the dispute already determined by way of a final judgment and rendered the judgment of 12 December 2001, which had determined the issue of the annuity owed to the applicant differently, devoid of any legal effect (see Brletić v. Croatia, no. 42009/10, §§ 48-49, 16 January 2014). Those courts thereby breached the principle of res judiciata and, consequently, the principle of legal certainty.

21.  There has accordingly been a violation of Article 6 § 1 of the Convention in the present case.

2. OTHER COMPLAINTS

22.  The applicant raised the same complaint as the one examined above under Article 1 of Protocol No. 1 to the Convention. Having regard to the facts of the case, the submissions of the parties, and its findings above, the Court considers that it has dealt with the main legal questions raised by the case and that there is no need to examine this remaining complaint (see Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).

APPLICATION OF ARTICLE 41 OF THE CONVENTION

23.  The applicant claimed 24,440 euros (EUR) in respect of pecuniary damage, EUR 5,000 in respect of non-pecuniary damage and EUR 10,000 in respect of costs and expenses incurred before the domestic courts.

24.  The Government contested these claims.

25.  The Court notes that under domestic law the applicant may request reopening of the third set of the civil proceedings in respect of which the Court has found a violation of Article 6 § 1 of the Convention and considers that in the given circumstances this seems to be the most appropriate way for her to obtain full compensation for the pecuniary damage alleged. The Court therefore finds that there is no call to award the applicant any sum in respect of pecuniary damage.

26.  On the other hand, the Court awards the applicant 5,000 EUR in respect of non-pecuniary damage, that is, the sum sought, plus any tax that may be chargeable.

27.  As regards the claim for costs and expenses, the Court notes that it concerns only the costs and expenses incurred before the domestic courts (see paragraph 23 above). That claim must be rejected given that the applicant will be able to have those costs and expenses reimbursed should the third set of civil proceedings be reopened (see, for example, Stojanović v. Croatia, no. 23160/09, § 84, 19 September 2013).

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares the complaint concerning the breach of the principle of legal certainty under Article 6 § 1 of the Convention admissible;
2. Holds that there has been a violation of Article 6 § 1 of the Convention;
3. Holds that there is no need to examine the admissibility and merits of the complaint under Article 1 of Protocol No. 1 to the Convention;
4. Holds

(a)  that the respondent State is to pay the applicant, within three months, EUR 5,000 (five thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(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;

5. Dismisses the remainder of the applicant's claim for just satisfaction.

Done in English, and notified in writing on 26 September 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Dorothee von Arnim Jovan Ilievski
 Deputy Registrar President