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Cite as: [2007] ECHR 430

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FOURTH SECTION

CASE OF RIIHIKALLIO AND OTHERS v. FINLAND

(Application no. 25072/02)

JUDGMENT

STRASBOURG

31 May 2007

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 Riihikallio and Others v. Finland,

The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:

Sir Nicolas Bratza, President,
Mr J. Casadevall,
Mr G. Bonello,
Mr K. Traja,
Mr S. Pavlovschi,
Mr J. Šikuta,
Mrs P. Hirvelä, judges,
and Mr T.L. Early, Section Registrar,

Having deliberated in private on 10 May 2007,

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

PROCEDURE

The case originated in an application (no. 25072/02) against the Republic of Finland lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by three Finnish nationals, Mr Reino Kaarlo Antero Riihikallio, Mr Klaus Antero Ketola and Mr Olavi Johannes Niemikoski (“the applicants”), on 27 June 2002.

The applicants were represented by Mr P. Impola, a lawyer practising in Helsinki. The Finnish Government (“the Government”) were represented by their Agent, Mr Arto Kosonen of the Ministry for Foreign Affairs.

On 18 October 2005 the Court declared the application partly inadmissible and decided to communicate the complaint concerning the length of the proceedings to the Government. Applying Article 29 § 3 of the Convention, it decided to rule on the admissibility and merits of the application at the same time.

THE FACTS

THE CIRCUMSTANCES OF THE CASE

The applicants were born in 1949, 1939 and 1936 respectively and live in Tuusula (Finland), Mijas Costa (Spain) and Nukari (Finland).

A. The Tuusula District Court

On 31 December 1993 and 18 November 1994 the Finnish Savings Bank – SSP Oy (which later became the Property Management Corporation Arsenal (Omaisuudenhoitoyhtiö Arsenal – SSP Oy, Egendomsförvaltningsbolaget Arsenal – SSP Ab; hereinafter “Arsenal”) instituted civil proceedings against 16 defendants, including the applicants.

It sought damages amounting to some 275 million Finnish marks (FIM; equivalent to 46.25 million euros (EUR)) plus 16 per cent interest fom 1 December 1994 for allegedly granting credit negligently in 1989-1991 and for subsequent credit losses allegedly caused by the 16 defendants in their capacity as members of the Board, managing director or other delegates in the management of the Savings Bank of Keski-Uusimaa (which in 1992 merged into the Finnish Savings Bank – SSP Oy, later replaced by Arsenal). The first applicant, Mr Riihikallio, was the Chairman of the Board; the second applicant, Mr Ketola, was the Managing Director; and the third applicant, Mr Niemikoski, was a member of the Board.

The first summons was served on the applicants on 7 January 1994. At the request of several defendants, the District Court extended the time-limit for responding to the claims until 30 September 1994 and, additional claims having been lodged with it in November 1994, again until the end of January 1995. All three applicants denied the claims, maintaining that the amounts of damage allegedly caused had not been sufficiently proved. They demanded that the amounts at least be adjusted to make them reasonable. The court requested the plaintiff’s observations to be filed by 31 March 1995 and, following two extensions, received them on 19 June 1995. They ran to 500 pages and included 12 folders of further evidence. The defendants’ observations in reply were requested by 15 November 1995 and, following an extension, were received on 25 January 1996. On 6 July 1994 and 7 August 1995 the plaintiff requested the seizure of the applicants’ assets.

From 6 October to 16 October 1995, the District Court held a hearing concerning a claim made by the defendants challenging the plaintiff’s right to lodge its claims, and on the seizure of their assets. On 16 October 1995, the District Court gave judgment on these issues.

From 26 February to 4 June 1996 the District Court held preparatory oral hearings. At the parties’ request, the case was adjourned. From 19 August to 23 September or October 1996 additional preparatory hearings were held. During this period there were more than 40 days of hearings.

From 11 November 1996 to 25 or 30 September 1997, the District Court examined the merits, holding over 120 days of hearings. The parties were informed that judgment would be delivered on 30 January 1998. The delivery was subsequently postponed until 31 March 1998 and again until 15 May 1998.

On 15 May 1998, the District Court gave judgment (running to 1,278 pages). It ordered the second applicant to pay damages of FIM 20 million. The first applicant, together with defendant X, was ordered to share this liability up to FIM 3.5 million. The third applicant, together with defendant Y, was ordered to share the liability up to FIM 2.8 million. Interest would run at 16 per cent from 1 December 1994. All applicants were ordered to pay substantial legal costs to the plaintiff.

B. The Helsinki Court of Appeal

All applicants appealed. The thirty-day time-limit for lodging the appeal was extended twice and on 1 February 1999 the appeals were lodged.

On 31 May 1999 the court refused the second applicant’s, among others’, request that the seizure be revoked.

The court held preparatory oral hearings from 14 to 18 January 2000.

On 16 February 2000, the Court of Appeal held a main hearing concerning the District Court’s judgment on the plaintiff’s right to lodge the claim and the seizures. On the former point, the District’s Court’s judgment was upheld. The seizures were also maintained in force.

From 29 February to 4 May 2000, the court held the main hearing on the merits.

On 25 January 2001, the court gave judgment (running to 247 pages). The second applicant and another person were ordered to pay damages jointly in the amount of FIM 22 million. The first applicant was ordered to share this liability up to FIM 2 million. The third applicant, together with a number of other defendants, was ordered to share this liability up to FIM 1.5 million. They were ordered to pay 16 per cent interest from 1 December 1994.

C. The Supreme Court

On 26 March 2001 the applicants requested leave to appeal, which was refused on 28 December 2001.

THE LAW

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

The applicants 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 his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...”

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

The period to be taken into consideration began on 7 January 1994 when the summonses in respect of the initial claims were served and ended on 28 December 2001. It thus lasted almost eight years for three 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 applicants and the relevant authorities and what was at stake for the applicants in the dispute (see, among many other authorities, Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII).

The Government argued that the case had been complex, the case-file voluminous and the financial interests involved significant. The applicants’ requests for extensions of the time-limits and the lodging by the plaintiff of two separate sets of claims had contributed to the length of the proceedings. The schedule for the proceedings had been drawn up in agreement with the parties. At the material time, the Finnish courts had faced an exceptionally heavy and rapidly growing case load. The proceedings had coincided with the reform of the Code of Judicial Procedure, which had necessarily delayed the examination of the case. There had been no period of unnecessary inactivity attributable to the courts or other authorities.

The applicants took the view that the State of Finland as owner of the plaintiff corporation had had indirect control over the case and had therefore been responsible for the running of the proceedings. The facts of the case had not been challenging. The legal points had been similar in respect of all claims and the applicable legislation had been clear. While it was true that the case file had been extensive, that fact should not be used to deny a party’s right to have his case processed within a reasonable time. It was for the Government to provide the necessary resources for managing trials within a reasonable time. This was particularly important in cases involving substantial financial interests.

The Court has frequently found violations of Article 6 § 1 of the Convention in cases raising issues similar to the one in the present case (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 argument capable of persuading it to reach a different conclusion in the present case. Having regard to its case-law on the subject, the Court considers that in the instant case 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. 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

In respect of pecuniary damage the first and the second applicant claimed EUR 26,112.25 and EUR 11,273.98 respectively which was half the penalty interest on the compensation they had been ordered to pay. They considered that the delay in the proceedings had increased the interest. The third applicant also claimed EUR 50,000 as compensation for financial loss suffered; the long duration of the seizure of his real property had prevented him from handing over to his son the property to continue to be used for farming purposes.

In respect of non-pecuniary damage all three applicants claimed EUR 30,000 each for suffering and distress. The first and the second applicants’ health had deteriorated as a result of the long period of uncertainty.

They claimed interest from 4 April 2002 on the above amounts.

The Government contested the claims for pecuniary damage. They considered the claims for non-pecuniary damage excessive; any award should not exceed EUR 1,000 per applicant.

The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim. On the other hand, it awards the applicants EUR 4,000 each in respect of non-pecuniary damage.

B. Costs and expenses

The first and the third applicant claimed EUR 35,908.12 and 22,113.65 respectively which was half the costs and expenses incurred before the domestic courts. They considered that the delay in the proceedings had increased their costs.

All three applicants claimed EUR 4,423.16, EUR 4,139.91 and EUR 4,679.36 respectively for the costs and expenses incurred before the Court.

They claimed interest from 4 April 2002 on the above amounts.

The Government contested these claims insofar as they concerned the domestic proceedings. As to the Strasbourg proceedings, any award should not exceed EUR 1,000 (net of value-added tax) for each applicant.

The Court reiterates that an award under this head may be made only in so far as the costs and expenses were actually and necessarily incurred in order to avoid, or obtain redress for, the violation found (see, among other authorities, Hertel v. Switzerland, judgment of 25 August 1998, Reports 1998-VI, p. 2334, § 63).

In the present case, regard being had to the information in its possession and the above criteria, the Court rejects the claim for costs and expenses in the domestic proceedings. As to the Strasbourg proceedings, the Court notes that the application was examined under the joint procedure provided for under Article 29 § 3 of the Convention and that the costs and expenses before it have not been fully substantiated (Rule 60 of the Rules of Court). It however considers it reasonable to award the applicants jointly the sum of EUR 4,000 (inclusive of value-added tax) for the proceedings before the Court.

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

Declares the remainder of the application admissible;

Holds that there has been a violation of Article 6 § 1 of the Convention;

Holds

(a) that the respondent State is to pay, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 4,000 (four thousand euros) to each applicant in respect of non-pecuniary damage and EUR 4,000 (four thousand euros) to the applicants jointly in respect of costs and expenses, plus any tax that may be chargeable;

(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts 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 applicants’ claims for just satisfaction.

Done in English, and notified in writing on 31 May 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

T.L. Early Nicolas Bratza
Registrar President