CASE OF VALENTIN v. DENMARK
(Application no. 26461/06)
26 March 2009
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 Valentin v. Denmark,
The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:
Mirjana Lazarova Trajkovska, judges,
and Stephen Phillips, Deputy Section Registrar,
Having deliberated in private on 22 January 2008 and on 3 March 2009,
Delivers the following judgment, which was adopted on the last mentioned date:
I. THE CIRCUMSTANCES OF THE CASE
6. The applicant was born in 1944 and lives in Copenhagen.
II. RELEVANT DOMESTIC LAW AND PRACTICE
45. The Bankruptcy Act
The Bankruptcy Act (Konkursloven), Consolidation Act no. 588 of 1 September 1986, which comprised the rules relevant to the administration of the applicant's bankruptcy estate, stated in as far as relevant:
Upon the pronouncement of the bankruptcy order, the debtor is deprived of his right to assign or to abandon his property, to accept payments and other services rendered, to accept terminations, complaints and similar declarations, to incur debts or to deal in any other way with his property with any effect as regards the estate.
(1) Where the debtor is unable to provide for his own and his family's needs by his own work, the estate may award maintenance to the debtor or to his dependents.
(2) The estate may grant the debtor a right of use to real property or chattels.
(3) Where specific grounds so justify, the Bankruptcy Court may reject the election of a trustee or remove him later. ...
Where the trustee or meeting of creditors acts to the detriment of the estate, or where rights vested in mortgagees, the debtor or other parties are infringed upon, the Bankruptcy Court may set aside the decisions made, give directions to the trustee, and take any other requisite steps.
(1) Where the debtor obtains a compulsory composition, cf. section 196, and where the creditors of the bankruptcy estate who, under section 158(2), are not comprised by the composition have been satisfied or adequately secured, or where the debtor, after the expiry of the period allowed for proof of claims, produces a consent from all creditors or proof of their having been satisfied, the bankruptcy proceedings must be finalised promptly, and the assets of the estate must be handed over to the debtor, subject to deduction of any costs inclined in connection with the bankruptcy proceedings.
(2) Where the debtor, after the bankruptcy proceedings have been completed, substantiates that the creditors have been satisfied or have waived their claims, the Bankruptcy Court shall issue a certificate to such effect to him.
On the basis of a recommendation from the trustee, the bankruptcy court may decide that the preparation of the final accounts, and distribution, if any, of an amount not yet collected, of any amount set aside pursuant to section 147(2), or of any other specifically limited parts of the estate, will be deferred to the period after finalisation of the bankruptcy proceedings.
Section 127(a) of the Bankruptcy Act (Consolidation Act no. 1259 of 23 October 2007), now in force, reads as follows:
The debtor or a creditor may demand that the Bankruptcy Court make use of its authorities set out in section 16, subsection 2, and that it fix a hearing pursuant to section 143 or 150 [with a view to finalising the estate], if such proves necessary due to the requirement in Article 6 of the Convention concerning a fair trial within a reasonable time.
46. Partnerships (I/S)
A partnership is an association formed by several natural or legal persons for the purpose of promoting the partners' (members') financial interests through business activities.
A partnership is a form of business enterprise in which all members are liable personally, without limitation and jointly and severally for the obligations of the enterprise (see section 2(1) of Consolidation Act no. 651 of 15 June 2006 on certain business enterprises). This implies that the members are liable with their entire personal property, that the individual member is liable for the entire debt, and that the creditors of the partnership have a direct claim against the individual member without first having to raise a claim against the partnership.
The partnership and its members are liable to the creditors of the partnership. Under applicable Danish law, it is therefore a prerequisite for administration of the bankruptcy estate of a partnership that all partners are subject to bankruptcy proceedings. A co-partner's bankruptcy estate is thus of importance to the closing of the other co-partners' bankruptcy estates. By contrast, the partnership is not liable to the partners' personal creditors. Hence, personal creditors cannot seek satisfaction from partnership assets, but only in the surplus distributed to the partners.
There are few rules of law regulating partnerships. In the absence of a rule of law regulating the matter, the legal position depends on an interpretation of the partnership agreement and on what may be inferred from non-mandatory rules.
If a member of a partnership is declared bankrupt, section 61 of the Bankruptcy Act applies. This provision enables the estate to release the relevant partner's share of the net assets of the partnership with a suitable notice so that all his assets are applied to satisfy his creditors.
I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION
“In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal...”
Period to be taken into consideration
Reasonableness of the length of the proceedings
The Parties' submissions
The Court's assessment
II. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
“The Court notes that, following the bankruptcy order, the applicant was deprived not of his property, but of the right to administer and deal with his possessions, as the responsibility for administering them was assigned to the trustee in bankruptcy. The interference with his right to the peaceful enjoyment of his possessions thus took the form of a control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1. ... Consequently, the Court finds that there was no justification for restricting the applicant's right to the peaceful enjoyment of his possessions for the full duration of the proceedings since, while in principle it will be necessary to deprive the bankrupt of the right to administer and deal with his or her possessions in order to achieve the aim pursued, the necessity will diminish with the passage of time. In the Court's view, the length of the proceedings [fourteen years and eight months] thus upset the balance that had to be struck between the general interest in securing the payment of the bankrupt's creditors and the applicant's personal interest in securing the peaceful enjoyment of his possessions. The interference with the applicant's right was accordingly disproportionate to the aim pursued.”
IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION
“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. Pecuniary damage
B. Non-pecuniary damage
C. Costs and expenses before the Court
D. Default interest
FOR THESE REASONS, THE COURT UNANIMOUSLY
(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 16,000 (sixteen thousand euros) in respect of non-pecuniary damage to be converted into the national currency of the respondent State at the rate applicable at the date of settlement, 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 amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
Done in English, and notified in writing on 26 March 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Stephen Phillips Rait Maruste
Deputy Registrar President
1 On 17 December 2006, when the claim was lodged