AS TO THE ADMISSIBILITY OF
by Microintelect OOD and Others
The European Court of Human Rights (Fifth Section), sitting on 26 May 2009 as a Chamber composed of:
Peer Lorenzen, President,
Mirjana Lazarova Trajkovska,
Zdravka Kalaydjieva, judges,
and Claudia Westerdiek, Section Registrar,
Having regard to the above application lodged on 20 October 2003,
Having deliberated, decides as follows:
The first applicant, Microintelect OOD, is a limited liability company incorporated and with a registered office in Sofia, Bulgaria. The second applicant, Mr Todor Kyuchukov, a Bulgarian national born in 1955 and living in Sofia, is one of its members and its manager. The third applicant, Ms Vanya Georgieva Peneva, is a Bulgarian national born in 1968 and living in Dobrich. The applicants are represented before the Court by Ms V. Krumova, a lawyer practising in Sofia.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
1. The proceedings relating to the billiards club
On 3 July 2002 the tax authorities carried out an on-site inspection at a billiards club operated jointly by the applicant company and a sole trader, Ms T.Z. They found that the sole trader was selling alcohol without the requisite licence. The next day, 4 July 2002, the authorities drew up a report accusing her of trading in excise goods without the requisite licence, contrary to section 17a(2) of the 1994 Excise Act (see Relevant domestic law, below), and impounded the alcohol which they found in the club. It seems that the applicant company was not notified of these events.
On 16 July 2002 the regional tax director rejected an objection made by the sole trader to the lawfulness of the impounding, observing that it was not subject to a separate appeal as it had merely been an ancillary measure to the opening of administrative-criminal proceedings and amounted to a measure intended to prevent any tampering with the evidence. Upon an appeal by the sole trader, in a decision of 25 October 2002, the Dobrich District Court upheld this decision, finding that the impounding was not subject to judicial review in proceedings separate from the penal order which would conclude the administrative criminal proceedings.
In the meantime, on 17 July 2002, the regional tax director issued a penal order against the sole trader. The penalties imposed were a fine and the forfeiture of the impounded alcohol. The applicant company was not served with a copy of the order.
The sole trader sought judicial review of the order. On 29 January 2003 the applicant company applied to intervene in the proceedings as a third party, arguing, inter alia, that it was the owner of the forfeited alcohol. The next day, 30 January 2003, the Dobrich District Court turned down its application. It also discontinued the judicial review proceedings, finding that the sole trader’s application was out of time.
A subsequent appeal by the applicant company against the discontinuation was rejected by the Dobrich District Court on 17 February 2003 on the ground that, not being a party to the proceedings, it did not have standing to appeal against their discontinuation. Upon an appeal by the applicant company, in a final decision of 22 April 2003 the Dobrich Regional Court upheld this decision, holding that it did not have standing to intervene in the proceedings, because it had not made an application earlier under section 59(2) of the 1969 Administrative Offences and Penalties Act on the ground that it was a victim of the administrative offence (see Relevant domestic law, below). Ensuing attempts by the applicant company to obtain the reopening of the proceedings were unsuccessful.
2. The proceedings relating to the electronic games club
On 3 July 2002 the tax authorities carried out an on-site inspection at an electronic games club operated jointly by the applicant company and a sole trader, Ms Vanya Georgieva Peneva (the third applicant). They found that the third applicant was selling alcohol without the requisite licence and on the next day, 4 July 2002, drew up a report accusing her of trading in excise goods without the requisite licence, contrary to section 17a(2) of the 1994 Excise Act (see Relevant domestic law, below). They impounded the alcohol which they found in the club. It seems that the applicant company was not notified of these events.
The third applicant sought judicial review of the impounding. In a decision of 23 October 2002 the Dobrich District Court rejected the application as inadmissible, holding that it was not subject to judicial review in proceedings separate from the penal order which would conclude the administrative criminal proceedings. The third applicant did not appeal against this decision.
In the meantime, on 19 August 2002 the regional tax director issued a penal order against the third applicant. The penalties imposed were a fine and the forfeiture of the impounded alcohol. The applicant company was not served with a copy of the order.
The third applicant sought judicial review of the penal order. She alleges that in the ensuing proceedings before the Dobrich District Court one of the hearings, held in the morning of 27 May 2003, was not properly recorded. According to the documents in the file, a hearing was due to be held at 2 p.m. that day, but in view of the fact that the summons sent to the respondent authority had mentioned erroneously that it would take place at 11 a.m., the court adjourned the case to a later date.
At a hearing held on 4 November 2003 the applicant company applied to intervene in the proceedings as a third party, arguing, inter alia, that it was the owner of the forfeited alcohol. However, the Dobrich District Court turned down its application, finding that it had not been party to the administrative-criminal proceedings.
In a judgment of 10 February 2004 the Dobrich District Court fully upheld the penal order. It found, inter alia, that the alcohol had been properly forfeited. The Dobrich Regional Court upheld this judgment in a final judgment of 7 June 2004.
3. The litigation concerning the coffee vending machine
In 2001 the applicant company sold a coffee vending machine to a sole trader, Ms N.K. As Ms N.K. failed to pay the purchase price in full, in 2003 the applicant company asked the Yambol District Court to attach her shares in two limited liability companies, in order to secure the enforcement of an impending civil action against her. The court refused and its refusal was upheld by the Yambol Regional Court in a final decision of 20 March 2003. However, in the meantime, acting pursuant to a separate application by the applicant company, the Sofia District Court attached Ms N.K.’s shares in the two companies. In May 2003 the applicant company tried to enforce the attachment by requesting the winding-up of one of the companies of which Ms N.K. was a member. The Yambol Regional Court, finding that the statement of claim had certain omissions, returned it to the applicant company with instructions to rectify it. An appeal by the company against this ruling was dismissed by the Burgas Court of Appeal and then by the Supreme Court of Cassation in a final decision of 5 November 2003.
In the meantime, in February 2003 the applicant company brought a civil action against Ms N.K., seeking the sale price of the coffee vending machine, liquidated damages and costs. After holding five hearings, in a judgment of 19 November 2003 the Yambol Regional Court partly allowed and partly dismissed the action. On appeal, on 15 November 2004 the Burgas Court of Appeal upheld the judgment. The applicant company appealed to the Supreme Court of Cassation. It has not provided any details as to these proceedings.
B. Relevant domestic law
1. Forfeiture in administrative criminal proceedings
When imposing a penalty for an administrative offence, the penalising administrative authority must, if the applicable statute so provides, also order the forfeiture of, inter alia, the goods which were the subject of the offence and which belong to the offender (section 20(3) of the 1969 Administrative Offences and Penalties Act). At the relevant time section 17a(10) of the 1994 Excise Act (now superseded by section 124(1) of the 2005 Excise and Tax Warehouses Act), read in conjunction with section 17a(2) of the same Act, provided that excise goods sold by a company or a sole trader without the requisite licence were subject to forfeiture. Unlike the provision which succeeded it, which expressly says that such goods are to be forfeited regardless of whom they belong to, it did not specify whether this was so only if the goods belonged to the offender or whether it included a situation where they belonged to third parties.
The 1969 Administrative Offences and Penalties Act does not make provision for third parties who claim to be the owners of forfeited goods to intervene in the proceedings against the offender.
2. Persons who have suffered damage as a result of an administrative offence
Before issuing a penal order in respect of an administrative offence, the penalising authority has to give notice of the proceedings to the persons, if any, who have suffered damage as a result of the offence (section 52(3) of the 1969 Administrative Offences and Penalties Act). They can then ask the authority to award them compensation, provided the claim does not exceed two levs (section 45(1) of the same Act). As a rule, compensation has to be awarded simultaneously with the issuing of the penal order (section 55(1) of the Act). However, if the authority has difficulties deciding the compensation issue, it can discontinue this part of the proceedings and direct those concerned to bring a normal civil claim (section 56 of the Act).
A copy of the penal order has to be served on, inter alia, the persons who have made claims for damages (section 58(1) of the Act). They can then seek judicial review of the order within seven days (section 59(2) of the Act). In that case, they have to be summoned to the hearing before the district court (section 61(1) of the Act).
2. Selling excise goods without the requisite licence
Section 17a(2) of the 1994 Excise Act, as in force at the material time, made it an administrative offence punishable with a fine for a company or a sole trader to, inter alia, sell excise goods without the requisite licence.
Article 6 (right to a fair hearing)
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.
Article 1 of Protocol No. 1 (protection of property)
“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 considers that it cannot, on the basis of the case file, determine the admissibility of these complaints and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.
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
Decides to adjourn the examination of the applicant company’s complaints concerning the forfeiture of the alcohol in the billiards club and the electronic games club and the impossibility of intervening in the proceedings for judicial review of the two penal orders;
Declares the remainder of the application inadmissible.
Claudia Westerdiek Peer Lorenzen