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FIFTH SECTION

CASE OF ČANGOV v. THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA

(Application no. 14419/03)

JUDGMENT

STRASBOURG

24 February 2011

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

In the case of Čangov v. the former Yugoslav Republic of Macedonia,

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

Zdravka Kalaydjieva, President,
Mirjana Lazarova Trajkovska,
Julia Laffranque, judges,
and Stephen Phillips, Deputy Section Registrar,

Having deliberated in private on 31 January 2011,

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

PROCEDURE

The case originated in an application (no.14419/03) against the former Yugoslav Republic of Macedonia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Macedonian national, Mr Duško Čangov (“the applicant”), on 12 February 2003.

The Macedonian Government (“the Government”) were represented by their Agent, Mrs R. Lazareska Gerovska.

On 28 November 2006 the President of the Fifth Section decided to give notice of the application to the Government. In accordance with Protocol No. 14, the application was allocated to a Committee of three Judges.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

The applicant was born in 1942 and lives in Skopje. He is the manager and sole owner of a limited liability company, the Tehno Interexport company (“T.”), the acquirer and legal successor of the Unimont company (“U.”), which ceased to exist on 4 February 1994.

A. The first set of proceedings

On 13 June 1990 U. brought a compensation claim against another company.

After the case was remitted for reconsideration by the Supreme Court on 18 November 1998, the Gevgelija Court of First Instance, which had meanwhile become the court with jurisdiction in the matter, partly upheld T.’s claim on 24 October 2005. That decision was upheld by the Skopje Court of Appeal on 28 June 2006. On 16 April 2008 the Supreme Court rejected as out of time an appeal on points of law submitted by T.

B. The second set of proceedings

On 3 November 1992 U. requested the enforcement of a court decision given in its favour. On 6 November 1992 the then competent court made an enforcement order against a private company (“the debtor”). On 21 December 1992 the order was set aside. The proceedings continued on a contentious basis.

In proceedings to settle a conflict of jurisdiction (постапка за решавање на судир на надлежности), the case was assigned to the Skopje Court of First Instance (“the first-instance court”), as the court with jurisdiction in the matter.

On 20 November 1998 T. appealed against the decision of 21 December 1992. The Skopje Court of Appeal dismissed the appeal in a decision of 21 February 2001.

On 6 December 2004 the first-instance court stayed the civil proceedings as the debtor, now the defendant, had meanwhile ceased to exist. The parties disagreed as to whether that decision was served on the applicant. According to the Government, the case was archived on 25 December 2005. No evidence was produced as to whether that information was communicated to the applicant.

C. The third set of proceedings

On 31 January 1994 U. lodged a claim for damages against the then Payment Exchange Office (“the Office”) (Служба за Општествено Книговодство Скопје), a State-run institution. The claim concerned alleged irregularities in the enforcement of U.’s claim, which formed the subject of the eighth set of proceedings (see section H. below).

At a hearing on 27 November 2002 T. indicated the Ministry of Finance, the legal successor of the Office, as the defendant in the proceedings.

On 19 September 2003 the Skopje Court of First Instance dismissed T.’s claim as it found that the Ministry of Finance had acted in accordance with the law. That decision was upheld by the Skopje Court of Appeal and the Supreme Court in judgments of 3 February 2005 and 14 June 2006 respectively.

D. The fourth set of proceedings

On 7 April 1995 the applicant requested the enforcement of a final judgment of 20 May 1988 by which three physical persons (“the debtors”) had been ordered jointly to pay him a certain amount of money. On 14 April 1995 the then competent court granted the request and ordered the debtors to pay the debt, together with interest.

On 2 September 1996 the first-instance court annulled the court order of 14 April 1995 in respect of the interest. It upheld the remainder of the order and ordered a recalculation of the interest. In the meantime, two of the debtors died. Their successors took over the debt. On 5 June 1997 the Skopje Court of Appeal quashed the decision of the first-instance court and ordered the lower court to continue with the enforcement.

The judgment debt was subsequently partly settled. It remained unenforced in respect of only one of the debtors.

On 6 September 1999 the first-instance court ordered the seizure of that debtor’s salary. The enforcement was not successful as the debtor had meanwhile been dismissed from his job.

On 30 June 2000 the applicant sought an enforcement order in respect of a plot of land owned by the debtor in question. On 13 October 2000 the first-instance court granted that request.

On 27 December 2001 the first-instance court ordered an expert valuation and public sale of the land. It requested the applicant to make an advance payment of the expert’s fees. The court also informed the applicant that the decision of 13 October 2000 had not been served on the debtor. It requested the applicant to assist the court’s bailiff in the service of the order. The applicant stated that he had made two unsuccessful attempts to serve the order on the debtor.

On 8 November 2002 the first-instance court stayed (запира) the proceedings since part of the debt had already been settled and the applicant had failed to pay the expert’s fees in relation to the remaining part of the debt. According to the applicant, he learnt about that decision on 13 March 2007. On 21 March 2007 the applicant appealed. In the absence of any evidence to the contrary, no further decision has been taken in the course of these proceedings.

E. The fifth set of proceedings

On 26 November 1999 T. requested the enforcement of a court decision of 24 December 1998 establishing a judgment debt against a private company (“the debtor”). It proposed that the debtor’s income obtained from renting business premises be transferred into its account. On 30 November 1999 the first-instance court granted that request. On 13 December 1999 it ordered T. to pay court fees and to submit evidence that the premises concerned were in the debtor’s possession.

On 30 March 2000 T. withdrew the initial request since it could not provide a certificate of title regarding the immovable property at issue. It also made a fresh request proposing an alternative means of enforcement, namely an inventory and public sale of the debtor’s movable property. T. also proposed that the court fees be deducted from its account. On 4 April 2000 the first-instance court granted T.’s request.

Owing to structural changes affecting the debtor, on 5 April 2001 T. withdrew its request and submitted a fresh request, seeking the confiscation, valuation and public sale of stakeholders’ shares (удели) in the capital of the debtor’s legal successor (“the successor”).

On 17 May 2001 the first-instance court, in a formal decision, rejected T.’s request of 26 November 1999 as it had failed to comply with the order of 13 December 1999. In a separate decision of the same date, the court granted T.’s request of 5 April 2001 and ordered the successor to register the confiscation order in its records. It also prohibited any trading in the shares. The court ordered their sale once they had been valued and once the decision of 17 May 2001 had become final. One of the successor’s shareholders challenged that decision by means of an appeal, which was rejected on 9 November 2001.

According to the Government, on 18 April 2002 T. was requested to pay the court fees. No evidence was submitted in support of that assertion.

On 22 December 2003 T. informed the first-instance court that its account had been blocked by a competent State agency (Агенција за работа со блокирани сметки) and proposed that the court fees be paid through that agency.

On 11 March 2004 the first-instance court ordered T. to submit information about the successor and its seat, with a warning that in the event of non-compliance the request would be rejected. T. was also ordered to pay the court fees.

28. It appears that the case was archived, but that it was reopened following a request submitted by T. on 27 September 2005. That transpired from a letter from T. dated 10 August 2006 in which it sent the court information about the successor’s address. On 21 September 2006 T. withdrew the enforcement request. Consequently, on 22 September 2006 the first-instance court stayed the enforcement proceedings.

On 18 December 2006 T. requested enforcement by private bailiffs in accordance with the Enforcement Act of 2005 (see paragraph 52 below). In the absence of any evidence to the contrary, T’s enforcement claim has not yet been enforced.

F. The sixth set of proceedings

On 11 November 1993 the then competent court ordered the enforcement of a final court decision given in favour of U. against a private company (“the debtor”). On 1 December 1994 that decision became final.

On 12 May 1998 T. requested the court to resume the enforcement proceedings. On 15 July 1998 the Skopje Court of First Instance (“the first-instance court”) rejected that request as civil proceedings were pending between the parties regarding the same legal issues. On 7 October 1998 the Skopje Court of Appeal upheld T.’s appeal and quashed the lower court’s decision.

On 20 September 1999 the first-instance court rejected T.’s request as res judicata. According to the applicant, T. appealed against that decision to the Skopje Court of Appeal, but the case file was allegedly not transmitted by the first-instance court for consideration, since T. did not pay the court fees. No evidence was submitted to confirm the applicant’s allegation.

According to the Government, the case was archived in 2003 and destroyed in 2005.

G. The seventh set of proceedings

According to the applicant, the Office (see paragraph 11 above) was ordered, on the basis of a final court decision of 1998, to transfer a certain amount of money from the account of a socially owned enterprise to T.’s account. The Office partly enforced the order, but allegedly failed to transfer interest as requested by T. Consequently, on 12 February 1999 T. requested the court to rectify the allegedly erroneous calculation of the interest by the Office.

On 18 February 1999 the Skopje Court of First Instance ordered an agency to draw up an expert opinion as to the calculation of interest and whether the Office had complied with the order. T. was ordered to pay the expert’s fees. The expert allegedly returned the case file to the court to transfer it to the Office.

According to the applicant, the case was never transferred to the Office, as the latter had ceased to exist and no legal successor was specified by law.

It would appear that the case was archived in 2005. The Government confirmed that the case had been archived and destroyed. The applicant did not specify the date when he learnt that the case had been archived.

H. The eighth set of proceedings

On 3 November 1992 U. sought an enforcement order against a handcraft cooperative (градежна занаетчиска задруга) (“the debtor”). Оn 17 November 1992 the then competent court made an enforcement order.

After two remittal orders were given, on 11 November 1993 the court noted that the decision of 17 November 1992 had become final in respect of the principal debt and interest (calculated until 15 October 1992) and ordered the Office to transfer the amount due into U.’s account. It further ruled that the proceedings regarding the remaining part of the interest would continue on a contentious basis. That decision was confirmed on 7 December 1993.

In the contentious proceedings, on 1 March 1994 the first-instance court upheld U.’s claim in a decision which was confirmed on appeal on 31 May 1994. On 22 December 1994 the Supreme Court upheld a legality review request (барање за заштита на законитоста) lodged by the public prosecutor and quashed those decisions.

At a hearing held on 9 June 1995, the applicant being the legal representative (законски застапник) of U. stated that the principal debt with interest (calculated until 15 October 1992) had been settled. On the same date, the Commercial Court dismissed as time-barred U.’s claim in respect of the remaining part of the interest. On 15 May 1997 the Skopje Court of Appeal upheld the lower court’s judgment. On 25 December 1998 the Supreme Court rejected an appeal on points of law lodged by U.

According to the applicant, in 1996 T. lodged a request for enforcement of a claim (“the first request”) established by a final judgment. As the request had allegedly been lost, on 16 May 1996 T. lodged another request for enforcement (“the second request”). According to the applicant, these two requests concerned the order of 17 November 1992.

On an unspecified date, the Commercial Court requested T. to indicate the final judgment to which the second request referred and to provide a stamp attesting that that judgment had been enforceable (потврда за извршност). T. did not comply with that request.

According to the applicant, no action has been taken since that time because the file was lost and T. was under no obligation to submit a fresh request for the third time.

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. Enforcement Proceedings Act of 1997 (Закон за извршната постапка)

In accordance with section 13 of the Enforcement Proceedings Act of 1997 (“the 1997 Act”), the provisions of the Civil Proceedings Act were applicable to enforcement proceedings, unless otherwise specified in the 1997 Act or any other law.

In accordance with section 29 of the 1997 Act, the courts were required to enforce judgment debts by the means and in respect of the assets specified in the request for enforcement.

Section 32 provided that expenses relating to enforcement were to be covered in advance by the creditor.

Section 35 provided that a request for enforcement should specify: the creditor and debtor; the final order; the debtor’s duty; the means and assets for enforcement; and any other information necessary for completion of the enforcement.

B. Civil Proceedings Act of 1998 (Закон за парничната постапка)

Under section 158(1) of the Civil Proceedings Act (“the 1998 Act”), as valid at the time, a court would exempt from payment of procedural costs (трошоци на постапката) a party to the proceedings who, on the basis of his or her financial status, could not bear the trial costs without causing prejudice to the necessary means of subsistence of himself or herself and his or her family.

Section 158(2) provided that the exemption from procedural costs concerned court fees and advance payment of costs regarding witnesses and experts, on-site inspections (увид) and court announcements (судски огласи).

Under section 158(3), the relevant court could exempt a party to the proceedings from payment of court fees (судска такса) only if the payment thereof would substantially decrease the means of subsistence of that party and the members of his or her family.

C. Enforcement Act of 2005 (Закон за извршување)

52. Section 3 of the Enforcement Act of 2005 (“the 2005 Act”) provides that bailiffs (извршители) are to carry out enforcement.

Enforcement proceedings instituted before the 2005 Act entered into force were to continue, until 1 July 2011, under the 1997 Act. Thereafter, the 2005 Act would apply (according to Law of 2010 amending the 2005 Act).

THE LAW

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

The applicant complained that the length of certain of the impugned sets of proceedings and the non-enforcement of final judgments in the other sets of proceedings had not complied with the “reasonable time” requirement under Article 6 of the Convention. He further alleged that the T. company had been denied the right of access to a court in the fifth and sixth sets of proceedings since the domestic law had not entitled legal entities to request exemption from trial costs and court fees. Article 6 § 1 of the Convention, in so far as relevant, reads as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing within a reasonable time by [a] ... tribunal ...”

A. Admissibility

1. Objection of incompatibility ratione personae in respect of the first, second, third, fifth, sixth, seventh and eighth sets of proceedings

The Government objected that the applicant’s complaints in respect of the above-mentioned sets of proceedings were incompatible ratione personae with the provisions of the Convention. They argued that only U. and T., as legal entities, had been parties to the impugned proceedings, whereas the applicant had acted merely as their legal representative.

The applicant contested the Government’s arguments.

The Court reiterates that the term “victim” in Article 34 of the Convention denotes the person directly affected by the act or omission which is at issue (see, for example, Eckle v. Germany, 15 July 1982, § 66, Series A no. 51). In the present case, the Court notes that the applicant was not a party of the relevant proceedings. It further observes that he was the sole owner and manager of T., the acquirer and, accordingly, legal successor of U. However, the applicant is the sole owner of a limited liability company and he did not present any evidence that T. had ceased to exist and that it was not able to pursue the application in its own name. Consequently, the Government’s objection must be sustained (see, a contrario, Graberska v. the former Yugoslav Republic of Macedonia (no. 6924/03, § 41, 14 June 2007).

It follows that the applicant’s complaints in respect of the above proceedings are incompatible ratione personae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.

2. Conclusion

59. The Court considers that the applicant’s complaint in respect of the fourth set of proceedings is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It also finds that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B. Merits

Non-enforcement complaint in respect of the fourth set of proceedings

(a) General principles

The Court reiterates that the execution of a judgment given by any court must be regarded as an integral part of the “trial” for the purposes of Article 6 of the Convention (see Jankulovski v. the former Yugoslav Republic of Macedonia, no. 6906/03, § 33, 3 July 2008). Moreover, it considers that the State has a positive obligation to organise a system for enforcement of judgments that is effective both in law and in practice and ensures their enforcement without undue delay (see Pecevi v. the former Yugoslav Republic of Macedonia, no. 21839/03, § 29, 6 November 2008). However, the Court notes that State responsibility for enforcement of a judgment against a private party extends no further than the involvement of State bodies in the enforcement procedures. Once the enforcement procedures have been terminated by a court in accordance with the national legislation, the responsibility of the State ends (see Martinovska v. the former Yugoslav Republic of Macedonia, (dec.), no. 22731/02, 25 September 2006).

(i) The parties’ submissions

The Government stated that the proceedings had been stayed as the applicant had failed to pay the expert’s fees (see paragraph 20 above).

The applicant contested the Government’s arguments.

(ii) The Court’s assessment

The Court notes that the enforcement proceedings, which began in 1995, were initially launched against three individuals. By 1999 the applicant’s claim had been enforced against two of the debtors. As to the remainder of the claim, the applicant requested enforcement on 30 June 2000. The Court will therefore examine the applicant’s complaint in respect of the proceedings from that date. The proceedings were stayed on 8 November 2002 owing to the applicant’s failure to pay the expert’s fees. No further action was taken until 21 March 2007, when the applicant appealed against that decision. It appears that no further decision has been taken in the course of these proceedings.

The Court cannot but conclude that the applicant’s claim of 30 June 2000 has not yet been enforced.

The Court observes that the applicant did not show any active interest in the outcome of the proceedings from 2001 to 2007 (see paragraphs 19-20 above).

Notwithstanding the above, having regard to all the circumstances of the case, the Court considers that by refraining from taking adequate and effective measures to enforce the remainder of the applicant’s claim, the domestic courts deprived the provisions of Article 6 § 1 of the Convention of all useful effect (see Kalanoski v. the former Yugoslav Republic of Macedonia, no. 31391/03, §§ 26-27, 17 December 2009).

There has therefore been a violation of Article 6 § 1 of the Convention.

III. ALLEGED VIOLATION OF ARTICLE 14 OF THE CONVENTION

The applicant further complained that T. had been discriminated against in the fifth and sixth sets of proceedings, as the domestic law had provided for different rules for legal and natural persons concerning exemption from court fees.

Article 14 of the Convention provides:

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

The Court observes that the applicant failed to lodge a constitutional complaint with the Constitutional Court alleging discriminatory treatment, although under national law that court has full jurisdiction to deal with complaints filed by any individual who claims to be the victim of a violation of the very same rights and freedoms of which the applicant now alleges a violation before the Court (see, mutatis mutandis, Šijakova and others v. the former Yugoslav Republic of Macedonia (dec.), no. 67914/01, § 2, 6 March 2003).

It follows that these complaints must be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.

IV. 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

The applicant claimed 89,660 euros (EUR) in respect of pecuniary damage concerning all the impugned sets of proceedings. This figure corresponded to his lost income and to the amount awarded in the substantive proceedings, together with interest. He also claimed a global sum of EUR 96,000 in respect of non-pecuniary damage for the emotional suffering resulting from the ineffectiveness of the domestic proceedings.

The Government contested these claims.

The Court notes that in respect of the fourth set of proceedings, the applicant did not submit any evidence that the debtor, a private individual, had sufficient funds to honour his claim. The Court therefore rejects the claim under this head.

The Court finds, however, that the applicant must have suffered non-pecuniary damage on account of the violation found. Ruling on an equitable basis, it awards him EUR 600 under this head.

B. Costs and expenses

The applicant also claimed EUR 3,202 for the costs and expenses incurred before the domestic courts. He did not make any claim in respect of the costs and expenses incurred before the Court.

The Government contested the claim.

The Court reiterates that only such costs and expenses as were actually and necessarily incurred in connection with the violation found, and are reasonable as to quantum, are recoverable under Article 41 (see Kyrtatos v. Greece, no. 41666/98, § 62, ECHR 2003 VI). As to the applicant’s request for reimbursement of the costs incurred in the proceedings before the domestic courts, the Court notes that such costs were not incurred in order to seek, through the domestic legal order, the prevention of and redress for the violations alleged before the Court. Accordingly, it does not award any sum under this head (see Milošević v. the former Yugoslav Republic of Macedonia, no. 15056/02, § 34, 20 April 2006).

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 complaint concerning the lengthy non-enforcement of a final judgment in the fourth set of proceedings admissible and the remainder of the application inadmissible;

Holds that there has been a violation of Article 6 § 1 of the Convention in respect of the fourth set of proceedings;

Holds

(a) that the respondent State is to pay the applicant within three months from the date of the present judgment, EUR 600 (six hundred euros) in respect of non-pecuniary damage, plus any tax that may be chargeable, to be converted into the national currency of the respondent State at the rate applicable at the date of settlement;

(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;

Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 24 February 2011, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Stephen Phillips Zdravka Kalaydjieva Deputy Registrar President