European Court of Human Rights

 

FOURTH SECTION

CASE OF MARIA MIHALACHE v. ROMANIA

(Application no. 68851/16)

 

 

JUDGMENT

 

STRASBOURG

30 June 2020

 

 

 

 

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 Maria Mihalache v. Romania,

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

          Yonko Grozev, President,
          Faris Vehabović,
          Iulia Antoanella Motoc,
          Carlo Ranzoni,
          Georges Ravarani,
          Jolien Schukking,
          Péter Paczolay, judges,
and Andrea Tamietti, Section Registrar,

Having regard to:

the application against Romania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Romanian national, Ms Maria Mihalache (“the applicant”), on 24 October 2016;

the decision to give notice to the Romanian Government (“the Government”) of the application;

the parties’ observations;

Having deliberated in private on 9 June 2020,

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

INTRODUCTION

The present case concerns the failure of the domestic authorities to enforce the final judgment of 29 June 2016 given by the Suceava County Court in the applicant’s favour.

THE FACTS

1.  The applicant was born in 1970 and lives in Straja.

2.  The Government were represented by their Agent, most recently Ms O. Ezer, from the Ministry of Foreign Affairs.

3.  The facts of the case, as submitted by the parties, may be summarised as follows.

I. Search and seizure

4.  On the night of 8 August 2013 the police raided the applicant’s home and found 5,450 packets of cigarettes in an outbuilding (the applicant used the word beci (“cellar”)) on the applicant’s property, which was located close to the Ukrainian border. The packets were stamped with Ukrainian tax stamps exclusively; the applicant and her husband could not provide any proof as to their provenance or of payment of the corresponding customs duties to the Romanian authorities. They declared that they were completely unaware of the very existence of the impugned goods, indicating that the respective outbuilding had been abandoned for a long time.

II. Criminal proceedings initiated against the Applicant and the Customs’ decision

5.  On 12 August 2013 the prosecutor initiated criminal proceedings against the applicant and her husband, accusing them of having committed aggravated smuggling of cigarettes.

6.  On 24 September 2013 the prosecutor asked the Regional Excise and Customs Operations Department (hereinafter “the customs authority”) to calculate the corresponding customs duties, VAT and penalties due for the presumably smuggled goods.

7.  On 23 December 2013 the customs authority issued a decision according to which the applicant had to pay a total amount of 61,780 Romanian lei (RON - approximately 13,730 euros (EUR)), which represented the material damage of the evasion of customs checks in respect of the smuggled goods. The customs authority requested that a seizure (sechestru) be enforced in respect of the applicant’s property until the payment of the due amount had been made.

8.  The decision also indicated that under Articles 205-07 of the Tax Procedure Code (hereinafter “the TPC”, see paragraph 37 below), the applicant could challenge the measures taken by the customs authority within thirty days of notification of the decision.

9.  The applicant was notified of that decision on 10 January 2014; she did not challenge it, allegedly in view of the fact that she was awaiting the outcome in the criminal proceedings which were pending against her for the act of smuggling (see also paragraphs 13 and 17 below).

10.  On 31 January 2014 the prosecutor decided to terminate criminal proceedings against the applicant and her husband for lack of sufficient evidence to rebut the presumption of innocence operating in their favour. The proceedings continued in respect of “U.P.” (“unknown perpetrator”) instead.

In the same decision, the prosecutor ordered the confiscation of the cigarettes.

11.  On 15 March 2014 the applicant was notified of the prosecutor’s decision.

12.  This decision was confirmed by the higher prosecutor on 18 July 2014, following an appeal lodged by the customs authority. No further appeal was lodged against this latter decision.

13.  On 2 July 2014 the applicant allegedly wrote to the customs authority and requested that they stop any proceedings against her owing to the prosecutor’s decision which had absolved her of any criminal liability in relation to the confiscated goods.

14.  The customs authority allegedly confirmed orally that the case would be examined based on the new information submitted. However, no written reply was ever given to the applicant’s request.

15.  On 25 July 2014 the tax authority issued a warrant of execution in respect of the decision of 23 December 2013 (see paragraph 7 above), and notified the applicant of that. The warrant was received by the applicant on 11 August 2014, as indicated by her signature on the notification slip appended to the documents.

III. Procedure pursued in accordance with Article 205 of the TPC

16.  On 10 February 2015 the applicant lodged an application with the Rădăuţi First-Instance Court, seeking to annul the decision of 23 December 2013 (see paragraph 7 above); at the same time, she lodged an application for an extension of the time-limit set to challenge the impugned decision. She relied on Articles 205-18 of the TPC (see paragraph 37 below).

17.  The applicant argued that when she had been notified of the decision - in January 2014 (see paragraph 9 above) - the criminal proceedings against her had still been ongoing and their outcome had been uncertain; she asserted therefore that the said decision had breached the presumption of innocence, which had operated in her favour. In any event, pending the said outcome, it was unreasonable to presume that she was able to formulate any articulated defence against the decision issued by the customs authority.

18.  She also argued that as soon as she had been notified of the prosecutor’s decision to terminate the criminal proceedings against her, she had forwarded a copy of that decision to the customs authority, asking that her tax situation be clarified (see paragraph 13 above). The applicant submitted that she had sent that request by fax, appending proof that on that date she had faxed some documents to the customs authority. At that moment and in view of the outcome of the criminal proceedings against her, she had presumed that all further actions seeking to annul the tax decision against her had become unnecessary. In any event, she considered it to be self-evident that she could not be held liable for damage that she had not caused.

19.  On 11 June 2015 the Suceava County Court rejected as ill-founded the applicant’s request for an extension of the time-limit and rejected as inadmissible her request for the annulment of the decision of 23 December 2013.

20.  The court firstly held that once the applicant was notified of the decision, she had the possibility to challenge it and to then ask for the suspension of the challenge procedure pending the outcome of the criminal proceedings against her.

21.  The County Court also held that even if the applicant had sent to the customs authority a copy of the prosecutor’s decision which had exonerated her from criminal liability (see paragraph 14 above), such notification could not be considered as a valid request to annul the tax decision as set out in Article 205 of the TPC. Moreover, even assuming the request was valid, the court noted that the applicant had only submitted proof that she had sent some pages by fax on 2 July 2014 (see paragraph 18 above), without being able to prove what exactly she had sent; in any event, the customs authority had not given any reply to the applicant’s request (see paragraph 13 above). In that context, the court reiterated that it had jurisdiction only to examine any decision that the customs authority gave in reply to the applicant’s request to have the decision annulled. Hence, the courts could not directly order the annulment of the impugned decision before the authorities had themselves decided on the annulment request. The applicant’s claims were therefore inadmissible.

22.  An appeal by the applicant against this judgment was dismissed on 24 November 2015 by the Suceava Court of Appeal. The appellate court held that the applicant had not sufficiently substantiated her assertion that she had lodged a valid request challenging the decision of 23 December 2013 before the customs authority.

IV. Measures of enforcement of the decision of 23 December 2013

23.  On 20 November 2014 the Land Registry allowed the request submitted by the tax authority on 18 November 2014 to place a mortgage (ipotecă) on the applicant’s immovable property, namely on three plots of land surrounding the applicant’s home, and to record the change in the land register.

24.  On 19 December 2014 the applicant requested that the Land Registry provide her with the documents which justified the decision to place a mortgage on her property. Upon receipt, she lodged an application with the tax authority to have the measure lifted.

25.  On 12 February 2015 the local tax office replied to the applicant that her request had been forwarded to the customs authority for comments. On 27 February 2015 the applicant was informed that the lifting of the mortgage was possible only if the decision setting out the applicant’s debts to the State, namely that of 23 December 2013 (see paragraph 7 above), was annulled.

V. Challenge to enforcement UNDER Article 711 et seq. of the code of CIVIL Procedure

26.  On 5 January 2015 the applicant lodged an application with the Rădăuţi First-Instance Court, seeking to annul all the enforcement measures against her including the placement of a mortgage on her immovable property (see paragraph 23 above). She relied on Article 711 et seq. of the Code of Civil Procedure (see paragraph 40 below).

27.  On 11 December 2015 the First-Instance Court allowed the applicant’s claims and annulled all the enforcement measures against her. It found that in so far as the prosecutor’s decision of 31 January 2014 (see paragraph 10 above) held that the applicant had not committed the acts which had caused the damage claimed by the State, she could not be held responsible for someone else’s deed and thus she was not liable to pay any amount thereto.

28.  The court furthermore found that the outstanding tax decision against the applicant, namely that of 23 December 2013 (see paragraph 7 above), was not a final judgment and therefore could not be considered to be a warrant of execution (titlu executoriu).

29.  The tax authority challenged this judgment.

30.  On 29 June 2016 the Suceava County Court allowed the appeal and partly changed the lower court’s judgment, specifically in respect of the annulment of the enforcement measures taken on 25 July 2014 (see paragraph 15 above).

31.  The court found that the challenge lodged on 5 January 2015 (see paragraph 26 above) in respect of the enforcement measures taken on 25 July 2014 was inadmissible as being lodged out of time, in view of the fact that the applicant had been notified of the decision to enforce on 11 August 2014, as shown by her signature on the notification slip (see paragraph 15 above).

32.  The county court also held that the decision of 23 December 2013 had become a warrant of execution, as it had not been challenged, thus becoming final; it could be challenged in accordance with the provisions of Article 205 of the TPC (see paragraph 37 below).

33.  However, the court indicated that, even if it could no longer assess the lawfulness of the said warrant, according to Article 148 of the TPC (see paragraph 38 below), direct enforcement ended essentially when the tax debt could be considered as extinguished. In the applicant’s case, the warrant of execution had been issued as a result of the initiation of criminal proceedings against her for smuggling. It followed that once the criminal proceedings had been terminated on 31 January 2014, the applicant having been exonerated of any criminal liability (see paragraph 10 above), the tax debt had been extinguished and the applicant had been discharged of any obligation to pay damages caused by the alleged criminal act. It followed that the applicant could no longer be considered a “tax debtor”, given the lack of any tax-law relationship between her and the tax authority.

34.  It appears that at the date of the latest information available to the Court (19 February 2018), this judgment had not been enforced, in spite of the applicant’s efforts thereto, which included written requests sent to the tax authority, the last one dating 10 October 2016.

35.  On 9 February 2017 the tax authority issued a new decision for the seizure (sechestru) of the applicant’s property, with the aim of securing payment of a total of RON 61,780 (approximately EUR 13,730). The parties have not submitted any further information in relation to this measure taken by the tax authority.

36.  In their observations, the Government indicated that the total amount owed by the applicant on 27 December 2017 was RON 83,228 (approximately EUR 18,495), in view of the penalties which had continued to accrue as a result of the debt not having been paid.

RELEVANT LEGAL FRAMEWORK

I. TAX Procedure Code (“the TPC”)

37.  Articles 205-18 of the TPC as in force at the relevant time set out the procedure to challenge a decision issued by the tax authority; the time-limit was set for thirty days from the moment of notification and the request for annulment should be lodged with the authority which had issued the contested decision. The response given by the tax authority could in its turn be challenged before the domestic courts in accordance with the rules of administrative procedure, specifically within thirty days of notification, or, if there was no response, within six months of the initial challenge having been lodged.

38.  Article 148 of TPC set out the circumstances in which direct enforcement could cease as follows:

Article 148

“Direct enforcement ceases if:

a) the tax obligation stipulated in the warrant of enforcement, including the obligations of payment of the accessories, the costs for enforcement and any other amounts settled by the debtor, according to the law, have been extinguished in full;

b) the enforceable title was annulled;

c) any other circumstances prescribed by law.”

II. Code of civil procedure

39.  The principle of res judicata and the binding character of judgments under Romanian civil-procedure law are set out in Articles 430-35 of the Code of Civil Procedure as follows: judgments of the civil courts are binding on the parties and their successors. An issue determined in the court’s holding on the merits is res judicata. In addition, certain decisive findings on elements directly determinative of the disputed right or obligation may also be seen as res judicata, whether they appear in the operative part of the judgment or are reflected only in the reasoning part.

40.  Articles 711 et seq. set out the conditions in which certain enforcement measures may be challenged before the courts; the time-limit set for such challenges is fifteen days after the notification of the impugned enforcement decision.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 1 of Protocol No. 1 to the Convention

41.  The applicant complained that the judgment given in her favour on 29 June 2016 (see paragraph 30 above) had remained unenforced, including in connection with the court’s findings to the effect that she could not be held responsible for damage she had not caused.

She relied on Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention.

42.  Master of characterisation to be given in law to the facts of the case (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, §§ 114 and 126, 20 March 2018), which concern essentially tax proceedings against the applicant, the Court considers that these complaints should be examined only from the standpoint of Article 1 of Protocol No. 1 to the Convention.

This provision provides as follows:

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.”

A.    Admissibility

1.    The parties’ submissions

(a)    The Government

43.  The Government argued that the applicant had failed to exhaust the available domestic remedies, specifically to challenge the warrant of execution issued on 23 December 2013 (see paragraph 7 above) under Article 205 of the TPC (see paragraph 37 above). They claimed that as long as that warrant had been valid, all enforcement measures taken against the applicant had been lawful.

44.  They further submitted that while the two sets of proceedings - administrative and criminal - had been intertwined, their outcome had not necessarily been interdependent. Therefore the applicant had not been bound to wait for the outcome of the criminal proceedings before exhausting the administrative remedies.

(b)    The applicant

45.  The applicant argued that she had exhausted all the remedies available in the domestic judicial system. She had sought the annulment of the decision of 23 December 2013 by faxing her request to the customs authority on 2 July 2014 (see paragraph 13 above); in support of her request, she appended a copy of the prosecutor’s decision to terminate the criminal proceedings against her. In any event, she argued that it had been the tax authority’s duty and interest to stay informed about the outcome of the criminal case which had been initiated against her, in the light of the fact that its civil claims would have to be pursued against the real perpetrator, whoever that person might be.

46.  The applicant had interpreted the lack of any written reply to her request faxed to the customs authority as a positive sign until she had been notified of the decisions of November 2014 placing a mortgage on her property (see paragraph 24 above).

47.  At that juncture, she had decided to lodge complaints with the domestic courts, both in accordance with Article 205 of the TPC (see paragraph 16 above) and in accordance with the relevant provisions of the Code of Civil Procedure (see paragraph 26 above). The outcome of those cases had been partly in her favour, but in spite of that, the domestic courts’ decision to annul the seizure title had not been enforced.

2.    The Court’s assessment

48.  The Court notes that the applicant complained of the non‑enforcement of the outstanding judgment of 29 June 2016 (see paragraph 30 above). In that connection, the fact that the applicant failed to obtain the annulment of the decision of 23 December 2013 (see paragraphs 7 and 9 above) may be relevant in the overall assessment of the applicant’s complaints, as it appears to constitute the main justification underlying the authorities’ failure to enforce the findings of the outstanding judgment of 29 June 2016.

49.  Hence, the Court considers the Government’s objection of non‑exhaustion of domestic remedies to be a question which raises issues going to the merits of the case and which cannot be regarded merely as a preliminary matter; it must therefore be joined to the merits.

50.  The Court further notes that these complaints are neither manifestly ill‑founded nor inadmissible on any other grounds listed in Article 35 of the Convention. They must therefore be declared admissible.

B.     Merits

1.    The parties’ submissions

(a)    The applicant

51.  The applicant claimed that she could not be held responsible and obliged to compensate for damage she had not caused; furthermore, the smuggled cigarettes had been found in an open outbuilding located on her large property, where they had been deposited without her knowledge; therefore, the goods had not been in her possession, as claimed by the authorities. The customs authority’s issuing of the decision finding her liable to pay customs charges had been unlawful as the criminal proceedings had been still ongoing at that time.

52.  Furthermore, to claim that the criminal and taxation liabilities were unconnected was contrary to the findings in the customs authority’s decision itself, which had been issued as a consequence of the incident of 8 August 2013 (see paragraph 4 above) and based on the existence of the goods confiscated at that time.

53.  The applicant finally claimed that her property remained seized, as the enforcement was still ongoing against her, in spite of the domestic authorities’ findings that she had not been responsible for the damage caused to the State (see paragraphs 10, 27 and 33 above).

(b)    The Government

54.  The Government argued that the customs authority had calculated the amount due by the applicant based on the fact that the smuggled cigarettes had been found in her possession; her criminal liability related thereto had had no effect on the tax liability thus established. This aspect had also been confirmed by the prosecutor’s decision, which had not indicated anything in relation to the tax debt owed by the applicant.

55.  The Government submitted that criminal and civil liability were two different concepts which were not necessarily interdependent. Thus, the applicant could still be found liable to pay for the damage caused to the State, even if her criminal liability had not been established for various reasons. The payment of customs duties by the applicant had been mandatory irrespective of any criminal liability established or otherwise in respect of her.

56.  The Government further argued that the seizure was a measure falling under the second rule of Article 1 of Protocol No. 1, namely the control of use of property, and it aimed to secure the payment of taxes. Such a measure was prescribed by the law and was proportionate in the applicant’s case, because she had had the possibility to challenge it before the domestic courts.

57.  Lastly, the Government noted that the enforcement of the outstanding tax decision against the applicant was ongoing, having regard to the fact that the said decision was still in force, in so far as the domestic courts had decided to annul only one enforcement measure, namely the seizure issued on 18 November 2014 (see paragraphs 23, 27 and 30 above).

2.    The Court’s assessment

58.  The Court emphasises that the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be lawful (see Iatridis v. Greece [GC], no. 31107/96, § 58, ECHR 1999-II). The requirement of lawfulness, within the meaning of the Convention, demands compliance with the relevant provisions of domestic law and compatibility with the rule of law, which includes freedom from arbitrariness (see East West Alliance Limited v. Ukraine, no. 19336/04, § 167, 23 January 2014).

59.  According to the Court’s well-established case-law, an interference, including one resulting from a measure to secure the payment of taxes, must strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The concern to achieve this balance is reflected in the structure of Article 1 as a whole, including the second paragraph: there must therefore be a reasonable relationship of proportionality between the means employed and the aims pursued. Furthermore, in determining whether this requirement has been met, it is recognised that a Contracting State, not least when framing and implementing policies in the area of taxation, enjoys a wide margin of appreciation and the Court will respect the legislature’s assessment in such matters unless it is devoid of reasonable foundation (see National & Provincial Building Society, the Leeds Permanent Building Society and the Yorkshire Building Society v. the United Kingdom, 23 October 1997, § 80, Reports of Judgments and Decisions 1997-VII, with further references).

60.  Turning to the present case, the Court notes that the applicant’s complaints concerning the non-enforcement of the judgment of 29 June 2016 are twofold: on the one hand, she complained that the mortgage placed on her property had not been lifted, as ordered by the outstanding judgment; on the other hand, she complained that the findings of the domestic courts which related to the lack of any tax obligation in respect of her to pay for damage caused by somebody else had been completely disregarded by the tax authority, who had continued enforcement proceedings against her.

61.  The Court notes at the outset that the judgment of 29 June 2016 had not been enforced at the date of the latest available information (see paragraph 34 above). Moreover, in February 2017 the tax authority started new enforcement measures against the applicant (see paragraph 35 above), based on the decision of 23 December 2013, which they considered to be valid so long as no domestic court had annulled it (see paragraphs 25 and 43 above).

62.  The Court therefore considers that the enforcement measures complained of by the applicant constituted interference with the exercise of her right to the peaceful enjoyment of her possessions. This was not contested by the parties.

63.  The Court further reiterates that the seizure of property for legal proceedings, which does not deprive the owner of his possessions, but only provisionally prevents him or her from using them and from disposing of them, normally relates to the control of the use of property (see, for instance, East West Alliance Limited, cited above, § 185). The Court does not see any reasons for holding otherwise in the present case and considers the interference at stake, aimed to secure the payment of taxes, to be falling under the second rule of Article 1 of Protocol No. 1, namely the control of use of property.

64.  In this context, the Court underlines that the fiscal decision of 23 December 2013 (see paragraph 7 above) was indeed the source of all the matters complained of by the applicant before the domestic authorities, as well as before this Court.

65.  The Government argued that the payment of customs duties by the applicant had been mandatory irrespective of any criminal liability established or otherwise in respect of her (see paragraph 55 above).

66.  It is not the Court’s task here to examine in abstracto the legal theory underlying the interrelation or lack thereof between the tax and criminal liabilities of an individual in circumstances similar as those revealed by the present case. It must limit its analysis to the question of whether or not the application of the law in the particular circumstances of the present case resulted in a violation of the applicant’s rights under the Convention, and in particular, of her rights protected by Article 1 of Protocol No. 1 to the Convention (see, mutatis mutandis, Kehaya and Others v. Bulgaria, nos. 47797/99 and 68698/01, § 65, 12 January 2006).

67.  The Court must take into account the fact that the judgment of 29 June 2016 (see paragraph 30 above) was the result of contentious proceedings between the applicant and the tax authority, before two levels of jurisdiction. Both courts essentially accepted the applicant’s claims challenging the enforcement started against her, on the basis of the consideration that in the absence of any criminal liability, no tax liability could be established in respect of her either. These findings were binding on the parties, as they were res judicata, pursuant to domestic law, in so far as they were directly determinative of the disputed right (see paragraphs 33 and 39 above).

68.  Moreover, the appellate court also referred to Article 148 of the TPC (see paragraph 38 above) to conclude that direct enforcement ended when the tax debt could be considered as extinguished, as it was in the applicant’s case (see paragraph 33 above). The Court reiterates that the principle of legal certainty dictates that, where a dispute has been examined on the merits by competent courts, it should be decided once and for all (see in the context of Article 6 of the Convention, Kehaya, cited above, § 68) and its findings should become operative, including by being fully enforced to the benefit of the successful party.

69.  However, in the present case, as already mentioned above (see paragraph 61 above) that outstanding judgment had, at the date of the latest information available to the Court, remained unenforced. Moreover, the Court notes that the domestic court’s decisive findings concerning the lack of any obligation of the applicant to cover the impugned damage caused by an alleged tax evasion remained completely inoperative to her detriment; in fact, the outstanding judgment as a whole was rendered devoid of any legal effect on account on the tax authority’s consistent position as to the existence of a debt to be paid by the applicant, in spite of the findings of the prosecutor and of the court which had absolved her of any such liability in that regard (see paragraphs 10, 27 and 33 above).

70.  The Court reiterates that particular importance must be attached to the principle of good governance, requiring that public authorities act in an good time, in appropriate manner and with the utmost consistency, when an issue in the general interest is at stake (see Beyeler v. Italy [GC], no. 33202/96, § 120, ECHR 2000-I, and Megadat.com S.r.l. v. Moldova, no. 21151/04, § 72, 8 April 2008). However, the Court observes that in the present case the domestic authorities have not complied with their above‑mentioned obligations, since they failed to give full effect to the findings of the domestic courts and to thus remedy an error that was attributable to the Customs, as implied by the domestic courts in their reasoning (see paragraphs 27 and 33 above).

71.  Moreover, the Court cannot see any reasonable justification for the authorities’ continuous calling into question of the rulings of 29 June 2016 by the Suceava County Court.

72.  It cannot be maintained, therefore, that the control of the use of the property at issue was lawful, in the sense of the Convention. The present case concerns a failure to recognise the res judicata effect of a final judgment delivered in contentious proceedings. It cannot be considered that a public interest overriding the fundamental principle of legal certainty and the applicant’s rights justified the constant calling into question of the court’s findings that she was no longer a tax debtor, as well as the resulting constant interference with the applicant’s right to peacefully enjoy her property.

73.  The above is, in principle, sufficient for the Court to conclude that the interference with the applicants’ “possessions” fell foul of the requirements of Article 1 of Protocol No. 1 (see, mutatis mutandis, Chengelyan and Others v. Bulgaria, no. 47405/07, § 50, 21 April 2016).

74.  Nevertheless, the Court also takes note of the facts put forward by the Government to justify that interference, specifically that the seizure was necessary to secure the payment of taxes, and that it was proportional in so far as the applicant had the possibility to challenge it (see paragraph 56 above). However, as already mentioned, no reasonable justification was provided by the Government as to why a final judgment rendered in the applicant’s favour and which considered that the seizure needed to be lifted and that the applicant was not a tax debtor has remained unenforced (see paragraph 71 above).

75.  The foregoing considerations are sufficient to enable the Court to dismiss the preliminary objection of non-exhaustion of domestic remedies lodged by the Government (see paragraph 43 above) and to conclude that the nature of the failings of the State authorities to recognise the res judicata effect of the final judgment of 29 June 2016 (see paragraph 30 above) and to implement its findings (see paragraph 33 above) by fully enforcing that outstanding judgment, resulted in an excessive burden being imposed on the applicant (see, mutatis mutandis, Polimerkonteyner, TOV v. Ukraine, no. 23620/05, § 20, 24 November 2016).

76.  It follows from the above that there has been a violation of Article 1 of Protocol No. 1 in this case.

II. APPLICATION OF ARTICLE 41 OF THE CONVENTION

77.  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

78.  The applicant claimed 14,100 euros (EUR) in respect of pecuniary damage, representing the amount she had been ordered to pay to the tax authority, and EUR 20,000 in respect of the non-pecuniary damage caused by the distress and frustration suffered for many years.

79.  The Government has not submitted any comments in that regard.

80.  The Court reiterates that the most appropriate form of redress in non‑enforcement cases is to ensure full enforcement of the domestic judgments in question (see for instance Đurić and Others v. Bosnia and Herzegovina, nos. 79867/12 and 5 others, § 36, 20 January 2015). This principle equally applies to the present case, the Court considering that the full implementation of the findings of the outstanding judgment of 29 June 2016 (see paragraph 30 above) would ensure appropriate redress to the applicant.

81.  Failing such enforcement by the respondent State within three months of the date on which this judgment becomes final, the Court holds that the respondent State is to pay the applicant, in respect of pecuniary damage, the amount of EUR 14,100 which represents the amount the applicant claims is owed to the tax authority on the basis of the decision of 23 December 2013 (see paragraph 7 above).

82.  The Court further accepts that the applicant suffered distress, anxiety and frustration as a result of the respondent State’s failure to fully enforce the final domestic judgment in her favour. Making its assessment on an equitable basis, as required by Article 41 of the Convention, it awards the applicant EUR 4,000 in respect of non-pecuniary damage, plus any tax that may be chargeable.

B.     Costs and expenses

83.  The applicant also claimed EUR 1,000 for the costs and expenses incurred before the domestic courts.

84.  The Government has not submitted any comments in that regard.

85.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these were actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 1,000 for costs and expenses in the domestic proceedings, plus any tax that may be chargeable to the applicant.

C.    Default interest

86.  The Court considers it appropriate that the default interest rate 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,

1.      Decides to join to the merits the Government’s preliminary objection concerning non-exhaustion of domestic remedies and rejects it;

2.      Declares the application admissible;

3.      Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention on account of the non-enforcement of the outstanding judgment of 29 June 2016 ;

4.      Holds

(a)   that the respondent State shall ensure, by appropriate means, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the full enforcement of the outstanding judgment of 29 June 2016, failing which the State is to pay the applicant EUR 14,100 (fourteen thousand and one hundred euros), plus any tax that may be chargeable to her, this amount representing what the applicant claims to be owing to the tax authority on the basis of the decision of 23 December 2013;

(b)  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, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:

(i) EUR 4,000 (four thousand euros), in respect of non-pecuniary damage, plus any tax that may be chargeable;

(ii) EUR 1,000 (one thousand euros), in respect of costs and expenses, plus any tax that may be chargeable to the applicant;

(c)   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;

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

Done in English, and notified in writing on 30 June 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Andrea Tamietti                                                                     Yonko Grozev
       Registrar                                                                              President