EUROPEAN COMMISSION OF HUMAN RIGHTS

Application No. 26760/95

Mikołaj Werner

against

Poland

REPORT OF THE COMMISSION

(adopted on 10 September 1999)

I. INTRODUCTION

(paras. 1-15) ........................................................ 1

A. The application

(paras. 2-4) ..................................................... 1

B. The proceedings

(paras. 5-10) .................................................... 1

C. The present Report

(paras. 11-15) .................................................. 2

II. ESTABLISHMENT OF THE FACTS

(paras. 16-29) ....................................................... 4

A. The particular circumstances of the case

(paras. 16-24) .................................................. 4

B. Relevant domestic law

(paras. 25-29) .................................................. 5

III. OPINION OF THE COMMISSION

(paras. 30-54) ....................................................... 6

A. Complaint declared admissible

(para. 30) ...................................................... 6

B. Point at issue

(para. 31) ...................................................... 6

C. As regards Article 6 para. 1 of the Convention

(paras. 32-53) .................................................. 6

CONCLUSION

(para. 54) ..................................................... 10

APPENDIX: DECISION OF THE COMMISSION AS TO

THE ADMISSIBILITY OF THE APPLICATION ................. 11

1 . The following is an outline of the case as submitted to the European Commission of Human Rights, and of the procedure before the Commission.

A. The application

2 . The applicant is a Polish citizen, born in 1946 and resident in Koszalin.

3 . The application is directed against Poland. The respondent Government were represented by their Agent, Mr Krzysztof Drzewicki of the Ministry of Foreign Affairs.

4 . The case concerns the applicant’s complaint that he was denied access to a court to challenge his dismissal from the function of manager of the estate in bankruptcy. The applicant invokes Article 6 para. 1 of the Convention.

B. The proceedings

5 . The application was introduced on 15 November 1994 and registered on 20 March 1995.

6 . On 28 June 1995 the Commission decided, pursuant to Rule 48 para. 2 (b) of its Rules of Procedure, to give notice of the application to the respondent Government and to invite the parties to submit written observations on the admissibility and merits of the applicant's complaints under Article 6 para. 1 of the Convention.

7 . The Government's observations were submitted on 29 December 1995, after an extension of the time-limit fixed for this purpose. The applicant replied on 27 March 1995. On 18 June 1996 the Government submitted additional observations to which the applicant replied on 28 January 1997.

8 . On 19 January 1998 the Commission declared admissible the applicant's complaint under Article 6 para. 1 of the Convention. It declared inadmissible the remainder of the application.

9 . The text of the Commission's decision on admissibility was sent to the parties on 6 February 1998 and they were invited to submit such further information or observations on the merits as they wished. The parties did not avail themselves of this possibility.

10 . After declaring the case admissible, the Commission, acting in accordance with former [1] Article 28 para. 1 (b) of the Convention, also placed itself at the disposal of the parties with a view to securing a friendly settlement. In the light of the parties’ reaction, the Commission now finds that there is no basis on which such a settlement can be effected.

C. The present Report

11 . The present Report has been drawn up by the Commission in pursuance of former Article 31 of the Convention and after deliberations and votes, the following members being present:

MM S. TRECHSEL, President

E. BUSUTTIL

G. JÖRUNDSSON

A. WEITZEL

J.-C. SOYER

H. DANELIUS

Mrs G.H. THUNE

MM F. MARTINEZ

C.L. ROZAKIS

Mrs J. LIDDY

MM L. LOUCAIDES

J.-C. GEUS

B. MARXER

M.A. NOWICKI

I. CABRAL BARRETO

Sir Nicolas BRATZA

MM I. BÉKÉS

D. ŠVÁBY

G. RESS

A. PERENI Č

K. HERNDL

E. BIELIŪNAS

E.A. ALKEMA

M. VILA AMIGÓ

Mrs M. HION

MM R. NICOLINI

A. ARABADJIEV

12 . The text of this Report was adopted on 10 September 1999 by the Commission and is now transmitted to the Committee of Ministers of the Council of Europe, in accordance with former Article 31 para. 2 of the Convention.

13 . The purpose of the Report, pursuant to former Article 31 of the Convention, is:

(i) to establish the facts, and

(ii) to state an opinion as to whether the facts found disclose a breach by the State concerned of its obligations under the Convention.

14 . The Commission's decision on the admissibility of the application is annexed hereto.

15 . The full text of the parties' submissions, together with the documents lodged as exhibits, are held in the archives of the Commission.

II. ESTABLISHMENT OF THE FACTS

A. The particular circumstances of the case

16 . On 15 December 1993 the Koszalin District Court (SÄ…d Rejonowy) appointed the applicant to the function of trustee in insolvency proceedings concerning a limited liability company H. located in Koszalin.

17 . On 19 March 1994 judge M., who supervised the insolvency proceedings, requested the Koszalin District Court to dismiss the applicant from his function. She submitted that the applicant had been involved in civil proceedings relating to his failure to pay salaries to his employees and that the court had found against him. Thus he did not comply with the legal requirements of a trustee of an estate in bankruptcy as he could not be considered trustworthy. Furthermore, until the end of January 1994 he had failed to give notice to all the employees of the H. company; thus he had not carried out his obligations as a trustee in a satisfactory manner as required by the law.

18 . On 21 March 1994 the Koszalin District Court, in a panel composed of three judges, including judge M., at a session held in camera , dismissed the applicant and appointed a new trustee. No party to the insolvency proceedings attended the hearing and the applicant was, likewise, not present.

19 . On 28 March 1994 the applicant appealed against this decision. He submitted that, while it was true that no appeal could be filed against the decision to appoint a new trustee, the law was not clear as to whether an appeal lay against that part of the decision by which he had been dismissed. Furthermore, his good reputation as a lawyer and as an employer had been damaged both by the contents of judge M.'s motion and by the District Court's decision to dismiss him. He submitted that certain statements in the motion were incorrect as to the facts. Therefore he had to lodge an appeal in order to challenge them. He contested both the allegation that he was untrustworthy and that he had not been carrying out his duties satisfactorily. He further submitted that judge M., considering her own motion for dismissal, had acted both as a claimant and as a member of the court, which called into question the impartiality of the Koszalin District Court.

20 . On 30 March 1994 the Koszalin District Court rejected the applicant's appeal. The Court considered that the Insolvency Act did not provide for an appeal against dismissal of a trustee. Judge M. was entitled to participate in the court panel as the Insolvency Act excluded participation of a judge-supervisor only where an appeal lay against a decision of that judge.

21 . The applicant appealed to the Koszalin Regional Court (Sąd Wojewódzki), submitting that the District Court was wrong to hold that there was no appeal against its decision. He reiterated that he was deprived of a possibility to have the allegations against him reviewed by a court.

22 . On 8 July 1994 the Koszalin Regional Court dismissed the applicant's appeal. The Court considered that, according to the Insolvency Act, no appeal lay against the decision by which a previous trustee was dismissed and a new one appointed.

23 . On 29 April 1996 the Koszalin Regional Court convicted the applicant of misappropriation of the H. company's assets, sentenced him to one year's imprisonment and suspended the execution of the sentence for a period of two years.

24 . On 26 September 1996 the Koszalin Court of Appeal (SÄ…d Apelacyjny) quashed this judgment and ordered that the case be reconsidered.

B. Relevant domestic law

25 . The Ordinance of the President of Republic of Poland of 24 October 1934 on Insolvency Law (as amended) sets out the rules governing insolvency proceedings.

26 . Article 1 of the Insolvency Law, insofar as relevant, provides:

“1. Any business enterprise which is unable to pay its debts shall be declared insolvent.”...

3. Any public enterprise, cooperative ... [or] joint-stock company shall be declared insolvent if its assets are not sufficient to cover its liabilities.”

27 . According to Article 8 of the Insolvency Law proceedings relating to an insolvency petition shall be instituted before the district court, sitting as a panel of three judges, in whose jurisdiction the debtor has its registered office.

28 . Pursuant to Article 14 of the Insolvency Law, a court making an insolvency order shall call on creditors to submit their claims within a fixed time-limit, assign a so-called "judge-receiver" (who shall conduct the subsequent insolvency proceedings, supervise a trustee's actions and determine in which instances a trustee shall not act without his prior permission) and appoint a trustee (who shall take possession of the insolvent entity's property and, subject to certain prior decisions of the judge-receiver, distribute it among creditors).

29 . According to Article 60 of the Insolvency Law, a trustee alone has the capacity to sue or to be sued in all proceedings concerning claims against an insolvent estate.

III. OPINION OF THE COMMISSION

A. Complaint declared admissible

30 . The Commission declared admissible the applicant’s complaint that he was denied access to a court to challenge his dismissal from the function of trustee of the insolvent company.

B. Point at issue

31 . Accordingly, the Commission must examine whether there has been a violation of Article 6 para. 1 of the Convention.

C. As regards Article 6 para. 1 of the Convention

32 . Article 6 para. 1 of the Convention, insofar as relevant, provides:

“1. 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.”

a) Applicability of Article 6 para. 1 of the Convention

33 . The Commission must first ascertain whether Article 6 of the Convention was applicable to the proceedings in question.

34 . The applicant submits in this respect that the scope of Article 6 of the Convention extends to the determination of civil rights and obligations and of criminal charges. This should be understood in such a manner that the proceedings which are not covered under the criminal head of this provision fall within its scope of application under its civil head. Thus, cases concerning civil rights, as well as rights originating from the provisions of administrative law, labour law, intellectual property law, family law and, ultimately, insolvency law, would be subject to the guarantees of this provision of the Convention. The restrictive interpretation of the scope of application of Article 6 of the Convention, relied on by the Government, would run counter to the Convention organs' case-law. Therefore, in the applicant’s view, the conclusion that there are legal relations which do not fall within the scope of either of the domains of Article 6 para. 1 would not be compatible with the Convention's character and purpose.

35 . The applicant further refers to the Government’s submissions concerning the criminal proceedings against him, and points out that they contain a negative assessment of his personal qualities, which is of no relevance to the case. He emphasises that the central issue of the present case is the complaint about his rights being breached, not the assessment of him as a person. He further states that he was not informed of an enquiry concerning the present case, referred to by the Government, and did not participate in it. He finally submits that the Government's argument based on his criminal conviction amounts to defamation as on 26 September 1996 the Court of Appeal quashed this judgment. Moreover, the charges against him in the criminal proceedings do not correspond to the contents of judge M.'s motion.

36 . T he Government first recall that Article 6 is applicable where there is a serious and genuine dispute relating to rights and obligations recognised at least on arguable grounds in domestic law and that the outcome of the dispute must be directly decisive for the rights or obligations concerned.

37 . The Government further submit that the jurisdiction of the court in the insolvency proceedings encompasses all aspects of the liquidation of assets of the insolvent company. The trustee is the court's assistant appointed to manage the estate since the court cannot assume these duties. Therefore the trustee performs a public function and he is supervised by the court in its exercise. Polish law does not set out the requirements that must be satisfied by a candidate for a post of trustee. The appointment of a trustee is made by the court following an appraisal of the competence of the person concerned. As a consequence, as the law entrusts the court with a duty to appoint the trustee, it is likewise entitled to dismiss him or her if the relevant duties are not performed properly.

38 . The Government further refer to the applicant's criminal conviction for misappropriation of assets of the bankrupt company, pronounced on 29 April 1996. This proves, they emphasise, that the applicant's dismissal was well-founded, and that the judge's submissions in her motion to the court cannot be considered unjustified.

39 . The Government consider that the assessment made by the court in the present case is similar to that which was examined by the European Court in the Van Marle judgment (Eur. Court HR, Van Marle v. the Netherlands judgment of 26 June 1986, Series A no. 101) in that the examination and evaluation of professional competence by a public authority is a matter which cannot be brought under the notion of civil rights.

40 . The Government further emphasise that neither appointment nor dismissal of the trustee are governed by the provisions of labour law. In particular, the provisions of the Labour Code are not applicable thereto. It is only the factual aspect of the trustee's duties that can be considered comparable to an employment, not the legal one. Further, the remuneration of a trustee is fixed on the basis of the Minister of Justice's by-law enacted pursuant to the Insolvency Act.

41 . The Government further submit that there is no civil right or claim to become or to remain a trustee. Even assuming that such a right exists in domestic law, the Convention does not guarantee a fair hearing in the determination of all the rights and obligations which an individual might arguably claim under domestic law. In the present case there is no possibility for anyone to exercise a right “to be a trustee” and no corresponding obligation of the State to ensure that such right be exercised.

42 . The Government conclude that in view of the special character of the legal rules governing the function of trustee, Article 6 para. 1 of the Convention is not applicable to the proceedings relating to his dismissal as they do not concern the applicant's civil rights and obligations within the meaning of this provision.

43 . The Commission first considers that the nature of the function exercised by the court in the insolvency proceedings is indeed of a public character. The court's task is to ensure the maximum possible degree of solvency on the part of the estate in bankruptcy in the interest of the community. However, this factor alone does not confer on the trustee, who assists the court, a status of civil servant. He or she remains an independent professional carrying out public functions under the court's supervision and his or her relation to the court should be assimilated to an employment, the more so as he or she receives a salary. On becoming a trustee he or she does not become a part to any hierarchical system of public service, and after his or her tasks are completed, he or she automatically resumes carrying out his or her profession, if he or she is a lawyer, or can seek another assignment, if he or she does not belong to a liberal profession. Thus, any dispute concerning his or her appointment or dismissal cannot automatically be deemed as pertaining to the “termination of career” of a civil servant within the meaning used in the Convention organs' case-law (see, among other authorities, Eur. Court  HR, the Neigel v. France judgment of 17 March 1997, Reports of Judgments and Decisions 1997-II, p. 410, para. 43; the Couez v. France judgment of 24 August 1998, Reports 1998-V, p. 2265, para. 24).

44 . As regards the pecuniary interests connected with the proceedings in question, the Government emphasise that neither appointment nor dismissal of a trustee are governed by the provisions of labour law. Further, the remuneration of a trustee is fixed pursuant to the Minister of Justice's special by-law promulgated on the basis of the Insolvency Act. The Commission recalls in this connection that the notion of civil rights is an autonomous one and that the origin of the dispute and the character of the laws governing the relations concerned is not decisive (Eur. Court HR, the Editions Periscope v. France judgment of 26 March 1992, Series A no. 234-B, p. 66, para. 40). The Commission further notes that as a result of the dismissal the applicant lost his income which he had been receiving as a trustee. Thus, the proceedings concerning his dismissal related first and foremost to his rights which must be regarded as being of a pecuniary character.

45 . The Commission finally recalls that it is established in the case-law of the Convention organs, that the right to enjoy a good reputation and the right to have determined before a tribunal the justification of attacks upon such reputation must be considered to be civil rights within the meaning of Article 6 para. 1 of the Convention (Eur. Court HR, the Helmers v. Sweden judgment of 29 October 1991, Series A no. 212-A, p. 14, para. 27l, the Tolstoy Miloslawsky v. the United Kingdom judgment of 13 July 1995, Series A no. 316-B, p. 78, para. 58).

46 . The Commission observes that in the present case the judge's motion for dismissal clearly contained disparaging statements about the applicant. Moreover, the issues related to the applicant’s reputation were intrinsically linked with his dismissal. The applicant contends that his dismissal became publicly known and caused numerous unfavourable comments as regards both his personal qualities and his professional skills as a lawyer. Thus, in the Commission’s opinion, the proceedings at issue could also be deemed to have had a bearing on the applicant’s good reputation.

47 . In the light of the foregoing considerations, the Commission takes the view that Article 6 of the Convention is applicable to the proceedings in question.

b) Compliance with Article 6 para. 1 of the Convention

48. The question remains whether the applicant had access to a court complying with the requirement of Article 6 in the determination of his civil rights. The Commission will first examine whether the proceeding before the Koszalin District Court which resulted in his dismissal as trustee complied with such requirements.

The Government argue that in those proceedings the court did not act in its judicial capacity in which courts are called upon to rule on civil claims submitted by parties to proceedings. The court's jurisdiction in insolvency proceedings is of an administrative character and, as such, includes supervision over the acts of a trustee, acting as a public organ. The Government thus conclude that the nature of relations between the court and the trustee in the bankruptcy proceedings must lead to the conclusion that the court in the proceedings concerned was not carrying out any judicial functions.

49. The applicant submits that the court acted pursuant to the Insolvency Act, which entrusts the courts with the handling of insolvency cases. The procedural provisions applicable in such proceedings are those of a civil judicial procedure. The applicant further stresses that he was denied access to a court since the motion of the judge receiver for his dismissal from the function of a trustee was examined by the court at a session held in camera . Thus, the applicant did not have any possibility of defending himself against the allegations contained in the motion and of presenting his arguments to a court in proceedings which would be in compliance with the requirements of Article 6 of the Convention. As the law did not provide for an appeal to a higher court, he did not have any possibility of challenging the disparaging allegations against him before a court.

50. The Commission first reiterates that in the bankruptcy proceedings the court’s task is to ensure the maximum possible degree of solvency on the part of the estate in bankruptcy in the interest of the community (see above, para. 43). The court is assisted in this task, first, by the judge receiver. Pursuant to the applicable provisions of the Insolvency Law, a court making an insolvency order assigns a judge receiver to the case. The judge receiver conducts the subsequent insolvency proceedings. Likewise, the court appoints a trustee, who conducts the day-to-day management of the property of the insolvent entity and, subject to certain prior decisions of the judge receiver, distributes it among creditors. The court also supervises the trustee’s actions and determines in which instances a trustee cannot act without his or her permission. In the proceedings concerned in the present case the Koszalin District Court, having considered the motion of the judge receiver for the applicant’s dismissal, allowed her motion. In doing so, the court examined whether the manner in which the applicant had been administering the property of the insolvent company, was consistent with the purpose of insolvency proceedings and consonant with the interests of the company’s creditors.

51.  Even assuming that, in these circumstances, the Koszalin District Court may be regarded as a tribunal in deciding to dismiss the applicant, the Commission finds that the proceedings before this court did not comply with the requirements of Article 6. In the first place, in circumstances where the proceedings were initiated by the judge receiver who was herself a member of the Court, the Koszalin District Court cannot be regarded as independent or impartial, more especially since the Insolvency Act did not preclude the judge receiver from herself participating in its decision. Further, the proceedings did not in any event comply with the procedural guarantees in Article 6, the hearing being conducted in camera and in the absence of the applicant, who was not represented before the court.

52. The Commission further finds that, following his dismissal, the applicant had no access to a court complying with Article 6 para. 1 in which to challenge the dismissal.  It notes, in this regard, that the applicant’s appeal to the Koszalin District Court itself and his further appeal to the Koszalin Regional Court were rejected on the grounds that the Insolvency Act did not provide for an  appeal against dismissal as a trustee.

53. The Commission accordingly finds that the applicant did not enjoy an effective right of access to court for the determination of his civil rights as guaranteed by Article 6 para.1.

CONCLUSION

54. The Commission concludes, unanimously, that in the present case there has been a violation of Article 6 para. 1 of the Convention.

M.-T. SCHOEPFER S. TRECHSEL

Secretary President

to the Commission of the Commission

[1] The term “former” refers to the text of the Convention before the entry into force of Protocol No. 11 on 1 November 1998.