EUROPEAN COMMISSION OF HUMAN RIGHTS

Application No. 29082/95

Zoltán Dallos

against

Hungary

REPORT OF THE COMMISSION

(adopted on 8 September 1999)

TABLE OF CONTENTS

Page

I. INTRODUCTION

(paras. 1-16) 1

A. The application

(paras. 2-4) 1

B. The proceedings

(paras. 5-11) 1

C. The present Report

(paras. 12-16) 2

II. ESTABLISHMENT OF THE FACTS

(paras. 17-34) 4

A. The particular circumstances of the case

(paras. 17-24) 4

B. Relevant domestic law

(paras. 25-34) 5

III. OPINION OF THE COMMISSION

(paras. 35-49) 7

A. Complaints declared admissible

(para. 35) 7

B. Point at issue

(para. 36) 7

C. As regards Article 6 §§ 1 and 3 of the Convention

(paras. 37- 48) 7

CONCLUSION

(para. 49) 9

APPENDIX: DECISION OF THE COMMISSION AS TO

THE ADMISSIBILITY OF THE APPLICATION 10

I. INTRODUCTION

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 Hungarian citizen, born in 1949 and resident in Vonyarcvashegy , Hungary. He was represented before the Commission by Mr L. Noll , a lawyer practising in Nagykanizsa , Hungary.

3.  The application is directed against Hungary. The respondent Government were represented by their Agent, Mr L. Höltzl .

4.  The case concerns the fairness of criminal proceedings in the course of which the offence committed by the applicant - who had been prosecuted for, and at first instance convicted of, aggravated embezzlement - was recharacterised by the appeal court as aggravated fraud. The applicant invokes Article 6 §§ 1 and 3 of the Convention.

B. The proceedings

5.  The application was introduced on 9 January 1995 and registered on 7 November 1995.

6.  On 4 September 1996 the Commission (First Chamber) decided, pursuant to Rule 48 § 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 complaint based (under Article 6 § 1 of the Convention) on the alleged unfairness of the criminal proceedings against him and (under Article 6 § 3 of the Convention) on the alleged insufficiency of the information on the nature and cause of the accusation against him and the resultant impairment of his defence facilities.

7.  The Government's observations were submitted on 30 October 1996. The applicant replied on 20 January 1997.

8.  On 10 September 1998 the Commission declared the application admissible.

9.  The text of the Commission's decision on admissibility was sent to the parties on 24 September 1998 and they were requested to submit further observations on the merits. The Government submitted some further observations on 9 October 1998. The applicant submitted some further observations on 29 October 1998 and 4 January 1999.

10.  Pursuant to the entry into force of Protocol No. 11 to the Convention on 1 November 1998, the application was transferred to the Commission sitting in Plenary.

11.  After declaring the case admissible, the Commission, acting in accordance with former  Article 28 § 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

12.  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

A.S. GÖZÜBÜYÜK

A. WEITZEL

J.-C. SOYER

H. DANELIUS

Mrs G.H. THUNE

Mr F. MARTINEZ

Mrs J. LIDDY

MM L. LOUCAIDES

J.-C. GEUS

M.P. PELLONPÄÄ

B. MARXER

M.A. NOWICKI

B. CONFORTI

Sir Nicolas BRATZA

MM I. BÉKÉS

D. ŠVÁBY

G. RESS

A. PERENIČ

K. HERNDL

E. BIELIŪNAS

E.A. ALKEMA

M. VILA AMIGÓ

Mrs M. HION

MM R. NICOLINI

A. ARABADJIEV

13.  The text of this Report was adopted on 8 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 § 2 of the Convention.

14.  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.

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

16.  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

17.  On 25 November 1992 the Zala County Public Prosecutor's Office ( Zala Megyei Főügyészség ) preferred a bill of indictment against the applicant, charging him with aggravated embezzlement ( különösen nagy értékre elkövetett sikkasztás bűntette ). The Prosecutor's Office submitted that between July 1990 and May 1991 the applicant, the managing director of a Hungarian limited liability company (the “E. Kft ”), had been involved in a foreign-trade contract of commission between a Dutch and a Hungarian business partner. According to the Prosecutor's Office, the applicant had failed to transfer, on behalf of the E. Kft , parts of the amounts due under the contract to the Hungarian partner and had spent them for the E. Kft's own purposes, thus causing damage of some 1,400,000 Hungarian forints (HUF). The bill of indictment was served upon the applicant on 20 April 1993. In these and the subsequent proceedings the applicant was represented by defence counsel.

18.  On 30 June 1993 the Keszthely District Court ( Keszthelyi Városi Bíróság ) convicted the applicant of aggravated embezzlement ( jelentős értékre elkövetett sikkasztás bűntette ) and sentenced him to one year and four months' imprisonment and a fine.

19.  The District Court found that, under a commission contract scheme valid between July 1990 and May 1991, the applicant, acting on behalf of the E. Kft , had failed to transfer parts of the amounts collected from the Dutch partner to the Hungarian partner as he should have done under the contract. In fact, he had spent them for the E. Kft's own purposes. The District Court noted the applicant's defence that he had simply failed to pay the necessary attention to his contractual duty to transfer the amounts in question; that he had not been aware until April 1991 that the amounts in question were available for transfer; that the E. Kft's eventual failure to fulfil its contractual obligations had simply been due to its inability to recover some outstanding debts; and, finally, that he had entered into a verbal agreement with the Hungarian partner about the use of parts of the amounts in question. However, taking into consideration the testimony of a Mr S. and of two further witnesses, the District Court was convinced that the applicant had deliberately failed to transfer the amounts in question in order to finance the activities of the E. Kft .

20.  The applicant brought an appeal against the District Court’s judgment, whereas the Public Prosecutor’s Office accepted it. In his appeal the applicant claimed that he should be acquitted on the ground that the findings of fact in his case had been erroneous.

21.  On 12 November 1993 the Zala County Regional Court ( Zala Megyei Bíróság ) upheld the applicant’s conviction and sentence, but recharacterised his offence as aggravated fraud ( jelentős értékre elkövetett csalás bűntette ).

22.  The Regional Court held that the set of facts, as referred to by the Prosecutor's Office in the bill of indictment and established by the District Court, did not constitute the offence of embezzlement. However, the applicant’s conduct, namely, that in the context of the transaction in question he had, on several occasions, falsely informed the Hungarian partner about the actual state of the payments made by the Dutch partner, did constitute the offence of aggravated fraud. In this respect the Regional Court relied on the contents of the case-file as compiled at first instance, in particular on the statements made by the applicant and the witness Mr S. during the first-instance hearings and on investigation documents.

23.  The applicant lodged a petition for review ( felülvizsgálati indítvány ) with the Supreme Court ( Legfelsőbb Bíróság ), complaining about his allegedly erroneous conviction and pointing out, in particular, that he had not originally been indicted of fraud, but of embezzlement.

24.  On 28 June 1994 the Supreme Court upheld the applicant’s conviction of aggravated fraud. The Supreme Court recalled that, while it was true that courts were bound by the contents of the bill of indictment, this did not apply to the legal characterisation of the offences. It held that the factual elements, which - in the second-instance proceedings - had warranted the recharacterisation of the offence, had already been contained in substance in the bill of indictment. As regards the applicant's allegedly erroneous conviction, the Supreme Court found no grounds to support his view. The Supreme Court's decision was served upon the applicant on 18 August 1994.

B. Relevant domestic law

25.  Section 9 (2) of the Code of Criminal Procedure (a büntető eljárásról szóló , többször módosított 1973. évi I. törvény ) provides that proceedings before the criminal court may be initiated only upon lawful indictment. The court shall decide on the criminal responsibility of the indicted person exclusively by reference to facts contained in the bill of indictment.

26.  Section 132 (1) provides that where there is a strong suspicion, based on the available information, that a person has committed an offence, the authority shall inform him of the substance of the suspicion against him and of the relevant laws.

27.  Section 146 (2) provides that the bill of indictment shall contain a brief description of the facts on account of which the defendant is being prosecuted.

28.  Section 203 (1) requires that documents, the contents of which are regarded by the court as evidence, shall be read out at the hearing.

29.  According to Section 239 (1), the second-instance court shall, when passing its decision, rely on the findings of fact reached by the first-instance court, unless the first-instance judgment lacks factual support.

30.  Section 241 provides that a defendant acquitted at first instance may be convicted, or a convicted defendant’s sentence increased, only if an appeal has been lodged to his detriment. An appeal shall be regarded as being to the defendant’s detriment if it is aimed at having him convicted, or convicted of a more serious offence or increasing his sentence.

31.  According to Section 258 (1a), where the proper establishment of the facts of the case can be achieved on the basis of the case-file, the second-instance court shall complete or rectify the establishment of the facts and shall thereupon examine the first-instance judgment on this factual basis.

32.  According to Section 260, where the first-instance court has applied the law erroneously but its judgment need not be quashed, the second-instance court shall amend the judgment and pass a decision in accordance with the law.

33.  According to Section 317 (1) of the Criminal Code (a Büntető Törvénykönyvről szóló , többször módosított 1978. évi IV. törvény ), a person who unlawfully appropriates to himself an asset in his charge, or disposes of such an asset as if it were his own, commits the offence of embezzlement. Subsection (5a) provides that embezzlement committed with regard to assets of a substantial value shall be punishable by one to five years' imprisonment.

34.  According to Section 318 (1), a person who deceives someone, or maintains someone's deception, in order to make unlawful gains, commits the offence of fraud, provided that actual damage has occurred as a result of his conduct. Subsection (5a) provides that fraud committed in respect of a substantial sum shall be punishable by one to five years' imprisonment.

III. OPINION OF THE COMMISSION

A. Complaints declared admissible

35.  The Commission has declared admissible:

- the applicant’s complaint that since he had been prosecuted for, and at first instance convicted of, aggravated embezzlement, the recharacterisation by the appeal court of the offence committed by him as aggravated fraud prevented him from exercising his defence rights properly and that this rendered the criminal proceedings against him unfair.

B. Point at issue

36.  The point at issue in the present case is as follows:

- whether there has been a violation of Article 6 § 3(a) and (b), taken together with Article 6 § 1 of the Convention.

C. As regards Article 6 §§ 1 and 3 of the Convention

37.  The applicant complains that since he had been prosecuted for, and at first instance convicted of, aggravated embezzlement, the recharacterisation by the appeal court of the offence committed by him as aggravated fraud prevented him from exercising his defence rights properly and that this rendered the criminal proceedings against him unfair.

38.  Article 6 of the Convention in its relevant parts provides:

“1. In the determination ... of any criminal charge against him, everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law. ...

3. Everyone charged with a criminal offence has the following minimum rights:

a. to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;

b. to have adequate time and facilities for the preparation of his defence ; ...”

39.  The applicant maintains that the Regional Court convicted him of an offence constituted by facts not fully contained in the bill of indictment. In these circumstances, he cannot be regarded as having been properly informed of the nature of the charges against him, which is an infringement of his rights under Article 6 § 3. Furthermore, since he was not informed of the possibility that his offence might be recharacterised in the appeal proceedings, he could not properly exercise his defence rights in regard to the offence of which he was eventually held guilty in the course of those proceedings. Since the Supreme Court’s ruling on his petition for review did not remedy these shortcomings of the proceedings, he maintains that his trial was not fair within the meaning of Article 6 § 1 of the Convention.

40.  The Government submit that the requirements of Article 6 § 3 were fully respected as regards each of the investigative stage, the indictment, the first-instance trial and the appeal proceedings. Concerning these latter, they maintain that the procedure of the appeal court was in compliance with the relevant rules of the Code of Criminal Procedure and the guarantees enshrined in Article 6 § 1 of the Convention. All the factual elements upon which the appeal court based its judgment were known to the applicant and his lawyer and had already been included in the case-file in the course of the first-instance trial. As regards the recharacterisation of the applicant’s offence, the Government emphasise that the facts which the Regional Court found to constitute the offence of fraud were contained in the bill of indictment: the applicant’s conviction for fraud concerned the same events on account of which he had been prosecuted and then convicted at first instance. The Regional Court was merely required, in pursuance of Section 260 of the Code of Criminal Procedure, to rectify the first-instance court’s erroneous legal characterisation of the applicant’s offence. In any event, the offences of aggravated embezzlement and aggravated fraud carry the same penalties and the applicant’s sentence was upheld by the appeal court.

41.  The Commission recalls at the outset that the fairness of proceedings is assessed with regard to the proceedings as a whole (cf., e.g., Eur. Court HR, Miailhe (no. 2) v. France judgment of 26 September 1996, Reports of Judgments and Decisions 1996-IV, p. 1338, § 43 and Imbrioscia v. Switzerland judgment of 24 November 1993, Series A no. 275, pp. 13-14, § 38).

CONCLUSION

M.-T. SCHOEPFER S. TRECHSEL

Secretary      President

to the Commission        of the Commission