Lexploria

EUROPEAN COMMISSION OF HUMAN RIGHTS

SECOND CHAMBER

Application No. 17951/91

H. B.

against

Switzerland

REPORT OF THE COMMISSION

(adopted on 18 October 1995)

TABLE OF CONTENTS

Page

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. 16-31). . . . . . . . . . . . . . . . . . . . . . . . 3

A. The particular circumstances of the case

(paras. 16-29) . . . . . . . . . . . . . . . . . . . . . 3

B. Relevant domestic law

(paras. 30-31) . . . . . . . . . . . . . . . . . . . . . 4

III. OPINION OF THE COMMISSION

(paras. 32-49). . . . . . . . . . . . . . . . . . . . . . . . 5

A. Complaint declared admissible

(para. 32) . . . . . . . . . . . . . . . . . . . . . . . 5

B. Point at issue

(para. 33) . . . . . . . . . . . . . . . . . . . . . . . 5

C. Article 6 para. 1 of the Convention

(paras. 34-48) . . . . . . . . . . . . . . . . . . . . . 5

CONCLUSION

(para. 49) . . . . . . . . . . . . . . . . . . . . . . 7

DISSENTING OPINION OF MM. J.-C. SOYER,

L. LOUCAIDES, J.-C. GEUS AND M.A. NOWICKI . . . . . . . . . . . . . 8

APPENDIX : DECISION OF THE COMMISSION AS TO THE

ADMISSIBILITY OF THE APPLICATION . . . . . . . . . . 9

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, a German citizen born in 1940, is a businessman

residing in Engelberg in Switzerland. Before the Commission he is

represented by Mr. H.P. Derksen, a lawyer practising in Zurich.

3. The application is directed against Switzerland. The respondent

Government are represented by their Deputy Agent, Mr. Ph. Boillat, Head

of the European Law and International Affairs Section of the Federal

Office of Justice.

4. The case concerns the applicant's complaint under Article 6

para. 1 of the Convention that the proceedings were not conducted in

public.

B. The proceedings

5. The application was introduced on 16 January 1991 and registered

on 19 March 1991.

6. On 8 January 1993 the Commission (Second Chamber) 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 and

Article 7 of the Convention.

7. The Government's written observations were submitted on

16 April 1993. The applicant replied on 9 July 1993 after one

extension of the time-limit.

8. On 5 April 1995 the Commission declared admissible the complaint

that the applicant did not have a public hearing. The remainder of the

application was declared inadmissible.

9. The text of the Commission's decision on admissibility was sent

to the parties on 5 May 1995 and they were invited to submit further

observations on the merits of the case. The applicant submitted

further observations on 29 June 1995.

10. After declaring the case admissible, the Commission, acting in

accordance with 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 (Second

Chamber) in pursuance of Article 31 of the Convention and after

deliberations and votes, the following members being present:

MM. H. DANELIUS, President

S. TRECHSEL

G. JÖRUNDSSON

J.-C. SOYER

H.G. SCHERMERS

F. MARTINEZ

L. LOUCAIDES

J.-C. GEUS

M.A. NOWICKI

I. CABRAL BARRETO

J. MUCHA

D. SVÁBY

P. LORENZEN

12. The text of this Report was adopted on 18 October 1995 by the

Commission and is now transmitted to the Committee of Ministers of the

Council of Europe, in accordance with Article 31 para. 2 of the

Convention.

13. The purpose of the Report, pursuant to 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 as an Appendix.

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. Upon establishing his residence in the Canton of Obwalden in 1979

the applicant entered into an agreement with the Obwalden Cantonal Tax

Administration according to which he would pay cantonal taxes in the

amount of at least 35,000 SFr per year.

17. In 1981/1982 the applicant's income was assessed as amounting to

180,000 SFr for the years 1980 and 1981/82.

18. In 1982 the Federal Tax Administration audited the accounts of

the C. company. It transpired that the latter had paid the applicant

735,845 SFr for commission services.

19. In 1983 the applicant submitted a new tax declaration wherein he

referred, in addition to the previous 180,000 SFr, to remunerations

obtained from the C. company.

20. The Cantonal Tax Commission of the Canton of Obwalden then

introduced evasion proceedings (Hinterziehungsverfahren) against the

applicant.

21. On 19 August 1986 the Cantonal Tax Commission imposed on the

applicant a supplementary tax of 172,328.15 SFr for the years 1980-

1982, as well as a fine of 413,587.40 SFr on account of tax evasion

(Steuerhinterziehung). This fine was imposed on the basis of Section

129 para. 1 (b) of the Federal Decree on the Imposition of a Direct

Federal Tax (Bundesratsbeschluss über die Erhebung der direkten

Bundessteuer; see below, at para. 30) of 9 December 1940.

22. On 19 September 1986 the applicant complained against this order

to the Cantonal Tax Appeals Commission (Steuerrekurskommission) of the

Canton of Obwalden which then fixed an oral hearing for

19 February 1987. At short notice the hearing was postponed to

23 February 1987. At this hearing the applicant was prevented from

attending, though his lawyer was present. The hearing was not public,

and the applicant's lawyer did not ask for it to be conducted in

public.

23. On 23 February 1987 the Cantonal Tax Appeals Commission dismissed

the applicant's complaint.

24. On 23 April 1987 the applicant filed an administrative law appeal

(Verwaltungsgerichtsbeschwerde) with the Federal Court (Bundesgericht).

Therein he complained, inter alia, that he had not been able personally

to participate in the proceedings, in particular at the oral hearing

of 23 February 1987.

25. On 8 July 1988 the Federal Court upheld the administrative law

appeal and referred the case back to the Tax Appeals Commission with

the directive that it should question the applicant personally and

determine the supplementary tax and the fine for the years 1980 until

1982. As to the applicant's absence at the hearing on

23 February 1987, the Federal Court found that he could not be blamed

for this as the hearing had been fixed at short notice.

26. Proceedings were then resumed before the Cantonal Tax Appeals

Commission. On 25 April 1989 the Cantonal Tax Appeals Commission

conducted a hearing. The applicant was questioned as to his personal

circumstances with a view to fixing the fine for the tax evasion in

1980, and as to the facts of the case concerning the alleged tax

evasion in 1981/1982. The hearing was not public, and the applicant

did not ask for it to be conducted in public.

27. On 7 November 1989 the Cantonal Tax Appeals Commission reduced

the supplementary tax imposed on the applicant to SFr 103,648.15, and

the fine to SFr 109,659.10.

28. On 9 January 1990 the applicant again filed an administrative law

appeal with the Federal Court. Therein he complained, inter alia, that

he had not had a public hearing in these proceedings.

29. On 12 June 1990 the Federal Court dismissed the administrative

law appeal. In its decision it did not refer to the applicant's

complaint that he had not had a public hearing.

B. Relevant domestic law

30. Section 129 para. 1 (b) of the Federal Decree on the Imposition

of a Direct Federal Tax (Bundesratsbeschluss über die Erhebung der

direkten Bundessteuer) of 9 December 1940 provides that the offence of

tax evasion "is subject to a fine of up to four times the fraudulently

concealed tax amount" ("unterliegt einer Busse bis zum Vierfachen des

entzogenen Steuerbetrages").

31. Section 71 of the Federal Decree states, insofar as relevant:

:

"Professional secrecy

1. Members and civil servants of the authorities of the

Federation, the Cantons and the communities and members of the

Cantonal Tax Appeals Commissions responsible for the Direct

Federal Tax must observe secrecy in respect of facts of which

they learn when assessing a taxpayer and in respect of the

authorities' proceedings ...

2. Breaches of professional secrecy ... shall be punished ..."

"Schweigepflicht

1. Die Mitglieder und Beamten der für die Direkte Bundessteuer

zuständigen Behörden des Bundes, der Kantone und der Gemeinden

und die Mitglieder der kantonalen Rekurskommissionen haben über

Tatsachen, die ihnen bei der Veranlagung eines Steuerpflichtigen

bekannt werden, und über die Verhandlungen in den Behörden

Stillschweigen zu beobachten ...

2. Verletzungen der Schweigepflicht ... werden ... geahndet

..."

III. OPINION OF THE COMMISSION

A. Complaint declared admissible

32. The Commission has declared admissible the applicant's complaint

that he did not have a public hearing.

B. Point at issue

33. The point at issue is whether there has been a violation of

Article 6 para. 1 (Art. 6-1) of the Convention.

C. Article 6 para. 1 (Art. 6-1) of the Convention

34. The applicant complains that he did not have a public hearing.

He relies on Article 6 para. 1 (Art. 6-1) of the Convention which

states, insofar as relevant:

"In the determination of ... any criminal charge

against him, everyone is entitled to a ... public hearing

... Judgment shall be pronounced publicly but the press

and public may be excluded from all or part of the trial in

the interest of morals, public order or national security

in a democratic society, where the interests of juveniles

or the protection of the private life of the parties so

require, or to the extent strictly necessary in the opinion

of the court in special circumstances where publicity would

prejudice the interests of justice."

35. The Government submit with reference to Section 71 of the Federal

Decree on the Imposition of a Direct Federal Tax that such cases are

conducted in non-public proceedings in order to protect the private

sphere of taxpayers. Article 6 para. 1 (Art. 6-1) of the Convention

has not been breached as the applicant's lawyer, who was well versed

in these matters, could have asked for a public hearing but failed to

do so.

36. The applicant submits that Section 71 of the Federal Decree

protects the secrecy of taxes in cases of ordinary tax assessment. It

does not protect secrecy in criminal proceedings. Regular criminal

courts have always conducted proceedings in public.

37. The Commission observes that Article 6 para. 1 (Art. 6-1), first

sentence, of the Convention sets forth the principle of the public

character of proceedings, while establishing in the second sentence

certain exceptions to the general rule.

38. According to the Convention organs' case-law, the public

character of the proceedings contemplated in Article 6 para. 1

(Art. 6-1) of the Convention protects litigants against the

administration of justice in secret with no public scrutiny. It is

also one of the means whereby confidence in the courts, superior and

inferior, can be maintained. By rendering the administration of

justice visible, publicity contributes to the aim of Article 6 para. 1

(Art. 6-1) of the Convention, namely a fair trial, the guarantee of

which is one of the fundamental principles of any democratic society

within the meaning of the Convention (see Eur. Court H.R., Golder

judgment of 21 February 1975, Series A no. 18, p. 18, para. 36; Pretto

and others judgment of 8 December 1983, Series A no. 71, p. 11,

para. 21; No. 15561/89, dec. 25.2.91, D.R. 69 p. 312).

39. Nevertheless, while the member States of the Council of Europe

all recognise the principle of such publicity, there is some diversity

as to its scope and manner of implementation, as regards both the

holding of hearings and the pronouncement of judgments.

40. Thus, according to the Convention organs' case-law, provided that

a public hearing has been held in first instance, the absence of a

hearing before a second or third instance may be justified by the

special features of the case (see Eur. Court H.R., Andersson judgment

of 29 October 1991, Series A no. 212-B, p. 45, para. 27).

41. Moreover, both in criminal and civil cases it is possible to

waive a right guaranteed by the Convention. However, insofar as the

waiver is permissible, it must be established in an unequivocal manner.

In the case of procedural rights, furthermore, a waiver, in order to

be effective for Convention purposes, requires minimum guarantees

commensurate to its importance (see Eur. Court H.R., Poitrimol judgment

of 23 November 1993, Series A no. 277, p. 13 et seq., para. 31;

Pfeiffer and Plankl judgment of 25 February 1992, Series A no. 227,

p. 16 et seq., para. 37). Thus, it has so far been found in civil

cases that neither the letter nor the spirit of this provision prevents

a person from waiving of his own free will and in an unequivocal

manner, the entitlement to have his case heard in public (see Eur.

Court H.R., Le Compte, Van Leuven and De Meyere judgment of

23 June 1981, Series A no. 43, p. 25, para. 59; H. v. Belgium judgment

of 30 November 1987, Series A no. 127-B, p. 36, para. 54; De Moor

judgment of 23 June 1994, Series A no. 292-A, p. 27, para. 60;

No. 13800/88, Dec. 1.7.91, D.R. 71 p. 94).

42. In the present case, criminal proceedings were instituted against

the applicant on account of tax evasion (see above, para. 20). A first

hearing, which was not public, was held before the Cantonal Tax Appeals

Commission on 23 February 1987. The applicant's complaint about this

hearing has been declared inadmissible by the Commission (see below,

Appendix, p. 15 et seq.). After the applicant's administrative appeal

was upheld by the Federal Court on 8 July 1988, proceedings were

resumed before the Cantonal Tax Appeals Commission. The latter

conducted on 25 April 1989 as the only instance an oral hearing which

was not, however, held in public. At this hearing, the applicant was

questioned as to his personal circumstances with a view to fixing the

fine for the tax evasion in 1980, and as to the facts of the case

concerning the alleged tax evasion in 1981/1982 (see above, para. 26).

43. It transpires that at the hearing of 25 April 1989 the applicant,

who was assisted by a lawyer, did not ask for it to be held in public

though he later complained of the lack of a public hearing in his

administrative law appeal of 9 January 1990 to the Federal Court (see

above, para. 28).

44. The Commission has considered whether the applicant, by not

asking for a hearing, could be considered to have waived, of his own

free will and in an unequivocal manner, the entitlement to have his

case heard in public before the Cantonal Tax Appeals Commission.

45. The Commission notes the respondent Government's submission

according to which the legal basis for non-public hearings in criminal

tax proceedings is Section 71 of the Federal Decree on the Imposition

of a Direct Federal Tax. This provision enshrines the principle of

professional secrecy in particular for members of the Cantonal Tax

Appeals Commissions. Professional secrecy covers the tax assessment

of a taxpayer as well as the proceedings. Paragraph 2 of Section 71

provides that breaches of professional secrecy shall be punished.

46. The applicant was aware that, other than in the common cantonal

law of criminal procedure, public hearings are in principle excluded

in criminal tax proceedings. Before the Commission the applicant has

also argued that Section 71 of the Federal Decree does not protect

secrecy in criminal proceedings and that regular criminal courts have

always conducted proceedings in public.

47. In these circumstances, the applicant could have been expected

to request the Cantonal Tax Appeals Commission that the hearing of

25 April 1989 be held in public, if he attached importance to it.

However, he did not do so. Indeed, the Commission notes that already

at the hearing of 23 February 1987 before the Cantonal Tax Appeals

Commission the applicant's lawyer did not ask for the hearing to be

held in public.

48. It may reasonably be considered, therefore, that the applicant

unequivocally waived his right to a public hearing before the Cantonal

Tax Appeals Commission.

CONCLUSION

49. The Commission concludes, by 9 votes to 4, that in the present

case there has been no violation of Article 6 para. 1 (Art. 6-1) of the

Convention.

Secretary to the Second Chamber President of the Second Chamber

(M.-T. SCHOEPFER) (H. DANELIUS)

(Or. English)

DISSENTING OPINION OF MM. J.-C. SOYER,

L. LOUCAIDES, J.-C. GEUS AND M.A. NOWICKI

Contrary to the majority of the Commission we consider that the

applicant could not have waived, of his own free will and in an

unequivocal manner, the entitlement to have his case heard in public

before the Cantonal Tax Appeals Commission.

Thus, in view of the categoric wording of Section 71 of the

Federal Decree, apparently based on the assumption that the tax secret

generally requires the exclusion of the public from such proceedings,

it does not appear that the applicant's request to have a public

hearing would have had any reasonable prospects of success. The

applicant could not therefore have been expected to ask for an oral

hearing.

It follows that the applicant did not benefit from his right to

a "public hearing" within the meaning of Article 6 para. 1 of the

Convention.

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H.B. v. SWITZERLAND

H.B. v. SWITZERLAND

LEXI