EUROPEAN COMMISSION OF HUMAN RIGHTS

FIRST CHAMBER

Application No. 17208/90

Rudolf Hannak

against

Austria

REPORT OF THE COMMISSION

(adopted on 31 August 1994)

TABLE OF CONTENTS

Page

I. INTRODUCTION

      (paras. 1 - 6)       1                            

II.   ESTABLISHMENT OF THE FACTS

      (paras. 7 - 57)       2

A. Particular circumstances of the case

(paras. 7 - 46)                    2

B. Relevant domestic law

(paras. 47 - 57)       5

III.  OPINION OF THE COMMISSION

      (paras. 58 - 87)                    7

A. Complaints declared admissible

(para. 58)       7

B. Points at issue

(para. 59)           7

C. The alleged violation of Article 6 para. 1 of

the Convention regarding the criminal proceedings

(paras. 60 - 71)       7

CONCLUSION

(para. 72)       9

D. The alleged violation of Article 6 para. 1 of

the Convention regarding the bankruptcy proceedings

(paras. 73 - 80)       9

CONCLUSION

(para. 81)      10

E. The alleged violation of Article 8 of

the Convention

(paras. 82 - 83)       10

CONCLUSION

(para. 84)       10

F. Recapitulation

(para. 85 - 87)              11

APPENDIX : DECISION ON THE ADMISSIBILITY OF THE

APPLICATION 12

I. INTRODUCTION

1. The present Report concerns Application No. 17208/90 by Rudolf Hannak against Austria, introduced on 3 August and registered on 5 November 1990.

2. The applicant, born in 1933, is an Austrian national and resident at Wels .  Before the Commission he is represented by Mr. G. Kusatz , a lawyer practising at Wels .

The Government of Austria are represented by their Agent, Ambassador F. Cede, Head of the International Law Department at the Federal Ministry of Foreign Affairs.

3. The application was communicated to the respondent Government on 19 February 1992.  Following an exchange of memorials, the applicant's complaint about the length of the criminal proceedings against him (Article 6 para. 1 of the Convention), his complaint about the length of the bankruptcy proceedings against him (Article 6 para. 1 of the Convention) and his complaint about restrictions upon his right to respect for his private life and his correspondence in the context of the bankruptcy proceedings (Article 8 of the Convention) were declared admissible on 13 October 1993.  The decision on admissibility is appended to this Report.

4. Having noted that there is no basis upon which a friendly settlement within the meaning of Article 28 para. 1 (b) of the Convention can be secured, the Commission (First Chamber), after deliberating, adopted this Report on 31 August 1994 in accordance with Article 31 para. 1 of the Convention, the following members being present:

MM. A. WEITZEL, President

C.L. ROZAKIS

F. ERMACORA

E. BUSUTTIL

A.S. GÖZÜBÜYÜK

Mrs. J. LIDDY

MM. M. PELLONPÄÄ

B. MARXER

B. CONFORTI

N. BRATZA

I. BÉKÉS

E. KONSTANTINOV

5. In this Report the Commission states its opinion as to whether the facts found disclose a violation of the Convention by the Austrian Government.

6. The text of this Report is now transmitted to the Committee of Ministers of the Council of Europe, in accordance with Article 31 para. 2 of the Convention.

II. ESTABLISHMENT OF THE FACTS

A. The particular circumstances of the case

a. The criminal proceedings

7. On 1 December 1981 criminal investigations were started against the applicant and others on the suspicion of fraud in the context of the insolvency and bankruptcy of a firm.  In 1984 the investigations were extended to further charges of fraudulent conversion committed until the beginning of 1984.  In these proceedings the applicant was assisted by counsel.

8. On 4 April 1984 the Wels Regional Court ( Kreisgericht ) ordered the applicant's detention on remand on the grounds of a danger of his absconding and risk of repetition of the criminal offences concerned.  On 5 April 1984 the applicant was questioned upon the charges against him.

9. On 20 April 1984 the Investigating Judge instructed the expert H. to prepare an opinion relating to the applicant's business transactions.

10. On 30 August 1984 the Linz Court of Appeal, upon the applicant's appeal ( Haftbeschwerde ), ordered his release from detention on remand on various conditions, inter alia the obligation not to leave his place of residence without permission of the investigating judge, that he reported once a month to the investigating judge (restrictions terminated in January 1991), that his passport was provisionally taken away (measure lifted in August 1986) and that he had to give bail of AS 300,000 (lifted in January 1991).

11. On various occasions in 1984 witnesses were questioned.  Furthermore, in November and December 1984, the investigations were twice extended to cover further charges brought against the applicant.

12. On 24 April 1985 nineteen banking institutes and nine firms involved in business transactions with the applicant were requested to provide the expert H. with all necessary information.

13. On 2 February 1986 the expert H. submitted his opinion, which comprised several volumes.  He filed a fee note concerning more than two thousand working hours.  Following successful appeals by the applicant and a co-accused, the expert delivered a break-down of his services, and his fees were again fixed.  The applicant's further appeal remained unsuccessful.

14. In June 1986 the proceedings were extended to further charges.  The applicant's appeals in this respect were to no avail.

15. In May, June, July and September 1986, witnesses were heard.

16. On 15 April 1987 the preliminary investigations were terminated.

17. On 6 July 1987 the Wels Public Prosecutor's Office ( Staats - anwaltschaft ) preferred the indictment ( Anklageschrift ) against the applicant and his co-accused.

18. On 1 February 1988 the Linz Court of Appeal partly granted the applicant's appeal against the indictment. The major part of the indictment was confirmed.

19. On 30 May 1988 the Public Prosecutor's Office requested the Wels Regional Court to transfer the proceedings to the Vienna Regional Court on the ground that the applicant had indicated his intention to change his place of residence and had joined a medical certificate according to which he was not fit to travel from Vienna to Wels to attend the trial.  The case was transferred to the Vienna Regional Court on 5 August 1988.

20. On 22 June 1989 the trial was scheduled for the period between 5 September and 1 December 1989.  The applicant's repeated requests to terminate the restrictions imposed upon him in 1984 were dismissed.

21. On 7 July 1989 the Vienna Regional Court appointed the medical expert J. to prepare an opinion on the applicant's capacity to attend the trial.  The opinion was delivered on 11 August 1989.

22. On 25 September 1989 the Vienna Prosecutor's Office requested that the proceedings be transferred to the Linz Regional Court as the applicant eventually did not move.  The transfer was ordered accordingly by the Supreme Court ( Oberster Gerichtshof ) on 18 December 1989.

23. On 27 November 1990 the medical expert J. filed a further opinion on the applicant's capacity to attend the trial.

24. The trial against the applicant started before the Linz Regional Court on 18 December 1990.  It comprised altogether fifty-five hearings.

25. At the hearing of 29 May 1991 the applicant's counsel challenged the expert H. for bias on the ground that he had also acted as expert in the context of bankruptcy proceedings concerning the applicant. Thus there was a conflict of interests.  The motion was dismissed, and so were his further motions in this respect in a decision by the Regional Court of 10 July 1991.

26. On 5 June 1991 the Linz Court of Appeal ordered the applicant's detention on remand.

27. On 5 September 1991 the Linz Regional Court convicted the applicant of fraud on numerous counts, fraudulent conversion, fraudulent bankruptcy, false testimony, and sentenced him to seven years' imprisonment.  A co-accused was also convicted of fraud and fraudulent bankruptcy and sentenced to eighteen months' imprisonment.  The written judgment, comprising 692 pages, was served upon the applicant's counsel on 11 December 1991.

28. The applicant announced a plea of nullity ( Nichtigkeits-beschwerde ) and an appeal ( Berufung ) against sentence, and submitted the reasons on 7 January 1992.

29. The applicant was released from detention on 9 April 1992.

30. On 26 November 1992 the Supreme Court quashed the Linz Regional Court's judgment of 5 September 1991 regarding numerous counts of fraud, fraudulent bankruptcy and fraudulent conversion.  The case was, to this extent, sent back to the Linz Regional Court.  The Supreme Court confirmed the finding of the applicant's guilt as regards fraudulent bankruptcy on two counts and false testimony on two counts.  The decision on further legal issues raised in the applicant's plea of nullity and upon the Public Prosecutor's plea of nullity was postponed in order to conduct a public hearing on these matters.  The Supreme Court based its decision to quash the major part of the Regional Court's judgment upon the consideration that the expert H., who had also acted as expert in the context of bankruptcy proceedings, had been biased.  The judgment was served on 3 December 1992.

31. On 17 December 1992 the Supreme Court, following a hearing, dismissed the remainder of the applicant's plea of nullity and the plea of nullity lodged by the Public Prosecutor's Office.  The judgment was served on 29 January 1993.

32. The new trial before the Linz Regional Court was fixed to open on 9 March 1993.  This decision was taken by a judge who had participated in the judgment of 5 September 1991.  Following a successful objection lodged by the applicant with the Linz Court of Appeal, his case was assigned to another judge at the Linz Regional Court.

33. On 14 April 1993 the Linz Court of Appeal, upon request of the Linz Public Prosecutor's Office dated 10 March 1993, transferred the criminal proceedings against the applicant to the Wels Regional Court, where the proceedings are still pending.

b. The bankruptcy proceedings

34. On 5 June 1984 the Wels Regional Court opened bankruptcy proceedings against the applicant and firms owned by him.  The applicant unsuccessfully appealed against these decisions.

35. In November 1984 the official receiver instituted proceedings for a forced sale by auction of the applicant's shares in two pieces of land.  These proceedings terminated on 14 December 1988.

36. In 1985 the official receiver instituted altogether twenty-one court actions to have transactions entered into by the applicant set aside.  Four of these actions were terminated by settlement in 1985; four by settlement and one by a court judgment in 1986; one by court judgment and one by settlement in 1987;  three actions terminated in 1988, five further actions terminated by settlement in 1992.  Two remaining actions were apparently settled in 1993.

37. Furthermore, in November 1985 the official receiver instituted proceedings for a forced sale by auction of three pieces of land owned by the applicant.  These proceedings terminated in April 1990.

38. Proceedings instituted by the applicant's divorced wife to have some items separated from the applicant's assets in bankruptcy remained unsuccessful.

39. In 1986 the official receiver also brought, successfully, a court action against a firm which had paid fees to the applicant personally.

40. The bankruptcy proceedings involved various restrictions under the Austrian Bankruptcy Act ( Konkursordnung ), in particular the control, by the official receiver, of the applicant's incoming mail under S. 78 para. 2 of the Bankruptcy Act.

41. On 30 January 1989 the applicant requested the Wels District Court to suspend the control of his incoming mail.  He submitted in particular that the bankruptcy proceedings had at that time lasted already five years, and that he received even personal mail only to the extent that he fetched it personally.  However, due to his bad state of health, he had repeatedly not been able to do so.

42. On 13 February 1989 the Wels District Court dismissed the applicant's request of 30 January 1989.  The District Court referred to the comments of the official receiver according to which only due to the control of the applicant's incoming correspondence, he had, in 1986, discovered a payment made to the applicant, and found out in January 1989 that the applicant perceived a pension.  The Court found that in these circumstances the measure was still necessary for the purposes of the bankruptcy proceedings.

43. On 14 April 1989 the Linz Court of Appeal, upon the applicant's appeal, quashed the decision of 13 February 1989 and lifted the control of the applicant's correspondence.

44. On 15 June 1989 the Supreme Court, upon the appeal on points of law of the official receiver, quashed the appeal decision of 14 April 1989 and confirmed the Wels District Court's decision of 13 February 1989.

45. On 25 November 1993 the Wels Regional Court lifted the control of the applicant's correspondence.

46. The bankruptcy proceedings terminated on 24 May 1994.

B. The relevant domestic law

47. Bankruptcy proceedings are governed by the Austrian Bankruptcy Act ( Konkursordnung ).

48. Bankruptcy proceedings are instituted against individuals in case of insolvency (S. 66), against legal entities also in case of heavy indebtedness (S. 67).

49. Following the opening of bankruptcy proceedings ( Konkurser-öffnung ), the debtor is deprived of the right to administer his assets (S. 1 para. 1) which are to be seized and administered in accordance with the provisions of the Bankruptcy Act and used to settle the claims of the creditors who have claims of a financial nature against the bankrupt at the time of the opening of the bankruptcy proceedings  (S. 1 para. 2).  According to S. 3, any legal transactions by the bankrupt following the opening of the bankruptcy proceedings, which affect his assets, are not valid as regards the creditors, payment of a debt to the bankrupt personally do not in principle discharge the debtor.

50. According to S. 63, bankruptcy proceedings are conducted by the Bankruptcy Court ( Konkursgericht ) as court of first instance, whereby the provisions of in particular the Code of Civil Proceedings applies mutatis mutandis , if the Bankruptcy Act does not provide otherwise.

51. Upon the opening of bankruptcy proceedings, the Bankruptcy Court appoints an official receiver, pursuant to S. 80.

52. The duties and responsibility of the official receiver are regulated in S. 81, in particular the duty to establish the financial situation of the bankrupt and his assets, and to take all necessary steps regarding the bankrupt's claims and debts, including litigation concerning the assets.

53. Furthermore, S. 78 provides for various protective measures and notifications of the opening of bankruptcy proceedings which also concern the official receiver.  In particular, according to S. 78 paras. 2 and 3, the post office is notified and has to transmit all mail, which would have otherwise sent to the bankrupt, to the official receiver.  This does not apply to mail sent by courts or other authorities, if there is an official note that the mail should be served upon the bankrupt despite the control of correspondence.  The official receiver is entitled to open the mail.  He is obliged to return all court or otherwise official documents which are not related to the bankrupt's assets, with a note informing about the bankruptcy proceedings.  As regards the remainder of mail the official receiver is obliged to grant the bankrupt access, and to pass mail not related to the assets promptly on to him.

54. The activities of the official receiver are controlled by the Bankruptcy Court which also decides upon complaints lodged by creditors or the bankrupt against measures taken by the official receiver or his performance in general (S. 84).

55. SS. 27 to 43 provide for the possibility to have transactions entered into by the bankrupt set aside, in particular if they were entered into before opening of the bankruptcy proceedings with the intention to prejudice his creditors ( Benachteiligungsabsicht ), or in case of obvious underselling ( Vermögensverschleuderung ), furthermore gratuitous dispositions.  The right to request that such transactions be set aside is exercised by the official receiver (S. 37) in instituting a court action with the bankruptcy court or as defence to an action (S. 43).

56. Once the assets have been completely realised and all claims have been finally decided, a final distribution takes place (SS. 136 to 138).  Subsequently, the Bankruptcy Court terminates the bankruptcy proceedings under S. 138 of the Bankruptcy Act.

57. S. 59 provides that the applicant's right to administer his assets is restored following the final decision of the Bankruptcy Court to terminate the bankruptcy proceedings.

III. OPINION OF THE COMMISSION

A. Complaints declared admissible

58. The Commission has declared admissible the applicant's complaints

- that the criminal charges against the applicant were not determined within a reasonable time;

- that the length of the bankruptcy proceedings against the applicant exceeded a reasonable time;

- that the control of the applicant's correspondence and further restrictions, in the context of the bankruptcy proceedings, amounted to a violation of the applicant's right to respect for his private life and correspondence.

B. Points at issue

59. The points at issue are

- whether there has been a violation of Article 6 para. 1 (Art. 6-1) of the Convention in respect of the criminal proceedings;

- whether there has been a violation of Article 6 para. 1 (Art. 6-1) of the Convention in respect of the bankruptcy proceedings;

- whether there has been a violation of Article 8 (Art. 8) of the Convention.

C. The alleged violation of Article 6 para. 1 (Art. 6-1) of the Convention regarding the criminal proceedings

60. The applicant submits that the criminal proceedings against him have exceeded a reasonable time.  He invokes Article 6 para. 1 (Art. 6-1) of the Convention which includes the following provision:

"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a ... hearing within a reasonable time by (a) ... tribunal ..."

61. The Government attribute the length of the proceedings to the complexity of the case and the applicant's conduct.  The applicant disputes in particular his responsibility for any delays.

62. The period to be taken into consideration started on 1 December 1981 when the criminal investigations were instituted against the applicant.  The proceedings have not yet terminated, i.e. after more than twelve years and nine months.

63. The Commission recalls that the reasonableness of the length of proceedings must be assessed in the light of the particular circumstances of the case and having regard to the complexity of the case, the conduct of the parties and the conduct of the authorities dealing with the case.  In this instance the circumstances call for an overall assessment (see Eur. Court H.R., Ficara judgment of 19 February 1991, Series A no. 196-A, p. 9, para. 17).

64. The Commission finds that the proceedings were of some complexity as the charges against the applicant concerning fraud, fraudulent bankruptcy and fraudulent conversion related to numerous business transactions and raised factual questions, which necessitated the taking of extensive expert evidence.  

65. Moreover, the applicant, throughout the proceedings, had resort to remedies against various decisions.  However, these remedies were not, on the whole, abusive, and only to some extent contributed to the length of the proceedings.

66. As regards the conduct of the judicial authorities, the Commission notes that the preliminary proceedings lasted from 1 December 1981 until 15 April 1987, i.e. more than five years and four months.  The Government failed to specify any action on the part of the judicial authorities until about April 1984, i.e. concerning a period of approximately two years and four months.  The business expert appointed in April 1984 was not given any time-limit for the preparation of his opinion nor was he otherwise controlled by the Investigating Judge.  It appears doubtful that he could effectively work on the preparation of his opinion before April 1985 when the Investigating Judge requested various banking institutes and other firms to co-operate with the expert.  The termination of the opinion, though voluminous, took another nine months.

67. The Commission further observes that the proceedings before the Linz Court of Appeal concerning the applicant's appeal against the indictment of 6 July 1987 lasted almost seven months.

68. Between May 1988 and December 1989 the proceedings could not be furthered due to the transfer of the case from the Wels Regional Court to the Vienna Regional Court and then to the Linz Regional Court.  These transfers may have been brought about by the applicant's indication that he intended to move, but it appears questionable whether this mere intention voiced by the applicant justified the transfer of the proceedings to another court.  Moreover,  taking into account the applicant's continuing obligation to ask for permission to change his place of residence and to report once a month to the Investigating Judge, the authorities were in a position to react speedily to the fact that he abandoned this project.

69. Following the transfer of the case to the Linz Regional Court, a further delay of one year occurred before the trial was opened.  The Commission does not regard the Government's reference to the case-load of the competent judge as a sufficient explanation.  According to the case-law of the Convention organs, Article 6 para. 1 (Art. 6-1) imposes on the Contracting States the obligation to organise their judicial systems in such a way that their courts can meet each of its requirements (cf. Eur. Court H.R., Pizzetti judgment of 26 February 1993, Series A no. 257-C, p. 37, para. 18).  The Commission finds that no sufficient measures were taken to ensure a speedy continuation of the proceedings which had lasted, at that time, already more than eight years.

70. Finally, it does not appear that, following the applicant's largely successful plea of nullity, there has been any activity in the proceedings, pending again before the Wels Regional Court, since April 1993.

71. In these circumstances, the Commission cannot regard as "reasonable" a lapse of time which is now already more than twelve years and nine months.   In this respect, the Commission also considered that a particular diligence is required in criminal cases where the accused is detained on remand or, as in the present case, for more than six years subjected to important restrictions on his freedom of movement.

CONCLUSION

72. The Commission concludes unanimously that there has been a violation of Article 6 para. 1 (Art. 6-1) of the Convention in respect of the criminal proceedings.

D. The alleged violation of Article 6 para. 1 (Art. 6-1) of the Convention regarding the bankruptcy proceedings

73. The applicant also submits that the bankruptcy proceedings against him were not terminated within a reasonable time, in breach of Article 6 para. 1 (Art. 6-1) of the Convention.

74. As regards the applicability of Article 6 para. 1 (Art. 6-1) to the said proceedings, the Commission recalls that there is "a determination of ... civil rights and obligations" in "all proceedings the result of which is decisive for private rights and obligations"; "the character of the legislation which governs how the matter is to be determined (civil, commercial, administrative law, etc.) and that of the authority which is invested with jurisdiction in the matter (ordinary court, administrative body, etc.) are therefore of little consequence" (Eur. Court H.R., Ringeisen judgment of 16 July 1971, Series A no. 13, p. 39, para. 94).  The Commission decided in a previous case that proceedings to declare a person bankrupt, having had the direct effect of depriving the person concerned of the right to continue trading and to manage the business in person until the annulment of the bankruptcy, temporarily affect civil rights and obligations within the meaning of Article 6 para. 1 (Art. 6-1) (No. 10259/83, Dec. 10.12.84, D.R. 40 p. 170).

75. In the present case, following the institution of bankruptcy proceedings, the applicant was subjected, in accordance with the Austrian Bankruptcy Act, to various restrictions such as the continuous suspension of his right to administer his assets.  The decisions and measures taken by the Bankruptcy Court and, under its supervision, by the official receiver had implications on his property rights and on contracts previously concluded, and the outcome of the bankruptcy proceedings directly affected his legal and financial position, in particular in respect of his property rights and his obligations vis-à-vis his creditors.

76. The Commission finds these elements sufficient to examine whether the bankruptcy proceedings against the applicant complied with the requirement of Article 6 para. 1 (Art. 6-1) as to the right to a hearing "within a reasonable time".

77. The period to be considered under Article 6 para. 1 (Art. 6-1) started in May 1984.  The Bankruptcy Court terminated these proceedings about ten years later on 24 May 1994.

78. The Government explain the length of the bankruptcy proceedings by their complexity, in particular the numerous litigations started by the official receiver, and the conduct of the applicant.

79. The Commission notes that the applicant has no procedural standing in the bankruptcy and related proceedings.  Moreover, the Commission finds no explanation as to the length of the proceedings instituted by the official receiver against third parties, which were partly only settled after about seven or eight years.  The Commission further observes that a particular diligence is required in cases concerning the civil status or capacity of a person (cf. Eur. Court H.R., Bock judgment of 29 March 1989, Series A no. 150, p. 23, para. 48).

80. In the circumstances of the present case, a period of about ten years for the conduct of the bankruptcy proceedings against the applicant cannot be regarded as "reasonable" within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention.

CONCLUSION

81. The Commission concludes unanimously that there has been a violation of Article 6 para. 1 (Art. 6-1) of the Convention in respect of the bankruptcy proceedings.

E. The alleged violation of Article 8 (Art. 8) of the Convention

82. The applicant further claims that the length of the bankruptcy proceedings with the continuing restrictions upon particularly his right to administer his assets and the control of his mail amounted to a violation of his right to respect for his private life and correspondence.  He relies on Article 8 para. 1 (Art. 8-1) of the Convention which provides, so far as relevant, as follows:

"1. Everyone has the right to respect for his private ... life, ... and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society ... for the prevention of disorder or crime, ... or for the protection of the rights and freedoms of others."

83. The Commission, in view of the circumstances of the case and its finding regarding the reasonableness of the length of the bankruptcy proceedings, considers it unnecessary to determine also the complaint based on Article 8 para. 1 (Art. 8-1) of the Convention.

CONCLUSION

84. The Commission concludes unanimously that it is unnecessary to determine whether there has been a violation of Article 8 (Art. 8) of the Convention.

F. Recapitulation

85. The Commission concludes unanimously that there has been a violation of Article 6 para. 1 (Art. 6-1) of the Convention in respect of the criminal proceedings (para. 72);

86. The Commission concludes unanimously that there has been a violation of Article 6 para. 1 (Art. 6-1) of the Convention in respect of the bankruptcy proceedings (para. 81);

87. The Commission concludes unanimously that it is unnecessary to determine whether there has been a violation of Article 8 (Art. 8) of the Convention (para. 84).

         Secretary                             President

   to the First Chamber                  of the First Chamber

     (M.F. BUQUICCHIO)                       (A. WEITZEL)