EUROPEAN COMMISSION OF HUMAN RIGHTS

                       Application No. 15375/89

                 Gasus Dosier- und Fördertechnik GmbH

                                against

                            the Netherlands

                       REPORT OF THE COMMISSION

                     (adopted on 21 October 1993)

                           TABLE OF CONTENTS

                                                                 Page

I.    INTRODUCTION

      (paras. 1-19) . . . . . . . . . . . . . . . . . . . . . . . . 1

      A.   The application

           (paras. 2-6) . . . . . . . . . . . . . . . . . . . . . . 1

      B.   The proceedings

           (paras. 7-14)  . . . . . . . . . . . . . . . . . . . . . 1

      C.   The present Report

           (paras. 15-19) . . . . . . . . . . . . . . . . . . . . . 2

II.   ESTABLISHMENT OF THE FACTS

      (paras. 20-43). . . . . . . . . . . . . . . . . . . . . . . . 4

      A.   Particular circumstances of the case

           (paras. 20-33) . . . . . . . . . . . . . . . . . . . . . 4

      B.   Relevant domestic law

           (paras. 34-43) . . . . . . . . . . . . . . . . . . . . . 6

III.  OPINION OF THE COMMISSION

      (paras. 44-79). . . . . . . . . . . . . . . . . . . . . . . .11

      A.   Complaint declared admissible

           (para. 44) . . . . . . . . . . . . . . . . . . . . . . .11

      B.   Point at issue

           (para. 45) . . . . . . . . . . . . . . . . . . . . . . .11

      C.   Article 1 of Protocol No. 1

           (paras. 46-65) . . . . . . . . . . . . . . . . . . . . .11

      CONCLUSION (para. 69) . . . . . . . . . . . . . . . . . . . .14

      CONCURRING OPINION OF MRS. J. LIDDY . . . . . . . . . . . . .15

      DISSENTING OPINION OF MR. S. TRECHSEL

      JOINED BY MM. C.L. ROZAKIS AND J.-C. GEUS . . . . . . . . . .16

      DISSENTING OPINION OF MR. H.G. SCHERMERS. . . . . . . . . . .17

      DISSENTING OPINION OF MR. M. PELLONPÄÄ. . . . . . . . . . . .18

APPENDIX I   :  HISTORY OF THE PROCEEDINGS. . . . . . . . . . . . .19

APPENDIX II  :  DECISION ON THE ADMISSIBILITY OF THE APPLICATION. .20

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 German private company with limited liability,

having its registered office in Würzburg, Germany.  Before the

Commission the applicant company is represented by

Mr. J.E. van der Wolf, a lawyer practising in Soest, the Netherlands.

3     The application is directed against the Netherlands, whose

Government are represented by their Agent, Mr. K. de Vey Mestdagh of

the Netherlands Ministry of Foreign Affairs.

4     The applicant complains under Article 1 of Protocol No. 1 that

it was unjustly deprived of its possessions without any compensation

in the following circumstances.

5     On 31 July 1980 the Dutch tax authorities seized a concrete

mixing machine on the premises of a Dutch tax debtor for non-payment

of taxes due and subsequently agreed to its sale. The tax debtor was

a customer of the applicant company, who had sold and delivered the

machine to this company under retention of title, whereas only a down

payment of 17% had been made by the latter.

6     The tax authorities rejected the applicant company's objection

against the seizure on 15 May 1981. The applicant company subsequently

started civil proceedings challenging the lawfulness of the seizure.

Its claims were rejected in a final decision of 13 January 1989 by the

Supreme Court.

B.    The proceedings

7     The application was introduced on 6 July 1989 and registered on

16 August 1989.

8     On 7 November 1990 the Commission decided to communicate the

application to the respondent Government and invite them to submit

written observations on the admissibility and merits of the

application.

9     The Government's observations were submitted on 13 March 1991.

The applicant submitted his observations in reply on 4 June 1991.

10    On 11 May 1992 the Commission decided to invite the parties to

a hearing on the admissibility and merits of the application.

11    At the hearing on 21 October 1992, the Government were

represented by their Agent, Mr. K. de Vey Mestdagh, and by

Mr. H.D.O. Blauw as counsel and MM. A. van Eijsden and A. van Vliet,

Ministry of Finance as advisers. The applicant company was represented

by Mr. J.E. van der Wolf, and by the applicant company's shareholders

Mr. H.-J. Leuschner and Mrs. C. Leuschner.

12    Following the hearing the Commission declared the application

admissible in respect of the applicant company's complaint under

Article 1 of Protocol No. 1.

13    On 4 November 1992 the Commission requested the parties to submit

further information. On 10 February 1993 the applicant company

submitted the information, followed by the Government on

12 February 1993.

14    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 of the case.  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

15    The present Report has been drawn up by the Commission in

pursuance of Article 31 of the Convention and after deliberations and

votes, the following members being present:

           MM.   C.A. NØRGAARD, President

                 S. TRECHSEL

                 E. BUSUTTIL

                 G. JÖRUNDSSON

                 H.G. SCHERMERS

                 H. DANELIUS

           Mrs.  G.H. THUNE

           MM.   F. MARTINEZ

                 C. L. ROZAKIS

           Mrs.  J. LIDDY

                 J.-C. GEUS

                 M.P. PELLONPÄÄ

16    The text of the Report was adopted on 21 October 1993 and is now

transmitted to the Committee of Ministers of the Council of Europe, in

accordance with Article 31 para. 1 of the Convention.

17    The purpose of the Report, pursuant to Article 31 para. 1 of the

Convention, is

      (1)  to establish the facts, and

      (2)  to state an opinion as to whether the facts

           found disclose a breach by the State concerned

           of its obligations under the Convention.

18    A schedule setting out the history of the proceedings before the

Commission is attached hereto as Appendix I and the Commission's

decision on the admissibility of the application forms Appendix II.

19    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.    Particular circumstances of the case

20    In June 1980 the applicant company, Gasus Dosier- und

Fördertechnik GmbH (hereinafter referred to as "Gasus"), sold a

concrete mixing machine to Atlas Junior Beton B.V. (hereinafter

referred to as "Atlas"), a Dutch company with limited liability in

Leiderdorp, the Netherlands, for a sum of DM. 125.401,24.  The

transaction was concluded under the condition that the ownership of the

machine would be transferred to Atlas after the purchase price had been

fully paid by Atlas to Gasus (eigendomsvoorbehoud).

21    Following a down payment of DM. 21.672, the machine was delivered

to Atlas on 28 July 1980.  On 31 July 1980, whilst the machine was

being installed, the movable property found on Atlas' premises,

including the concrete mixing machine, was seized (bodembeslag) on the

order of the Collector of Direct Taxes (Ontvanger der Directe

Belastingen) in Leiden by virtue of Section 16 para. 3 of the Direct

Taxes Collection Act of 22 May 1845 (Wet op de invordering van 's Rijks

directe belastingen - hereinafter referred to as the "1845 Collection

Act") for Atlas' failure to pay taxes.  Gasus was not informed about

this seizure and continued installing the concrete mixing machine,

which was completed on 2 August 1980.

22    On 16 October 1980 Atlas was granted a provisional moratorium

(voorlopige surséance van betaling) as it could no longer meet its

financial obligations and a receiver (bewindvoerder) was appointed.

23    By registered letter of 21 October 1980, specifying the invoice

numbers and amounts, the applicant company informed Atlas' receiver

about the still outstanding debt of Atlas to Gasus and claimed full

payment or a bank guarantee. Gasus further informed the receiver that

in case of non-payment, it would exercise its property rights by taking

back its delivered and unpaid goods on 30 October 1980.

24    On 23 October 1980 a meeting took place at the office of Atlas'

receiver between Atlas, Van Baarsen Wandplaten B.V. (hereinafter

referred to as "Van Baarsen"), the tax authorities and the National

Investment Bank (Nationale Investerings Bank), the latter being one of

the two Banks who were the fiduciary owners of Atlas' assets.  During

this meeting all parties agreed to the sale of all of Atlas' assets,

part of which was seized by the tax authorities, to Van Baarsen for a

total amount of 500.000 Dutch guilders.  It was agreed that this

transaction would not include goods on which third parties could still

exercise any rights.  It was furthermore agreed that one half of the

proceeds of this transaction would be paid to the National Investment

Bank and the other half to the tax authorities.  The turnover tax Van

Baarsen paid on this amount to Atlas was not divided nor paid to the

tax authorities who had agreed that this amount would remain on Atlas'

account. The sold assets, including the concrete mixing machine, were

delivered to Van Baarsen at the end of October 1980.

25    On 30 October 1980 Atlas was declared bankrupt. During these

proceedings Atlas' liquidator (curator) paid 4.021 Dutch guilders to

the company Gebr. Rook B.V. out of what was still in Atlas' estate,

since the sale to Van Baarsen had included masonry sand, which the

Gebr. Rook B.V. had delivered under retention of title. There were no

other secured commercial creditors. The bankruptcy proceedings were

terminated on 20 June 1990 for lack of funds. Atlas' unsecured

creditors remained fully unpaid.

26    The Government state it was agreed that the seizure by the tax

authorities would be rescinded as soon as the tax authorities would

have received their share of the proceeds of the sale, i.e.

250.000 Dutch guilders.  This amount was received on 25 August 1981.

The Government further state that on 23 October 1980 the tax

authorities were unaware of Gasus' retention of title.

27    The applicant company states that it has never been informed that

the seizure was rescinded on 25 August 1981.  In this connection it

refers to a specific statement made by its adversary parties in 1983

in the national proceedings on this issue to the effect that, since it

had become clear that Atlas did not own the concrete mixing machine,

the latter was not one of Atlas' assets and the tax authorities could

continue to exercise their rights pursuant to Section 16 para. 3 of the

1845 Collection Act (bodemrecht).  The tax authorities also stated that

they did not object to the use of the concrete mixing machine by

Van Baarsen pending the outcome of the proceedings on the seizure.

28    After learning of the fate of the concrete mixing machine, Gasus

filed on 4 March 1981 an objection (bezwaarschrift) against the

seizure.  The Director of Direct Taxes (Directeur der Directe

Belastingen) rejected the objection on 15 May 1981, primarily for

having been submitted out of time and subsidiarily as in any event he

found no grounds for rescinding the seizure.  Against this decision no

appeal lay.

29    By summons of 22 May 1981 Gasus started civil proceedings before

the Regional Court (Arrondissementsrechtbank) of Utrecht against Atlas'

liquidator and Van Baarsen demanding that the concrete mixing machine

be returned to Gasus.

30    Furthermore, by summons of 17 September 1981, Gasus started civil

proceedings before the Regional Court of The Hague against the tax

authorities, the liquidator of Atlas and Van Baarsen, complaining,

inter alia, that the seizure was unlawful and that Gasus' rights under

Article 6 para. 1 of the Convention had been violated as Section 16

para. 3 of the 1845 Collection Act excludes the possibility for a third

party to have the seizure at issue examined by a court.

31    On 21 December 1983 the Regional Court of The Hague dismissed

Gasus' complaints.  Gasus' appeal was rejected by the Court of Appeal

(Gerechtshof) of The Hague on 3 December 1986.

32    Gasus' subsequent appeal in cassation to the Supreme Court (Hoge

Raad) was rejected on 13 January 1989. The Supreme Court held that

Article 1 of Protocol No. 1 to the Convention was not violated as

Section 16 para. 3 of the 1845 Collection Act was necessary to secure

the payment of taxes in the sense that this payment should not be

frustrated by a reservation of ownership (eigendomsvoorbehoud) of a

third party-supplier.

33    In view of the Supreme Court's decision the applicant company

withdrew its proceedings against the Liquidator and Van Baarsen before

the Regional Court of Utrecht.

B.    Relevant domestic law and practice

34    Section 16 of the 1845 Collection Act deals with a specific form

of seizure of assets of tax debtors by the tax authorities (hereinafter

referred to as "bodemrecht") in case a tax-debtor fails to pay taxes,

which are due to be paid.  It gives the tax authorities the right to

seize, without a prior judicial authorisation, and subsequently to sell

certain goods (bodemzaken), which are situated on the premises of the

tax-debtor at the time of the seizure of assets, regardless of who owns

these goods.

35    Section 16 of the 1845 Collection Act provides:

      "1.  Derden die geheel of gedeeltelijk recht menen te

      hebben op roerende goederen welke ter zake van

      belastingschuld in beslag zijn genomen, kunnen een

      bezwaarschrift richten tot den directeur der directe

      belastingen, mits zulks doende vóór den verkoop en

      uiterlijk binnen zeven dagen, te rekenen van den dag der

      inbeslagneming. Het bezwaarschrift wordt ingediend bij den

      ontvanger, tegen een door dezen af te geven

      ontvangstbewijs. De directeur neemt zoo spoedig mogelijk

      een beslissing. De verkoop mag niet plaats hebben, dan na

      acht dagen na de beteekening van die beslissing aan den

      reclamant en aan dengene tegen wien het beslag is gelegd.

      met nadere bepaling van den dag van verkoop.

      2.   Door het indienen van een bezwaarschrift volgens het

      vorig lid, verliest de belanghebbende niet het recht om

      zijn verzet voor den gewonen rechter te brengen.

      3.   Behoudens het recht van terugvordering, toegekend bij

      artikel 2014 van het burgerlijk wetboek en bij artikel 230

      en volgende van het wetboek van koophandel, kunnen derden

      echter nimmer verzet in rechten doen tegen de

      inbeslagneming ter zake van belastingen, uitgezonderd de

      grondbelasting, indien de ingeoogste of nog niet ingeoogste

      vruchten, of roerende goederen tot stoffeering van een huis

      of landhoef, of tot bebouwing of gebruik van het land, zich

      tijdens de inbeslagneming op den bodem van den

      belastingschuldige bevinden."

      "1.  Third parties, who claim to have a full or partial

      right to movable goods which have been seized in view of a

      tax debt, can address an objection to the Director of

      Direct Taxes, on the condition that the objection is

      submitted before the sale and at the latest within seven

      days, to be calculated from the date of the seizure.  The

      objection will be submitted to the Receiver, who will

      provide an acknowledgement of receipt.  The Director will

      take a decision as soon as possible.  The sale may not take

      place earlier than eight days after the notification of

      this decision to the objector and to the person against

      whom the seizure is directed, with a further determination

      of the day of the sale.

      2.   By submitting an objection within the meaning of the

      previous paragraph, the party concerned does not forfeit

      the right to submit his objection to the ordinary court.

      3.   Apart from the right of objection, granted by

      Section 2014 of the Civil Code and by Section 230ff. of the

      Commercial Code, third parties, however, may never legally

      object to the seizure of assets in connection with taxes,

      with the exception of land-tax, if the harvested or not yet

      harvested fruits, or movable goods used as furnishings of

      a house or farmstead, or for construction or use of the

      land, are situated on the premises of the tax-debtor

      concerned at the time of the seizure of assets."

36    "Premises" within the meaning of Section 16 para. 3 are a plot

or part of a plot of land, which, for whatever purpose, is in use by

the tax-debtor and which he has, independently of others, at his

disposal (cf. Hoge Raad, judgment of 18 October 1991, N.J. 1992,

no. 298). "Furnishings" within the meaning of Section 16 para. 3 are

objects involved in the use of the plot in accordance with its purpose,

such as, inter alia, all movable fixtures and fittings, including

movable machinery (cf. Hoge Raad, judgment of 8 March 1920, N.J. 1920,

p. 831, Hoge Raad, judgment of 11 March 1927, N.J. 1927, p. 494,

Arrondissementsrechtbank Haarlem, judgment of 18 February 1964,

N.J. 1965, no. 402 and Hoge Raad, judgment of 26 January 1981,

N.J. 1981 no. 656).  It does, however, not include stocks, raw and

auxiliary materials and finished goods (cf. Hoge Raad, judgment of

11 March 1927, N.J. 1927, p. 494).

      During the seizure, the owner may continue to use the seized

goods.

37    The tax authorities have fixed certain criteria for the

application of the "bodemrecht".  These criteria are laid down in

Section 30 para. 9 of the Collection Guidelines (Leidraad Invordering-

Resolutie van 8 december 1961, nr. B 1/18516) of the Ministry of

Finance, which, insofar as relevant, reads:

           "De beslissing van de directeur behoort niet alleen

      afhankelijk te zijn van juridische overwegingen, doch

      daarbij dient, nadat nopens de juridische verhoudingen

      voldoende klaarheid is verkregen, ook aan overwegingen van

      billijkheid en eisen van goed beleid een grote plaats te

      worden ingeruimd. In dat beleid past dat het eigendomsrecht

      van een derde wordt ontzien voorzoveel een persoonlijke

      belasting- of premieschuld wordt ingevorderd en buitendien

      in de gevallen, waarin sprake is van reële eigendom van de

      derde, een en ander behoudens hetgeen hierna wordt

      opgemerkt.

      (...)

           Het voorenstaande laat onverlet dat in geen enkel

      geval aanleiding kan bestaan voor een terughoudend beleid

      indien duidelijk sprake is van samenspanning tussen de

      belastingschuldige en de derde, waarbij in een poging

      verhaal op goederen te bemoeilijken de juridische

      eigendomssituatie wordt gefingeerd.

           Uit een oogpunt van billijkheid en goed beleid is

      verhaal op goederen van een derde in het algemeen

      gerechtvaardig in de gevallen, waarin het verhaal dient tot

      invordering van zakelijke belasting- en premieaanslagen en

      de economische verhouding tussen de belastingschuldige en

      de goederen aanleiding geeft ze als zijn goederen aan te

      merken en de omstandigheid dat juridisch de goederen aan

      een ander toebehoren in hoofdzaak is geschapen om verhaal

      op de goederen ten laste van de belastingschuldige uit te

      sluiten of om te bereiken dat de derde zich bij voorrang op

      die goederen kan verhalen.

           Als voorbeelden hiervan kunnen gelden de gevallen,

      waarin goederen zijn geleverd in huurkoop of door middel

      van verschillende vormen van leasing of andere vormen,

      waarbij de leverancier van goederen de eigendom ervan

      voorbehoudt.

           Voorts kan worden gedacht aan de gevallen, waarin de

      goederen tot zekerheid in eigendom aan derden zijn

      overgedragen.

      (...)."

           "The decision of the director should not only depend

      on legal considerations. Once sufficient clarity has been

      obtained in respect of the legal relations at issue,

      considerations of fairness and demands of good policy

      should be given a large place in it. It suits such a policy

      that the property right of a third party is spared insofar

      as a personal tax or (social security) premium debt is

      collected and also where it concerns genuine property of a

      third party, all this with the exception of what is stated

      below.

      (...)

           What is stated above leaves unaltered that in no case

      there can be reasons for a reticent policy where it clearly

      concerns machination between the tax debtor and the third

      party, whereby the legal property situation is being

      feigned in an attempt to hamper recovery on goods.

           From a point of view of fairness and good policy

      recovery on goods of a third party is in general justified

      in cases, where the recovery serves the collection of

      commercial tax and premium assessments and the economic

      relation between the tax debtor and the goods gives cause

      to consider these goods as being his and the circumstance

      that the goods legally belong to another has been mainly

      created in order to exclude recovery at the expense of the

      tax debtor on these goods or to achieve that a third party

      obtains a preferential recovery right on these goods.

           Examples of this can be the cases, where goods have

      been delivered under a hire-purchase agreement or under

      different forms of leasing or other forms, in which the

      supplier of the goods retains the ownership thereof.

           Further those cases can be considered in which the

      ownership of the goods has been transferred to a third

      party as security.

      (...)."

38    Under Dutch law the tax authorities may take execution measures

with regard to goods belonging to a third party by way of retention of

title after having seized these goods under Section 16 of the 1845

Collection Act (cf. Arrondissementsrechtbank Haarlem, judgment of

18 February 1964, N.J. 1965, no. 402) and the application of the

"bodemrecht" is not limited to cases of machinations between the tax

debtor and the third party owner (Hoge Raad, judgment of

9 January 1981, N.J. 1981 no. 656).

39    When a tax debtor is declared bankrupt all seizures of his

assets, including a seizure pursuant to Section 16 of the 1845

Collection Act, become defunct with the exception of a seizure pursuant

to Section 16 of the 1845 Collection Act of goods on the tax debtor's

premises which belong to third parties (Hoge Raad, judgment of

20 December 1957, N.J. 1958 no. 81). However, in cases where such a

third party waives his right, the seizure pursuant to Section 16 of the

1845 Collection Act becomes defunct, since in such cases the goods at

issue become a part of the bankrupt's estate (cf. Hoge Raad, judgment

of 10 April 1987, N.J. 1987 no. 829).

40    In a judgment of 26 May 1989 concerning a case, where during

bankruptcy proceedings a Liquidator with the consent of the tax

authorities had sold a machine, which had been delivered under

retention of title, which had not been fully paid and in respect of

which the "bodemrecht" had been applied, the Supreme Court held that

a Liquidator, with the tax authorities' consent, is at liberty to sell

such goods as if they belonged to the tax debtor, having regard to the

fact that the proceeds of that sale were higher than the expected

proceeds of a sale by the tax authorities at a public auction pursuant

to Section 462 of the Code of Civil Procedure (Wetboek van Burgerlijke

Rechtsvordering) this being in the interest of the tax authorities as

a secured creditor (Hoge Raad, N.J. 1990, no. 331).

41    On 1 June 1990 the 1990 Collection Act and new Collection

Guidelines came into force, slightly altering the legal situation with

respect to the "bodemrecht".  The position of owners by way of

retention of title under the new Act and Collection Guidelines has

remained unchanged.

42    It is not possible for suppliers of goods to obtain information

from the Netherlands tax authorities on their debtors' outstanding tax

debts. According to Section 67 para. 1 of the General Act on State

Taxes (Algemene Wet inzake Rijksbelastingen) tax officials in the

Netherlands are bound by professional secrecy.

43    Under both German and Dutch law the ownership of goods sold and

delivered under retention of title is formally transferred upon full

payment of the purchase price.

III.  OPINION OF THE COMMISSION

A.    Complaint declared admissible

44    The Commission has declared admissible the applicant company's

complaint that it was unjustly deprived of its possessions without any

compensation.

B.    Point at issue

45    Accordingly, the issue to be determined is whether there has been

a violation of Article 1 of Protocol No. 1 (P1-1) to the Convention.

C.    Article 1 of Protocol No. 1 (P1-1)

46    Article 1 of Protocol No. 1 (P1-1) to the Convention reads as

follows:

           "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."

47    The applicant company argues that under German law, which in view

of a clause to this effect in Gasus' general terms of sale and delivery

it considers applicable to its transaction with Atlas, Gasus is the

legal owner of the concrete mixing machine. Ownership through retention

of title is recognised under Dutch law as a form of ownership.

Ownership entails the right to voluntarily restrict the enjoyment of

possessions, including selling property under retention of title and

reclaiming it when called for. Ownership through retention of title

cannot be considered as a mere security right under Dutch law, since

it lacks the specific characteristics of a security right under Dutch

law. Therefore the concrete mixing machine must be considered as

forming a part of Gasus' possessions within the meaning of Article 1

of Protocol No. 1 (P1-1).

48    The applicant submits that the application of the "bodemrecht"

does not fall within the scope of the second paragraph of Article 1 of

Protocol No. 1 (P1-1), since this provision concerns control of the use

of property, not deprivation of property. The application of the

"bodemrecht" implies that a third party owner is in fact deprived of

his possessions. Having regard to the fact that there is no connection

between the tax debt collected and Gasus, the applicant company finds

no objective or reasonable justification for the deprivation of its

property right in respect of the concrete mixing machine.

49    The applicant company finally submits that, even if the

application of the "bodemrecht" fell within the scope of the second

paragraph of Article 1 of Protocol No. 1 (P1-1), given that in practice

the possibility of the exercise of its ownership right became nil

following the application of the "bodemrecht" and given that it

received no compensation for the loss of its machine, there was no fair

balance struck between the public and private rights in the application

of the "bodemrecht" and the measure complained of was grossly

disproportionate to its aim.

50    The Government primarily submit that Article 1 of Protocol No.1

(P1-1) does not apply to security rights, such as ownership through

retention of title and that, therefore, the concrete mixing machine at

issue cannot be regarded as forming a part of Gasus' "possessions"

within the meaning of Article 1 of Protocol No. 1 (P1-1).

51    The Government, alternatively, submit that, if the concrete

mixing machine should be considered as a "possession" within the

meaning of Article 1 of Protocol No. 1 (P1-1), this complaint falls

under the second paragraph of Article 1 (P1-1-2), which entitles

Contracting States to enforce such laws as they deem 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.

52    According to the Government the margin of appreciation

Contracting States enjoy under Article 1 of Protocol No. 1 (P1-1)

implies that where a Contracting State recognises ownership through

retention of title, it is at liberty to restrict it in the sense that

another statutory right, such as the tax authorities' "bodemrecht", can

overrule it.  This restriction is in the public interest. If it would

not exist it would in many cases be impossible for the Netherlands

authorities to recover tax debts, since in such a situation a tax

debtor's assets could be protected by commercial creditors from the

collection of taxes due.

53    The Government find nothing in the genesis of Article 1 of

Protocol No. 1 (P1-1) suggesting that the second paragraph of this

provision is only applicable to the tax debtor's own possessions. The

Government add that in the application of the "bodemrecht" genuine

property of third parties is respected. The "bodemrecht" is only

exercised in respect of third parties who have stipulated certain

rights as security.

54    The Government conclude that the application of the "bodemrecht"

did not violate the applicant company's rights under Article 1 of

Protocol No. 1 (P1-1).

55    The Commission recalls that Article 1 of Protocol No. 1 (P1-1)

guarantees in substance the right of property. It comprises "three

distinct rules". The first, which is expressed in the first sentence

of the first paragraph and is of a general nature, lays down the

principle of peaceful enjoyment of property. The second rule, in the

second sentence of the same paragraph, covers deprivation of

possessions and subjects it to certain conditions. The third, contained

in the second paragraph, recognises that the Contracting States are

entitled, amongst other things, to control the use of property in

accordance with the general interest, by enforcing such laws as they

deem necessary for the purpose. However, the rules are not "distinct"

in the sense of being unconnected: the second and third rules are

concerned with particular instances of interference with the right to

peaceful enjoyment of property. They must therefore be construed in the

light of the general principle laid down in the first rule (cf. Eur.

Court H.R., Mellacher and others judgment of 19 December 1989, Series A

no. 169, p. 24, para. 42).

56    The Commission considers that where, as in the present case,

property is sold and delivered on the condition that the seller should

remain owner until the purchase price has been fully paid, a special

legal situation arises where the respective rights of the seller and

the owner will depend on the domestic legal rules which are applicable

to the transaction. Normally, both the seller and the buyer will in

such cases be holders of a limited property right which is protected

under Article 1 of Protocol No. 1 (P1-1), but the exact scope of the

right of each of the parties may be different in different legal

systems. In particular, it will depend on the domestic rules of private

law to what extent the seller's retention of title entails a protection

against claims by the buyer's creditors. If these creditors are

entitled, in some circumstances, to have the property seized and sold

in payment of their claims, the result will be that the seller is

deprived of his property right.

57    In the present case, the applicant company was deprived of its

property right in accordance with specific rules of Dutch law, which

allowed the property to be seized and sold in payment of the buyer's

debts to the tax authorities. This measure falls under the second

sentence of the first paragraph of Article 1 of Protocol No. 1 (P1-1),

and the Commission must therefore determine whether the conditions laid

down in that provision were satisfied or, in other words, whether the

deprivation of property was effected in the public interest and subject

to the conditions provided for by law and by the general principles of

international law.

58    The Commission notes that, where a person has not paid his debts,

it is normal that the creditor can obtain enforcement measures against

him. Such measures may include the deprivation of property, the purpose

being to sell the property and to give the creditor satisfaction out

of the proceeds. Such deprivation of property must in general be

considered to be effected in the public interest, since it contributes

to the good functioning of the economic system and of those legal rules

which are aimed at ensuring that creditors will obtain satisfaction for

their claims.

59    The deprivation of the applicant company's property, which took

place in the present case, must be seen in the context of those general

rules which allow property to be seized and sold in payment of debts.

Although in this case the various specific rights inherent in property

were shared between the seller and the buyer, the seizure and sale of

the property for the purpose of giving satisfaction to one of the

buyer's creditors must still be considered a measure taken within the

general legal framework aimed at upholding a well-functioning system

of economic relations.

60    Moreover, when considering the proportionality of the measure in

relation to the loss suffered by the applicant company, the Commission

notes that it was taken in accordance with specific rules of Dutch law.

Consequently, the applicant company could, at least with appropriate

legal advice, have taken these rules into account as well as the risks

resulting therefrom in regard to the machine which it sold. If these

risks were found to be considerable, the applicant company could have

chosen not to sell the machine to Atlas, or it could, as an

alternative, have wished to protect its interests in a suitable manner,

for instance by claiming specific security in addition to the retention

of title or by taking out an insurance.

61    In these circumstances, the Commission cannot find that the

application of the "bodemrecht" rules to the present case were

disproportionate to the applicant company's interests, and the

deprivation of property must therefore be considered to have been

effected in the public interest.

62    The Commission has already noted that the seizure and sale of the

machine were effected on the basis of specific rules of Dutch law. The

deprivation of property therefore occurred "subject to the conditions

provided for by law" within the meaning of Article 1 of Protocol No.1

(P1-1).

63    As regards the requirement of Article 1 of Protocol no. 1

(P1-1) that deprivation of property must respect "the general rules of

international law", the Commission recalls that this provision refers

to those principles of international law which protect foreign property

against confiscation or against nationalisation or expropriation

without adequate compensation being paid (cf. Eur. Court H.R., Lithgow

and Others judgment of 8 July 1986, Series A no. 102, p. 49,

paras. 117-119). It is true that in the present case the property right

at issue was that of a foreign company. Nevertheless, the deprivation

of property which occurred cannot be compared to those measures of

confiscation, nationalisation of expropriation in regard to which

international law provides special protection to foreign citizens and

companies.

64    The Commission is therefore of the opinion that the deprivation

of the applicant company's property right was not contrary to Article 1

of Protocol No. 1 (P1-1).

D.    Conclusion

65    The Commission concludes, by six votes to six with the casting

vote of the President, that there has been no violation of Article 1

of Protocol No. 1 (P1-1) to the Convention.

Secretary to the Commission             President of the Commission

   (H.C. Krüger)                             (C.A. Nørgaard)

                                                             (ORG. E)

                 CONCURRING OPINION OF MRS. JANE LIDDY

      The interference complained of originates in Section 16 of the

1845 Collection Act, which aims at the collection of outstanding tax

debts.  The collection of taxes is an interference with the right

guaranteed in the first paragraph of Article 1 of Protocol No. 1, but

is justified under the second paragraph of this provision.  The

application of the "bodemrecht" in the present case was a measure taken

for the enforcement of the collection of outstanding taxes.  Although

it did involve a deprivation of a right in rem of a third party, I

consider that, in the circumstances of the present case, the

deprivation formed a constituent element of the procedure for the

collection of tax debts, which constitutes a control of the use of

property.  It is therefore the second paragraph of Article 1 of

Protocol No. 1, which is applicable in the present case (see Eur. Court

H.R., Agosi judgment 24 October 1986, Series A no. 108, p. 17,

para. 51).

      The second paragraph of Article 1 of Protocol No. 1 recognises

the right of a State to enforce such laws as it deems necessary, in

distinction to the second paragraphs of the Articles 8 up to and

including 11 of the Convention which only permit exceptions which are

necessary.  By making this distinction the founders of the Convention

underlined that it is for the national authorities to make the initial

assessment, in the field of taxation, of the aims to be pursued and the

means by which they are pursued; accordingly a margin of appreciation

is left to them.  The margin of appreciation must be wider in this area

than it is in many others (cf. No. 12560/86, Dec. 16.3.89, D.R. 60

p. 194).

      However, the finding that the application of the "bodemrecht" is

a measure which as such comes under the scope of the second paragraph

of Article 1 of Protocol No. 1 does not bring it wholly outside the

control of the Convention organs.  The correct application of

Article 1 of Protocol No. 1, like that of any other provisions of the

Convention, is in principle subject to their supervision.  This

supervision includes, apart from the examination whether a certain

measure is of such a kind that it can be reasonably considered as

necessary for one of the purposes enumerated in the Article, an

examination whether its application in the concrete case is not

disproportionate to its aim (cf. No. 13013/87, Dec. 14.12.88, D.R. 58

p. 163).

      Having regard to the State's margin of appreciation in taxation

matters, the fact that the "bodemrecht" can only be applied in respect

of goods found on a tax debtor's premises, the fact that Gasus only

lost its right to reclaim the concrete mixing machine and not its right

to receive payment from Atlas and taking into consideration that

parties to a commercial transaction in general take certain financial

risk and can inform themselves as to any relevant laws having an effect

on their contractual commitments, I do not consider that in the

circumstances of the present case the application of the "bodemrecht"

complained of was disproportionate.

      It is for these reasons that I consider that there has been no

violation of Article 1 of Protocol No. 1 to the Convention.

                                                             (ORG. E)

                 DISSENTING OPINION OF MR. S. TRECHSEL

                 JOINED BY MM. C.L. ROZAKIS AND J.-C. GEUS

      To my regret I cannot follow the opinion expressed by my

colleagues according to which the interference with the property of the

applicant company was in conformity with Article 1 of the Protocol.

      I first come to the conclusion that the exercise of the

"bodemrecht" in the present case falls to be considered as a

deprivation of property to the detriment of the applicant.  In fact,

the very purpose of selling an object under a retention title consists

in securing the claim of the vendor to the full price in case the buyer

were to become unable to fulfil his obligations.  Under civil law there

is no doubt that, in the present case the applicant remained the owner

of the concrete mixing machine.  Economically, with the payment of

instalments by Atlas the right of Gasus would gradually lose substance,

but this aspect is not relevant to the present case as the machine was

seized while it was still being installed.

      The exercise of the "bodemrecht" by the tax authorities thus

deprived Gasus not only of a "nuda proprietas" but of their possessions

in the sense of Article 1 para. 1, second sentence, of Protocol No. 1.

      Leaving aside the sheer economical interest of filling the

treasury, which cannot be meant by that provision, I can think of no

"public interest" which could justify such an expropriation as there

exists no link whatsoever between the claims of the Dutch tax

authorities and the applicant company's possessions.  I am not aware

of any other legislation which would allow the tax authorities to

confiscate the property of a third party which happens to be on the

premises of a tax debtor.

      I also fail to find any justification for this "bodemrecht" when

taking into account the economic background of the

"eigendomsvoorbehoud".  It is a relatively simple instrument of credit

which may have great practical importance.  This instrument is deprived

of its value when the seller must fear that the tax authorities will

interfere as, in particular, he has no possibility of finding out

whether his partner, the buyer, has paid his taxes due.

      Even assuming that the State could claim a legitimate interest

in applying the "bodemrecht", quod non, I would still find that, as the

applicant company was left without even the commencement of any

compensation, no fair balance was struck between the interests of the

fiscal authorities and those of the applicant company.  Only in passing

do I wish to express some astonishment at the way in which Dutch

legislation accords a privileged position to the fiscal authorities in

comparison to other creditors.

      For the reasons set out above I conclude that there has been a

violation of Article 1 of the Protocol in the present question.

                                                             (ORG. E)

               DISSENTING OPINION OF MR. H.G. SCHERMERS

      I agree with the majority of the Commission that the

Netherlands's legal rules on the "bodemrecht" do not infringe the

Convention.  In fact I support the majority's reasoning up to para. 60

of the Report.

      However, deprivation of property, even if legal, should be

executed in a fair and non-discriminatory manner.  The wide margin of

appreciation which the Governments have under Article 1 of

Protocol No. 1 remains under the supervision of the Convention organs.

      In the present case the possessions of Atlas were sold for

500,000 Dutch guilders.  This amount was arbitrarily divided between

the two largest creditors, the tax authorities and the fiduciary owners

of Atlas' assets.  Gasus, as the third largest creditor and holding a

security right which is, in my opinion, equivalent to that of the

fiduciary owners, did not receive any part of these proceeds. This

fundamentally different way of compensating one creditor holding

ownership  from another creditor also holding ownership infringes in

my opinion the general principles underlying the European Convention

of Human Rights which are by their nature general principles of

international law.

      I therefore conclude that there has been a violation of Article 1

of Protocol No. 1.

                                                             (ORG. E)

                DISSENTING OPINION OF MR. M. PELLONPÄÄ

      I agree with the majority of the Commission that the exercise of

the "bodemrecht" in the present case constituted a deprivation of

possessions within the meaning of the second sentence of Article 1,

para. 1 of the First Protocol to the Convention.  I further agree that

this deprivation took place "in the public interest and subject to the

conditions provided for by law", as required by that provision.

      I nevertheless conclude that Article 1 was violated in that the

application of the relevant legal rules in this case failed to strike

a fair balance between the various interests at stake, thus imposing

a disproportionate burden on the applicant company.

      The sale and delivery contract between the applicant and Atlas

was governed by German law.  In addition, also under Dutch private law

the ownership of goods sold and delivered under retention of title is

not formally transferred until payment in full of the purchase price.

In these circumstances the applicant could legitimately consider its

ownership interest to be sufficiently protected against interference

of a confiscatory nature by Dutch authorities.  Although the governing

law clause in the contract between the two private parties cannot be

interpreted as preventing the application of Dutch public law rules on

"bodemrecht", I nevertheless consider that the applicant could not

reasonably be expected to take specific precautionary measures with a

view to protecting itself against the application of those rules.

      I refer to and agree with the considerations put forward in the

dissenting opinion of Mr. Trechsel concerning the practical importance

and the economic background of the concept of retention of title.  I

also agree with what he says about the lack of any compensation.  In

the last-mentioned respect I further agree with the views expressed by

Mr. Schermers in his dissenting opinion and conclude that there has

been a violation of Article 1 of the First Protocol.

                              APPENDIX I

                        HISTORY OF PROCEEDINGS

Date                                   Item

___________________________________________________________________

6 July 1989                            Introduction of application

16 August 1989                         Registration of application

Examination of admissibility

7 November 1990                        Commission's decision to invite

                                       the Government to submit their

                                       observations on the

                                       admissibility and merits of the

                                       application

13 March 1991                          Government's observations

4 June 1991                            Applicant's observations in

                                       reply

11 May 1992                            Commission's decision to hold a

                                       hearing on the admissibility and

                                       the merits of the application

21 October 1992                        Hearing on the admissibility and

                                       the merits of the application,

                                       Commission's decision to declare

                                       the application admissible and

                                       to invite the parties to submit

                                       additional information and, if

                                       they so wish, further

                                       observations

Examination of the merits

10 February 1993                       Applicant's additional

                                       information and further

                                       observations

12 February 1993                       Government's additional

                                       information and further

                                       observations

12 October 1993                        Commission's deliberations on

                                       the merits and final vote

21 October 1993                        Commission's adoption of the

                                       Report