Lexploria

EUROPEAN COMMISSION OF HUMAN RIGHTS

Application No. 10873/84

TRE TRAKTÖRER AKTIEBOLAG

against

SWEDEN

REPORT OF THE COMMISSION

(adopted on 10 November 1987)

TABLE OF CONTENTS

page

I. INTRODUCTION (paras. 1-14) ............................ 1

A. The application (paras. 2-4) ...................... 1

B. The proceedings (paras. 5-10) ..................... 1

C. The present Report (paras. 11-14) ................. 2

II. ESTABLISHMENT OF THE FACTS (paras. 15-47) ............. 4

A. Particular circumstances of the case

(paras. 15-35) .................................... 4

B. Relevant domestic law (paras. 36-47) .............. 9

III. SUBMISSIONS OF THE PARTIES (paras. 48-107) ............ 13

A. The applicant (paras. 48-74) ...................... 13

a. Article 1 of Protocol No. 1 (paras. 48-68) .... 13

b. Article 6 of the Convention (paras. 69-74) .... 16

B. The Government (paras. 75-107) .................... 17

a. Article 1 of Protocol No. 1 (paras. 75-97) .... 17

b. Article 6 of the Convention (paras. 98-107) ... 21

IV. OPINION OF THE COMMISSION (paras. 108-146) ............ 24

A. Points at issue (para. 108) ....................... 24

B. Article 1 of Protocol No. 1 (paras. 109-125) ...... 24

C. Article 6 of the Convention (paras. 126-145) ...... 27

a. Applicability of Article 6 para. 1 of the

Convention (paras. 128-136) ................... 27

b. Compliance with Article 6 para. 1 of the

Convention (paras. 137-145) ................... 29

D. Recapitulation (para. 146) ........................ 30

Dissenting opinion by Mr. Martinez joined by Mr. Campinos .. 31

APPENDIX I HISTORY OF THE PROCEEDINGS .................. 34

APPENDIX II DECISION ON ADMISSIBILITY ................... 36

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, Tre Traktörer Aktiebolag, is a limited

liability company with its seat at Helsingborg. The sole shareholder

of the company is Mrs. Olga Flenman. Before the Commission the

company is represented by Mr. Göran Ravnsborg, lecturer at Lund

University.

3. The Government are represented by their Agent, Mr. Hans

Corell, Ambassador, Under-Secretary at the Ministry for Foreign

Affairs, Stockholm.

4. The case relates to the revocation of the applicant company's

licence to serve beer, wine and alcoholic beverages in a restaurant

run by the company. The applicant company alleges that the revocation

of the licence constituted a breach of the right to the peaceful

enjoyment of possessions as guaranteed by Article 1 of Protocol No. 1,

and that there has been a breach of Article 6 of the Convention since

the company could not have the revocation of the licence examined by a

court.

B. The proceedings

5. The application was introduced on 23 January 1984 and

registered on 23 March 1984. On 4 December 1984 the Commission

decided, in accordance with Rule 42 para. 2 sub-para. b of its Rules

of Procedure, to give notice of the application to the respondent

Government and to invite them to present before 22 March 1985 their

observations in writing on the admissibility and merits of the

application.

The Government's observations were dated 21 March 1985 and

the applicant's observations in reply were dated 2 May 1985.

6. On 10 October 1985 the Commission declared the application

admissible.

7. The text of the decision on admissibility was transmitted to

the parties on 19 November 1985. The parties were invited to submit

any additional observations on the merits of the application they

wished to make. The applicant company's observations were dated 15

January 1986 and 27 February 1986, and the Government's observations

were dated 16 January 1986 and 25 February 1986. These observations

were communicated to the other party for information.

8. On 8 March 1986 the Commission decided to invite the parties to

a hearing on the merits of the application.

At the hearing, which was held on 10 December 1986, the

applicant company was represented by Mr. Göran Ravnsborg. The

Government were represented by their Agent, Mr. Hans Corell, and as

advisers Mr. Leif Lindgren, legal adviser at the Ministry of Health

and Social Affairs, and Mr. Håkan Berglin, legal adviser at the

Ministry for Foreign Affairs.

On 10 December 1986, after the hearing, the Commission

deliberated on the merits.

Further written submissions were received from the Government

by letters dated 28 January 1987 and 24 April 1987, and from the

applicant by a letter dated 6 March 1987.

On 9 May 1987 the Commission considered the state of

proceedings of the case.

9. On 10 November 1987 the Commission deliberated on the merits

of the case and took the final votes in the case.

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

accordance with Article 28 (b) of the Convention, 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' reactions the Commission

now finds that there is no basis on which a friendly settlement can be

effected.

C. The present Report

11. The present Report has been drawn up by the Commission in

pursuance of Article 31 of the Convention and after deliberations and

votes in plenary session, the following members being present:

MM. J.A. FROWEIN

S. TRECHSEL

G. JÖRUNDSSON

A. WEITZEL

J. C. SOYER

H.G. SCHERMERS

H. DANELIUS

G. BATLINER

J. CAMPINOS

Mrs G. H. THUNE

Mr. F. MARTINEZ

The text of the Report was adopted by the Commission on

10 November 1987 and is now transmitted to the Committee of Ministers

in accordance with Article 31 para. 2 of the Convention.

12. 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 Government of their obligations

under the Convention.

13. 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.

14. 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

15. AB Citykällaren was a limited liability company created in

1960. As from July 1977 Mrs. Olga Flenman was the shareholder and

only board member of the company.

16. On 6 March 1980 AB Citykällaren opened the restaurant Le

Cardinal in Helsingborg and continued in business up to 29 July 1980.

17. On 29 July 1980 the applicant company, Tre Traktörer AB, took

over the management of the restaurant Le Cardinal. The applicant

company obtained a licence to serve beer, wine and miscellaneous

alcoholic beverages in the restaurant. The applicant company has

submitted that without such a licence the restaurant business in

question would not have been profitable.

18. Following certain information from the Police Board

(polisstyrelsen) of Helsingborg, the County Administrative Board

(länsstyrelsen) of Malmöhus County raised the question of whether the

applicant company should be allowed to continue to have the licence.

The Police Board indicated that the sole shareholder of the applicant

company, Mrs. Flenman, was suspected of having hindered a tax

investigation. This suspicion was based on an audit report of

17 September 1981 drawn up by the Tax Department of the County

Administrative Board.

19. The audit report deals with the period 1 July 1979 - 30 June

1980 relating to the company AB Citykällaren which was managed and

owned by Mrs. Flenman. During the period in question Mrs. Flenman

was at various times managing three different establishments

including the restaurant Le Cardinal. The inspection on which the

audit report was based revealed various inaccuracies in the

book-keeping, the most significant discrepancy being estimated at

93,000 SEK for the period March - June 1980 concerning the

sale of beers, wines and spirits in the same restaurant. The total

turnover for AB Citykällaren for the period in question was 770,000

SEK.

20. By letter of 4 November 1982 the County Administrative Board

informed the applicant company of the above and stated that as a

result it considered withdrawing the licence to serve alcoholic

beverages under Section 64 para. 2 of the 1977 Act on the Sale of

Beverages (lagen om handel med drycker, "the 1977 Act"). The

applicant company was invited to submit any observations it wished to

make before 15 November 1982. It explained that the discrepancies as

regards the sale of alcoholic beverages were due to thefts.

21. As a result of the audit report Mrs. Flenman's taxable income

for 1980 was increased by 100.000 SEK.

22. On 7 January 1983 the County Administrative Board decided to

issue an admonition under Section 64 of the 1977 Act. The decision

stated inter alia:

"In view of what has been established at the audit control

and as the company has not been able to explain

satisfactorily the discrepancies, the County Administrative

Board finds that there are reasons to revoke the licence

under Section 64 of the 1977 Act. Accordingly, the licence

ought to be revoked now. The only argument against a

revocation is that the negligence took place in the spring

of 1980, thus almost three years ago. As far as has been

ascertained, no criticism has been levelled against the

management of the restaurant thereafter. The County

Administrative Board has, against this background, not found

it necessary to revoke the licence. Instead the Board issues

a serious admonition against the company pursuant to Section

64 of the 1977 Act."

23. The Social Council (socialnämnden) of Helsingborg appealed

against the decision to the National Board of Health and Welfare

(socialstyrelsen) and requested that the licence be revoked. The

Council referred to the results of the audit report and to the fact

that the special provisions accompanying the licence had not been

complied with.

24. In respect of the latter the Council invoked a report

concerning an inspection made at the restaurant on 13 February 1982.

From the report it appears inter alia that at the inspection the

restaurant was overcrowded and a great number of guests did not have

seats. The guests were between 18 and 25 years old. Most of them

were 18 years old. In the upper part of the premises there was a

discotheque open all evening. According to the provisions of the

licence there was to be live dance music and activities were to

concentrate on young people above the age of 22 years.

25. In the meantime, on 14 January 1983, the County Administrative

Board renewed the applicant company's licence, the previous licence

being dated 9 November 1981, to be valid until further notice. The

licence read as follows:

(front page)

"Licence to sell beverages under the 1977 Act

Validity From 14 January 1983 onwards

Licenced premises Le Cardinal S Kyrkogatan 9

259 23 Helsingborg

Conditions of licence cf plan dated 11 June 1981 (first and

regarding place of second floor)

sale on premises

serving may take place in a bar

according to the plan of 11 June 1981

Conditions of licence

regarding

time the whole year

and

permitted types of Beer, wine and alcoholic beverages

alcohol

(cf special provisions on the reverse

side concerning young customers)

Licensing hours The sale of beer may commence at the

earliest at 11.00 a.m. and terminate

at the latest at 2.00 a.m. *) PTO

The sale of alcoholic beverages and

wine may commence at the earliest at

midday and terminate at the latest at

2.00 a.m. *) PTO

The premises should be vacated at the

latest 30 minutes after the end of the

licensing hours.

Provisions See the reverse side

Previous licence This licence replaces a licence of

9 November 1981"

(reverse side)

"REGULATIONS

1. This licence cannot be transferred.

2. There should be a person responsible for serving ....

3. Alcoholic beverages may not be served unless the person

responsible or his or her substitute is present... .

4. Any change of activity should be reported to the

County Administrative Board ... .

5. The licence or a copy thereof shall be exposed in the

restaurant.

6. The activities shall be performed so as not to be

directed at a young public, i.e. under 22 years of age.

The licence holder is therefore obliged to take this

into account, inter alia when advertising.

The County Administrative Board recalls that the licence has

been granted on the assumption that the provision of cooked

food will be a major part of the business and that the

company, in accordance with its 'programme', does not intend

to run a discotheque. It is further noted that the company

has undertaken to discourage too young a clientele by its

choice of music and by not playing recorded music.

The County Administrative Board orders that serving

shall end at 02.00 hours."

26. Criminal proceedings were instituted against Mrs. Flenman for

hindering tax investigation (försvårande av skattekontroll) under

Section 10 of the Act on Tax Offences (skattebrottslagen). It was

alleged that Mrs. Flenman had deliberately or as a result of gross

negligence as a representative of AB Citykällaren disregarded the

book-keeping obligation and thereby seriously impaired the

control activities of the authorities.

By a judgment of 27 May 1983 the District Court (tingsrätten)

of Helsingborg acquitted Mrs. Flenman. The Court did not find it

established that the result of the calculations concerning wine,

spirits, beer and tobacco could be explained by mistakes in the

book-keeping. Regarding the period from 6 to 17 March 1980 the Court

found that the basis for the book-keeping had been insufficient as a

result of the absence of a cash box. In view of the short period and

of the fact that the problem with the cash box was not foreseeable the

Court considered that the discrepancies were not caused by deliberate

action or gross negligence. The other alleged discrepancies could not

in the Court's opinion be regarded to be of such a nature and extent

as to hinder seriously the fiscal control as required by Section 10 of

the Act on Tax Offences.

27. On 13 July 1983, upon the appeal by the Social Council against

the decision of the County Administrative Board, the National Board of

Health and Welfare decided to revoke the applicant company's licence.

In the decision the following reasons are stated:

"Under Section 64 para. 1 of the 1977 Act on the Sale of

Beverages the County Administrative Board shall revoke a

licence to serve, or limit it to certain beverages, inter

alia if the provisions of the 1977 Act or the provisions

issued under it have not been complied with. If there is

reason to believe that satisfactory conditions could be

achieved without such drastic measures, it is possible to

issue an admonition to the holder of the licence or to

issue special provisions. Under Section 64 para. 2 of

the 1977 Act the same rules should also apply where the

holder of the licence cannot any longer be considered to

be qualified to run a business with alcoholic beverages

or where the conditions for granting a licence are no

longer at hand.

The provisions of Section 64 para. 2 of the 1977 Act are

connected inter alia with the requirement in Section 40

of the 1977 Act that a new holder of a licence should be

suitable. This requirement of suitability has in practice

been considered to include a requirement of personal

suitability to sell alcoholic beverages, a task involving

great social responsibility. As regards companies this

requirement is applicable to those individuals who have

a considerable influence on the business.

The unsuitability of the licence holder which is a reason

to revoke the licence to serve may be of many different types.

In the Bill 1981/82: 143 page 82 economic mismanagement is

given as an example of personal unsuitability even if it is

not criminal.

According to Section 70 of the 1977 Act the book-keeping of

a business involved in the selling of alcoholic beverages

should be such as to enable control of the business. In the

instant case the County Administrative Board refers to an

audit report as the basis for its decision. From this report

it appears that the book-keeping of AB Citykällaren was

deficient in several respects. For instance there are

differences to be found concerning the recorded sale of

beverages. The explanations given by the company, inter

alia regarding thefts of such beverages, show in the opinion

of the National Board of Health and Welfare that those who

have had a decisive influence on the business have failed to

demonstrate sufficient competence regarding both book-keeping

and internal control. Section 64 of the 1977 Act is therefore

applicable in this case.

The National Board of Health and Welfare finds that the

deficiencies concern compliance with Section 70 of the

1977 Act and as far as suitability is concerned are of such

a nature that a measure other than revocation of the licence

cannot be considered. The fact that in the instant case the

District Court has rejected the charges of hindering a tax

investigation does not affect this assessment.

In view of the above the appeal is granted. The National

Board of Health and Welfare quashes the appealed decision

and refers the matter back for new action."

This decision was not subject to appeal.

In a letter of 15 August 1983 the Director General of the

National Board of Health and Welfare, in reply to a query concerning

the decision in the present case, made, inter alia, the following

statement:

"On 1 July 1982 Section 64 and other provisions of the 1977

Act was amended. The amendment means that the legal text

clearly sets out what was already the law before the

amendment, namely that measures shall be taken against

a licence-holder who demonstrates unsuitability."

28. On 18 July 1983 the County Administrative Board of Malmöhus

County decided to revoke, with immediate effect, the licence to serve

alcoholic beverages.

29. The applicant company appealed to the National Board of Health

and Welfare requesting that the decision to revoke the licence should

take effect as from 1 March 1984. It stated that the applicable

periods of notice for the personnel would create financial problems

if a licence to sell alcoholic beverages until the end of February was

not granted.

30. The National Board of Health and Welfare, in its decision of

15 August 1983, rejected the appeal stating that in view of its

previous decision there were no reasons to depart from the main rule

in Section 67 of the 1977 Act that decisions under that Act should

take effect immediately. This decision was not subject to appeal.

31. The applicant company states that as a result of the decision

of 18 July 1983, which had immediate effect, the restaurant had to be

closed down on 19 July 1983.

32. By letter of 23 January 1984 the applicant company submitted

to the Government a claim for compensation based on the decision to

revoke the licence to serve alcoholic beverages. It requested the

Government to find that the decision of the County Administrative

Board violated the applicant company's rights under the European

Convention of Human Rights. It was further alleged that Swedish law

had been incorrectly applied.

33. On 16 February 1984 the Government decided to refer the claim

for compensation to the Chancellor of Justice (justitiekanslern) and

not to take any measures in the matter as regards the other issues.

34. On 5 March 1984 the Chancellor of Justice decided to reject

the claim for compensation; he found no indication that any authority

had made any mistake which could make the State liable under the Tort

Liability Act (skadeståndslagen).

35. In June 1984 the applicant company was sold for 1.500.000 SEK.

B. Relevant domestic law and practice

36. The aim of Swedish policy as regards alcohol is to limit the

total consumption of alcohol and to counteract the abuse of alcohol

and the resultant damage to health. Restrictions on alcohol in Sweden

are of long standing. As from 1895 restaurants and bars serving

alcoholic beverages had to be licensed, and in the early 1900s a

State monopoly was introduced for the wholesale and retail trading of

alcohol. These restrictions remain in force.

37. The present Act on the Sale of Beverages was introduced in

1977 and regulates trading in beer, wine and liquor. It also

lays down rules for the serving of these beverages for consumption

on the premises of restaurants and bars as well as the issuing

of licences for and inspection of these premises. The Act is

supplemented by an Ordinance on the Sale of Beverages (förordning om

handel med drycker).

38. Alcoholic beverages may only be served if a licence has been

issued (Section 34 of the Act). Licences are only issued after an

investigation into the need for a restaurant serving alcoholic

beverages and the suitability of the applicant and the premises.

Section 40 of the Act provides:

(Swedish)

"Vid tillståndsprövningen skall särskilt beaktas behovet

av serveringen, sökandens lämplighet och serveringsställets

tjänlighet för ändamålet."

(English translation)

"In the examination of the issue of a licence special regard

should be had to the need for the restaurant, the applicant's

suitability and the suitability of the premises for the

purpose."

39. Licences are issued by the County Administrative Board in the

county where the premises are situated. When the application concerns

a new establishment for the serving of alcoholic beverages the County

Administrative Board has to consult the local municipal council

(kommunfullmäktige) and the local police authority before a decision

is taken. Even in cases concerning the transfer of licences to new

owners, extended serving-hours and the revocation of licences the

County Administrative Board may consult these local authorities.

The County Administrative Board shall inform the local Social

Council of its decisions concerning the serving of alcoholic

beverages. It is therefore possible for the local authorities to be

kept informed of all questions concerning alcoholic beverages and to

appeal against the decisions of the Board if they are not in

agreement.

40. Appeals against decisions of the County Administrative Board

are made to the National Board of Health and Welfare. The decisions

of the National Board in these matters are final (Section 68 of the

Act).

41. The National Board of Health and Welfare supervises the

implementation of the Act and the Ordinance at a national level. The

local supervision of the implementation of the Act and the Ordinance

is entrusted to the County Administrative Board, the Social Council

and the police authorities. The Social Councils and the police

authorities shall inform the County Administrative Board of

circumstances which might be of importance in connection with the

supervision of the Act.

Only the Board has authority to take actions in accordance

with the Act. According to the travaux préparatoires, the activity of

the supervising authorities shall mainly be consultative and

preventive, and administrative means of compulsion shall only be used

to a limited extent.

42. Under Section 64 of the Act, licences may be revoked - wholly

or partly (limited to certain beverages) - if the sale of alcoholic

beverages causes annoyance relating to public order, drunkenness or

disturbance of the peace or if the provisions of the Act are not

complied with. The same also applies if the licence holder is no

longer believed to be suitable to sell alcoholic beverages. If there

is reason to suppose that acceptable conditions can be achieved

without resorting to such an action, the licence holder may be given

an admonition.

Section 64 paras. 1 and 2 of the Act read as follows in their

wording after 1 July 1982 (SFS 1982:289):

(Swedish)

"Föranleder sådan försäljning av alkoholdrycker som äger

rum med tillstånd enligt denna lag olägenheter i fråga om

ordning, nykterhet och trevnad eller iakttages ej

bestämmelserna i denna lag eller med stöd därav meddelade

föreskrifter, skall tillståndsmyndigheten återkalla

tillståndet eller begränsa det till att avse viss eller

vissa drycker. Finns anledning antaga att tillfredsställande

förhållanden kan åstadkommas utan att så ingripande åtgärd

vidtages, får tillståndshavaren i stället meddelas varning

eller särskilda föreskrifter.

Första stycket tillämpas även i fall då tillståndshavaren

inte längre kan anses lämplig att bedriva försäljning av

alkoholdrycker eller annars de förutsättningar som gäller

för meddelande av tillstånd ej längre föreligger."

(English translation)

"The licensing authority shall revoke the licence or limit

it to certain beverages where such sale of alcoholic

beverages as takes place under a licence according to

this Act causes annoyance relating to public order,

drunkenness or disturbance of the peace or where the

provisions of this Act or the rules issued under it are

not complied with. If it may be assumed that satisfactory

conditions can be achieved without such a severe measure,

the licence holder may instead be given an admonition or

special instructions.

The first paragraph also applies when the licence holder can

no longer be considered suitable to sell alcoholic beverages

or when otherwise the conditions for granting a licence are

no longer present."

43. Before 1 July 1982, the second paragraph of Section 64 read

as follows:

(Swedish)

"Första stycket äger motsvarande tillämpning om de

förutsättningar som gäller för meddelande av till-

stånd ej längre föreligger."

(English translation)

"The first paragraph also applies mutatis mutandis if

the conditions for granting a licence are no longer

present."

44. Under the Act economic mismanagement may be a reason for

considering the licence holder unsuitable, even if the sale of

alcoholic beverages has been carried out in conformity with the

relevant legislation. Only considerable economic mismanagement is

significant. Small tax debts or unpaid contributions do not disqualify

the licence holder. Anyone who systematically mismanages the payment

of taxes and contributions or seriously disregards his obligations

regarding book-keeping or the supplying of information shall be

considered unsuitable to hold a licence. It is, however, not a

condition that mismanagement is criminal or even intentional. A

considerable degree of negligence in the performance of these

obligations can also constitute sufficient reason for intervention.

45. The book-keeping in an establishment licensed to serve

alcoholic beverages shall be carried out in a manner which makes

inspection practicable.

Section 70 of the Act reads:

(Swedish)

"Bokföring i rörelse som avser försäljning av alkoholdrycker

skall vara så utformad att kontroll av verksamheten är

möjlig. Den som driver rörelsen är skyldig att på anfordran

av tillståndsmyndighten förete bokföringen i rörelsen. Han

är dessutom skyldig att lämna statistiska uppgifter i

enlighet med de föreskrifter regeringen eller, efter

regeringens bestämmande, socialstyrelsen meddelar."

(English translation)

"The book-keeping of an establishment which carries out

the sale of alcoholic beverages shall be so organised as

to permit control of the activities. The manager of the

establishment is obliged at the request of the licensing

authority to produce the books of the establishment. He is

also obliged to produce statistical information pursuant to

the regulations issued by the Government or, after the

Governmemnt's decision, by the National Board of Health

and Welfare."

The travaux préparatoires of Section 70 state that

unsatisfactory book-keeping is in itself proof of unsuitability to

conduct a business dealing with the sale of alcoholic beverages.

46. In a report on Swedish legislation on the sale of beverages

(SOU 1985:15), based on terms of reference issued by the Government,

it is proposed that decisions by the County Administrative Boards

should be appealable to the Administrative Courts of Appeal. From the

report it appears that the National Board of Health and Social Welfare

is of the opinion that appeals should be examined by another authority.

However, the author of the report considers that it is not appropriate

for a body - like the Board - which is vested with supervisory

functions to fulfil an appellate role, such tasks being more suitably

performed by administrative courts. This proposal is at present being

considered by the competent Ministry.

47. Under Chapter 3 Section 2 of the 1972 Tort Liability Act the

State is liable to pay compensation in the event of fault or

negligence in the exercise of authority (myndighetsutövning).

III. SUBMISSIONS OF THE PARTIES

A. The applicant

a. Article 1 of Protocol No. 1

48. There are two main types of restaurants in Sweden: first those

which can offer alcoholic beverages to their guests and secondly those

which cannot. From many points of view there are great differences

between the two types. Licenced restaurants involve greater capital

investment since the standard of cooking and service is expected to be

significantly higher as the "price" for maintaining the licence.

High salaries for skilled personnel and extensive running costs mean

that the owner of a licenced restaurant is constantly struggling for

survival.

49. The applicant company considers that a licence holder is

completely deprived of his restaurant business if his licence is

revoked. Because of the competition in the licenced restaurant trade

the revocation of a licence has disastrous consequences: the working

capital invested in the business loses its value to a very great

extent and good will disappears.

50. The licenced restaurant business must be considered as a

"possession" in the meaning of Article 1 of Protocol No. 1.

51. The prelude to this case is the audit report of the County

Administrative Board dated 17 September 1981. This audit report was

"torn to pieces" in the criminal proceedings against Mrs. Flenman as

the responsible manager of the company concerned in 1983 at the

District Court of Helsingborg where Mrs. Flenman was acquitted of the

charge of hindering a tax investigation.

52. Nevertheless, this audit report is the basis for the

administrative decision to revoke the applicant company's licence to

serve beverages, which revocation is rejected both as illegal from a

domestic point of view and as constituting serious violations of the

Convention.

53. The audit report refers to the accounts of AB Citykällaren in

Helsingborg for the period 1 July 1979 to 30 June 1980. This company

was established in 1960. Since its financial period 1977/1978

Mrs. Flenman was the shareholder and the responsible manager of the

company. On 6 March 1980 AB Citykällaren opened the restaurant Le

Cardinal. In July 1980, the same year, a contract was signed with a

new joint stock company, Tre Traktörer AB, and, at the same time, the

contract involved the takeover of Le Cardinal by Tre Traktörer. Mrs.

Flenman later became the sole shareholder of Tre Traktörer AB which

ran Le Cardinal until it was closed down on 18 July 1983 as an

immediate, unavoidable consequence of the administrative revocation of

the beverage licence, a consequence which had obviously been foreseen

and planned by the administration.

54. In its first decision on the licence issue the County

Administrative Board thought that the alleged "book-keeping

discrepancies" could be considered as a basis for the revocation of

the licence. However, almost three years had elapsed after the

alleged mismanagement and since during those years there had been no

criticism against Mrs. Flenman the Board confined itself to a serious

warning. This decision is on the borderline of domestic unlawfulness.

However, the decision on 18 July 1983 by the County

Administrative Board implying the revocation of the licence as well as

the National Board for Health and Welfare's decision on 15 August 1983

are clearly unlawful in domestic law and are in violation of the

applicant company's rights under the Convention.

55. As to the domestic unlawfulness it has to be observed that in

the aforementioned audit report the alleged "book-keeping discrepancies"

occurred exclusively in the period from 1 July 1979 to 30 June 1980.

When the National Board of Health and Welfare decided on 13 July 1983

to quash the County Administrative Board's decision the National Board

noted an amendment in the Act on the Sale of Beverages which was not

enforced until 1 July 1982 and which gave the administrative authorities

a wider competence to impose sanctions for alleged "oversights" or

"book-keeping discrepancies"

56. The Director General of the National Board of Health and

Welfare refers to this amendment, in a letter to Mr. S.S. to which the

applicant company refers. In the applicant company's view it appears

from this document that the administrative decisions concerning the

revocation of the licence are based entirely upon Section 64 para. 2

of the 1977 Act in its wording after 1 July 1982.

57. Since the alleged "book-keeping discrepancies" relate to the

period 1979/1980, the applicant company alleges a retroactive use of

the amendment of 1982 as to the alleged mismanagement of 1980. For

that reason the administrative decisions constitute violations of the

prohibition of retroactive law-making and retroactive application of

the law as provided in the Swedish Instrument of Government

(regeringsformen), and in Article 7 of the Convention.

58. The applicant company finds that the sanction provisions of

the Act on the Sale of Beverages are of a penal law nature. It is

impossible to accept as valid an unwritten penal law of such

importance to the licence holder.

59. Moreover, the 1977 Act is an empty law. It creates too much

administrative discretion. It is therefore not accepted that the 1977

Act is a "law" in the autonomous Convention meaning of the word.

60. The revocation of the licence must be regarded as a kind of

prohibition of trade (cf. H v. Belgium, Comm. Report, 8.10.85). If

so, licensees are the victims of discrimination since, unlike other

traders, they do not enjoy the protection of tribunals which satisfy

Article 6 and must suffer restrictions on their trade imposed by way

of unchecked administrative discretion.

61. The decisions on revocation of the licence placed an excessive

economic burden on the applicant company.

62. The financial consequences for the applicant company and its

owner, Mrs. Flenman, resulting from the withdrawal of the licence to

serve alcoholic beverages in Le Cardinal, amount to a total loss of

3.996.000 SEK, composed of the following three items:

- Loss of net income during 17 months, monthly

(average) net income 60.000 SEK 1.020.000

- Rent expenses during 17 months, monthly 28.000 SEK 476.000

- Mrs. Flenman was invited to sell her enterprise

during 1982-1983 at a price of 3.000.000 SEK but

refused to sell since the enterprise was considered

worth 4.000.000 SEK. After the withdrawal of the

licence and the closing down of Le Cardinal,

Mrs. Flenman had to sell the enterprise in November

1984 for 1.500.000 SEK 2.500.000

_________

3.996.000

63. The present owners of Le Cardinal received an offer to sell

back Le Cardinal in 1986 for a price around 5.000.000 SEK but

rejected it.

64. The applicant company is aware that future income cannot be

considered a "possession" within the meaning of Article 1 of Protocol

No. 1. However, in the absence of any income from Le Cardinal due to

its being closed down the rent expenses for the premises had to be

taken from investment capital, a necessity which must be regarded as

contrary to the peaceful enjoyment of possessions.

65. Mrs. Flenman has also suffered personal losses, not included

in the above.

66. The applicant company considers that the above, which was

the result of the revocation of the licence, must be a violation of

Article 1 of Protocol No. 1, without any possible justification under

the second paragraph of this provision.

67. The Government have submitted that the effects of the

revocation of the licence on the business are not the direct purpose

of the decision to revoke the licence but are the indirect effects of

such a decision, the reason for revocation being of a social

character. The applicant company contests this submission. In its

view the reasons for the revocation of the licence have nothing to do

with any problems of a social or a public order nature in connection

with the running of Le Cardinal. The only reason for this step was

the alleged "annoyances" in the accounts for 1981. It is tempting to

suggest that the revocation was punitive in character.

68. The applicant company further alleges that the 1977 Act is in

fact being used by the National Board of Health and Welfare as a

punitive measure operating alongside the ordinary criminal law. This

abuse of power has led to the imposition of a penalty on a licensee

who has not committed any criminal offence.

b. Article 6 of the Convention

69. The applicant company finds that the revocation of the licence

involved a determination of one of its civil rights. The fact that Tre

Traktörer AB has no access to the Swedish courts in order to have the

revocation reviewed by a tribunal in accordance with the provisions of

Article 6 of the Convention constitutes a violation of that Article.

The case of the applicant involves a violation of that Article, not

only Article 6 para. 1 but also para. 2. The applicant company has

been deprived of its licence to serve alcoholic beverages without any

legal possibility to have this administrative decision on revocation

of the licence reconsidered by a court.

70. From the point of view of the rule of law this case reveals

many weaknesses in the current Swedish system, in particular the

extraordinary division of competence between the courts and the

administrative authorities as regards administrative sanctions and

punishments for the acts of licensees. It is paradoxical that the

ultimate sanction, namely the revocation of a licence, cannot be

reviewed by a court.

71. Taking into consideration its very serious effects the

revocation of a licence can never be recognised as anything but a

penalty and for that reason it should be administered by the courts

in a lawsuit as required by Article 6 paras. 1 and 2 of the

Convention. The current Swedish system concerning revocation of

licences violates these rights.

72. The applicant company submits that in licence matters it is

impossible in practice to claim compensation before the courts under

the Tort Liability Act. To succeed the litigant must prove that the

administration is at fault in revoking the licence or has behaved

negligently in the exercise of its discretion.

73. The applicant company recalls the contents of the decision of

13 July 1983 of the National Board of Health and Welfare and submits

that it must be clear from that text that the administration is

completely autonomous in its interpretation of the legal provisions on

revocation of licences to sell alcohol. The audit report on which the

authorities rely in revoking the licence was heavily criticised before

the District Court leading to the rejection of the prosecution.

However this is not a matter which affects the conviction of the

County Administrative Board which persists in its opinion that the

licensee is unsuitable and that the licence should be revoked.

74. The different treatment by the law, on the one hand, of all

licence holders and, on the other hand, of all other business

managers as to prohibition of trade also makes it necessary to invoke

Article 14 of the Convention.

B. The Government

a. Article 1 of Protocol No. 1

75. The Government submit that a licence to sell alcoholic

beverages is not a possession within the meaning of Article 1 of Protocol

No. 1 nor can the holding of a licence to sell alcoholic beverages be

regarded as a "profession".

76. The following differences between the holder of a possession

and the holder of a licence should be noted. A licence to serve

alcoholic beverages is only granted subject to several conditions

allowing for its possible revocation in the future. A licence holder

cannot be considered to have a reasonable and legitimate expectation

to continue to sell such beverages, if these conditions are no longer

fulfilled. Neither can the licence holder have an expectation as to

the permanent nature of the licence and as to the possibility to

continue to draw benefits from the exercise of the activity for which

the licence has been granted. As regards the expectations of future

earnings, the Commission has in its case-law stated that future income

can only be considered to constitute a possession if it has already

been earned or where an enforceable claim to it exists. The

Government refer to the Commission's decision on admissibility in the

case of Pudas v. Sweden (No. 10426/83, Dec. 5.12.84, to be published

in D.R. 40).

77. Should the Commission not agree with this opinion, the

Government contend that the decision to revoke the licence cannot be

regarded as a deprivation of possessions within the meaning of

Article 1 of Protocol No 1.

78. It is not denied that a revocation of a licence may have

effects on the restaurant business. However, these effects are not

the direct aim of the decision to revoke the licence but are the

indirect effects of such a decision. The reason why a licence is

revoked is of a social character. A licence is revoked only because

the licence holder is not observing the general rules on the trading

and serving of alcoholic beverages in Sweden. Such a decision does

not come within the scope of the first paragraph of Article 1 of

Protocol No. 1.

Since the basic aim of the decision to revoke the licence was

not to "deprive" the applicant company of its "possessions", it seems

more accurate to examine whether the decision was justified under the

second paragraph of the said Article.

79. The restrictions imposed on the trading and serving of

alcoholic beverages are aimed at curbing social problems related to

the excessive consumption of alcohol and the social evils it causes.

Swedish society has traditionally been - and continues to be -

vigilant in this respect. In this connection the Government maintain

that restrictions in connection with licences for serving alcoholic

beverages are imposed in the general interest as a social necessity.

They are thus compatible with the provisions of the second paragraph

of Article 1 of Protocol No. 1.

80. The granting of the licence imposed certain obligations on the

applicant company. These obligations were in the interest of the

public and a condition for the granting and maintenance of the

licence. The reason for the revocation of the licence was that the

applicant company had failed to meet one of these obligations, i.e.

the obligation of properly complying with the statutory requirements

of book-keeping. In the absence of clear indications that this

obligation had not been met, no question of revoking the licence would

have arisen. Furthermore, no grounds were invoked in support of the

decision to revoke the licence other than the discrepancies in the

book-keeping.

81. The Government submit that it has to be taken into

consideration that the issue of the deficiencies in the book-keeping

was in fact prior to the revocation of the licence considered in

proceedings meeting the requirements of Article 6 para. 1. Thus,

precisely this issue was before the District Court of Helsingborg in

the criminal proceedings. Although the Court did not find

deficiencies to the extent alleged in the audit report initiating the

criminal charge it did find that the book-keeping had not been

properly carried out. The fact that the proceedings resulted in an

acquittal on, inter alia, the ground that no criminal intent or gross

negligence as required by the relevant penal statute was established,

could not blur the fact that the issue of deficiencies in the

book-keeping was in fact considered by the court.

82. It is clear that the withdrawal of the licence was lawful and

carried out on the basis of Swedish law. Every significant material as

well as procedural aspect in respect of the withdrawal was regulated

by written law readily available to the applicant company. In

particular, the significance of the appropriate book-keeping and its

importance when considering the suitability of the licence holder

could be directly deduced from the terms of the relevant provisions

and their legislative history. Furthermore, there is every indication

that the applicant company was also in fact fully informed of these

provisions and their potential consequences.

83. As to the proportionality or fair balance question, it is

necessary to examine whether the withdrawal of the licence in itself

was an appropriate measure in view of the aim sought to be achieved

and whether under the circumstances the applicant company had to

suffer undue hardship.

84. The goals of Swedish policy on alcohol could hardly be

achieved without imposing, and vigorously enforcing, appropriate

restrictions on the serving of alcoholic beverages at restaurants.

The framing and administration of such restrictions offer a variety

of possible measures to be taken, some of which necessarily involve

serious interferences with the individual's right, such as the

withdrawal of a licence previously granted.

85. As regards the choice between such possible measures, the

concept "in the public interest" clearly suggests that the discretion

afforded to the Contracting States is considerably wider in scope than

under other similar provisions of the Convention, for instance,

Articles 8, 9 and 10, where the notion "necessary in a democratic

society" is employed.

86. Given the wide discretion afforded to a Contracting State as

regards the particular measures to be taken in order to implement

legitimate policy goals, it could not reasonably be questioned that

the measures taken in the present case were appropriate in view of the

goals sought to be achieved.

87. What remains to be considered is the question whether the

withdrawal of the licence could be considered disproportionate in view

of the policy goals sought to be achieved or, in other words, whether

undue burdens were placed upon the applicant. For the following

reasons, the Government maintain that this is not the case.

88. It goes without saying that legislation implementing

policy goals such as those concerned in the present case affects in

one way or another individuals' rights to their property.

Furthermore, in order to serve their intended function, the legal

provisions need to be drafted so that a variety of different

situations will be covered by a reasonably limited number of

appropriate ways of interfering. An almost inevitable consequence

of this is that borderline cases occasionally will occur where the

individual will have to bear what at first sight might be viewed as

considerable hardship.

89. The Convention organs have recognised that in such situations

it is for the national legislator, within a wide margin of

appreciation, to assess the advantages and disadvantages involved in

the possible legislative measures concerned. In other words, it is

for the national legislator to take the policy decision as to what

burdens should ultimately be placed on its citizens for the benefit of

society at large. This means, to quote the Court (Eur. Court H.R.,

James and Others judgment of 21 February 1986, Series A no. 98, p. 42

para. 69) that on occasions some "anomalies" must be accepted.

Recognising this, the Court has viewed its function as being limited

merely to reassuring that the measures taken will not be "so

unreasonable as to be outside the State's margin of appreciation".

90. When considering the present case in the light of these

standards, there is nothing in the legislation as such that, given the

policy goals pursued, could reasonably render it unacceptable under

Article 1 of Protocol No. 1. In particular, the measures provided

for, and resorted to in the present case, were strictly confined in

the sense that they did not concern anything else than the right to

serve alcoholic beverages. Furthermore, the circumstances that

ultimately resulted in the withdrawal of the licence were particularly

covered by the relevant legal provisions. These circumstances were

within the direct control of the applicant company itself. In other

words, the consequences were not only a matter of the State

interfering with the applicant company's right to property, but rather

a response to its own actions or omissions.

91. The only inaccuracy referred to in the decision to withdraw

the licence was that, according to the applicant company, alcoholic

beverages at a sales value amounting to considerably more than ten

percent of the total turnover had been stolen from the restaurant.

Considering the policy underlying the restrictions on alcohol in

Sweden, and considering in particular the conditions under which the

licence had been granted, it is reasonable to expect the licence

holder to take some form of action for the purpose of having the

alleged thefts investigated. The applicant company chose not to

take any action. In the Government's opinion, this fact alone would

justify the conclusion that the measures taken, i.e. the withdrawal of

the licence, fall short of being "so unreasonable as to be outside the

State's margin of appreciation".

92. To sum up, it is reasonable, and in accordance with the

provisions of Article 1 of Protocol No. 1, to make the serving of

alcoholic beverages subject to the requirement of a licence, to

prescribe certain conditions for obtaining and keeping a licence, and

to withdraw the licence when the conditions are no longer satisfied.

This being so, any possible economic consequences necessarily

resulting from a withdrawal also have to be accepted. It is for this

reason that the Government have taken the position that the alleged

economic consequences referred to by the applicant company are of no

relevance when considering whether the withdrawal of the licence was

justified under the terms of Article 1 of Protocol No. 1.

93. In case the Commission does not share this view, it is not

denied that a withdrawal of a licence may have some effects on a

restaurant business. Assessing any possible economic losses is a

complicated matter that could not be carried out merely on the basis

of the material presented by the applicant company.

94. As regards the figures submitted by the applicant company,

indicating a total loss of almost 4 million SEK, the following brief

remarks are made.

None of the figures presented are directly referrable to the

withdrawal of the licence but rather to decisions taken by the

applicant company itself. Furthermore, the Government do not accept

the view that these decisions were a necessary consequence of the

withdrawal of the licence. For instance, according to the applicant

company a considerable part of the losses was due to the fact that the

restaurant was closed down for about one-and-a-half years prior to the

ultimate sale in November 1984. It appears that the restaurant was

closed down more than one month before the licence was withdrawn.

Even apart from this fact the closing down of the restaurant for about

one-and-a-half years prior to the sale could not in the Government's

opinion be viewed as a necessary consequence of the withdrawal of the

licence even if it is assumed that the restaurant had to be sold.

Furthermore, the remaining part of the losses is referrable to

the alleged difference between an estimated sales value of the

restaurant and the price at which it was ultimately sold. No

indications have been given as to how the estimated value has been

arrived at. Moreover, according to the applicant company, offers were

made during 1982 and 1983 to buy the restaurant at a price of 3

million SEK. The offers were rejected since the applicant company

considered the appropriate value to be 4 million SEK. Nevertheless,

the restaurant was sold in 1984 at a price of 1.5 million SEK.

According to the applicant company, the new owners have refused to

sell the restaurant, although offered a price of about 5 million SEK.

No one would accept these figures without a convincing explanation of

the obvious and considerable discrepancy between, on the one hand, the

price at which the restaurant was actually sold and, on the other

hand, its alleged sales value prior to, as well as after, the sale.

It should be observed in this context that the sales value of the

restaurant should not be affected by the withdrawal of the licence

since the circumstances causing the withdrawal could not have been

held against a presumptive buyer.

95. It follows that even if the alleged economic losses as such

were to be accepted, the conclusion is that they resulted from

considerations made, and actions taken, by the applicant company.

Furthermore, these considerations and actions could not be viewed as

merely a necessary consequence of the withdrawal of the licence.

96. Finally, the reasoning based on the assumption that a licence

to serve alcoholic beverages should be considered a possession must

ultimately boil down to the idea that in a certain situation the State

would have to pay compensation in order to have a licence revoked.

But, apart from the fact that the licence as such has no value in the

hands of the State, the situation becomes absurd. In order to revoke

a licence, which is part of the State's system for regulating the

serving of alcoholic beverages, the Government have to pay

compensation to licence holders who do not live up to the conditions

prescribed by the law. This only shows what the Government have

maintained. It is not possible to regard a licence to serve alcoholic

beverages as a possession.

97. It seems as if the applicant company really founds its claim

on the fact that the decision to revoke the licence was handed down by

a body which was not a court within the meaning of Article 6 para. 1.

There is, however, nothing to suggest that the decision would have

been another one, should the case have been examined by a court.

b. Article 6 of the Convention

98. It is clear from the case-law that not every disagreement

which may be present in a case amounts to a "contestation" (dispute)

within the meaning of Article 6 para. 1. For a disagreement to come

within the scope of Article 6, it has to be "genuine and of a serious

nature" and it must concern "questions of fact and questions of law".

There is still uncertainty as to the requirement that the

disagreement be "genuine and of a serious nature". However, in the

Government's opinion there is no such uncertainty as to the

requirement that the disagreement be on "questions of fact" or

"questions of law". For Article 6 para. 1 to be applicable, at least

one of two conditions must be met: either there has to be a

disagreement as to the facts on which the disputed decision is based,

or there has to be a disagreement concerning the legal basis for the

decision.

99. The Benthem case (Eur. Court. H.R., Benthem judgment of 23

October 1985, Series A no. 97) is of particular interest in this

context, since the similarities with the present case are in some

respects striking. The Benthem case concerned the right to be granted

a licence to exploit an installation for delivering liquid petroleum

gas. Under the relevant law Mr. Benthem had a legal right to be

granted such a licence in the sense that a licence could be refused

only if certain conditions related to the erection, bringing into

operation, exploitation, extension or modification of the installation

were not satisfied. In Mr. Benthem's view, these conditions were met

and accordingly the refusal to grant him the licence was inconsistent

with the relevant legal provisions and, more generally, with the

requirements of the rule of law (above-mentioned Benthem judgment,

pp. 14 and 16, paras. 30 and 36).

100. Conversely, in the case of van Marle and Others (Eur. Court

H.R., judgment of 26 June 1986, Series A no. 101), the case concerned

a claim for the right to be registered as a certified accountant.

Having analysed the object of the disagreement presented, the Court

found this disagreement not to concern "matters of law and of fact

susceptible to judicial assessment" (para. 36 of the judgment).

Instead the Court found the disagreement to concern an alleged

"incorrect assessment of the applicant company's competence". The

Court concluded that differences on such assessments did not amount to

"disputes" within the meaning of Article 6 para. 1 of the Convention

(paras. 35 and 36).

101. In the present case the Government have not been able to find

the kind of significant disagreement on questions of fact or questions

of law that is required in order for the case to come within the scope

of Article 6 para. 1. The disputed decision was taken on the basis of

facts that were not disputed and, in addition, on the applicant

company's explanations of these facts. The explanations in turn were

not rejected or questioned by the authorities. Furthermore, the

existence of a legal basis for the decision has not been questioned.

Consequently, this case does not involve any "genuine" disagreement

"of a serious nature" on questions of fact or questions of law.

102. The substance of the applicant company's complaint seems to be

a strongly expressed dissatisfaction with the very existence of the

legal provisions applied and the "purely bureaucratic" system by which

under the law the provisions are sought to be enforced, and the

seriousness of the consequences that in the present case have followed

from the enforcement of the provisions in question. Such a complaint

does not fall within the scope of Article 6 para. 1, since it falls

short of presenting a "genuine dispute" on questions of fact and

questions of law.

103. The only disagreement between the applicant company and the

authorities in the present case concerned the assessment whether, in

view of the observed deficiencies in the book-keeping and the

explanations given, the applicant company was competent and suitable

to have a licence to serve alcoholic beverages. In the Government's

opinion, this is the same kind of disagreement as the Court in the

case of van Marle and Others found not to be a "contestation"

(dispute) within the meaning of Article 6 para. 1 of the Convention.

104. There is under Swedish law no right to obtain a licence in the

sense that everyone suitable would have a right under the law to be

granted a licence. Among the circumstances to be considered before

granting a licence is the question whether there is at all a need in

the area for a restaurant, or another restaurant as the case may be,

with a licence to serve alcoholic beverages. The possibility of being

granted a licence should therefore be viewed as an exception from the

existing State monopoly on dealing with alcoholic beverages. It

should also be observed in this context that, regardless of the

outcome of the views taken on an application for a licence, the

municipality concerned has an absolute veto in the matter. Under

these circumstances, the Government maintain that the present case

does not concern any "civil rights" within the meaning of Article 6

para. 1 of the Convention.

105. Anyone who considers himself to be the victim of an

administrative error committed by a civil servant or an authority may

claim compensation under the Tort Liability Act of 1972. The fact that

the applicant's case was referred by the Government to the Chancellor of

Justice, who decided on 5 March 1984 to reject the claim, does not

mean that the applicant is excluded from the possibility of initiating

litigation against the State.

106. The applicant company appears to claim that the decision made

by the central authority was illegal under the domestic system.

If the applicant company really means that the decision as such is

illegal there is no objection whatsoever to bringing such a case

before the civil court in Sweden, because according to the Tort

Liability Act it is possible to bring the case before a court and

allege that the authorities, having made a decision in an

administrative matter, have made mistakes or have taken decisions

which are contrary to domestic law. If a civil court were to come

to the same conclusion there would be room for damages by the State.

107. The granting or the revocation of licences to serve alcoholic

beverages are purely administrative matters under Swedish law.

Consequently, the ordinary courts cannot deal with these matters as

such. But as mentioned above it is possible to claim compensation

before the courts under the Tort Liability Act. For this reason the

Government contend alternatively that the applicant company's

complaint as regards Article 6 of the Convention is ill-founded.

IV. OPINION OF THE COMMISSION

A. Points at issue

108. The issues to be determined are:

- whether the revocation of the applicant company's licence to

serve beer, wine and alcoholic beverages violated its right

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

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

applicable in the case, and if so, whether or not there has

been a breach of this provision.

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

109. The applicant company complains that the decision to revoke

its licence to serve beer, wine and alcoholic beverages violated

Article 1 of Protocol No. 1 (P1-1). The Government submit that a licence

cannot be regarded as a "possession" within the meaning of this

provision. They contend accordingly that Article 1 of Protocol No. 1

(P1-1) is not applicable. Alternatively they submit that the complaint

is ill-founded.

110. Article 1 of Protocol No. 1 reads (P1-1):

"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."

111. The Commission considers that the economic interests connected

with the applicant company's restaurant business were "possessions"

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

sell alcoholic beverages was an important element in the running of

the restaurant and the applicant company could legitimately expect to

keep the licence as long as it did not infringe the conditions

attaching to the licence. The revocation of the licence was

therefore, in the circumstances of the case, an interference with the

company's rights under Article 1 of Protocol No. 1 (P1-1) (cf. Eur. Court

H.R., van Marle and Others judgment of 26 June 1986, Series A no. 101,

p. 13, paras. 41-42).

112. Having found that the revocation of the applicant company's

licence to serve alcoholic beverages constituted an interference with

its right to the peaceful enjoyment of possessions the Commission must

next examine whether the revocation of the licence was justified under

Article 1 of Protocol No. 1 (P1-1). In that context it must first be

determined whether the established interference with the applicant

company's property right falls to be considered under the second

sentence of the first paragraph (deprivation of property) or the

second paragraph (control of use of property).

113. It is evident that the Act on the Sale of Beverages, notably

the provisions concerning the licensing requirement for the sale of

alcoholic beverages, is designed to control the sale of alcoholic

beverages. The revocation of a licence to serve alcoholic beverages

may in some circumstances be seen as a deprivation of property.

However, since in the present case the possibility of such deprivation

was an inherent element in the control of the sale of alcoholic

beverages, it is the second paragraph of Article 1 of Protocol No. 1 (P1-1)

which is material in the present case (see mutatis mutandis Eur. Court H.R.,

Agosi judgment of 24 October 1986, Series A no. 108, p. 17, para. 51).

114. Under the second paragraph of Article 1 of Protocol No. 1

(P1-1) the Commission must examine whether the revocation of the applicant

company's licence was "necessary to control the use of property in

accordance with the general interest". The task of the Convention

organs in this context is to supervise the lawfulness, purpose

and proportionality of the revocation of the licence (cf. e.g.

No. 10378/83, Dec. 7.12.83, D.R. 35 p. 235). The question of

proportionality requires a determination as to whether there was a

reasonable relationship between the means employed and the aim sought

to be realised or, in other words, whether a fair balance has been

struck between the demands of the general interest and the interest

of the individual. In determining whether a fair balance exists,

the State enjoys a wide margin of appreciation with regard both

to choosing means of enforcement and to ascertaining whether the

consequences of enforcement are justified in the general interest

for the purpose of achieving the object of the measure in question

(Agosi judgment, loc. cit., p. 18, para. 52).

115. The applicant company has submitted that the revocation of the

licence was an abuse of power by the authorities and that it was

illegal under Swedish law. In this connection, the applicant company

has referred to Article 7 (Art. 7) of the Convention and alleged that Section

64 para. 2 of the 1977 Act has been applied retroactively to acts

occurring before the provision was amended on 1 July 1982.

116. The Commission finds that the revocation of the licence had a

basis in Swedish law, notably Section 64 of the Act on the Sale of

Beverages read together with Sections 40 and 70 of the Act. It

finds no support for the applicant company's contention that the

decision was unlawful, either as being a retroactive application of

the law or for any other reason. The Commission is thus satisfied

that the revocation was lawful. It also considers that the Act on the

Sale of Beverages has been enforced in the general interest of

controlling the consumption and sale of alcohol. The Commission thus

finds that the revocation of the licence was a lawful measure which

pursued a general interest.

117. On the question of the proportionality of the interference

with the applicant company's rights and the aim pursued, the Commission

notes the following.

118. As regards the effects on the restaurant business of the

revocation of the licence, the Commission finds that it is not

necessary to resolve the dispute as to the date of the closing of

the restaurant. The Commission has based its examination on the

assumption that the licence was, as submitted by the applicant

company, a necessary condition for running the restaurant at a profit

and on the assumption that the restaurant was closed down as a result

of the revocation of the licence.

119. The Commission considers that there are certain elements which

suggest that the revocation of the licence was a severe measure in the

circumstances. First the restaurant had to be closed down immediately.

The effects were particularly serious since the revocation of the

licence was immediately enforceable, the applicant company's request

for a stay of execution having failed. The financial repercussions of

the revocation were thus significant.

120. Moreover, the revocation of the licence took place on 18 July

1983 whereas the facts on which the revocation was based - discrepancies

in the book-keeping - related to the period July 1979 to June 1980.

It has not been alleged that in the meantime there were any further

deficiencies in the book-keeping. Thus, the revocation of the licence

came late after the event. Furthermore, besides the administrative

proceedings concerning the revocation of the licence, criminal

proceedings were instituted against Mrs. Flenman on substantially the

same facts and she was acquitted in essence because intent or gross

negligence, as required under the Act on Tax Offences, could not be

proven. Finally, the authorities could have taken less serious

measures as is shown by the decision of the County Administrative

Board which considered that an admonition was a sufficient sanction.

121. On the other hand, the applicant company must have known the

rules and conditions attached to the licence. Under Sections 64 and

70 of the 1977 Act unsatisfactory book-keeping may be a reason to

revoke a licence to serve alcoholic beverages. Moreover, the

applicant company was informed in a letter of 4 November 1982 that the

County Administrative Board considered the question of revocation of

the licence. In these circumstances, the company cannot have been

taken by surprise when the licence was revoked on 18 July 1983.

122. Finally, the discrepancies in the book-keeping of AB

Citykällaren relating to the sale of alcoholic beverages were

significant. It was estimated that sales amounting to 93.000 SEK were

not recorded in the accounts. The applicant company explained that

the discrepancies were due to thefts. Having regard to the company's

turnover of 770.000 SEK, a theft of 93.000 SEK worth of alcohol must

be regarded as significant and serious. Against this background the

conclusion of the National Board of Health and Welfare that this

showed inadequate book-keeping and internal control on the part of

management does not appear unreasonable.

123. In view of Swedish policy concerning alcoholic beverages and

the wide margin of discretion enjoyed by States under the second

paragraph of Article 1 of Protocol No. 1 (P1-1), the Commission considers

that the measures taken against the applicant company were not

disproportionate to the aim pursued.

124. The Commission therefore finds that, as interference with the

applicant company's right to the peaceful enjoyment of its

possessions, the revocation of the licence was justified under the

terms of the second paragaraph of Article 1 of Protocol No. 1 (P1-1).

Conclusion

125. The Commission concludes, by ten votes to one, that there has

been no violation of Article 1 of Protocol No. 1 (P1-1).

C. Article 6 (Art. 6) of the Convention

126. The applicant company also alleges a violation of Article 6 para. 1

(Art. 6-1) of the Convention, in that it had no possibility of having the

revocation of the licence examined by a court.

127. The Government submit that the revocation of the licence is an

administrative matter which the ordinary courts cannot deal with. They

argue in the first place that the complaint falls outside the scope

of Article 6 (Art. 6). Alternatively they submit that the applicant could

have initiated litigation against the State under the Tort Liability

Act before the ordinary courts.

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

128. Article 6 para. 1 (Art. 6-1) first sentence reads as follows:

"In the determination of his civil rights and obligations or

of any criminal charge against him, everyone is entitled to

a fair and public hearing within a reasonable time by an

independent and impartial tribunal established by law."

129. Article 6 para. 1 (Art. 6-1) of the Convention guarantees to everyone,

who claims that an interference by a public authority with his "civil

rights" is unlawful, the right to submit that claim to a tribunal meeting the

requirements of Article 6 para. 1 (Art. 6-1) (see Eur. Court H.R., Le Compte,

van Leuven and De Meyere judgment of 23 June 1981, Series A no. 43, p. 20,

para. 44). The claim or dispute must be "genuine and of a serious nature" (see

Eur. Court H.R., Benthem judgment of 23 October 1985, Series A no. 97, p. 14,

para. 32).

130. It is established case-law that the concept of "civil rights

and obligations" cannot be interpreted solely by reference to the domestic law

of the State concerned. Furthermore, Article 6 (Art. 6) does not only cover

private-law disputes in the traditional sense, i.e. disputes between

individuals or between an individual and the State to the extent that the

latter has been acting as a private person subject to private law. The

character of the legislation which governs how the matter is to be determined

and the authority which is invested with jurisdiction in the matter are not

decisive. What is decisive is the character of the right at issue.

131. In the Benthem case (Eur. Court H.R., Benthem judgment of 23

October 1985, Series A no. 97) the Court found that the dispute which

arose in relation to the grant of a licence to operate an installation

for the delivery of liquid petroleum gas (LPG) to motor vehicles as part

of a garage owner's business activities related to a "civil right".

The Court stated as follows (p. 16, para. 36):

"The grant of the licence to which the applicant claimed to

be entitled was one of the conditions for the exercise of

part of his activities as a businessman. It was closely

associated with the right to use one's possessions in

conformity with the law's requirements. In addition, a

licence of this kind has a proprietary character, as is

shown, inter alia, by the fact that it can be assigned to

third parties.

According to the Government, Mr. Benthem was prevented only

from exploiting an LPG installation on a site of his own

choosing, and could have obtained a licence for another

locality. The Court is not persuaded by this argument: a

change of this kind - which anyway would have involved an

element of chance since it would have required a fresh

application whose success was in no way guaranteed in

advance - might have had adverse effects on the value of the

business and of the goodwill and also on Mr. Benthem's

contractual relations with his customers and his

suppliers. This confirms the existence of direct links

between the grant of the licence and the entirety of the

applicant's commercial activities."

132. In the Pudas case (Eur. Court H.R., Pudas judgment of

27 October 1987, Series A no. 125), the Court concluded that the

revocation of the applicant's licence to transport passengers

concerned a "civil right". The Court stated as follows (para. 37):

"The maintenance of the licence to which the applicant

claimed to be entitled was one of the conditions for the

exercise of his business activities. Furthermore, public

transport services in Sweden are not ensured by a State

monopoly but by public bodies and by private persons. At

least in the latter event, the provision of such services

takes the form of a commercial activity. It is carried out

with the object of earning profits and is based on a

contractual relationship between the licence holder and the

customers."

133. Although the applicant company's licence to sell alcoholic

beverages could not be assigned to a third party, the Commission

considers that the present case cannot be distinguished in law from

the Benthem case and the Pudas case. It notes in particular that the

revocation of the licence had adverse effects on the goodwill and

value of the business. As submitted by the applicant company, the

licence was even a condition for running the restaurant at a profit.

The Commission thus finds that a "civil right" of the applicant

company was at issue.

134. The Commission also finds that there was a "genuine" and

"serious" dispute, in particular as to whether the decision to revoke

the licence was in conformity with Swedish law, notably Section 64 of

the Act on the Sale of Beverages. The applicant has in essence

alleged that the authorities have abused their power and that the

decision was illegal under Swedish law.

135. The dispute which arose under Swedish law was whether the

facts of the case, which were not disputed, were such that the

authorities were justified, having regard to Sections 40, 64 and 70 of

the Act, to conclude that the applicant company should not retain its

licence because of unsuitability. The Commission considers that the

dispute which thus arose is not of the same nature as in the van Marle

and Others case relied on by the Government (see para. 103). In that

case the dispute related to whether or not the applicants were

qualified as accountants. In the present case, however, the dispute

relates to the lawfulness under Swedish law of the revocation of the

applicant company's licence.

136. Accordingly, the Commission finds that Article 6 para. 1 (Art. 6-1) was

applicable to the dispute over the revocation of the licence to serve

alcoholic beverages.

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

137. It must next be examined whether the applicant had the

possibility of submitting the dispute as to the revocation of the

licence to a "tribunal" satisfying the conditions of Article 6 para. 1

(Art. 6-1) of the Convention.

138. The Government admit that the ordinary courts cannot deal with

questions of revocation of licences to serve alcoholic beverages,

including the licence at issue here, as these questions are

administrative matters under Swedish law.

139. They further submit however that Article 6 (Art. 6) is complied with,

since the applicant could sue the authorities before the ordinary

courts and claim compensation under the Tort Liability Act.

140. The Commission recalls its above finding (para. 136) that

Article 6 para. 1 (Art. 6-1) was applicable to the proceedings concerning the

withdrawal of the licence. It notes that the initial decision to

revoke the licence was taken by the County Administrative Board. This

decision was upheld on appeal by the National Board of Health and

Welfare. No appeal lay against that decision.

141. In the Commission's view none of the administrative bodies

dealing with the applicant's case constituted a "tribunal" for the

purposes of Article 6 para. 1 (Art. 6-1).

142. The Commission moreover notes that the decision of the

National Board of Health and Welfare on the revocation of the

applicant's licence was not open to any ordinary appeal to the

ordinary or administrative courts.

143. As regards proceedings in tort, the Commission recalls that

the dispute, in relation to which the applicant was entitled under Article 6

para. 1 (Art. 6-1) to a procedure satisfying the conditions of Article 6, (Art.

6) related to the question whether under Swedish law the applicant company's

licence should be revoked or not. The court action suggested by the Government

would relate to whether the authorities had been negligent or at fault and not

to whether the licence should have been revoked (cf. para. 47). It is

therefore not sufficient for the purposes of Article 6 para. 1 (Art. 6-1) in

this case.

144. It follows that the applicant company did not have at its disposal a

procedure satisfying the requirements of Article 6 para. 1(Art. 6-1) in respect

of the dispute over the revocation of its licence to serve alcoholic beverages.

Conclusion

145. The Commission concludes, by nine votes to two, that there has

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

D. Recapitulation

146. - The Commission concludes, by ten votes to one, that there has

been no violation of Article 1 of Protocol No. 1 (P1-1) (para. 125).

- The Commission concludes, by nine votes to two, that there has

been a violation of Article 6 para. 1 of the Convention (Art. 6-1) (para. 145).

Secretary to the Commission Acting President of the Commission

(H. C. KRÜGER) (J. A. FROWEIN)

Opinion dissidente de M. Martinez, à laquelle M. Campinos

déclare se rallier

1. La requérante était titulaire d'une licence l'autorisant Ã

servir des boissons alcoolisées dans son restaurant LE CARDINAL sis

dans la ville suédoise de Helsingborg.

Le 13 juillet 1985 l'Administration nationale de la santé et

de la prévoyance sociale a révoqué cette licence.

La requérante soutient devant la Commission qu'une telle

révocation constitue une violation de l'article 1er du Protocole

additionnel et qu'une contestation sur ses droits de caractère civil a

été tranchée sans les garanties requises par l'article 6 par. 1 de la

Convention.

La majorité de la Commission est d'avis que l'Administration

suédoise a empiété sur les droits de la requérante au titre de

l'article 1er du Protocole additionnel mais que cette ingérence est

justifiée aux termes du paragraphe 2 dudit article. Elle estime par

ailleurs qu'une contestation sur des droits et obligations de

caractère civil a été tranchée sans les garanties exigées par

l'article 6 par. 1 de la Convention et elle conclut que ce texte a

été violé.

Je ne partage pas l'opinion de la majorité, et ce pour les

motifs suivants.

2. L'avis de la majorité repose sur l'idée que la requérante

était titulaire d'un droit civil de caractère patrimonial. L'existence

d'un droit civil est nécessaire à l'application de l'article 6 par. 1

de la Convention et le caractère patrimonial est à la base de tout

droit protégé par l'article 1er du Protocole additionnel.

Je conteste que la licence autorisant à servir des boissons

alcoolisées dans un restaurant suédois puisse appartenir à la

catégorie juridique des droits civils patrimoniaux.

3. Certes, la majorité suit la solution retenue par la Cour dans

l'affaire Benthem contre les Pays-Bas.

Je crois toutefois que les données du cas d'espèce sont

différentes de celles du cas Benthem. Les juristes romains

disaient : Minima mutatio facti mutat totum ius (une petite

différence de fait peut changer tout le droit).

Dans l'affaire Benthem la licence en cause était régie par la

loi néerlandaise de 1952 sur les nuisances. La décision incombait à la

municipalité (article 4). Celle-ci ne pouvait refuser l'autorisation

que si la construction, la mise en service, l'exploitation,

l'extension ou la modification de l'installation créait un danger pour

les biens, l'industrie ou la santé, un dommage ou encore une nuisance

grave, auxquels on ne pouvait suffisamment remédier en imposant des

conditions (article 13). Une fois octroyée, l'autorisation valait

pour le demandeur comme pour ses ayants cause (article 14).

Il s'agissait donc d'une licence à laquelle toute personne

avait droit à la seule condition de satisfaire à certaines conditions

imposées par les besoins de la sécurité.

La licence dont le retrait est mis en cause dans la présente

affaire est régie par la loi suédoise de 1977. La vente de boissons

alcoolisées en Suède est en principe un monopole d'Etat afin d'en

limiter la consommation. La licence de vendre des boissons

alcoolisées dans un restaurant confère à son titulaire une certaine

participation au monopole d'Etat.

C'est ainsi que le restaurateur titulaire d'une licence se

voit octroyer un privilège par rapport au restaurateur sans licence,

ce qui se traduit par un avantage dans ses bénéfices. Toutefois, il

n'a pas un droit à obtenir une licence et la licence octroyée ne peut

être transmise à des tiers.

D'autre part la licence peut être révoquée, non seulement si

la personne qui gère le restaurant n'en paraît plus digne, mais aussi

pour des causes tout à fait indépendantes de cette personne ; par

exemple, si la vente d'alcool cause des inconvénients pour l'ordre, la

sobriété ou le bien-être public (article 64 de la loi de 1977, voir la

décision de la Commission sur la recevabilité de la requête).

4. Dans l'arrêt Benthem la Cour a rappelé que pour établir si des

droits et obligations sont "de caractère civil", seul compte le

caractère du droit en question (arrêt Benthem par. 34). Il faut donc

s'attacher à reconnaître le caractère de la licence suédoise

concernant les boissons vendues dans les restaurants.

Dans le même arrêt Benthem, la Cour a fait état de ce que la

licence en question "revêt un caractère patrimonial, ce qui ressort

notamment de sa transmissibilité aux tiers" (par. 36).

Par contre, la licence suédoise relative à la vente de

boissons alcoolisées dans les restaurants n'est pas transmissible Ã

des tiers ; elle n'est pas non plus saisissable ; elle ne peut être

vendue ni transmise par voie de succession ; elle ne peut

être donnée en garantie ni faire l'objet d'une saisie-exécution. Elle

n'a donc aucun des caractères propres aux droits civils patrimoniaux.

Enfin, la licence peut être révoquée pour des causes tout Ã

fait indépendantes de son titulaire.

Or si le titulaire n'a ni le droit de se voir octroyer une

telle licence, ni le droit de la transmettre à des tiers ou à ses

héritiers, si les créanciers du titulaire ne peuvent la saisir, si

elle peut être révoquée pour des causes qui n'ont rien à voir avec la

personne du titulaire, que reste-t-il qui permette de dire qu'il

s'agit vraiment d'un droit civil patrimonial ?

Il faut souligner que les recettes supplémentaires que la

licence a pu apporter au restaurant LE CARDINAL ne sont qu'un effet

indirect et n'attribuent pas à cette licence ce qui est le propre d'un

droit civil patrimonial.

S'il ne s'agit pas d'un droit patrimonial, le retrait de la

licence ne peut poser de problème ni sous l'angle de l'article 6

par. 1 de la Convention ni sous celui de l'article 1er du Protocole

additionnel.

APPENDIX I

HISTORY OF THE PROCEEDINGS

Date Item

23 January 1984 Introduction of the application

23 March 1984 Registration of the application

Examination of admissibility

4 December 1984 Commission's deliberations and

decision to invite the Government

to submit observations on the

admissibility and merits of the

application

21 March 1985 Government's observations

2 May 1985 Applicant's reply

10 October 1985 Commission's deliberations and

decision to declare the application

admissible

Examination of the merits

15 January 1986 Applicant's observations on

the merits

16 January 1986 Government's observations on

the merits

25 February 1986 Government's further observations

on the merits

27 February 1986 Applicant's further observations

on the merits

8 March 1986 Commission's further deliberations

and decision to invite the parties

to a hearing on the merits of the

application

10 December 1986 Hearing on the merits. The parties

were represented as follows:

Government: MM. Corell

Lindgren

Berglin

Applicant: Mr. Ravnsborg

10 December 1986 Commission's deliberations on

the merits

28 January 1987 Government's further submissions

6 March 1987 Applicant's further submissions

24 April 1987 Letter from the Government

9 May 1987 Commission's consideration of state

of proceedings

10 November 1987 Commission's deliberations on the

merits, final votes and adoption of

the Report

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TRE TRAKTÖRER AKTIEBOLAG v. SWEDEN

TRE TRAKTÖRER AKTIEBOLAG v. SWEDEN

LEXI