Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 29400/95

by M.L.

against Finland

The European Commission of Human Rights (First Chamber) sitting

in private on 3 December 1997, the following members being present:

Mrs J. LIDDY, President

MM M.P. PELLONPÄÄ

E. BUSUTTIL

A. WEITZEL

C.L. ROZAKIS

L. LOUCAIDES

B. MARXER

B. CONFORTI

N. BRATZA

I. BÉKÉS

G. RESS

A. PERENIC

C. BÎRSAN

K. HERNDL

M. VILA AMIGÓ

Mrs M. HION

Mr R. NICOLINI

Mrs M.F. BUQUICCHIO, Secretary to the Chamber

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 8 September 1995

by M.L. against Finland and registered on 29 November 1995 under file

No. 29400/95;

Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The applicant is a Finnish citizen, born in 1945 and resident in

Helsinki, Finland. He is represented by Ms Sirpa Leppäluoto, a lawyer

practising in Helsinki.

The facts of the case, as submitted by the applicant, may be

summarised as follows.

The applicant was the sole shareholder of a limited company.

During the years 1988-1990 he had given commissions concerning some of

the limited company's purchases to a banking firm which also undertook

its bookkeeping. In 1991 the police instituted investigations

concerning these purchases in relation to the limited company's

accounting and tax reports. Subsequently, the applicant was indicted

before the Helsinki City Court (raastuvanoikeus, rådstuvurätten) on

charges of an accounting offence, along with two other defendants, as

well as aggravated tax fraud. The charges were based on the applicant's

position as the sole shareholder and the actual decision maker in the

limited company.

The first court session of a total of eleven took place on

27 January 1992. In the course of the proceedings the applicant pleaded

not guilty to the above-mentioned charges. He argued, inter alia, that

his position in the company, since he was not a member of its board or

its managing director, was not such as to cause liability for measures

other than those in which he had been actively involved. He alleged

that he had not been actively involved in the matters to which the

charges related. During the trial the co-defendants were heard, written

evidence was presented and witnesses were examined in connection with

the circumstances of the alleged crimes.

On 18 October 1993 the City Court pronounced judgment in the

case. After assessing the evidence presented the City Court considered

with respect to the accounting offence, inter alia, that it had been

established that a co-defendant had entered certain misleading

information into the company's accounts as regards a purchase worth

30,000,000 Finnish marks (FIM). The City Court deemed that, as the

person actually making the decisions for the company and thus

comparable to a managing director, the applicant was under obligation

to attend to the legality of the accounting. In neglecting this duty

he had out of gross carelessness entered misleading information into

the company's accounts in relation to the above purchase. The act had

substantially impeded the forming of a truthful picture of the

company's economic situation. Furthermore, the City Court found that

misleading information had been entered into the company's accounts as

regards the payment of a purchase worth FIM 102,000,000 and that one

of the co-defendants had thus substantially impeded the forming of a

truthful picture of the company's economic situation. The applicant had

signed a credit transfer order for the payment of the said purchase

price. Having regard to the size of the price the City Court did not

consider it to be credible that he would have been unaware of the

financing arrangement. In neglecting his duty to attend to the legality

of the accounting, the applicant had out of gross carelessness entered

misleading information into the accounts. Thus he had committed an

accounting offence.

As regards the tax fraud, after evaluating the evidence the City

Court held, inter alia, that the above-mentioned FIM 30,000,000

purchase had taken place later than it appeared from the limited

company's accounts. The City Court considered that the applicant had

had reasonable cause to try to find out how and when this purchase had

taken place. As the person actually making decisions for the company

and its sole shareholder the applicant was obliged to ensure that the

company's accounting and tax reports were correct. By neglecting to

check the veracity of the information given in the tax report the

applicant had given false information therein and thus committed tax

fraud.

The City Court rejected the remainder of the charges and

convicted the applicant of an accounting offence and tax fraud,

sentencing him to five months' imprisonment (suspended) and a

supplementary fine of 40 day-fines totalling FIM 17,120, and ordered

him to pay damages for the tax fraud in the amount of FIM 2,876,621

jointly and severally with two other defendants. At the same time the

court also convicted 13 other persons of various offences, part of

which were interrelated with those of other defendants.

As regards the accounting offence, the City Court relied on

section 38, subsection 2 of the Accountancy Act (kirjanpitolaki,

bokföringslag 655/1973), as in force at the relevant time, which

provided as follows:

(Translation)

"If a person who has a legal obligation to keep accounts,

a representative of such a person or a person who has been

commissioned to undertake bookkeeping, intentionally or out

of gross carelessness

1) neglects, totally or partly, to enter business

transactions into the accounts or to close the accounts,

2) enters false or misleading information into the

accounts, or

3) destroys, hides or damages accounting material

and thereby renders it essentially more difficult to attain

a truthful picture of the economic result or position of

the person required to keep such accounts, he shall be

convicted of an accounting offence and sentenced to a fine

or imprisonment for a maximum period of two years."

As regards the tax offence, the City Court referred to

chapter 38, section 11, subsection 1 of the Penal Code (rikoslaki,

strafflag 39/1889), as in force at the relevant time, which provided

as follows:

(Translation)

"A person who intentionally in his tax report or other

declaration, which is submitted to an authority for the

purpose of imposing a tax or a public payment, gives false

information or conceals a relevant fact or otherwise

fraudulently evades or tries to evade tax or payment due to

the state, a municipality or a parish, shall be convicted

of tax fraud and sentenced to a fine or imprisonment for a

maximum period of two years."

The Tort Liability Act (vahingonkorvauslaki, skadeståndslag

412/1974) prescribes liability for damages outside contractual

relations. Chapter 2, section 1, subsection 1 of this Act provides, as

far as relevant, as follows:

(Translation)

"A person who intentionally or negligently causes another

person damage is liable for compensation..."

On 15 November 1993 the applicant, among others, appealed to the

Helsinki Court of Appeal (hovioikeus, hovrätten) requesting that he be

acquitted or his sentence be reduced and that he be released from

paying damages or at least part of them. He submitted, inter alia, that

his acts did not constitute the crimes he was convicted of and that the

acts had not caused any loss to be covered.

On 8 September 1994 the Court of Appeal found no reason to amend

the City Court's judgment as regards the applicant and therefore upheld

it.

On 7 November 1994 the applicant, among others, requested leave

to appeal to the Supreme Court (korkein oikeus, högsta domstolen)

renewing, essentially, his earlier submissions.

On 9 March 1995 the Supreme Court refused the applicant leave to

appeal.

COMPLAINTS

1. The applicant complains that the City Court's reasoning did not

comply with the statutory definitions of the crimes of which he was

convicted, in particular, as regards criminal intent. He claims that

it was impossible to fulfil the requirements imposed by the courts. He

maintains that, therefore, he was unable to foresee that his acts or

omissions could be considered crimes. In addition, the applicant

submits that the damages he was ordered to pay were not based on law.

He invokes Article 7 of the Convention.

2. The applicant also complains that he was denied a fair trial. He

maintains that he was convicted contrary to the evidence in the case.

Furthermore, the applicant submits that the courts failed to elaborate

sufficient reasoning for their judgments, particularly, in that they

did not specify what the applicant ought to have done in order to avoid

committing the crimes at issue and that they did not answer all his

claims. Moreover, he alleges that the City Court's reasoning was

unclear in that it did not appear plainly from the judgment which

purchases constituted the accounting offence. The applicant also

contends that owing to the large number defendants at the trial, most

of whom in no way connected with his case, he was not afforded a

sufficiently individual and thorough hearing in a reasonable time. He

invokes Article 6 paras. 1 and 2 of the Convention.

THE LAW

1. The applicant complains that the City Court's reasoning did not

comply with the statutory definitions of the crimes he was convicted

of. He maintains that he was unable to foresee that he could be

convicted. The applicant also claims that the damages he was ordered

to pay were not based on law. He invokes Article 7 (Art. 7) of the

Convention which reads as follows:

"1. No one shall be held guilty of any criminal offence on

account of any act or omission which did not constitute a

criminal offence under national or international law at the

time when it was committed. Nor shall a heavier penalty be

imposed than the one that was applicable at the time the

criminal offence was committed.

2. This Article shall not prejudice the trial and

punishment of any person for any act or omission which, at

the time when it was committed, was criminal according to

the general principles of law recognised by civilised

nations."

In the present case the issue is whether the courts' reasoning

complied with the definition in law.

The Commission reiterates that Article 7 para. 1 (Art. 7-1) of

the Convention enunciates, more generally, the principle that only the

law can define a crime and prescribe a penalty (nullum crimen, nulla

poena sine lege) and the principle that the criminal law must not be

extensively construed to an accused's detriment, for instance by

analogy; it follows that an offence must be clearly defined in law.

This condition is satisfied where the individual can know from the

wording of the relevant provision, and if need be, with the assistance

of the courts' interpretation of it, which acts and omissions will make

him liable (see e.g. Eur. Court HR, Kokkinakis v. Greece judgment of

25 May 1993, Series A no. 260-A, p. 22, para. 52 and the relevant

Comm. Report 3.12.91, para. 45, p. 45).

In the present case, the applicant was convicted firstly for

entering misleading information into the limited company's accounts

thus impeding the forming of a truthful picture of its economic

situation. Secondly, he was convicted for failure to check the veracity

of the information given in the company's tax report thus giving false

information therein. These acts were covered by the definitions in the

relevant provisions the judgments were based on. Accordingly, the acts

constituted criminal offences under Finnish law at the time they were

committed. In the Commission's opinion it was possible to know from the

wording of the provisions at issue which acts and omissions would

result in criminal liability. Furthermore, the Commission considers

that nothing suggests that the Finnish courts interpreted the

provisions at issue abusively or in such a way as to make punishable

acts which would otherwise have remained outside the scope of the

relevant criminal law if it were interpreted narrowly (see e.g. the

above-mentioned Commission's Report para. 49, p. 46).

As regards the damages, the Commission notes that they were

ordered to be paid on the basis of an evaluation of the losses the

crime at issue had caused. The Commission notes further, that the legal

basis for this is to be found in the Tort Liability Act. In these

circumstances the Commission does not find that the decision concerning

the damages discloses any appearance of a violation of the Convention.

It follows that this part of the application is manifestly

ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

2. The applicant complains that he was denied a fair trial. He

maintains that he was convicted contrary to the evidence of the case.

Moreover, he claims that the courts failed to elaborate sufficient

reasoning and did not answer all his claims. He also alleges that the

City Court's reasoning was unclear. Furthermore, he submits that he was

not afforded a sufficiently individual and thorough trial. He invokes

Article 6 (Art. 6) of the Convention which reads as far as relevant:

"1. 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. ...

2. Everyone charged with a criminal offence shall be

presumed innocent until proved guilty according to law."

The Commission first recalls that, in accordance with Article 19

(Art. 19) of the Convention, its only task is to ensure the observance

of the obligations undertaken by the Parties to the Convention. In

particular, it is not competent to deal with an application alleging

that errors of law or fact have been committed by domestic courts,

except where it considers that such errors might have involved a

possible violation of any of the rights and freedoms set out in the

Convention or one of its Protocols (cf. Eur. Court HR, Schenk v.

Switzerland judgment of 12 July 1988, Series A no. 140, p. 29, para.

45).

The applicant claims that the courts decided the case contrary

to the evidence. The Commission notes, however, that the City Court

rendered a judgment in which it assessed the evidence and consequently

reached a reasoned conclusion. The Court of Appeal accepted the City

Court's reasoning and conclusion and the Supreme Court refused the

applicant leave to appeal. In view of this, the Commission does not

find any appearance of a violation of the Convention or its Protocols

as regards this particular aspect of the proceedings.

The Commission recognises that, in certain specific circumstances

failure to give reasons for a judgment can raise issues regarding the

right to a fair hearing as guaranteed by Article 6 para. 1 (Art. 6-1)

of the Convention. According to the Court's and the Commission's case-

law the effect of this provision is, inter alia, to place the

"tribunal" under a duty to conduct a proper examination of the

submissions, arguments and evidence adduced by the parties (Eur. Court

HR, Kraska v. Switzerland judgment of 19 April 1993, Series A no. 254-

B, p. 49, para. 30). The Commission recalls, however, that it does not

follow from this provision that the reasons given by a court should

deal specifically with all points which may have been raised by one

party; a party does not have an absolute right to require reasons to

be given for rejecting each of his arguments (see e.g. Eur. Court HR,

Van de Hurk v. the Netherlands judgment of 19 April 1994, Series A no.

288, p. 20, para. 61; No. 15384/89, Dec. 9.5.94, D.R. 77-B, p. 5;

No. 16717/90, Dec. 9.1.95, D.R. 80-A, p. 24; No. 10938/84,

Dec. 9.12.86, D.R. 50, p. 98).

The Commission observes that the City Court, in its judgment of

18 October 1993, found that the applicant had committed an accounting

offence out of gross carelessness as well as tax fraud. The City Court

rejected part of the charges. It also ordered the applicant to pay

damages on account of the tax fraud. As indicated above, the Court of

Appeal accepted the City Court's reasoning and the Supreme Court

refused leave to appeal. In these circumstances the Commission

considers that the courts have given sufficient reasoning for the

judgment.

As regards the complaint concerning the length of the

proceedings, the Commission recalls that according to the case-law of

the Convention organs the period to be taken into consideration under

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

autonomously. It begins at the time when formal charges are brought

against a person or when that person has otherwise been substantially

affected by actions taken by the prosecuting authorities as a result

of a suspicion against him (cf. e.g. Eur. Court HR, Eckle v. Germany

judgment of 15 July 1982, Series A no. 51, p. 33, para. 73).

In the present case the Commission recalls that the police

investigation was opened in 1991 to clarify whether crimes had been

committed. Subsequently, the applicant was indicted. It is unclear from

the facts of the case whether the applicant was substantially affected

by the preliminary investigations or not. For the purposes of Article 6

para. 1 (Art. 6-1) the Commission assumes, nevertheless, this to be the

case. Consequently, the proceedings started and the "reasonable time"

referred to in this provision began to run from the beginning of the

year 1991.

The Commission considers that the proceedings should be regarded

as having been terminated on 9 March 1995 when the Supreme Court

refused the applicant leave to appeal. Thus the total length of the

proceedings which the Commission must assess under Article 6 para. 1

(Art. 6-1) of the Convention was approximately four years and two

months.

From a general point of view the reasonableness of the length of

proceedings must be assessed with reference to the complexity of the

case, the conduct of the applicant and that of the authorities before

which the case was brought (cf. Eur. Court HR, Boddaert v. Belgium

judgment of 12 October 1992, Series A no. 235-D, p. 82, para. 36).

In the present case the Commission notes that there was a large

number of defendants at the trial and that some of them were charged

with interrelated crimes. This affected also the complexity of the

case. As regards the applicant's and the relevant authorities' conduct,

the Commission has not found it established that they would have acted

in a way which inappropriately prolonged the proceedings against the

applicant.

Furthermore, the proceedings before the courts (a total of about

four years and two months) do not disclose any unacceptable periods of

inactivity which could bring the proceedings at variance with Article 6

(Art. 6) of the Convention.

Therefore, making an overall assessment of the length of the

proceedings, the Commission considers that they did not go beyond what

may be considered reasonable in the particular circumstances of the

case.

As regards the individual treatment of the applicant, the

Commission finds that the applicant has not shown that he was denied

the possibility to present his case or that it was not dealt with in

accordance with the principles enshrined in Article 6 (Art. 6).

It follows that this part of the application is manifestly

ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

For these reasons, the Commission, unanimously,

DECLARES THE APPLICATION INADMISSIBLE.

M.F. BUQUICCHIO J. LIDDY

Secretary President

to the First Chamber of the First Chamber

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M.L. v. FINLAND

M.L. v. FINLAND

LEXI