Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 23458/94

by Hotel Casino AREGUA PARANA AG

against Austria

The European Commission of Human Rights (First Chamber) sitting

in private on 6 September 1995, the following members being present:

Mr. C.L. ROZAKIS, President

Mrs. J. LIDDY

MM. E. BUSUTTIL

A.S. GÖZÜBÜYÜK

A. WEITZEL

M.P. PELLONPÄÄ

G.B. REFFI

B. CONFORTI

N. BRATZA

I. BÉKÉS

E. KONSTANTINOV

G. RESS

A. PERENIC

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 18 October 1993

by Hotel Casino Aregua Parana AG against Austria and registered on

14 February 1994 under file No. 23458/94;

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

summarised as follows.

The applicant is a company incorporated under Swiss law. Before

the Commission it is represented by Mr. F.H. Knöbl, a lawyer practising

in Vienna.

A. Particular circumstances of the case

Between 1986 and 1988 the B.Z.S.A., a company registered under

the law of Panama was engaged in a real estate development project in

Paraguay. In May 1988 the B.Z.S.A. and an Austrian bank, the M. Bank,

concluded a contract according to which the M. Bank undertook to emit

shares of the B.Z.S.A. in order to finance the Paraguay development

project. Since B.Z.S.A. had no liquid means, the M. Bank put a sum of

310.000 Canadian $ at the disposal of Mr. T.S., an Austrian lawyer and

representative of the B.Z.S.A., for organising the financing of

development project.

Subsequently the M. Bank withdrew from the financing of the

Paraguay development project by issue of shares and instituted civil

proceedings against T.S. to recover the 310.000 Canadian $ put at his

disposal. In these proceedings T.S. in the name of B.S.Z.A. invoked

a counter claim in the amount of 36.925,000 Canadian $ against the

M.Bank, as, in his view, the plaintiff was responsible for the failure

of the project and had to compensate damages caused.

On 6 November 1989 the Vienna Regional Court (Landesgericht) in

a partial judgment found against T.S. and ordered him to refund the sum

to the M. Bank but at the same time found that the counter claim for

damages was justified and reserved the determination of its amount.

As regards the counter claim for damages the Regional Court noted that

the withdrawal of the M. Bank from the financing of the project was not

sufficiently justified and therefore had caused damages to B.Z.S.A.

The fact that the representative of B.Z.S.A. had issued without the

consent of the M.Bank order forms for shares could not be regarded as

seriously destroying the mutual relationship of trust and confidence

between the parties. Moreover, the rumour that the Austrian

representative of B.Z.S.A. had been involved in the bankruptcy of a

major Austrian company had been known to the M. Bank before concluding

the contract of May 1988.

On 30 November 1990 the Vienna Court of Appeal (Oberlandes-

gericht) amended the Regional Court's decision and found against the

defendant. The Court of Appeal held that in view of the abstract

nature of the claim of the plaintiff, based on a guarantee given by the

defendant, the claim could not be set off against other possible

claims.

On 10 April 1991 the Supreme Court (Oberster Gerichtshof)

dismissed the defendant's further appeal on points of law (Revision).

On 28 June 1991 the applicant company instituted civil

proceedings before the Vienna Commercial Court (Handelsgericht) for

compensation of damages in the amount of 35,000.000 Canadian $ against

the M. Bank for breach of the contract of May 1988. The applicant

company submitted that the B.Z.S.A. had meanwhile assigned its

compensation claim to the applicant company.

On 25 February 1991 the Commercial Court granted legal aid to the

applicant company for these proceedings.

On 29 January 1992 the Commercial Court dismissed the request of

the defendant that legal aid be withdrawn. It noted that since 1990

the applicant company had no financial means and it could not be

assumed that it had acquired such means meanwhile.

On 24 April 1992 the Court of Appeal rejected the defendant's

appeal as the action has not yet been served on the defendant who

therefore was not yet a party to the proceedings.

On 24 May 1992 the defendant requested again that legal aid be

withdrawn. This request was dismissed by the Commercial Court on

10 July 1992.

On 6 November 1992 the Vienna Court of Appeal, upon an appeal

lodged by the defendant, withdrew legal aid. The Court of Appeal noted

that a requirement for granting legal aid was that the party applying

for it was indigent and examined the circumstances of the assignation

of the compensation claim from B.S.Z.A. to the applicant company. It

noted that the assignment took place without any payment by the

assignee and that at the same time the shares of the applicant company

were transferred to Mrs. B.B., who had only a modest income, no further

assets and no knowledge that she had actually become the owner of these

shares. The Court of Appeal concluded that in such circumstances the

assignment was a sham transaction its only purpose being the shift of

a claim from the interested person who would not have qualified for

legal aid to another person who met the requirements. Such a conduct,

however, constituted abuse of legal aid.

Following the withdrawal of legal aid, on 20 January 1993 the

applicant company was ordered to pay as court fees (Gerichtsgebühr) the

sum of AS 3,557.750.

On 5 February 1993 the applicant company requested that the

amount of the court fees be reduced.

On 1 March 1993 the Minister of Justice (Bundesminister für

Justiz) dismissed this request. He found that if the conditions for

granting of legal aid were not met, no reduction could be granted.

On 14 April 1993 the applicant company lodged a complaint with

the Constitutional Court (Verfassungsgerichtshof) against the

Minister's decision.

On 15 June 1993 the Constitutional Court refused to deal with the

complaint for lack of prospect of success, having regard to its

previous case-law according to which no doubts as to the

constitutionality of the system of court fees existed. This decision

was served on the applicant company on 28 June 1993.

B. Relevant domestic law

Court fees in civil proceedings are regulated by the Court Fees

Act (Gerichts- und Justizgebührengesetz). In principle court fees are

calculated on the bases of the value of the claim raised in the action

(Section 14). Specific regulations exist if the claim is not for a

monetary amount and for certain summary proceedings. The amount of

court fees for proceedings at first instance are fixed sums

corresponding to value brackets up to an amount of 1,000.000 AS and if

the value of the claim is more than 1,000.000 AS 1% of the value

(Section 32 Scheme 1). Court fees are due once the action is filed

with the court (Section 2 para. 1). In case legal aid has been granted

the plaintiff is not liable to court fees (Section 9).

If a judgment is passed the court fees are part of the costs of

the proceedings which the party who looses the law suit has to pay

according to the principles of the Code on Civil Proceedings.

COMPLAINTS

1. The applicant company complains under Article 6 para. 1 of the

Convention that the imposition of court fees which it cannot afford,

violated its right of access to court. They submit that for ordinary

civil proceedings no maximum amount for court costs is fixed while such

a maximum amount exists for lawyers fees.

2. The applicant company complains further that the imposition of

court fees for their action violated their right to property as

guaranteed by Article 1 of Protocol No. 1. It submits that if it had

had the possibility to introduce an action against the M. Bank before

Swiss courts this action would have resulted in court fees of half of

the amount charged by the Austrian courts. In the difference of the

amount between the Austrian court fees and the probable court fees in

Switzerland its right to property had been violated.

THE LAW

1. The applicant company complains under Article 6 para. 1

(Art. 6-1) of the Convention that the imposition of court fees which

it considers as excessive and which it cannot afford, violated its

right of access to court.

Article 6 para. 1 (Art. 6-1) of the Convention, so far as

relevant, provides as follows:

"In the determination of his civil rights and obligations

..., everyone is entitled to a fair and public hearing ...

by an independent and impartial tribunal established by

law."

Having regard to the nature of the claim raised by the applicant

company in the proceedings before the Vienna Commercial Court, namely

compensation for damages, the Commission finds that these proceedings

concerned the determination of the applicant company's civil rights.

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

applicable to these proceedings.

The Commission recalls that Article 6 para. 1 (Art. 6-1) of the

Convention embodies the right to a court, of which the right of access,

that is the right to institute proceedings before courts in civil

matters, constitutes one aspect (Eur. Court H.R., Philis judgment of

27 August 1991, Series A no. 209, p. 20, para. 59).

However, Article 6 para. 1 (Art. 6-1) of the Convention does not

debar Contracting States from making regulations, in the interest of

the good administration of justice, concerning access to courts (No.

6916/75, Dec. 8.10.76, D.R. 6 p. 107; No. 22335/93, Dec. 17.5.95,

unpublished). Moreover, the right to free legal aid in civil cases is

not as such included among the rights and freedoms guaranteed by the

Convention (No. 8158/78, Dec. 10.7.80, D.R. 21 p. 95; No. 10594/83,

Dec. 14.7.87, D.R. 52 p. 158). Free legal aid can be made dependent

on the financial situation of the litigant or the prospects of success

of the proceedings (No. 8158/78, Dec. 10.7.80, D.R. 21 p. 95; No.

10594/83, Dec. 14.7.87, D.R. 52 p. 158).

Furthermore, when the State regulates access to courts, it must

not restrict the access to such an extent that the very essence of the

right is impaired and the limitation will not be compatible with

Article 6 para. 1 (Art. 6-1) of the Convention if it does not pursue

a legitimate aim and if there is not a reasonable relationship of

proportionality between the means employed and the aim sought to be

achieved (Eur. Court H.R., Fayed judgment of 21 September 1994, Series

A no. 294-B), para. 65 .

In the present case the Court of Appeal on 6 November 1992

withdrew legal aid granted to the applicant company by the Regional

Court. It considered the applicant company's application for legal aid

abusive, after having examined the circumstances of the assignment of

the B.Z.S.A.'s compensation claim to the applicant company. It noted

that the assignment took place without any payment by the assignee and

that at the same time the shares of the applicant company were

transferred to Mrs. B.B., who had only a modest income, no further

assets and no knowledge that she had actually become the owner of these

shares. Thereupon the Austrian courts imposed court fees on the

applicant company as it was no longer eligible for legal aid. On

1 March 1993 the Minster of Justice, relying on the reasoning of the

Court of Appeal, refused to reduce on exceptional grounds the amount

of court fees due.

The Commission, having regard to the detailed reasons given by

the Court of Appeal in the above decision, does not find that its

withdrawal of legal aid was unreasonable or that this decision was

taken arbitrarily.

The Commission therefore finds that the withdrawal of legal aid

which resulted in the imposition of court costs did not, in the

particular circumstances of the present case, impair the very essence

of the applicant company's right of access to court as guaranteed by

Article 6 para. 1 (Art. 6-1) 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 company complains further about a violation of its

right to property as guaranteed by Article 1 of Protocol No. 1 (P1-1)

in that the court fees which had been imposed on it by the Austrian

courts were much higher than court fees which would have been due if

it had had the possibility to bring an action before Swiss courts.

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

"(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.

(2) 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."

The Commission has found in previous cases that court fees are

contributions within the meaning of paragraph 2 of this provision (No.

7544/76, Dec. 12.7.78, D.R. 14 p. 60; No. 7909/74, Dec. 12.10.78, D.R.

15 p. 160). However, in a recent case the Commission has found that

the imposition of court fees under the specific circumstances of that

particular case, as they were imposed after the underlying civil

proceedings had been terminated and involved only a very small amount,

did not come within the ambit of Article 1 of Protocol No. 1 (P1-1)

(No. 21775/93, Dec. 25.5.1995, D.R. 81-B).

In the present case, however, the Commission finds that no such

specific circumstances exist and that the present case therefore can

be distinguished from the above mentioned one. Thus, the court fees

imposed on the applicant company have to be considered as contributions

within the meaning of this provision. It is irrelevant in this context

that the filing of the applicant company's action in another State

would have possibly resulted in the imposition of lower court fees.

The Commission therefore finds that there is no appearance of a

violation of the applicant company's right to peaceful enjoyment of its

possessions by the imposition of court fees possibly higher than such

which would have been incurred in another State.

It follows that this part of the application is manifestly ill-

founded within the meaning of Article 27 para. 1 (Art. 27-1) of the

Convention.

For these reasons, the Commission, unanimously,

DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the First Chamber President of the First Chamber

(M.F. BUQUICCHIO) (C.L. ROZAKIS)

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HOTEL CASINO AREGUA PARANA AG v. AUSTRIA

HOTEL CASINO AREGUA PARANA AG v. AUSTRIA

LEXI