Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 20062/92

by B. Company

and others

against the Netherlands

The European Commission of Human Rights (Second Chamber) sitting

in private on 1 September 1993, the following members being present:

MM. S. TRECHSEL, President

H. DANELIUS

G. JÖRUNDSSON

J.-C. SOYER

Mrs. G.H. THUNE

MM. F. MARTINEZ

L. LOUCAIDES

J.-C. GEUS

M.A. NOWICKI

I. CABRAL BARRETO

Mr. K. ROGGE, 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 6 March 1992 by

B. Company and others against the Netherlands and registered on 2 June

1992 under file No. 20062/92;

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 applicants are eight Dutch private companies with limited

liability represented by their director Mr. A.B., two Dutch private

companies with limited liability represented by their director Mr.

J.B., one Dutch private company with limited liability represented by

its director Mr. J. and one Dutch private company with limited

liability represented by Mr. J. and Mr. W. Before the Commission they

are all represented by Mr. A. Eijssen, a tax lawyer practising in

Eindhoven, the Netherlands.

The facts of the case, as submitted by the applicant companies,

may be summarised as follows.

On 30 January 1987 the applicant companies requested the Minister

of Economic Affairs to be exempted from their obligation pursuant to

Section 394 of the Civil Code Book 2 (Burgerlijk Wetboek boek 2) to

publish their balance sheets and profit and loss accounts. According

to Section 394 para. 5 of the Civil Code Book 2 it is possible to

obtain an exemption from this obligation pursuant to Sections 58, 101

or 210 of the Civil Code Book 2. The applicant companies argued that

their clients could by means of these published figures find out the

profits made by them with reasonable exactitude. In these circumstances

the margin of contract negotiations will diminish. The applicant

companies feared that as a result thereof the continuation of their

activities would be endangered, possibly leading to a liquidation of

one or more of the companies.

On 9 july 1987 the Minister of Economic Affairs rejected their

request.

On 7 August 1987 the applicant companies, invoking Article 8 of

the Convention and Article 1 of Protocol No. 1, filed an objection

(bezwaarschrift) with the Minister of Economic Affairs against this

refusal.

By decision of 17 November 1988 the Minister of Economic Affairs

rejected the objection as being ill-founded. Under Article 8 of the

Convention the Minister considered, even assuming there had been an

interference with the applicant companies' private life, that the

obligation to publish their annual accounts is necessary in the

interests of the economic well-being of the country or for the

protection of the rights and freedoms of others and is, therefore,

justified under Article 8 para. 2. The Minister furthermore did not

consider that the obligation at issue infringed the applicant

companies' right to the peaceful enjoyment of their possessions within

the meaning of Article 1 of Protocol No. 1.

On 8 December 1988 the applicant companies filed an appeal

against the decision of 17 November 1988 with the Judicial Division of

the Council of State (Afdeling Rechtspraak van de Raad van State).

By decision of 15 November 1991 the Judicial Division rejected

their appeal. Under Article 8 of the Convention the Judicial Division,

noting that the obligation to publish annual accounts is based on the

directly applicable Fourth Directive of the Council of the European

Communities concerning company law, considered that the interference

with the applicant companies' right to respect for their private life

within the meaning of Article 8 para. 1 of the Convention was justified

under para. 2 of this provision as being necessary in the interests of

the economic well-being of the country and for the protection of the

rights and freedoms of others. Under Article 1 of Protocol No. 1 the

Judicial Division confirmed the Minister's reasoning that the

companies' obligation to publish their annual accounts did not infringe

their right to the peaceful enjoyment of their possessions.

COMPLAINTS

The applicant companies complain that the obligation to publish

their annual accounts violates their rights under Article 8 of the

Convention and Article 1 of Protocol No. 1.

THE LAW

The applicant companies complain that the obligation to publish

their annual accounts violates their rights under Article 8 (Art. 8)

of the Convention and Article 1 of Protocol No. 1 (P1-1).

Article 8 (Art. 8) of the Convention, insofar as relevant,

provides as follows:

"1. Everyone has the right to respect for his private

(...) life, his home and his correspondence.

2. There shall be no interference by a public authority

with the exercise of this right except such as is in

accordance with the law and is necessary in a democratic

society in the interests of (...) the economic well-being

of the country (...) or for the protection of the rights

and freedoms of others."

Article 1 of Protocol No. 1 (P1-1), insofar as relevant, provides

as follows:

"Every natural or legal person is entitled to the peaceful

enjoyment of his possessions.

(...)

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 (...)."

The applicant companies accept that Contracting States may impose

such obligations as are necessary in the economic interest of the

country or for the protection of the rights and freedoms of others and

they may apply laws in order to control the use of property in harmony

with the general interest. The applicant companies are, however, of the

opinion that this does not justify the obligation imposed on them to

publish their annual accounts, as for such a supervision it is

sufficient that the State has access to their annual accounts. It is

not necessary that also the public has access to their annual accounts.

The first question arising in this context is whether legal

persons such as the present applicants can be regarded as capable of

having a private life within the meaning of Article 8 (Art. 8) of the

Convention. However, for the reasons set out below the Commission does

not find it necessary to determine this issue.

In fact, even assuming that the obligation to disclose financial

information to the general public, such as annual accounts and profit

and loss accounts, constitutes an interference with the applicants'

right to respect for their private life as guaranteed by Article 8

para. 1 (Art. 8-1) of the Convention, the Commission finds that this

obligation was in accordance with the law and necessary in a democratic

society for legitimate aims under para. 2 of this Article.

The Commission notes that the obligation to publish annual

accounts is based on Section 394 of the Civil Code Book 2 and on the

directly applicable Fourth Directive of the Council of the European

Communities concerning company law. The obligation to publish annual

accounts was therefore "in accordance with the law" within the meaning

of Article 8 para. 2 (Art. 8-2) of the Convention.

As to the legitimate aim pursued the Commission is of the opinion

that the obligation at issue, which aims at a certain control over

commercial activities and the need to ensure honest dealings, serves

the interests of the economic well-being of the country and the

protection of the rights and freedoms of others in the sense of Article

8 para. 2 (Art. 8-2) of the Convention.

As to the question is whether or not the obligation to publish

annual accounts was "necessary in a democratic society" within the

meaning of Article 8 para. 2 (Art. 8-2) of the Convention, the

Commission recalls that, in determining whether or not an interference

was "necessary in a democratic society" allowance should be made for

the margin of appreciation that is left to the Contracting States (Eur.

Court. H.R., W. v. the United Kingdom judgment of 8 July 1987, Series

A no. 121, p. 27, para. 60 (b) and (d); Eur. Court H.R., Olsson

judgment of 24 March 1988, Series A no. 130, pp. 31-32, para. 67). In

particular, in implementing social and economic policies the margin of

appreciation is a wide one (Eur. Court H.R., James and others judgment

of 21 February 1986, Series A no. 98, p. 32, para. 46).

Having regard to the fact that the obligation to publish annual

accounts is based on a Directive from the Council of the European

Communities concerning company law and to the fact that under certain

conditions an exemption from this obligation can be obtained, the

Commission considers that the obligation complained of is not

disproportionate to the legitimate aim pursued and may reasonably be

considered as necessary in a democratic society.

The needs of democracy justify transparency in commercial

companies' finances. The interest of the general public in being

informed about matters of public economic concern can best be served

by the publication of basic financial data of such companies (cf.

Mohamed Al Fayed, Ali Fayed and Salah Fayed v. the United Kingdom,

Comm. Report 7.4.93, Appendix II, p. 51).

Insofar as the applicant companies rely on Article 1 of Protocol

No. 1 (P1-1) the Commission finds no interference with their enjoyment

of their possessions.

It follows that the applicant companies' complaints are

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.

Secretary to the Second Chamber President of the Second Chamber

(K. ROGGE) (S. TRECHSEL)

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B. COMPANY AND OTHERS v. THE NETHERLANDS

B. COMPANY AND OTHERS v. THE NETHERLANDS

LEXI