Lexploria

AS TO THE ADMISSIBILITY OF

Application No. 14097/88

by ITALINVEST AKTIEBOLAG

against Sweden

The European Commission of Human Rights (First Chamber)

sitting in private on 6 March 1991, the following members being

present:

MM. J.A. FROWEIN, President of the First Chamber

E. BUSUTTIL

A. S. GÖZÜBÜYÜK

J. C. SOYER

H. DANELIUS

Sir Basil HALL

MM. C.L. ROZAKIS

L. LOUCAIDES

A.V. ALMEIDA RIBEIRO

Mr. M. de SALVIA, Secretary to the First 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 3 June 1988

by ITALINVEST AKTIEBOLAG against Sweden and registered on 5 August

1988 under file No. 14097/88;

Having regard to :

- the report provided for in Rule 47 of the Rules of Procedure

of the Commission;

- the written observations submitted by the Government on

24 January 1990 and by the applicant on 26 October 1990;

- the Commission's decision of 8 January 1991 to refer the

application to the First Chamber;

Having deliberated;

Decides as follows:

THE FACTS

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

summarised as follows.

The applicant is a limited liability company with its seat in

Lund. It is represented before the Commission by Mr. Göran Ravnsborg,

a lecturer at the University of Lund.

The applicant company owns 100 % of the shares of another

limited liability company called Giallo Aktiebolag (hereinafter: "Giallo").

In August 1985 Giallo bought a restaurant in Malmö. The restaurant

was transformed into a music restaurant, specialising in rock music.

The restaurant served lunch five days a week and four nights a week it

operated as a rock music restaurant, called Oves Rockklubb.

On 9 December 1985 Giallo was granted a licence to serve

alcoholic beverages on condition that the restaurant also in the

evenings served cooked meals to a considerable extent. The licence

was renewed on 11 April and on 21 November 1986. The latest licence was

valid until further notice.

By letter of 14 October 1987 the County Administrative Board

(länsstyrelsen) of the Malmöhus County informed Giallo that it was

considering whether or not the licence to serve alcoholic beverages

should be withdrawn, inter alia for the following reasons:

On 10 October 1987 the Social Authority (socialförvaltningen)

of Malmö had made an inspection of the restaurant. Many of the

persons in the queue outside the restaurant were drunk. In the

restaurant there had been great disorder. In all likelihood more

guests than permitted had been allowed in. Everywhere there had been

guests with glasses filled with alcohol. The level of intoxication in

the restaurant had been high and a couple of guests had been sleeping

on tables. The floor had been dirty from beer and smashed glass had

been noted between the tables. The restaurant had had the appearance

of a drinking place. On 19 November 1986 the County Administrative

Board had pointed out that the proportion of meals served was too low.

Moreover, the Social Authority had, during the last year, criticised

the way in which the restaurant business was run. The restaurant had

been inspected four times in December 1986 and three times in

February/March 1987. It had been noted that the club was not a

restaurant in the normal sense. There had been intoxicated persons in

the restaurant and the rooms had always been crowded with persons

walking around with glasses filled with alcohol. On 1 April 1987 it

had been pointed out that the club did not meet the condition of a

restaurant within the meaning of the 1977 Act on the Sale of Beverages

(lagen om handel med drycker; hereinafter "the Act"). Both the County

Administrative Board and the Social Authority had inspected the

restaurant.

The County Administrative Board pointed out that Section 7 of

the Act provides that the person selling beverages should ensure order

and sobriety at the place of sale; that according to Section 11 of the

Act, alcoholic beverages may not be sold to a person who is notably

influenced by alcohol; and that, under Section 41 of the Act, a

licence to serve alcoholic beverages may only be given if it can be

assumed that the serving of cooked meals will constitute a significant

part of the restaurant's activities.

Giallo was given the opportunity to submit their comments on

the above. By letter of 23 October 1987 Giallo contended that the

charges of disorder were too far-reaching, but admitted that

the order could and should be improved.

On 26 October 1987 the County Administrative Board withdrew

the licence with immediate effect in application of Section 64 of the

Act taken together with Sections 7, 11, 41, 69 and 71. In its

reasons the Board stated inter alia:

"...

From your restaurant's report submitted to the County

Administrative Board it appears that the proportion of

(meals served) during the three periods of 1986 was 20 %,

8 % and 15 % of the total turnover and 19 % and 17.5 % for the

first two periods of 1987. During July 1987 the restaurant

was closed during lunch-time, as a result of which the

proportion of food was reduced to 7.1 %. ... It can be

established that the proportion of (meals served) would be

less than 10% of the total turnover if you did not serve

lunch. During the whole period at issue (the turnover of)

the sale of strong beer has been three to four times higher

than (the turnover of) the sale of meals. Both the County

Administrative Board and the Social Authority have visited

the club and noted that it is rather a drinking-place or a

strong beer pub than a real restaurant. No improvement has

been made in spite of remarks from the County Administrative

Board. Furthermore you allow too many guests to enter for

them to have have any possibility to sit down and eat. In

addition, the sale of alcohol in Oves (Rockklubb) has

caused great inconveniences as regards order and sobriety.

Making a comprehensive assessment the County Administrative

Board finds that the activities (carried out) in Oves

Rockklubb do not satisfy the condition of a restaurant

within the meaning of the Act on the Sale of Beverages and

that you have failed seriously in the social responsibility

imposed on you by the granting of a licence to serve

alcoholic beverages. In the present case, any measure other

than a revocation is out of the question."

Giallo appealed to the National Board of Health and Social

Welfare (socialstyrelsen) claiming that the licence should not be

withdrawn and that the enforcement of the decision of the County

Administrative Board should be stayed, pending the outcome of the

appeal.

On 19 November 1987 the National Board of Health and Social

Welfare decided not to stay the enforcement of the County

Administrative Board's decision and on 8 December 1987 the appeal

was rejected. This decision was not subject to any further appeal.

COMPLAINTS

1. The applicant company submits that there was no possibility

to have the withdrawal of Giallo's licence to serve alcoholic

beverages reviewed by a court. It alleges a violation of Article 6 of

the Convention.

2. The applicant company further alleges that the withdrawal of

Giallo's licence was intended to serve as a punishment against

"certain inconveniences alleged by the bureaucracy in the past". It

alleges violations of Article 6 paras. 1 and 2 of the Convention, the

latter provision both in itself and read together with Article 14 of

the Convention.

3. The applicant company finally alleges that the withdrawal of

Giallo's licence violated Article 1 of Protocol No. 1 to the Convention.

PROCEEDINGS BEFORE THE COMMISSION

The application was introduced on 3 June 1988 and registered

on 5 August 1988.

On 9 November 1989 the Commission decided that notice of the

application should be given to the respondent Government and that the

parties should be invited to submit written observations on the

admissibility and merits of the application, limited to the issue

under Article 6 of the Convention.

The Government's observations were submitted on 24 January

1990. The applicant company's observations in reply were submitted on

26 October 1990.

On 8 January 1991 the Commission decided to refer the

application to the First Chamber.

THE LAW

1. The application was introduced by Italinvest Aktiebolag as

parent company of Giallo owning all the shares of Giallo. In view

of this the Commission considers that the applicant company may itself

claim to be a victim under the terms of Article 25 para. 1 (Art. 25-1)

of the Convention.

2. The applicant company complains that there was no possibility

to have the withdrawal of Giallo's licence to serve alcoholic

beverages reviewed by a court. It alleges a violation of Article 6

para. 1 (Art. 6-1) of the Convention, which reads, insofar as it is

relevant:

"In the determination of his civil rights and obligations...,

everyone is entitled to a ... hearing ... by [a] ... tribunal..."

The issues to be decided are whether the withdrawal of

Giallo's licence to serve alcoholic beverages was decisive for

Giallo's "civil rights and obligations" and, if so, whether a genuine

dispute of a serious nature arose between Giallo and the authorities

in relation to this decision. If the answer to both these questions

is affirmative, it will have to be determined whether Giallo had at

its disposal a procedure satisfying the conditions of Article 6 para.

1 (Art. 6-1) of the Convention with regard to that dispute.

The Government waive objections as to the admissibility of

this complaint and admit a violation of Article 6 para. 1 (Art. 6-1)

of the Convention.

The Commission finds that this complaint is not manifestly

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

Convention. As no other ground for declaring it inadmissible has been

established, this complaint is admissible.

3. The applicant company further alleges that the withdrawal of

Giallo's licence was intended to serve as a punishment and alleges

violations of Article 6 paras. 1 and 2 (Art. 6-1, 6-2) of the

Convention, the latter provision both in itself and read together with

Article 14 (Art. 14) of the Convention.

In the Government's view there has been no other violation of

Article 6 (Art. 6) of the Convention.

The Commission finds that an examination of this complaint as

it has been submitted does not disclose any appearance of a violation

of the provisions invoked by the applicant company.

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.

4. The applicant company finally alleges that the withdrawal of

Giallo's licence violated Article 1 of Protocol No. 1 (P1-1) to the

Convention, which reads:

"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."

The Commission considers that the economic interests connected

with the running of the restaurant were "possessions" for the purposes

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

maintenance of the licence was one of the principal conditions for the

carrying on of Giallo's business; that its withdrawal had adverse

effects on the goodwill and the value of the restaurant; and that the

withdrawal thus constituted an interference with the applicant

company's and Giallo's right to the "peaceful enjoyment of (their)

possessions" (cf. Eur. Court H.R., Tre Traktörer AB judgment of 7

July 1989, Series A No. 159, p. 21, para. 53).

The Commission further finds that the withdrawal of Giallo's

licence constitued a measure to control the use of property which

falls to be considered under the second paragraph of Article 1 of

Protocol No. 1 (P1-1) to the Convention (loc.cit., pp. 21-22, para. 54).

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

(P1-1) the Commission must examine whether the withdrawal of Giallo'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 withdrawal of the licence (cf. e.g. No. 10378/83, Dec. 7.12.83,

D.R. 35 p. 245). 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 (Eur. Court H.R.,

Agosi judgment of 24 October 1986, Series A No. 108, p. 18, para. 52).

As to the lawfulness of the withdrawal of the licence the

Commission observes that the decision was based on Section 64 of the

Act, read together with other Sections of the same Act. The

Commission considers that the Act has been enforced in the general

interest of controlling the consumption and sale of alcohol and that

the aim so pursued was the control of the use of property in

accordance with the general interest. The Commission is thus

satisfied that the withdrawal of the licence was lawful and served

the general interest (Tre Traktörer AB judgment, loc.cit, pp. 22-23,

paras. 57-58).

As to the relationship of proportionality between the means

employed and the aim sought to be realised, the Commission observes

that the withdrawal of the licence had immediate effect. No stay

of the enforcement of the decision having been granted by the National

Board of Health and Welfare, the repercussions of the decision were

serious. On the other hand, it appears from the file that the

restaurant, on a number of occasions, had been subject to inspections

both by the Social Authority and by the County Administrative Board

and that it had been found that the restaurant did not meet the

requirements stated in the Act. However, there was no improvement in

the way in which the restaurant was run.

In view of the Swedish policy concerning alcoholic beverages

and having regard to the wide margin of appreciation enjoyed by

Contracting States under the second paragraph of Article 1 of Protocol

No. 1 (P1-1), the Commission therefore concludes that the withdrawal of

Giallo's licence was not disproportionate to the aim pursued.

Accordingly, the withdrawal of the licence was justified under

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

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 ADMISSIBLE, without prejudging the merits of the

case, the applicant company's complaint concerning the

absence of a right to a court review of the withdrawal of

Giallo's licence to serve alcoholic beverages;

DECLARES INADMISSIBLE the remainder of the application.

Secretary to the First Chamber President of the First Chamber

(M. de SALVIA) (J.A. FROWEIN)

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ITALINVEST AKTIEBOLAG v. SWEDEN

ITALINVEST AKTIEBOLAG v. SWEDEN

LEXI