Lexploria

AS TO THE ADMISSIBILITY

Application No. 11692/85

by Gunnar SÖDERBERG BYGGNADS AB

against Sweden

The European Commission of Human Rights sitting in private on

5 October 1987, the following members being present:

MM. C.A. NØRGAARD, President

M.A. TRIANTAFYLLIDES

E. BUSUTTIL

A.S. GÖZÜBÜYÜK

A. WEITZEL

H.G. SCHERMERS

H. DANELIUS

G. BATLINER

J. CAMPINOS

H. VANDENBERGHE

Mrs. G.H. THUNE

Sir Basil HALL

MM. F. MARTINEZ

C.L. ROZAKIS

Mrs. J. LIDDY

Mr. H.C. KRÜGER, Secretary to the Commission

Having regard to Article 25 of the Convention for the

Protection of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 12 March 1984

by Gunnar SÖDERBERG BYGGNADS AB against Sweden and registered

on 8 August 1985 under file No. 11692/85;

Having regard to the report provided for in Rule 40 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 company,

may be summarised as follows:

The applicant is a joint stock company with a minor enterprise

in the building contractor branch in the Stockholm area. It is

represented before the Commission by Mr. Göran Ravnsborg, a lecturer

of law at the University of Lund.

In a tax audit report drawn up by the County Administrative

Board (länsstyrelsen) of Stockholm it was observed that the applicant

company had employed staff of two sub-contracting companies, but

that the sub-contracting companies had not fulfilled their obligations

to pay tax and social security fees (arbetsgivaravgifter) for its staff

during 1979 and 1980. As a result, the National Social Insurance

Board (riksförsäkringsverket) raised the question whether the

applicant company should be regarded as the actual employer of the

staff of the sub-contracting companies and, as such, responsible for

the payment of the social security fees regarding such staff.

By decision of 12 March 1982 the National Social Insurance

Board decided that the applicant company was responsible for the

payment of social security fees for the staff of the sub-contracting

companies for the years of 1979 and 1980 and it accordingly increased

the fee which the applicant company had to pay by 329.089 SEK.

Since the decision was immediately enforceable, the applicant

company asked for a stay of its enforcement. The request was refused,

the final decision being taken by the Supreme Administrative Court

(regeringsrätten) on 22 July 1982.

On 18 June and 18 August 1982 the applicant company paid the

sum due.

The applicant company appealed against the decision of the

National Social Insurance Board to the Administrave Court of Appeal

(kammarrätten) in Stockholm. In a judgment of 24 March 1983 the

Administrative Court of Appeal quashed the decision of the National

Social Insurance Board.

On 15 June 1983 the National Social Insurance Board paid back

the sum of 358.740 SEK which included 29.651 SEK as interest (9%).

The interest had been incorrectly calculated and was subsequently

increased by 2.708 SEK to which was added further interest of 94 SEK.

The National Social Insurance Board appealed against this

judgment to the Supreme Administrative Court which rejected the appeal

on 4 October 1985.

A further result of the original audit report was that the

local tax authority decided to charge the applicant company with

personal preliminary taxes for employees amounting to 354.487 SEK. The

company was granted an extension of time to make the payment.

Subsequently, on 20 October 1983 the tax authority revoked its claim.

Accordingly, no additional preliminary taxes were paid by the company.

However, the company had to reserve the amount in its book-keeping.

The audit report also resulted in a decision by the County

Administrative Board (länsstyrelsen) of Stockholm of 22 December 1981

to impose additional value added tax (VAT) of 118.844 SEK. The amount

was offset against claims that the applicant company had as a result

of excess VAT paid for a later period.

Upon appeal from the applicant company, the County

Administrative Court (länsrätten) of Stockholm decided on 12 October

1983 to revoke the decision of the County Administrative Board, and

the additional VAT was repaid on 18 November 1983. The repayment of

VAT did not include interest for the period July 1981 - November 1983.

The representative of the State appealed against the judgment

of the County Administrative Court. The appeal was rejected by the

Administrative Court of Appeal of Stockholm on 10 May 1985.

The applicant company appealed against the decision not to pay

interest on the excess payment of VAT. The appeal was rejected by

the Administrative Court of Appeal of Stockholm on 10 May 1985. The

applicant company appealed to the Supreme Administrative Court which,

on 7 January 1986, refused leave to appeal.

While the appeals were pending, the company was forced to pay

the social security fees concerned and the VAT. The company was

thereby allegedly emptied of most of its working capital. It became a

bad payer and lost goodwill. In consequence of this it sustained

heavy losses.

Although the company's appeal was successful, it could not

under Swedish law be compensated for any losses it had suffered, nor

for its legal costs.

COMPLAINTS

The applicant company complains that the decision by the

National Social Insurance Board was illegal and to be considered as a

confiscation of the company's liquid funds. It also complains of the

decision to charge additional VAT. The company claims full

compensation for all costs and losses it has sustained as a result of

these decisions. It alleges a violation of Article 1 of Protocol

No. 1. The applicant company also alleges violations of Article 6

para. 1 and Article 14 of the Convention.

THE LAW

1. The applicant company invokes Article 1 of Protocol No. 1 (P1-1) and

claims compensation for the losses it has suffered and for its legal

costs.

Article 1 of Protocol No. 1 (P1-1) provides:

"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 recalls that the applicant company was

successful in its appeal to the Administrative Court of Appeal and

that it was thus eventually not obliged to pay the additional social

security fees. It was equally successful concerning the charge of

additional VAT, since the County Administrative Court accepted the

appeal. The applicant company claims that, in addition, it has a

right to compensation for losses and legal costs resulting from the

decisions.

The Commission first observes that the Convention, including

Article 1 of Protocol No. 1 (P1-1), does not as such guarantee a right

to recover costs of proceedings.

The question which remains is whether Article 1 of Protocol No. 1

(P1-1) company had to pay social security fees in the amount of 329.089 SEK

during a period of almost one year and VAT of 118.844 SEK for more than two

years and reserve in its books a further amount of 354.487 SEK for possible tax

charges, given the alleged results thereof of inter alia lost working capital

and loss of goodwill. The Commission considers that the fact that the fees

imposed were payable while the proceedings concerning the appeals to the

Administrative Courts were pending does not as such raise any issue under

Article 1 (Art. 1). The Commission moreover observes that the applicant

company was reimbursed the fees it paid and that it also received an interest

of 9% on the amount paid for social security fees.

It is true that no interest was recovered on the VAT. However,

paragraph 2 of Article 1 of Protocol No. 1 (P1-1-1) authorises the State to

enforce such laws as it deems necessary to secure payment of taxes and

other contributions, such as social security fees and VAT.

In conclusion the Commission finds no indication of a

violation of the applicant company's rights under 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. 27-1) of the Convention.

2. The applicant company also complains of a violation of Article

6 para. 1 (Art. 6-1) of the Convention.

The Commission has consistently held that Article 6 para. 1 (Art. 6-1)

of the Convention does not govern proceedings relating to tax assessments (No.

9908/82, Dec. 4.5.83, D.R. 32 p. 266). It considers that Article 6 (Art. 6)

also does not apply to proceedings concerning the alleged responsibility of a

company for taxes of subcontracting companies' employees, nor to proceedings

concerning the fixing of social security fees of the nature at issue in this

case.

It follows that this part of the application is incompatible

ratione materiae with the provisions of the Convention within the

meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

3. The applicant company finally complains of a violation of Article 14

(Art. 14) of the Convention in conjunction with Article 6 para. 1 and Article 1

of Protocol No. 1 (Art. 6-1, P1-1).

The Commission finds no separate issue in this respect.

For these reasons, the Commission

DECLARES THE APPLICATION INADMISSIBLE

Secretary to the Commission President of the Commission

(H.C. KRÜGER) (C.A. NØRGAARD)

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SÖDERBERG BYGGNADS AB v. SWEDEN

SÖDERBERG BYGGNADS AB v. SWEDEN

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