FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 41765/98 by Seija and Vidar HAGMAN against Finland

The European Court of Human Rights (Fourth Section) , sitting on 14 January 2003 as a Chamber composed of

Sir Nicolas Bratza , President , Mr M. Pellonpää , Mr A. Pastor Ridruejo , Mrs V. Strážnická , Mr R. Maruste , Mr S. Pavlovschi , Mr L. Garlicki , judges , and Mr M. O’Boyle , Section Registrar ,

Having regard to the above application lodged with the European Commission of Human Rights on 4 June 1998,

Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants,

Having deliberated, decides as follows:

THE FACTS

The applicants are Seija and Vidar Hagman, Finnish nationals, who were born in 1949 and 1947 respectively and live in Vantaa . They are represented before the Court by Mr Olli Pohjakallio, a lawyer practising in Helsinki. The respondent Government are represented by Mr Arto Kosonen, Director in the Ministry for Foreign Affairs.

A. The circumstances of the case

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

The applicants’ dwelling, related buildings and their right to lease the land on which these were located were due to be forcibly sold on 14 December 1995 at 11.30 a.m. by the Enforcement Officer of the District of Vantaa . The applicants’ creditors had met in the Enforcement Officer’s office on 12 December 1995 at 11.30 a.m.

On 13 December at 2.50 p.m. the applicants filed, with the District Court ( käräjäoikeus , tingsrätten ) of Vantaa , a request to have their debts adjusted, pending which they sought to have the forced sale suspended. The request had been drawn up by L.K. from the Vantaa Office for the Counselling of Debtors.

At 3.45 p.m. a judge ordered as an interim measure that the forced sale be called off and enforcement be stayed. This decision was taken without any oral hearing having been held. The court based itself on the need to safeguard the applicants’ effective possibility of retaining their dwelling, even though the evidence they had adduced to that effect was insufficient. The urgency of the matter nevertheless required that the court issue an interim order without hearing the creditors. No separate appeal lay against this order.

The order was faxed to L.K. at 4 p.m.

The Enforcement Department and the District Court were located on different floors of the same building. At 4.10 p.m. a court clerk placed the judge’s decision – marked as urgent – on the desk of the District Court’s messenger. The court’s office hours ended at 4.15 p.m. but apparently the messenger had already left for the day.

On 14 December sometime before 10.00 a.m. the messenger brought the decision, together with the ordinary incoming mail, to the Registry of the Police, Prosecution and Enforcement District which was not situated on the same floor as the Enforcement Office but from where the incoming mail was distributed further to the registry of the Enforcement Department which was located on the third floor of the building.

The forced sale was carried out as scheduled without the applicants being either present or represented.

According to the applicants, a friend of the applicants, P.M., had allegedly enquired with the Enforcement Officer around 9.30 a.m. whether he had received the District Court’s decision. The Enforcement Officer had replied in the negative. P.M. had made an initial telephone call to the Enforcement Office on 13 December.

According to the Government, it is impossible to verify at this stage whether P.M. actually telephoned the Enforcement Office. They point to discrepancies in the applicants’ account on this point in their various appeals. What appears clear to the Government is that P.M. at least did not speak with the Enforcement Officer responsible for carrying out the forced sale. Moreover, the applicants did not find out about P.M.’s alleged enquiry until after the forced sale. Neither the applicants themselves nor their  counsellor L.K. contacted the competent Enforcement Officer or any other person in the Enforcement Department prior to the sale, even though they were aware of the creditors’ meeting and the forced sale and had the right to attend both.

The applicants’ appeal against the forced sale was dismissed by the County Administrative Board ( lääninhallitus , länsstyrelsen ) of Uusimaa on 28 August 1996, finding that they should themselves have ensured that the District Court’s order reached the Enforcement Officer in time. As he had not been aware of the decision when proceeding to the sale, he had not acted incorrectly.

The applicants appealed further to the Court of Appeal ( hovioikeus , hovrätten ) of Helsinki, referring inter alia to the constant practice whereby the District Court would pass on its interim orders directly to the Enforcement Office. Relying on that practice and since time had not allowed for the original of the order to be communicated to them, the applicants and their counsellor had had no reason to take any further steps. On 22 November 1996 the Court of Appeal dismissed the appeal, upholding the reasons given by the County Administrative Board.

The applicants were granted leave to appeal to the Supreme Court ( korkein oikeus , högsta domstolen ) but, on 4 December 1997, their appeal was dismissed by 3 votes to 2 (precedent no. 1997:191). The Supreme Court inferred from the silence in the Act on Adjustment of Individual Debts ( laki yksityishenkilön velkajärjestelystä , lag om skuldsanering för privatpersoner 57/1993; “the 1993 Act”) that the legislator had not intended to place on the court the responsibility for communicating to the enforcement authority an interim decision to suspend execution proceedings. Furthermore, since only the debtor could request such an interim order prior to the actual commencement of the debt adjustment, the Act could not be interpreted so broadly as to place such a communication obligation on the court at that stage of the proceedings.

The Supreme Court further noted that the applicants had sought the suspension only about an hour and a half before the end of the working day preceding the day of the forced sale. The applicants had not pointed to any reason for being unable to communicate the District Court’s decision to the Enforcement Officer, either personally or through their counsellor L.K. Neither had the telephone enquiry made in the morning of the day of the sale placed the Enforcement Officer under an obligation to enquire of his own motion into whether the decision had actually been made. Finally, the applicants could themselves have attended the forced sale and in that connection informed the Enforcement Officer of the District Court’s order.

In the meantime, the merits of the applicants’ debt adjustment request were examined by the District Court on 22 March 1996. The payment schedules adopted for each of the applicants on 13 December 1996 would have enabled them to retain their dwelling by paying off their debt within five years. On 18 June 1998, however, the creditor bank requested that the District Court annul those payment schedules as the applicants had failed to respect them. The District Court found that the second applicant had knowingly given incorrect information about his income when his payment schedule had been considered. It therefore annulled his schedule. The Court of Appeal upheld this decision on 23 February 1999.

The applicants were forced  to leave their property in March 1998.

In his decision of 10 June 1998, the Parliamentary Ombudsman ( eduskunnan oikeusasiamies , riksdagens justitieombudsman ) considered that neither the conduct of the District Court nor that of the Enforcement Officer could be considered incorrect. He nevertheless undertook to examine whether there was a need to improve the legal protection of debtors in similar situations, and whether amendments to the 1993 Act were necessary to that effect.

In his further decision of 24 November 1998 the Ombudsman noted that in light of Articles 16 and 16a of the Constitution ( Suomen Hallitusmuoto , Regeringsform för Finland ) the authorities were responsible in the last resort for the effective administration of justice. Debtors had been confused by the lack of clarity in the 1993 Act as to where the responsibility lay for notifying the enforcement authority of an interim order. Even though the wording of the 1993 Act did not require the district courts to inform the enforcement office of an order staying execution, they had nevertheless adopted such a practice. The Ombudsman therefore proposed that the Government should consider adding to the 1993 Act a provision explicitly rendering the courts responsible for notifying the enforcement office of such orders.

B. Relevant domestic law and practice

According to the 1993 Act, a court may write off debts on condition that the debtor agrees to a payment schedule in favour of the creditors determined by the court (section 25). If the debtor fails to adhere to the payment schedule or contracts a new debt the schedule may be revoked, thereby enabling all creditors to claim payment as if no debt adjustment had been granted (section 42). Both the debtor and the creditors may seek to have the payment schedule amended, extended or revoked while it remains in force or, in certain circumstances, within five  years from the adoption of the schedule (sections 30 and 61). The court may hear one or several creditors, guarantors and co-debtors before deciding on the request for debt adjustment (section 52).

The 1993 Act, as in force at the relevant time, was silent as to whether the onus was on the competent court or on a physical debtor to communicate to the enforcement authority an interim order suspending enforcement while the court was examining his or her request for debt adjustment. By contrast, in the legislation on the adjustment of company debts such an obligation was imposed on the court as regards both the commencement of adjustment proceedings and any interim measure suspending execution.

If a notice of a forced sale had been published before debt adjustment proceedings had been initiated, the sale could still be carried out. However, the court could stay enforcement and cancel the sale if the assets belonged to the debtor’s basic necessities and it was evident that they were protected from being recovered in the course of the debt adjustment (section 17).

If so requested by the debtor, the court could order a stay of enforcement even before the debt adjustment had commenced, provided such an order was deemed necessary. The order could be issued without hearing the creditors if the urgency of the matter so required. No appeal lay against such an order. If the court refused to issue an order staying an enforcement measure whereby basic necessities would be realised to cover debts, the debtor was entitled to file an appeal which the court had to examine urgently, if necessary after hearing the creditors (section 21).

When the actual debt adjustment proceedings had commenced the court was to notify the enforcement authorities at the debtor’s place of residence of the debtor and wherever the debtor owned real property (section 54). According to the existing section 21, subsection 3 of the 1993 Act (as amended by Act no. 714/2000), the court shall without delay inform those enforcement authorities already of an order staying enforcement.

COMPLAINTS

1. The applicants complain under Article 6 § 1 of the Convention that the ineffectiveness of the District Court’s interim order of 13 December 1995 resulted in their being denied a fair hearing in the debt adjustment and enforcement proceedings. The 1993 Act did not clearly prescribe that it was for an individual debtor to communicate an interim order issued prior to the commencement of debt adjustment proceedings. In the applicants’ case the District Court had agreed to assume responsibility for communicating its decision to the Enforcement Officer. This responsibility could not later be transferred to the applicants as a reason for upholding the forced sale, given the legal uncertainty, prior to the Supreme Court’s precedent, as to where responsibility for communicating the decision lay.

2. The applicants further complain that the interference with their right to respect for their home and property which resulted from the allegedly flawed proceedings was in violation of Article 8 of the Convention and Article 1 of  Protocol No. 1.

3. Finally, the applicants complain that they did not have at their disposal an effective remedy within the meaning of Article 13 of the Convention.

THE LAW

1. The applicants complain under Article 6 § 1 of the Convention that they were denied a fair hearing in the debt adjustment and enforcement proceedings. Although the District Court had agreed to assume responsibility for communicating its decision to the Enforcement Officer, its order of 13 December 1995 was not brought to his attention in time for the forced sale of the applicants’ dwelling to be stayed.

Article 6 § 1 reads, in its relevant parts, as follows:

“In the determination of his civil rights ..., everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law. ...”

The Government contest the applicability of the above provision to the proceedings in which the applicants sought to have the forced sale stayed. The District Court’s decision of 13 December 1995 contained only an interim order to stay the impending sale of the applicants’ property until their request for debt adjustment had been considered. As the District Court did not at that moment examine the merits of that request the proceedings did not involve a “determination” of the applicants’ civil rights or obligations within the meaning of Article 6 § 1.

Were the Court to have a different view, the Government argue that the complaint is manifestly ill-founded. It was the choice of the legislature to impose on the party concerned – in this case the debtor – the duty of informing the enforcement authorities of an interim order staying a forced sale. This rule cannot as such be considered to violate the Convention.

The Government furthermore refer to the judgment of the Supreme Court which found that the applicants and their counsel had remained passive once they had filed their request for an interim order staying the forced sale. A certain degree of activity is nevertheless required from an individual seeking a debt adjustment. A request to that end shall always be made by the debtor himself or herself, who must also provide the court with extensive documentary evidence and negotiate with the creditors before lodging the request. Although the applicants filed their request for debt adjustment at a very late stage, the District Court acted expeditiously and in time as its decision was faxed to the Office for the Counselling of Debtors a little over an hour after the request had been lodged. Given the urgency of the matter, the interim order was issued even though the District Court found the evidence presented to be inadequate.

The Government concede that up to the Supreme Court’s judgment there may have been some lack of clarity in the 1993 Act as to whether the duty to inform the enforcement authority of an interim order staying execution lay with the debtor or with the court itself. Nevertheless, a debtor may not remain passive for the sole reason that he or she believes the court to have a positive obligation which is not based on the law but which may be derived through interpretation. At the relevant time the district courts usually informed the enforcement authorities of an order staying enforcement by application of the 1993 Act, regardless of the debtor’s duty to pass on that information. Even so, it cannot be considered that the applicants had a justifiable reason for believing that the District Court was responsible for informing the enforcement authorities of the interim order in question. It is a different issue that the District Court had de facto aimed at informing the enforcement authorities of the order, although it had been under no obligation under the law to do so. Indeed the Supreme Court and other courts later considered that such a duty on the part of the tribunals could not be derived from the law, not even through extensive interpretation.

Finally, the Government submit that no evidence has been presented in support of the applicants’ suggestion that they could have preserved their dwelling in the debt adjustment proceedings, had the forced sale been stayed effectively. On the contrary, the District Court noted in its interim order of 13 December 1995 that the evidence presented in support of their request to that end was inadequate. In 1998 it went on to annul the payment schedule adopted in respect of the second applicant in 1996 in light of his failure to respect it.

The applicants contend that Article 6 § 1 applies. The 1993 Act enables a debtor to retain his or her dwelling against a creditor’s will in certain circumstances. As the purpose of so protecting the interests of the debtor at the expense of the creditor is of social nature, the interim measure which the applicants obtained served the same goal as the 1993 Act as a whole. The interlocutory proceedings cannot therefore be separated from the proceedings determining the merits of their request for debt adjustment. In order for a debt adjustment procedure to be effective the debtor’s dwelling must not be forcibly sold before that examination of the merits, if an order staying such a sale has been issued.

The applicants contend that they contacted their debt adjustment counsellor several months before their request was filed in the District Court. Neither the applicants themselves nor their counsellor were under any obligation to notify the Enforcement Office of the order staying the forced sale or to attend the sale itself. The Government’s interpretation to the contrary is based on mere interpretation of the law. The entitlement of individuals to effective protection under the law requires that they be favoured if the law is unclear.

The applicants affirm that they might have been able to retain their dwelling had the District Court accepted payment schedules of up to fifteen years. At any rate, the conducting of the forced sale in spite of the order staying it rendered futile the applicants’ right to propose a debt adjustment programme possibly enabling them to retain their dwelling.

Finally, it is the applicants’ view that since the District Court had de facto aimed at notifying the Enforcement Office of its interim order the Government cannot deny the responsibility of the District Court by explaining that the court had no legal obligation to do so.

The Court reiterates that in order for Article 6 § 1 to apply there must be a dispute (“ contestation ”) over a “right” which can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious; it may relate not only to the existence of a right but also to its scope and the manner of its exercise; and the outcome of the proceedings must be directly decisive for the right in question. Finally, the right must be civil in character (see, for example, the Zander v. Sweden judgment of 25 November 1993, Series A no. 279-B, p. 38, § 22).

The Court notes that the alleged violation occurred in the course of  proceedings in which the applicants obtained an interim order staying the forced sale of their dwelling, pending the District Court’s examination of their request for debt adjustment. The court held that even though the evidence the applicants had adduced was insufficient, the urgency of the matter required that an interim order be issued without the creditors having been heard. As the applicants’ request was granted no appeal lay against the order.

The applicants have argued that the interlocutory proceedings and the District Court’s examination of the merits of their request for debt adjustment were intertwined such that Article 6 applied from the very outset of the interlocutory proceedings. This argument appears to be based on the view that for the purposes of the applicability of Article 6 no distinction needs to be made between, on the one hand, interlocutory proceedings resulting in an interim order being issued in the debtor’s interests and, on the other hand, proceedings of the same nature but where a refusal to issue an order may be appealed by the applicant, in which case the creditors might be heard in an adversarial procedure. It is however not for this Court to pronounce itself in abstracto on the applicability of Article 6 to proceedings where the court has refused to issue an interim order prior to examining a request for debt adjustment.

The Court concludes that in the circumstances of the present case, where an interim order was indeed issued, the proceedings complained of did not involve a “determination” of the applicants’ civil rights or obligations within the meaning of Article 6 § 1 of the Convention (see, for example, APIS a.s . v. Slovakia , (dec.) no. 39754/98, unreported: the applicant company had obtained an interim injunction in order to prevent the sale of another company’s shares pending the outcome of the main proceedings. The Supreme Court’s quashing of the interim measure was not a decision on the merits of the case which was still being dealt with by a lower court).

Turning to the debt adjustment proceedings proper, the Court notes that these are distinguishable from the interlocutory proceedings conducted in the applicants’ case in that the District Court apparently wrote off or decreased some of their debts on condition that they agreed to a payment schedule in favour of the creditors. On the assumption that those proceedings may be considered to have involved a “determination” of the applicants’ “civil rights” for the purposes of Article 6 § 1, the Court finds no indication of any unfairness in the proceedings from March 1996 to February 1999.

It follows that this complaint is in part incompatible ratione materiae with the provisions of the Convention and in part manifestly ill-founded, and must be rejected in accordance with Article 35 §§ 3 and 4.

2. The applicants further complain that the interference with their right to respect for their home and property which resulted from the allegedly flawed proceedings was in violation of Article 1 of  Protocol No. 1 as well as Article 8 of the Convention.

Article 1 of Protocol No. 1 reads as follows:

“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.”

Article 8 of the Convention reads, as far as relevant, as follows:

“1. Everyone has the right to respect for ... his home ...

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 national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

The Government consider the complaint manifestly ill-founded. It may be questioned whether the recovery of secured debts and the forced sale of property given as security fall within the scope of application of Article 1 of Protocol No. 1. At any rate, the interference with the applicants’ property rights was lawful and aimed at protecting the creditors’  rights and freedoms as well as the public interest. The applicants’ liability for the payment of debts was undisputed. Their  dwelling, which had been given as a security for the payment of debts, was sold and the sales price was used for the repayment of debts. The applicants would not have been able to preserve their dwelling, even if it had not been sold on 14 December 1995.

The applicants contend that these aforementioned Convention provisions were also violated. The forced sale of their dwelling in spite of an interim order staying enforcement was not justified in the public interest within the meaning of Article of Protocol No. 1.

The Court finds it undisputed that the forced sale in itself was based on domestic law. It would appear from the manner in which the District Court staff proceeded after the interim order had been issued that the court had taken on itself to communicate its order to the Enforcement Officer by internal mail. No evidence has been adduced, however, to the effect that the court had undertaken to ensure that the order would actually reach the Enforcement Officer prior to the sale, if necessary by employing other means of communication. By contrast, the District Court took care to fax its order to the applicants’ counsellor immediately after issuing it on the day preceding the sale. It is undisputed that neither the applicants themselves nor their counsellor took any steps to transmit that order to the Enforcement Officer prior to the sale.

In these particular circumstances the fact that the order did not reach the Enforcement Officer in time cannot be imputed to the respondent State as a violation of Article 1 of Protocol No.1.

No separate issue arises under Article 8 of the Convention.

It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

3. Finally, the applicants complain that they did not have at their disposal an effective remedy within the meaning of Article 13 of the Convention. This provisions reads, in its relevant parts, as follows:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

Should the Court find Article 6 applicable, the Government submit that it would be unnecessary to examine Article 13 separately, as the requirements of Article 13 are absorbed by those prescribed by Article 6. At any r ate this complaint is also manifestly ill-founded, since the applicants were able to  appeal against the decision on forced sale to several court instances.

The applicants maintain that Article 13 was violated in that they were effectively unable to seek to retain their home and property in the debt adjustment procedure.

Article 13 guarantees the availability of a remedy at national level to enforce the substance of Convention rights and freedoms in whatever form they may happen to be secured in the domestic legal order. Thus, its effect is to require the provision of a domestic remedy allowing the competent national authority both to deal with the substance of the relevant Convention complaint and to grant appropriate relief (see Smith and Grady v. the United Kingdom , nos. 33985/96 and 33986/96, § 135, ECHR 1999-VI). Article 13 does not however presuppose that the remedy or remedies resorted to must always be successful.

Turning to the present case, the Court notes that the applicants, who were represented by a debtors’ counsellor, had ample opportunity to challenge the  forced sale at three appellate levels. In the actual debt adjustment proceedings they were able to have their views considered by three court levels. The fact that the District Court’s order staying the forced sale did not reach the Enforcement Officer in time cannot be imputed to a State authority as a violation of Article 13.

It follows that this complaint is also manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court by a majority

Declares the application inadmissible.

Michael O’Boyle Nicolas Bratza Registrar President