Information Note on the Court’s case-law 55

July 2003

Luordo v. Italy - 32190/96

Judgment 17.7.2003 [Section I]

Article 1 of Protocol No. 1

Article 1 para. 2 of Protocol No. 1

Control of the use of property

Bankrupt deprived of the administration of his property during excessively lengthy bankruptcy proceedings: violation

Article 6

Civil proceedings

Article 6-1

Access to court

Restrictions on the right to litigat e during excessively lengthy bankrupcty proceedings: violation

Article 8

Article 8-1

Respect for correspondence

Control of correspondence during excessively lengthy bankrupcy proceedings: violation

Article 2 of Protocol No. 4

Article 2 para. 1 of Protocol No. 4

Freedom of movement

Prohibition on leaving place of residence during excessively lengthy bankruptcy proceedings: violation

Facts : In 1982 a court declared that the company of which the applicant was a member was insolvent and in 1984 it declared the applicant bankrupt. Pursuant to the law on insolvency, the management and disposal of the assets then in existence were entrusted to a receiver, who was also empowered to bring or defend legal actions relating to the assets. Correspondence addressed to the applicant was to be delivered to the receiver, who could peruse it and retain any correspondence relating to financial interests. The applicant was unable to leave his place of residence without leave of the judge. In 1995, the receiver informed the judge that all the assets included in the insolvency had been sold, with the exception of the applicant’s house; attempts to sell the house in 1985, 1991 and 1995 had proved unsuccessful. The house was sold in 1996. In July 1999, the judge closed the insolvency proceedings; following the sale of the applicant’s house, the applicant had sufficient means to honour his debts.

Law : Article 1 of P rotocol No. 1 – The prohibition on the bankrupt’s managing his assets and disposing of them, which constitutes a control of the use of property, is intended to ensure that the creditors of the insolvency are paid. Having regard, in particular, to the legit imate aim thus pursued, and in accordance with the general interest and the margin of appreciation permitted by the second paragraph of Article 1 of Protocol No. 1, that restriction of the right to the peaceful enjoyment of the bankrupt’s possessions canno t be criticised in itself. However, such a system entails the risk that the bankrupt will be required to bear an excessive burden as regards the possibility of disposing of his assets, owing in particular to the length of the proceedings. In this case, the insolvency proceedings were spread out over fourteen years and eight months. There were periods of inaction attributable to the insolvency authorities and periods of inactivity on the part of the courts; for his part, the applicant did not by his conduct decisively slow down the insolvency proceedings. The Court therefore considers that the restriction of the applicant’s right to the peaceful enjoyment of his assets was not justified throughout the proceedings, since although in principle the deprivation o f the management and disposal of a bankrupt’s assets is a measure necessary for the attainment of the aim pursued, the necessity for that measure becomes less pressing with time.

Conclusion : violation (unanimous).

Article 8 – The fact that all the applican t’s correspondence was delivered to the receiver after the applicant had been declared bankrupt is not in itself a disproportionate interference. However, this system of monitoring correspondence entails the risk of imposing an excessive burden on the bank rupt as regards his right to respect for his correspondence, owing in particular to the length of proceedings, which, as in this case, were spread out over more than fourteen years. That period is not attributable, as the Government assert, to the failure of the attempts to sell the applicant’s house at auction or to the applicant’s conduct. The Court therefore considers that the restriction of the applicant’s right to respect for his correspondence was not justified throughout the proceedings, since althou gh in principle that control was a measure necessary for the attainment of the aim pursued – to ensure that the applicant’s assets were not diverted to the detriment of his creditors – the necessity for that measure becomes less pressing with time.

Conclus ion : violation (unanimous).

Article 6 § 1 – The restriction of the bankrupt’s capacity to bring and defend court proceedings is intended to confer on the bankrupt’s receiver the capacity to represent him in court proceedings relating to the bankrupt’s asse ts. The Court considers that this restriction is designed to protect the bankrupt’s creditors. However, the consequences for the bankrupt must be proportionate to the legitimate aim thus pursued. The declaration of bankruptcy prevented the bankrupt from br inging or defending court proceedings in disputes involving issues relating to his assets. This restriction of the applicant’s right of access to a court cannot be criticised in itself. However, such a system entails the risk that the applicant will be req uired to bear an excessive burden as regards the right of access to a court, notably in the light of the length of proceedings which, as in this case, were stretched over fourteen years and eight months. The Court reiterates that this duration is not attri butable to the failure of the attempts to sell the applicant’s house at auction or to the applicant’s conduct. The Court therefore considers that the restriction of the right of access to a court was not justified throughout the proceedings, since although in principle the restriction of the right to bring and defend legal proceedings is a measure necessary for the attainment of the aim pursued, the necessity for that measure becomes less pressing with time.

Conclusion : violation (unanimous).

Article 2 of P rotocol No. 4 – The ban on the applicant’s leaving his place of residence is intended to ensure that the bankrupt can be contacted in order to facilitate the proceedings, either in the interests of the bankrupt’s creditors or with the legitimate aim of pro tecting the rights of others. This restriction on freedom of movement is in itself necessary in a democratic society, unless it imposes an excessive burden on the applicant as regards his freedom to move without restriction, in particular as a consequence of the length of the proceedings. The Court refers to its previous reasoning on the duration of fourteen years and eight months of the proceedings and considers that the restriction of the applicant’s freedom of movement was not justified throughout those proceedings. Although in principle the ban on the bankrupt’s leaving his place of residence is a measure necessary for the attainment of the aim pursued, the necessity for that measure becomes less pressing with time.

Conclusion : violation (unanimous).

Ar ticle 41 – The Court awards the applicant the sum of  €31,000 for non-pecuniary harm.

N.B. The complaint relating to the length of the proceedings had been declared inadmissible in accordance with the Pinto Act.

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

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