FOURTH SECTION
\nCASE OF S.C. TEXTINC S.A. v. ROMANIA
\n(Application no. 52018\/10)<\/p>\n
JUDGMENT
\nSTRASBOURG
\n6 February 2018<\/p>\n
This judgment is final but it may be subject to editorial revision.<\/p>\n
In the case of S.C. Textinc S.A. v. Romania,<\/strong><\/p>\n The European Court of Human Rights (Fourth Section), sitting as a Committee composed of:<\/p>\n Paulo Pinto de Albuquerque, President, Having deliberated in private on 16 January 2018,<\/p>\n Delivers the following judgment, which was adopted on that date:<\/p>\n PROCEDURE<\/strong><\/p>\n 1.\u00a0\u00a0The case originated in an application (no. 52018\/10) against Romania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (\u201cthe Convention\u201d) by a Romanian company, S.C. Textinc S.A. (\u201cthe applicant company\u201d), on 26\u00a0July\u00a02010.<\/p>\n 2.\u00a0\u00a0The applicant company was represented by Mr P.S\u0103l\u0103jan, a lawyer practising in Arad. The Romanian Government (\u201cthe Government\u201d) were represented by their Agent, Ms C. Brumar, from the Ministry of the Foreign Affairs.<\/p>\n 3.\u00a0\u00a0On 24 February 2016 the application was communicated to the Government.<\/p>\n THE FACTS<\/strong><\/p>\n I.\u00a0\u00a0THE CIRCUMSTANCES OF THE CASE<\/p>\n 4.\u00a0\u00a0The applicant company, S.C. Textinc S.A., is a Romanian company whose registered office is in Timi\u015foara.<\/p>\n 5.\u00a0\u00a0On 12 December 2008 the Timi\u015foara Finance Inspectorate (hereinafter, \u201cthe T.F.I.\u201d) instituted enforcement proceedings against the applicant company on the grounds that it had an outstanding tax liability for the year 2008 amounting to 237,128\u00a0Romanian lei (RON).<\/p>\n 6.\u00a0\u00a0The applicant company, represented by its appointed lawyer, Mr.\u00a0P.\u00a0S\u0103l\u0103jan,challenged before the Timi\u015foara District Court the T.F.I.\u2019s decision to open enforcement proceedings. It claimed that it had no outstanding fiscal debts and submitted documentary evidence in this respect.<\/p>\n 7.\u00a0\u00a0At the first hearing in the proceedings the T.F.I. acknowledged that the applicant company had no outstanding tax liability and that the enforcement proceedings had been instituted in error. Invoking Article\u00a0275 of the Romanian Code of the Civil Procedure (hereinafter, \u201cthe CCP\u201d \u2013 see paragraph\u00a015 below), it also contended that as it had acknowledged its error at the first hearing in the proceedings it should not be ordered to pay the costs and expenses incurred by the applicant company.<\/p>\n 8.\u00a0\u00a0By a judgment of 16 February 2009 the Timi\u015foara District Court allowed the applicant company\u2019s challenge concerning the T.F.I.\u2019s decision to open enforcement proceedings and ordered the T.F.I. to pay the applicant RON\u00a09,893;this sum represented respectively the fees of the applicant company\u2019s lawyer(9,700 RON), stamp duty and trial tax (193 RON). The court held that although the T.F.I. had acknowledged its error at the first hearing it could not be exonerated from the payment of the costs and expenses incurred by the applicant company, as the challenge proceedings were the result of a mistake on its part. The court further noted that the T.F.I. had started enforcement proceedings against the applicant company for a non-existent debt and that the latter had accordingly had to hire a lawyer and pay the trial fees in order to defend itself. The court also noted that the applicant company had submitted evidence to support its request for the reimbursement of the expenses it had incurred.<\/p>\n 9.\u00a0\u00a0The T.F.I. lodged an appeal on points of law against the judgment of 16\u00a0February\u00a02009. It claimed that the first-instance court had not observed the principle of adversarial proceedings and of equality of arms, as it had not had the opportunity to challenge the amount paid by the applicant company in lawyer\u2019s fees, which in its opinion were too high.<\/p>\n 10.\u00a0\u00a0By a final judgment of 12 August 2009 the Timi\u015f County Court dismissed the appeal as unfounded. While holding that the lawyer\u2019s fees corresponded to his input in the case, the courtreiterated that the judge was entitled to increase or to reduce a lawyer\u2019s fees, according the specific criteria set out by Article 274 of the CCP (see paragraph\u00a015 below). The court thus concluded that the judgment given by the Timi\u015foara District Court was lawful and well-founded; it further awarded the applicant company the amount of 7,596 RON in legal costs in respect of the appeal proceedings.<\/p>\n 11.\u00a0\u00a0The T.F.I.lodged with the Timi\u015f County Court an application for the judgment of12 August 2009 to be set aside(contesta\u0163ie\u00eenanulare\u2013 see paragraph\u00a014 below) on the grounds that the County Court had not examined all the arguments that it had raised in its appeal on points of law; the T.F.I. referred in particular to the fact that before the Timi\u015foara District Court they were not given the possibility to bring their arguments concerning the amount requested by the applicant company and then awarded in legal costs and expensesby the first-instance court.<\/p>\n 12.\u00a0\u00a0In a final judgment of 19 February 2010 the Timi\u015f County Court, sitting in a different formation from that of 12 August 2009, allowed the request: itset aside the judgment of 12 August 2009(see paragraph\u00a010 above) and allowed the appeal lodged by the T.F.I. against thejudgment of 16\u00a0February\u00a02009 (see paragraph\u00a08 above), which it partly amended. The County Court held that the appellate court had not examined the arguments raised by the defendant in their appeal on points of law in relation to the manner in which the first instance court applied Article274\u00a73 of the CCP (see paragraph\u00a015 below); in particular, the first instance court had not allowed the parties to bring their arguments concerning the amount of the legal costs requested by the applicant company. Such an omission was sufficient, in the County Court\u2019s view, to justify the quashing of the previous judgments.<\/p>\n 13.\u00a0\u00a0The County Court then re-examined the amount paid by the applicant companyin lawyer\u2019s fees and considered that in relation to the lawyer\u2019s input inthe case, it was justified to reducethat amount from RON\u00a09700 to RON\u00a0700. It also considered that the stamp duty and trial tax in the amount of 193\u00a0RON were not to be granted to the applicant company, in so far as this amount could be requested separately from the fiscal authorities, based on the Law no. 146\/1997 on stamp duty, as a consequence of the fact that the challenge to the enforcement had been allowed.<\/p>\n II.\u00a0\u00a0RELEVANT DOMESTIC LAW<\/p>\n 14.\u00a0\u00a0Article 318 of the CCP, as in force at the material time, defined a \u201cmaterial error\u201d as one of the grounds for having a final decision quashed by means of an application to set aside. In so far as relevant, it read as follows:<\/p>\n 1.\u00a0\u00a0\u201cDecisions rendered by a court of last instance may also be challenged by means of an application to set asideif a decision has been based on a material error or if that court, in dismissing or partly granting the appeal, faultily omitted to assess any of the reasons for appeal…\u201d<\/p>\n 15.\u00a0\u00a0Articles 274-275 of the CCP, as in force at the material time, provided in their relevant parts:<\/p>\n Article 274<\/p>\n \u201c…<\/p>\n 3. A judge is entitled to increase or to reduce a lawyer\u2019s fees whenever he or she finds it established that they are unreasonably low or high, in relation to the case\u2019s worth or to the lawyer\u2019s input in the case.\u201d<\/p>\n Article 275<\/p>\n \u201cA defendant who at the first hearing (prima zi de \u00eenf\u0103\u0163i\u015fare) acquiesced to the claims of the plaintiff cannot be bound to pay the legal costs and expenses incurred by the latter, unless he or she was previously notified about the respective claims.\u201d<\/p>\n THE LAW<\/strong><\/p>\n I.\u00a0\u00a0ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION<\/p>\n 16.\u00a0\u00a0The applicant company complained that its right to a fair trial was violated as a result of the quashingby means of an application to set aside the judgment of 12August 2009(by which the fiscal authority was ordered to pay all the legal costs it had incurred in the enforcement proceedings). It invokedArticle 6 \u00a7 1 of the Convention, which reads in its relevant parts as follows:<\/p>\n \u201cIn the determination of his civil rights and obligations … everyone is entitled to a fair … hearing … by [a] … tribunal …\u201d<\/p>\n A.\u00a0\u00a0Admissibility<\/strong><\/p>\n 17.\u00a0\u00a0The Government claimed that the application was incompatiblerationae\u00a0personae with the provisions of the Convention in so far as it was not lodged by the applicant company, but by a third party, R.M.\u015e., who did not bring any proof that she acted on behalf of the company.<\/p>\n 18.\u00a0\u00a0The Court notes, however, that the application form bears the applicant company\u2019s stamp, as well as a signature belonging to R.M.\u015e., in hercapacity as administrator of the applicant company, as proved by the documents appended to the letter of 25 October 2017 sent by the applicant company to the Court. Moreover, in its reply to the Government\u2019s observations, the applicant company, represented by Mr P. S\u0103l\u0103jan, namely the same lawyer as the one who had represented it in the domestic proceedings,argued that the application form had been validly signed and stamped and that it confirmed its intention to pursue the proceedings before the Court. In these circumstances, the Court considers that the Government\u2019s preliminary objection must be dismissed, in so far as the applicant company has validly lodged its application before it.<\/p>\n 19.\u00a0\u00a0The Court further notes that the applicationis not manifestly B.\u00a0\u00a0Merits<\/strong><\/p>\n 20.\u00a0\u00a0The applicant company claimed that the quashing of the final judgment of 12August 2009 was done in breach of the legal certainty principle.<\/p>\n 21.\u00a0\u00a0The Government contested that argument, arguing that the quashing was justified,given the circumstances of the case, and compliant with the domestic legal provisions (namely with Article 318 of the CCP).<\/p>\n 22.\u00a0\u00a0The Court reiterates that the right to a fair hearing before a tribunal, as guaranteed by Article 6 \u00a7 1 of the Convention, must be interpreted in the light of the Preamble to the Convention, which declares, in its relevant part, that the rule of law is part of the common heritage of the Contracting States. One of the fundamental aspects of the rule of law is the principle of legal certainty, which requires, among other things, that where the courts have finally determined an issue, their ruling should not be called into question (see Brum\u0103rescu v. Romania [GC], no. 28342\/95, \u00a7 61, ECHR 1999-VII).<\/p>\n 23.\u00a0\u00a0Legal certainty presupposes respect for the principle of res\u00a0judicata (ibid., \u00a7 62) \u2013 that is to say the principle of the finality of judgments. This principle emphasises the fact that no party is entitled to seek a review of a final and binding judgment merely for the purpose of obtaining a rehearing and a fresh determination of the case. Higher courts\u2019 power of review should be exercised to correct judicial errors and miscarriages of justice, but not to carry out a fresh examination. A review should not be treated as an appeal in disguise and the mere possibility of two views on the subject is not a ground for re-examination. Departures from that principle are justified only when made necessary by circumstances of a substantial and compelling character (see for instance Ryabykh v. Russia,no. 52854\/99, \u00a7\u00a052, ECHR\u00a02003-IX).<\/p>\n 24.\u00a0\u00a0However, the requirements of legal certainty are not absolute. The Court itself recommends sometimes the re-opening of proceedings as the most appropriate reparatory measure when the domestic proceedings have not satisfied the Article 6 requirements (see, for instance,Moreira Ferreira v.\u00a0Portugal (no. 2) [GC], no. 19867\/12, \u00a7 48, ECHR 2017 (extracts)and Mitrea v. Romania, no.26105\/03, \u00a7 25, 29 July 2008). In any case, the power to conduct an extraordinary review should be exercised by the authorities so as to strike, to the maximum extent possible, a fair balance between the interests at stake (see, mutatis mutandis, Nikitin v.\u00a0Russia, no.\u00a050178\/99, \u00a7 57, ECHR 2004-VIII).<\/p>\n 25.\u00a0\u00a0Turning to the facts of the instant case, the Court notes that the final judgment of 12 August 2009 found in favour of the applicant company, the court dismissing as ill-founded, albeit in a concise manner, the arguments raised by theT.F.I. in relation to the amount of the legal costs and expenses claimed by the applicant company and to the manner in which they were assessed by the first-instance court (see paragraph 10 above). However, the same court, sitting in a different composition, allowed the defendant\u2019s application to set this judgment aside, on the ground that the court of last instance had not appropriately and exhaustively examined the matter complained about by in the appeal request (see paragraph 12 above).<\/p>\n 26.\u00a0\u00a0Despite the Government\u2019s claim to the contrary, the Court considers that this situation is a typical case of there being different views of the courts on a factual matter, namely on the manner in which the lawyer\u2019s input in the case is assessedby the judgeand consequently, on the amount to be granted as legal costs and expenses.According to the Court\u2019s case-law (see paragraph 23 above), such a difference of views does not justify the quashing of a final and binding decision(see, mutatis, mutandis, Mitrea, cited above, \u00a7 28).<\/p>\n 27.\u00a0\u00a0Lastly, the Court considers that it has not been shown that the miscarriage of justice or judicial error allegedly committed by the court in the first set of proceedings in the present case were such as to justify the quashing of the final and binding judgment.<\/p>\n 28.\u00a0\u00a0The foregoing considerations are sufficient to enable the Court to conclude that, by allowing the final judgment of 12 August 2009 to be quashed, the authorities failed to strike a fair balance between the interests at stake and thus infringed the applicant company\u2019s right to a fair hearing.<\/p>\n 29.\u00a0\u00a0There has accordingly been a violation of Article 6 \u00a7 1 of the Convention as a consequence of the fact that the legal certainty principle was not respected.<\/p>\n II.\u00a0\u00a0APPLICATION OF ARTICLE 41 OF THE CONVENTION<\/p>\n 30.\u00a0\u00a0Article 41 of the Convention provides:<\/p>\n \u201cIf the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.\u201d<\/p>\n A.\u00a0\u00a0Damage<\/strong><\/p>\n 31.\u00a0\u00a0The applicant company claimed 10,000 euros (EUR) in respect of pecuniary damage, referring to the legal costs and expenses incurred before the domestic courts and to which it was entitled according to the judgment of 12 August 2009; it further claimedEUR 5,000 in respect of non\u2011pecuniary damage.<\/p>\n 32.\u00a0\u00a0The Government stated that the claims in respect of pecuniary damage were general and unsubstantiated. They furthermore argued that the amount claimed in respect of non-pecuniary damage was excessive, in view of the fact that no damage was sustained by the applicant company.<\/p>\n 33.\u00a0\u00a0The Court accepts that the applicant company must have sustained some pecuniary and non-pecuniary damage as a result of the quashing of final domestic judgment in its favour. However, its claims in this respect appear to be excessive. Having regard to all the evidence in its possession and ruling on an equitable basis, as required by Article 41 of the Convention, the Court decides to award the applicantcompany a total of EUR\u00a05,600 to cover all heads of damage.<\/p>\n B.\u00a0\u00a0Costs and expenses<\/strong><\/p>\n 34.\u00a0\u00a0The applicant company did not claim any separate amount for the costs and expenses incurred before the domestic courts other than those requested in respect of pecuniary damage. Furthermore, no claim was submitted in respect of the costs and expenses incurred before the Court.<\/p>\n 35.\u00a0\u00a0Accordingly, the Court considers that there is no call to award it any sum on that account.<\/p>\n C.\u00a0\u00a0Default interest<\/strong><\/p>\n 36.\u00a0\u00a0The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.<\/p>\n FOR THESE REASONS, THE COURT, UNANIMOUSLY,<\/strong><\/p>\n 1.\u00a0\u00a0Declaresthe application admissible;<\/p>\n 2.\u00a0\u00a0Holdsthat there has been a violation of Article 6 of the Convention;<\/p>\n 3.\u00a0\u00a0Holds<\/p>\n (a)\u00a0\u00a0that the respondent State is to pay the applicant company, within three months,EUR 5,600 (five thousand sixhundred euros) in respect of pecuniary and non-pecuniary damage,to be converted into the currency of the respondent State at the rate applicable at the date of settlement;<\/p>\n (b)\u00a0\u00a0that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period, plus three percentage points;<\/p>\n 4.\u00a0\u00a0Dismissesthe remainder of the applicant company\u2019s claim for just satisfaction.<\/p>\n Done in English, and notified in writing on 6 February 2018, pursuant to Rule 77 \u00a7\u00a7 2 and 3 of the Rules of Court.<\/p>\n Andrea Tamietti\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Paulo Pinto de Albuquerque
\nEgidijus K\u016bris,
\nIulia Motoc, judges,
\nand Andrea Tamietti, Deputy Section Registrar,<\/p>\n
\nill-founded within the meaning of Article 35 \u00a7 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.<\/p>\n
\nDeputy Registrar\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 President<\/p>\n