CASE OF PHILIS v. GREECE
Violation of Art. 6-1;Not necessary to examine Art. 13+6 and 14+6;Pecuniary damage - claim dismissed;Non-pecuniary damage - financial award;Costs and expenses award - domestic proceedings;Costs and expenses award - Convention proceedings
C. Russo;N. Valticos
7. Mr Philis is a Greek national. Since 1970 he has been a consultant engineer. Following a disagreement as to the amount of fees owed to him for a number of projects which he had designed, three disputes arose between him and those who had commissioned the work, two public corporations and a private individual. 8. From 1971 to 1975, and then from 1976 to 1978, the A.O.E.K., a body under the authority of the Labour Ministry, concluded with the applicant a series of contracts for the design of electro-mechanical installations and the supervision of the relevant work. In March 1978 it repudiated these contracts and refused to pay him the agreed remuneration. 9. Between 30 October 1978 and 23 December 1982, the applicant brought, in the Athens first-instance court (Monomeles Protodikeio Athinon), i.e. composed of a single judge, thirteen actions to recover the fees payable for the supervision of the work in question. In addition, he asked the Technical Chamber of Greece (Techniko Epimelitirio Ellados -"T.E.E.") to bring proceedings on his behalf concerning the fees which he claimed in respect of the design of the projects, because, according to the terms of Royal Decree no. 30/1956 (see paragraph 45 below), it alone had the capacity to institute proceedings for the recovery of fees payable to engineers, being subrogated to their rights for this purpose. The T.E.E. brought four actions, on 23 December 1977, 16 December 1978, 5 December 1979 and 12 January 1980. 10. On 25 September 1979 Mr Philis asked the T.E.E. to bring four more actions. He repeated his request on 11 October and 19 November 1982. By a letter of 8 December 1982, the T.E.E. warned him of the poor prospects of success of the additional actions envisaged; consequently, it demanded the pre-payment of the legal fees and the lodging of a bank guarantee intended to cover the costs of the opposing party. The applicant regarded these conditions as unlawful and called upon the T.E.E. not to delay any further, because of the danger that his rights would become time-barred. On 20 December 1982 he repeated his protest but agreed to provide the guarantee requested. On 4 January 1983 the T.E.E. informed him that on 24 December 1982 it had complied with his request of 25 September 1979. It stated however that it would seek purely declaratory judgments (anagnoristikes agoges) if it did not receive payment of the legal costs before the first hearing. 11. In the meantime the first-instance court had allowed two of the actions brought by the T.E.E.; the Athens Court of Appeal (Efeteio) had, however, dismissed them, whereupon the T.E.E. had appealed to the Court of Cassation (Areios Pagos). In the course of the proceedings, the A.O.E.K. requested a stay, with a view to securing an out of court settlement with the applicant. 12. At this point, Parliament adopted, on 13 April 1983, on the basis of a bill prepared by the Labour Ministry, Act no. 1346/1983 which amended and supplemented various provisions of the employment legislation. Section 29 thereof reads as follows: "Transitional provisions ... 5. Works contracts or contracts for the provision of independent services of specified or indefinite duration, concluded prior to the day of the publication of the present Act between the A.O.E.K. and private engineers ... or engineers employed in the public sector or by public corporations ... shall be valid notwithstanding any other statutory provisions. The ... above-mentioned engineers shall be entitled to the remuneration agreed upon; the provisions ... of Act no. 716/1977 ‘on the registers of researchers and the award and design of projects’ shall not apply. The provisions of this paragraph shall also apply to cases currently pending before the courts at any level of jurisdiction in so far as no final ruling has been made." 13. After the entry into force of the 1983 Act, the A.O.E.K. refused any further negotiation. Before the Court of Cassation, Mr Philis complained of the "interference of the executive, through the legislature" in his cases pending before the courts. 14. By two judgments of 25 May and 19 September 1984 (nos. 919/1984 and 1597/1984), the Court of Cassation ruled that the new Act covered all engineers and did not therefore infringe the principle of equal treatment. It added that nothing prevented the legislature from adopting measures affecting civil rights provided that that principle was observed. Finally, it considered that the appeals were unfounded because they were based on provisions which had been repealed. These judgments are not at issue in the present case. 15. On 13 April 1981 the T.E.E. brought an action before the Athens first-instance court for the payment of the applicant’s fees relating to the projects designed in 1977 and 1978 (see paragraph 8 above). On 30 November 1981 the A.O.E.K. was ordered to pay the sum of 898,697 drachmas. It appealed from this judgment on 25 January 1982. The applicant intervened in the proceedings on 26 February 1987 (see paragraph 45 below). 16. On 6 April 1987 Mr Philis requested the T.E.E. to bring additional actions to obtain the compound interest (Article 296 of the Civil Code) which had accrued since 1981 and for the adjustment of his claim in accordance with the rate of inflation (Article 12 para. 10 of the Royal Decree of 19 February 1938). In addition, he complained that the action brought by the T.E.E. of 13 April 1981 had sought merely a declaratory judgment and that it had failed to contest a large number of objections raised by the opposing party. 17. The Athens Court of Appeal dismissed the A.O.E.K.’s appeal on 23 May 1987 (judgment no. 6324/1987). It considered that since 1977 no employment or works contract existed between the applicant and the Organisation. On the contrary, it noted that Mr Philis had designed the disputed projects as an independent engineer within the meaning of Act no. 716/1977 (see paragraph 12 above) and that the Act of 13 April 1983 was therefore not material to the case. The A.O.E.K. appealed to the Court of Cassation on 7 July 1987. 18. Five days previously, the applicant had again requested the T.E.E. to file the additional claims (see paragraph 16 above). On 24 July he complained that it had not yet collected the sum awarded on 30 November 1981 (see paragraph 15 above); in his view, the A.O.E.K.’s appeal did not preclude the execution of the appeal judgment upholding the first-instance decision. He also protested that there had been no replies to his previous representations. 19. By a fourth letter of 8 September 1987 Mr Philis accused the T.E.E. of being responsible for the slowness of the proceedings in the Court of Appeal and demanded explanations from it as to the manner in which it was carrying out its duties. 20. In a memorandum of 24 November 1987 to the T.E.E.’s legal advisor, which was communicated to the applicant, the lawyer assigned to the case stated as follows: "... a) The T.E.E. has never lodged a claim for compound interest against the State or a public corporation. b) Decree no. 676/1987 does not provide for the adjustment of fees. Admittedly, the above-mentioned judgment of the Court of Appeal (the only one in our favour) recognises that the design projects fell within the scope of Act no. 716/1977 which provides for such a possibility, but in our view this judgment is inconsistent with section 29 para. 5 of Act no. 1346/1983 ... . The terms of this provision suggest that the judgment will be quashed on appeal. c) More than twenty actions brought by ourselves and Mr Philis have already been dismissed with final effect. d) The T.E.E. has already paid out considerable amounts for these cases and has had costs awarded against it on several occasions. e) The outcome of the case pending in the Court of Cassation is uncertain. We shall probably lose it. For the above reasons we consider it unwise for the T.E.E. to incur criticism and run financial risks by bringing an action for compound interest and the adjustment of the claim under Act no. 716/1977 before the Court of Cassation has given judgment." 21. The applicant again contacted the T.E.E. on 10 December 1987 and 15 January 1988. 22. By a judgment of 17 January 1989 (no. 24/1989), the Court of Cassation ruled that Act no. 1346/1983 was not applicable and dismissed the A.O.E.K.’s appeal. 23. On 8 February 1989 Mr Philis called upon the T.E.E. to pay him the sum awarded on 30 November 1981 plus interest and various others sums, amounting to some 13,000,000 drachmas, which it had not included in the claims filed at the beginning of the proceedings. On 18 April 1989 the T.E.E. informed him in writing that the legislation in force did not allow it to institute enforcement proceedings against the A.O.E.K., that a request for the re-adjustment of the claim would be unlawful and that an action for interest "would clearly be devoid of any moral basis". It added that until the delivery of judgment no. 24/1989, serious doubts had subsisted as to the outcome of the main proceedings, which had prevented it from filing such claims, but the applicant could lodge them himself by means of a subrogation action (Article 72 of the Code of Civil Procedure, see paragraph 51 below). 24. On 27 March 1984, the T.E.E. re-introduced, in the light of the new legislation, two of the actions which it had brought on 24 December 1982 (see paragraph 10 above) in the Athens first-instance court. Mr Philis intervened in the proceedings. At the hearing on 23 April 1985 the T.E.E. converted these actions into actions for declaratory judgments. 25. The court found for the applicant, by two judgments of 15 November 1985 (nos. 384/1985 and 385/1985), but on 19 and 24 November 1986 the Athens Court of Appeal allowed the A.O.E.K.’s appeal (judgments nos. 9908/1986 and 10040/1986). It ruled that the applicant’s rights were time-barred on the ground that more than five years had elapsed between the end of the budgetary year in the course of which they had come into existence and the date on which the actions had been re-introduced before the court. In reply to the opposing view of the T.E.E., it considered that the initial claims had been made on a different legal basis and had therefore not been capable of interrupting the running of time. 26. On 6 April 1987 Mr Philis complained to the T.E.E. that it had failed to put his case properly. As it refused to lodge an appeal on points of law, he did so himself on 17 June. In his memorial, he stated that the appeal was directed against the T.E.E. as well as against the A.O.E.K. 27. By two judgments of 7 March (no. 213/1989) and 1 May 1989 (no. 450/1989), the Court of Cassation declared inadmissible the submissions concerning the T.E.E. and dismissed the remainder of the appeal as ill-founded. 28. On 2 April 1984 the T.E.E. re-introduced one of its actions of 24 December 1982 (see paragraph 10 above) before the Athens first-instance court, which simply declared the action in question time-barred (judgment no. 326/1985 of 16 September 1986). 29. On 19 November 1986 (judgment no. 8671/1986) the Athens Court of Appeal dismissed the T.E.E.’s appeal. 30. The applicant himself filed an appeal on points of law. His memorial, drawn up by a lawyer of his choice, contained a number of complaints regarding the manner in which the T.E.E. had carried out its duties as a body subrogated to his rights. By a judgment of 7 March 1989 (no. 214/1989), the Court of Cassation declared the appeal inadmissible in so far as it related to the T.E.E. and ill-founded for the rest. 31. In November 1984 the applicant requested the T.E.E. to re-introduce certain of the actions which it had instituted from 1977 to 1980 (see paragraph 9 above). In a report of 18 November 1984 to the head of the T.E.E.’s legal department, the lawyer assigned to the case expressed the view that there were sufficient prospects of success and stressed that no problem of res judicata arose from judgments nos. 919/1984 and 1597/1984 (see paragraph 14 above) of the Court of Cassation. 32. On 20 February 1986 Mr Philis repeated his request and warned the T.E.E. of the risk that the disputed rights would become time-barred. It brought the actions in the court on 26 February, but only in the form of actions for a declaratory judgment. The applicant intervened in the proceedings. On 27 May the court dismissed the actions on the same grounds as in the judgments on appeal of November 1986 (see paragraph 25 above). 33. The applicant’s appeal filed on 7 October 1986 is still pending. 34. On 30 October 1981 the (Patriotiko Idryma Koinonikis Pronoias kai Antilipseos) - Patriotic Foundation for Social Welfare and Assistance - P.I.K.P.A., a public body under the authority of the Ministry of Health and Social Welfare commissioned Mr Philis to design a project for the extension of the heating system of one of its hospitals, the Penteli children’s hospital. On 23 February 1983 this hospital, which in the meantime had become a public-law body, asked the applicant to alter his plans. The project, which was submitted within the time-limits laid down, was approved on 13 April 1983. The applicant considered that a reduction of his fees effected by the P.N.P. was arbitrary and he accordingly asked it to re-examine its method of calculation, but to no avail. On 24 February 1984 he applied to the relevant department of the Ministry of Health and Social Welfare. 35. As he did not obtain satisfaction, the applicant instituted proceedings against the P.I.K.P.A. and the P.N.P. in the Athens Court of Appeal on 1 August 1984 pursuant to section 61 of the "Introductory Act" (Eisagogikos Nomos) to the Code of Civil Procedure. On 26 February 1985 he was asked by the court to provide evidence that he was enrolled on the register of Public expenditure, a condition which allowed an engineer to carry out public works; he did so on 13 January 1986. On 15 July 1986 the court dismissed his action against the P.I.K.P.A. on the ground that all the latter’s rights and obligations had been transferred to the P.N.P. It also ordered the parties to produce expert opinions concerning the work carried out by Mr Philis. 36. At Mr Philis’s request, the Court of Appeal held a second hearing on 22 September 1987. It dismissed the action by a judgment, which became final on 16 November 1987. It ruled that, by virtue of Royal Decree no. 30/1956, only the T.E.E. had the capacity to bring proceedings to recover payment of fees in that it was subrogated to the rights of the engineer (see paragraph 45 below); it acknowledged nevertheless that the applicant could reasonably have believed that he was entitled to bring proceedings himself and ordered both parties to pay costs. 37. In November 1980 a public works contractor, A.S., commissioned the applicant to draw up plans for the installation of a drains system in the town of Amfilohia. 38. By a letter of 30 June 1981 Mr Philis asked for the assistance of the T.E.E. because A.S. had rejected the plans and had not paid the agreed remuneration. In September 1981 the T.E.E. replied to him that it wished to settle the dispute out of court. As the negotiations were unsuccessful, the applicant on 20 January 1982 urged it to bring legal proceedings. 39. On 30 March 1983 he repeated his request and asked the T.E.E. to reassess the sums claimed. On 23 January 1984 he complained to it for not already having brought the action and for having miscalculated the fees. 40. The T.E.E. brought an action in the Athens first-instance court on 16 December 1985. On 26 April 1986 the action was allowed in part; the applicant did not intervene in these proceedings. 41. The T.E.E. and A.S. challenged the judgment in the Athens Court of Appeal. On 11 June 1987 that court ordered A.S. to pay the T.E.E. 139,336 drachmas plus interest; however, it rejected the submission concerning the reassessment of the claim because the T.E.E. had not specified the amount claimed (judgment no. 7439/1987). 42. On 10 July 1987 Mr Philis complained to the T.E.E. for having failed to include in its memorial the information on the basis of which the coefficient for the above-mentioned reassessment could be calculated; he also requested it to institute enforcement proceedings in relation to the judgment of 11 June 1987. 43. On 9 May 1988 he again contacted the T.E.E. He accused it of having waited for four and a half years before bringing the proceedings, of having miscalculated his fees and of having failed to bring the enforcement proceedings to a conclusion with the result that he had received nothing. On 6 July 1988 the T.E.E. replied to him that it could not be accused of negligence and that he had not shown that he had suffered damage. It noted that A.S. had already paid the interest and the legal costs and had sought authorisation to pay the remaining sum in ten monthly instalments. Finally it added that it was for Mr Philis himself to specify such property of A.S. as might be liable to attachment. 44. According to Article 20 para. 1 of the Constitution, "every person shall be entitled to receive legal protection by the courts and may plead before them his views concerning his rights or interests, as specified by law." 45. The following provisions of the above-mentioned Royal Decree of 31 May 1956, as they were applicable at the material time, are relevant: "1. Engineers holding diplomas from the National Polytechnic ... , members of Technical Chamber of Greece (T.E.E.), and persons who pursue, on a full-time or part-time basis, ... in accordance with Act no. 6422/1934, the profession of engineer and naval architect, shall, when commissioned to design a project, communicate to the T.E.E. (...) a declaration attesting to their appointment by the commissioning party and a separate declaration to the effect that they have accepted the assignment; where the project is commissioned by the State or a public corporation, the copy of the document authorising the assignment of the project [shall be communicated to the T.E.E.] ... ..." "1. Any party who commissions the design of plans from the persons referred to in Article 1 ... shall deposit with the T.E.E. or the latter’s authorised representative ... , the full amount of the project fee, such fee being determined by the competent ministry or by the T.E.E. in the manner described below. He may not pay it directly to the person commissioned to carry out the work. ... 4. Where the commissioning party refuses, hinders or delays payment of the deposit or of the fee owed, the T.E.E. shall have the capacity to bring legal proceedings for the recovery of the amount due ... by being subrogated ex officio to the rights of the payee. 5. In such cases, the T.E.E. shall inform the payee that it has introduced proceedings, after which it is freed from any liability in his regard, in particular from any obligation to pay him compensation. The payee or the T.E.E. are entitled at any moment to intervene in the proceedings." "1. The fees paid shall be deposited by the T.E.E. in a special bank account and a sum equivalent to 2% of the total fee shall be credited to the T.E.E.’s account with the Bank of Greece. ... 2. The remainder of the fee, after deduction of the percentages witheld and the charge payable for the professional licence, shall be paid to the payee by the T.E.E. or its authorised representative, free of interest. ... 4. The State shall pay directly to the payees the fees which it owes to them after having deducted 2% of such amounts, which is paid to the T.E.E." 46. The subrogation system set up by Royal Decree no. 30/1956 was initially intended to protect engineers from pressure being brought to bear on them to reduce excessively their fees, but also - and this remains the case - to secure the payment of a compulsory contribution of 10% (since reduced to 2%) to their insurance fund (Article 3). It is applicable only in respect of the recovery of fees payable for the design of projects and not for the supervision of work (Article 1). The T.E.E. has the responsibility of instituting proceedings on the basis of the information provided by the engineer. Once the action has been brought, the latter may intervene (Article 2) and, by filing memorials or even by attending the hearing, support the arguments of the T.E.E., which remains the main party in the proceedings. By so intervening the engineer acquires the right to lodge appeals himself. 47. By a judgment of 17 April 1986 (no. 2827/1986) the Athens Court of Appeal ruled as follows: "... it follows that under the above-mentioned provisions [Article 2 paras. 4 and 5 of Royal Decree no. 30/1956] the T.E.E. has not only a right (discretionary power), but also an obligation, to take legal proceedings on behalf of the engineer to recover fees. This interpretation ... is consistent with the prevailing case-law according to which the payee has no right whatsoever to bring proceedings for the recovery of his remuneration. ... Consequently, in carrying out this obligation, the T.E.E. acts not as the engineer’s representative but as an authority exercising an unfettered and exclusive right conferred on it by law ... ." 48. In a judgment (no. 309/1986) the Court of Cassation held as follows: "... it is clear from ... Articles 1 and 2 of Royal Decree no. 30 of 31 May 1956 ... that the Technical Chamber of Greece, which alone is entitled to collect the disputed renumeration, is subrogated to the rights of engineers, regardless of whether they are members. If it were otherwise the aim of the above-mentioned provisions would be frustrated, that aim being to safeguard the interests of the profession and to deter any competition as regards engineers’ fees, liable to affect adversely the quality of the projects which they design". 49. On the other hand, in a judgment no. 8/1988 the Larissa Administrative Court of Appeal observed: "Royal Decree no. 30 of 31 May 1956 ... provides in paragraphs 4 and 5 of Article 2 thereof: ‘... 5. In such cases, the T.E.E. shall inform the payee that it has introduced proceedings ... . The payee or the T.E.E. are entitled at any moment to intervene in the proceedings’. It follows from these provisions that the T.E.E. has the right to take legal proceedings to secure the payment of remuneration owed to one of its members in respect of the design of a project only where the member in question has not done so himself. If the payee takes proceedings himself to recover the fees, the T.E.E. is entitled only to intervene in the proceedings". 50. The Court of Cassation had occasion to rule on a claim for compensation from an engineer who complained that the T.E.E. had not brought proceedings to recover his fees in sufficient time to avoid the action in question being time-barred. It considered that such negligence gave rise to a right to compensation, but only as from the moment at which the action became time-barred and at which the T.E.E. could therefore no longer bring it (judgment no. 25/1988). 51. The Code of Civil Procedure provides as follows: "Capacity to bring proceedings of parties Any person who can establish a direct legitimate interest may seek judicial protection." "Subrogation action (plagiastiki agogi) Creditors may apply for judicial protection, exercising the rights of their debtors in the event of the latter’s failure to exercise them, except rights of a close personal nature." "Intervention in support of one of the parties (apli prostheti paremvasi) If, in proceedings pending before a court, a third party has an interest in the success of one of the parties, he may intervene in support of the claims of that party until final judgment has been given." "Procedural position of the intervener The intervener may take all the steps in the proceedings in the interests of the party which he supports and is bound to accept any steps which have already been completed before his intervention. The steps which he takes shall be valid in so far as they are compatible with those of the main party in the proceedings ... " "‘Autonomous’ intervention (aftotelis prostheti paremvasi) If the decision in the main proceedings affects the relationship between the intervener and the opposing party, the provisions of Articles 76 to 78 shall apply." (Articles "concerning common interest between the parties" - "omodikia") 52. The subrogation action was introduced into Greek law in 1834 in Chapter 5 of the Code of Civil Procedure and was considered to be an action for provisional measures and interlocutory relief. It is now governed by the general provisions of the first Chapter of the Code. It is generally agreed that this action is a sui generis action which aims at safeguarding the property of the debtor in the interests of the creditor. A person who brings the action must prove that he is the creditor of a debtor who has neglected to exercise his rights. The latter’s insolvency is not a necessary condition for bringing the action. In a judgment of 6 June 1988 (no. 7892/1988) concerning enforcement proceedings against a debtor, a private individual, who had just lost his action against the T.E.E., the Athens Court of Appeal stated as follows: " ... between the T.E.E. and the engineer there is a ‘quasi’ debtor (the T.E.E.) - creditor (the engineer) relationship, which lasts for as long as the T.E.E. is under a statutory duty to secure the recovery of the fee and to pay it thereafter to the person to whom it is strictly due, the engineer ... It follows from the above-mentioned provisions (Article 72 of the Code of Civil Procedure) that if the T.E.E. fails to institute proceedings for the recovery of fees or to bring an enforcement action for their payment, ... the engineer, as the payee, has a legitimate interest in doing so provided that he stipulates in his application that the amount in question is to be paid to the T.E.E. ... "