BALÁŽ v. SLOVAKIA
Inadmissible
Alvina Gyulumyan;Ján Šikuta;Johannes Silvis;Josep Casadevall
1. The applicant, Mr Miroslav Baláž, is a Slovak national, who was born in 1960 and lives in Trenčianske Teplice. He was represented before the Court by Mr D. Chlapík, a lawyer practising in Žilina. The Government of the Slovak Republic (“the Government”) were represented by their Agent, Ms M. Pirošíková. 2. The facts of the case, as submitted by the parties, may be summarised as follows. 3. The applicant, who is a lawyer, ran a property business and became involved in a dispute with the tax authorities over his tax liability in the preceding years. That amount depended on the amount of deductible expenses in the relevant preceding years, these two types of amount being determined by separate decisions in separate sets of proceedings. 4. On 19 July 1997 the Trenčín tax office ordered him to pay the equivalent of some 112,500 euros (EUR) in outstanding tax for the year 1993. 5. On 1 December 1997 and 5 February 1998 respectively, the tax office ordered that the above amount be increased by 100% by way of a penalty and determined that the applicant’s overall tax liability was the equivalent of some EUR 225,000. 6. On 6 February 1998 the tax office decided to secure payment of the applicant’s outstanding tax by prohibiting him from selling or otherwise disposing of any of his real property. The decision became enforceable on 12 February 1998, despite the applicant lodging an appeal, which was dismissed on 21 July 1998. The decision was ultimately confirmed by the Central Tax Directorate on 8 February 1999. 7. The security established by the tax office had the legal form of a statutory lien and as such was registered in the Land Register. According to the applicant, the value of the encumbered property was the equivalent of some EUR 5,486,000. 8. The applicant also appealed against the tax order of 19 July 1997. Several tax audits followed. On 12 August 1998 a decision concerning the deductible expenses for the year 1992 was quashed by the Supreme Court (Najvyšší súd), which on 14 December 2000 dismissed a subsequent complaint regarding a fresh decision on the same matter. 9. The applicant’s tax liability for the year 1993 was recalculated and reduced several times. Eventually, on 18 March 2002, by a decision which became final on 13 September 2002, the tax office established that it was actually no more than the equivalent of some EUR 3,000. 10. On 7 May 2004 the tax office amended its decision of 6 February 1998 securing payment of the applicant’s outstanding tax and prohibited him from dealing with only one property. 11. On 2 June 2004 the applicant paid the outstanding tax owed. 12. Consequently, on 8 June 2004, the tax office cancelled the decision of 6 February 1998 in its entirety. 13. On 18 March 2005 the applicant, assisted by a lawyer then and throughout the subsequent proceedings, brought a claim for damages against the State, in the person of the Ministry of Finance. He relied on the 1969 State Liability Act (Law no. 58/1969 Coll. – “the SL Act”) and pointed out that by its decision of 6 February 1998, the tax office had encumbered his real property, which was worth twenty times more than his tax liability under the decision of 5 February 1998. Not only that, the decision had then turned out to be based on a completely inaccurate calculation. He claimed that because of the impugned lien, all of his real property had been encumbered for more than six years, which had actually prevented him from carrying out his business activities, causing him to lose profit equivalent to some EUR 330,000, an amount that he later increased to the equivalent of some EUR 5,544,000. The applicant also argued that the decision of 5 February 1998 had in fact been quashed by the decision of 8 June 2004, and that the entire calculation of his tax liability had been erroneous because it had been based on amounts of tax-deductible expenses that had been contested and had later turned out to be wrong. As to the damage allegedly caused, he calculated it as the interest he could have obtained from a bank for depositing the monetary value of the encumbered property, that value having been established by an expert. 14. The claim was examined and dismissed at first instance by the Trenčín District Court (Okresný súd) on 15 October 2008 and following an appeal (odvolanie) by the applicant, by the Trenčín Regional Court (Krajský súd) on 21 October 2009. 15. Both courts interpreted the applicant’s claim as being aimed at recovering damages in respect of a wrongful official decision (sections 1 et seq. of the SL Act) as opposed to wrongful official action (sections 18 et seq. of the SL Act). However, under the applicable statute (section 4 of the SL Act), the first prerequisite for that type of claim to be available was that the alleged damage had to have resulted from an enforceable official decision that had been quashed or amended for being unlawful (section 4 of the SL Act). The Regional Court explained that prerequisite in further detail, holding that the unlawfulness of the contested decision could not be examined as a preliminary issue in the proceedings in the claim for damages, and had to have been established by the body that had quashed the decision precisely on account of its unlawfulness. The courts noted that the damage asserted by the applicant had allegedly been sustained as a result of the tax office’s decision of 6 February 1998, and found that that decision had never been quashed or amended for being unlawful. It had been cancelled on 8 June 2004 for a different reason, namely because the applicant’s tax liability had been paid in full. 16. Both courts concluded that in the circumstances, the principal statutory requirement for the claim to be available had not been met. In addition, the District Court found the claim unfounded on several other grounds. These were, however, found by the Regional Court to be superfluous in view of the earlier finding. 17. An appeal on points of law (dovolanie) brought by the applicant made in reliance on alleged procedural irregularities was declared inadmissible by the Supreme Court on 30 November 2010. 18. He also brought a constitutional complaint alleging a violation of his rights under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 in the above proceedings, which was declared inadmissible on 13 April 2011. The Constitutional Court held that there was nothing to show that the ordinary courts had dealt with the case unfairly, or that their decisions had been arbitrary. As to the alleged breach of the applicant’s right to peaceful enjoyment of his possessions, it considered that it would only be entitled to examine that complaint if the ordinary courts had breached his rights under Article 6 § 1 of the Convention or its constitutional equivalent.