S.C. RED CREDIT SRL v. ROMANIA
Inadmissible
András Sajó;Egidijus Kūris;Iulia Motoc;Krzysztof Wojtyczek;Paulo Pinto De Albuquerque;Gabriele Kucsko-Stadlmayer
1. The applicant company, SC Red Credit SRL, was a Romanian legal entity based in Constanța, founded in 2002. It was initially represented before the Court by its administrator, V.D. From 2013, after the case was communicated to the Government, submissions in respect of the case were made by Ms L. Memet, a legal adviser practising in Constanța. 2. The Romanian Government (“the Government”) were represented by their Agent, Ms C. Brumar, from the Ministry of Foreign Affairs. 3. The facts of the case, as submitted by the parties, may be summarised as follows. 4. The applicant company was authorised to operate as a jewellery pawnbrokers. 5. According to the Single Control Register, on 25 September 2007 the applicant company had gold stock weighing 3,624 grams. 6. On 26 September 2007 the Constanța Tax Agency (“the CTA”) and the Constanța Consumer Protection Agency (“the CCPA”) carried out an inspection of the activities of the applicant company and other companies sharing the same commercial space. 7. On the same date the CCPA produced an inventory report of the applicant company’s jewellery stock which had been on display for sale. The report was drawn up in the presence of a representative of the applicant company, who had stated that some of the jewellery had been sold at different prices depending on quality. 8. On 3 October 2007 the CCPA produced a contravention report fining the applicant company 7,000 lei (RON – approximately 2,100 euros (EUR)) because on 26 September of that year it had displayed gold jewellery for sale without a licence to sell precious metals, alloys or stones. In addition, it ordered that the gold jewellery that had been on display for sale, which weighed 2,527 grams and was worth RON 111,683 (approximately EUR 33,140), be confiscated. 9. According to the contravention report, the CCPA had cooperated with the Constanța Tax Agency (“the CTA”) to produce it. 10. The representative of the applicant company who signed the contravention report objected to it on the grounds that the measure taken had been unjust. 11. The applicant company challenged the report of 3 October 2007 in the domestic courts. 12. On 4 July 2008 the Constanța District Court allowed the applicant company’s action, set aside the report of 3 October 2007 and ordered the return of the confiscated jewellery. It held that according to the European Court of Human Rights’ (“the Court”) case-law, proceedings seeking to challenge contravention reports fall under the criminal head of Article 6 of the European Convention of Human Rights (“the Convention”) and therefore the domestic authorities had to comply with the procedural guarantees set out in that Article with regard to criminal proceedings, including the right to be presumed innocent. The court further held that the fine had been imposed on the applicant company under general legal provisions and had been intended as a punishment to deter it from reoffending. Consequently, the burden of proof with regard to the applicant company’s guilt was on the CCPA. However, the agency had not submitted any evidence which proved the applicant company’s guilt. 13. The CCPA lodged an appeal on points of law (recurs). 14. By a final judgment of 23 December 2008 the Constanța County Court allowed that appeal, quashed the judgment of the lower court and upheld the report of 3 October 2007. It held that according to the documents available, on 26 September 2007 the applicant company had only been authorised to hold precious metals. However, it had only obtained authorisation to sell them on 2 October 2007. Moreover, according to the inventory report signed by the applicant company’s representative without any objection, the report had concerned the items which had been on display for sale. Also, according to the Court’s case-law, the contravention proceedings had to comply with the procedural requirements provided for under the criminal head of Article 6 of the Convention, which concerned both the rebuttal of the right to be presumed innocent and a relative presumption of truth in favour of the contravention report drafted by a State authority following its own perception of the events. Consequently, the burden of proof would have been on the State authority which had drafted the contravention report and the report could have been set aside only if the State authority’s representatives had not been present when the contravention had happened and it had failed to prove the statements made in the report. But the representatives of the said authority had been present when the contravention had been committed and the report had reflected their own perceptions. The report therefore had to be presumed to reflect the truth and the burden of proof had been reverted to the applicant company in order to rebut that presumption. 15. The court further held that in the inventory report the applicant company’s representative had stated that some of the jewellery had been sold at different prices depending on quality. Furthermore, the contravention report had been signed by the applicant company’s administrator, who had objected to it on the grounds that the measure taken had been unjust, but had not contested the fact that he had been selling jewellery. The contravention report had been lawful and had contained all the lawfully required information. Moreover, the contravention and inventory reports contained similar information about the quantity and value of the items mentioned in them and had been signed by both parties without any objection in this respect. Furthermore, these inconsistencies would not have rendered the contravention report null and void and the applicant company had not proven that it had incurred damage that could have been remedied solely by setting aside the report. Furthermore, absence from the contravention report of information that the fine could have been paid immediately or within forty-eight hours had not rendered the report unlawful. 16. Lastly, the court held that all of the reasons outlined above rendered the applicant company’s argument that the contravention had not existed inadmissible, because it had never intended to sell the jewellery that it had been holding. 17. On 10 September 2009 the applicant company signed a merger by acquisition (fuziune prin absorbție) with another company, namely SC IFN Master Credit SRL. They agreed, inter alia, that the latter company would acquire the applicant company that day and take over the applicant company’s assets and liabilities. V.D. was an associate of SC IFN Master Credit SRL. 18. On 28 September 2010 the applicant company was struck off (radiată) the Constanța Register of Commerce following the merger. 19. On 1 October 2013 Ms Memet submitted to the Court a power of attorney signed by the former administrator of the applicant company authorising her to represent it. 20. In 2014 SC IFN Master Credit SRL changed its name to S.C. Master Credit Stand-By SRL and then to SC Master C. Stand-By SRL. 21. In January and March 2014, part of the observations on the admissibility and merits of the case were submitted by Ms Memet in a document headed “SC Master Credit Stand-By SRL v. Romania”. She did not submit within any of the time-limits allotted by the Court a power of attorney or any other document authorising her to represent SC IFN Master Credit SRL, SC Master Credit Stand-By SRL or SC Master C. Stand-By SRL. Furthermore, neither she nor the companies submitted within the relevant time-limits any documents signed directly by any of the companies themselves or by V.D. expressly stating that they wished to continue the application. “Carrying out unauthorised operations with precious metals and stones is a contravention punishable by a fine of 5,000 [EUR 1,515] to 10,000 lei [EUR 3,030] and by confiscation of the goods subject to the contravention.” ...” 22. The relevant legal provisions concerning the amendments to the legal rules applicable in respect of legislation concerning contraventions are set out in the case of Anghel v. Romania (no. 28183/03, §§ 35-39, 4 October 2007). 23. Article 250 of Law no. 31/1991 on commercial companies provided, inter alia, that following a merger the assets and debts of the acquired company were transferred to the acquiring company in accordance with the terms of the merger plan. 24. Rule 47 § 7 of the Rules of Court (former Rule 47 § 6) provides that applicants shall keep the Court informed of any change of address and of all circumstances relevant to the application.