SECOND SECTION
DECISION
Application no. 18510/22
ELCOMAT D.O.O.
against Croatia
The European Court of Human Rights (Second Section), sitting on 25 February 2025 as a Committee composed of:
Gediminas Sagatys, President,
Davor Derenčinović,
Juha Lavapuro, judges,
and Dorothee von Arnim, Deputy Section Registrar,
Having regard to:
the application (no. 18510/22) against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 6 April 2022 by Elcomat d.o.o., a limited liability company incorporated under Croatian law and having its registered office in Matulji (“the applicant company”), which was represented by Mr A. Ivković, a lawyer practising in Rijeka;
the decision to give notice of the complaint concerning costs of proceedings to the Croatian Government (“the Government”), represented by their Agent, Ms Š. Stažnik, and to declare inadmissible the remainder of the application;
the parties’ observations;
Having deliberated, decides as follows:
SUBJECT MATTER OF THE CASE
1. The application concerns the domestic authorities’ refusal to reimburse the applicant company’s costs of legal representation in tax-related administrative proceedings.
2. In particular, by a decision of 29 April 2014 the tax authorities ordered the applicant company to pay a tax debt of 386,159.61 Croatian kunas (HRK; i.e. 51,252 euros (EUR)), consisting of unpaid taxes and the accrued statutory default interest. The applicant company then hired an advocate and eventually succeeded in the judicial review proceedings leading ultimately to the tax authorities’ finding in a decision of 15 September 2020 that collecting the tax debt in question had become statute-barred (zastara).
3. However, by the first-instance decision of 31 March 2020, upheld on appeal on 20 July 2020, the tax authorities dismissed the applicant company’s claim for reimbursement of HRK 90,625 (EUR 12,012), corresponding to the costs of its legal representation by an advocate in the above tax-related administrative proceedings.
4. By a judgment of 3 November 2020, the Rijeka Administrative Court dismissed an action for judicial review brought by the applicant company against the tax authorities’ decision on costs. On 20 January 2021 the High Administrative Court dismissed the applicant company’s appeal against that judgment. Those courts held that the General Administrative Procedure Act did not provide for reimbursement of costs of legal representation by an advocate in administrative proceedings.
5. The applicant company then lodged a constitutional complaint arguing that the refusal to reimburse the costs of its legal representation had been in breach of its right of access to a court and the right to property, both guaranteed by the Croatian Constitution.
6. On 29 September 2021 the Constitutional Court declared that constitutional complaint inadmissible, and on 14 October 2021 notified the applicant company’s representative of that decision. It held that the contested judgments of the administrative courts were based on a constitutionally acceptable interpretation of the relevant law.
7. Before the Court the applicant company complained, under Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 thereto, that the impossibility to recoup the costs of its legal representation incurred in the tax-related administrative proceedings in question had been in breach of its right of access to a court and its right to the peaceful enjoyment of possessions.
THE COURT’S ASSESSMENT
8. The relevant principles as to when a proprietary interest which is in the nature of a claim, as in the present case, may be regarded as an “asset” and therefore a “possession” enjoying protection under Article 1 of Protocol No. 1 are summarised in Radomilja and Others v. Croatia ([GC], nos. 37685/10 and 22768/12, §§ 142-43 and 149, 20 March 2018), and the cases cited therein.
9. In particular, a claim may be regarded as an “asset” only where it has a sufficient basis in national law, for example where there is settled case-law of the domestic courts confirming it, that is, when the claim is sufficiently established as to be enforceable (ibid., § 142). By way of contrast, it cannot be said that an applicant has a sufficiently established claim amounting to an “asset” for the purposes of Article 1 of Protocol No. 1 where there is a dispute as to the correct interpretation and application of domestic law and where the question whether he or she complied with the statutory requirements is to be determined in judicial proceedings (ibid., § 149), and the applicant’s submissions are subsequently rejected by the national courts (see Kopecký v. Slovakia [GC], no. 44912/98, § 50, ECHR 2004-IX).
10. The Government submitted that Article 1 of Protocol No. 1 to the Convention was inapplicable in the present case because at the relevant time the applicant company’s claim for costs had not been based on a settled case‑law of the domestic courts, and thus had not had a sufficient basis in national law.
11. In particular, the Government argued that the tax authorities’ and the administrative courts’ decisions dismissing the applicant company’s claim for costs had reflected the case-law existing at the time when those decisions had been adopted (they referred to twelve judgments of the High Administrative Court adopted in the period between May 2016 and October 2021). That case-law had changed with the Supreme Court’s decision no. U‑zpz-44/2016 of 14 July 2021, followed by the High Administrative Court’s decision no. Usž-4003/21 of 20 February 2022, in which those courts held that parties against whom the administrative authorities instituted administrative proceedings were, if successful, entitled to have the costs of their legal representation by advocates in those proceedings reimbursed. The Supreme Court’s decision had first been published on 29 September 2021 at 1.40 p.m. on a domestic case-law website used by the Croatian courts, and on 11 May 2022 on the Supreme Court’s website.
12. The Government pointed out that the tax authorities’ and the administrative courts’ decisions in the applicant company’s case had been adopted before the Supreme Court’s decision marking the above-mentioned shift in the case-law, whereas the Constitutional Court’s decision had been adopted on the same day when the Supreme Court’s decision had first been published (see paragraphs 3-4, 6 and 11 above). Thus, none of the domestic authorities deciding in the applicant company’s case could have taken that new case-law into account. More importantly, in those circumstances it could not have been argued that at the relevant time the applicant company’s claim for costs had been based on a settled case-law of the domestic courts.
13. The applicant company argued that its claim for costs had a sufficient basis in national law as it had been derived directly from the relevant provisions of the General Administrative Procedure Act. It further referred to two judgments of the Rijeka Administrative Court of 24 June 2013 and 17 September 2020 in which such costs were awarded.
14. The Court considers that the applicant company’s argument that its claim for costs had a sufficient basis directly in the General Administrative Procedure Act is unpersuasive because that legislation contains no provision explicitly listing the advocates’ fees as costs of administrative proceedings. It further finds that the Government convincingly demonstrated, by providing relevant case-law examples and explaining the evolution of the domestic case-law on the matter, that in the time frame in which the domestic administrative and judicial authorities ruled on the applicant company’s claim for costs of its legal representation in the administrative proceedings, that claim was not supported by the settled case-law of the domestic courts. The applicant company’s reference to two judgments in which such costs were awarded could only suggest that the domestic case-law on the matter at the relevant time was divergent rather than settled.
15. Accordingly, the applicant company’s claim at the time did not have a sufficient basis in national law to be regarded as an “asset” and therefore a “possession” protected by Article 1 of Protocol No. 1.
16. It follows that this complaint is inadmissible for being incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a), and that it must be rejected, pursuant to Article 35 § 4 thereof.
17. The applicant also complained under Article 6 § 1 of the Convention that the impossibility to recoup the costs of its legal representation in the tax‑related administrative proceedings had been in breach of its right of access to a court (see paragraph 7 above).
18. The Court reiterates that, under its case-law developed under Article 6 § 1 of the Convention, in disputes against the State arising from decisions of its organs in the exercise of public authority, ex post facto refusal to reimburse successful applicants’ own costs may constitute a breach of their right of access to court (see Zustović v. Croatia, no. 27903/15, §§ 96-111, 22 April 2021, and Černius and Rinkevičius v. Lithuania, nos. 73579/17 and 14620/18, §§ 65-74, 18 February 2020).
19. On the other hand, as its well-established case-law bears out, Article 6 of the Convention is not applicable under its civil limb to tax assessment proceedings (see, notably, Vegotex International S.A. v. Belgium [GC], no. 49812/09, §§ 65-66, 3 November 2022, and Ferrazzini v. Italy [GC], no. 44759/98, § 29, ECHR 2001-VII).
20. The proceedings in the present case were tax assessment proceedings as they concerned the decision ordering the applicant company to pay a tax debt (see paragraph 2 above), and the related issue of their costs which was subject to a separate decision within the same proceedings. Article 6 of the Convention is therefore not applicable under its civil limb to those proceedings. Moreover, since the proceedings did not concern tax surcharges, there is nothing to suggest that the Article in question is applicable under its criminal limb either (see Jussila v. Finland [GC], no. 73053/01, §§ 29-39, ECHR 2006-XIV).
21. The Court must further determine whether, by applying the jura novit curia principle, it can re-characterise the applicant company’s access-to-court complaint and examine it under Article 13 of the Convention. Such an examination would require assessing whether the impossibility to recoup the costs of the applicant company’s legal representation in the tax assessment proceedings undermined the effectiveness of the remedies it used to challenge the decision ordering it to pay the tax debt.
22. However, the Court could do this only if the applicant company claimed that the decision ordering it to pay the tax debt violated another substantive Article of the Convention. That is so, because Article 13 has no independent existence and can only be applied in combination with, or in the light of, one or more Articles of the Convention or the Protocols thereto of which a violation has been alleged (see Hovhannisyan and Karapetyan v. Armenia, no. 67351/13, § 144, 17 October 2023).
23. In the instant case the only other violation alleged was that of Article 1 of Protocol No. 1 to the Convention, which concerned the decision on costs of the tax assessment proceedings (see paragraph 7 above) and not the decision ordering the applicant company to pay the tax debt.
24. It follows that if the Court were, by applying the jura novit curia principle, to re-characterise and examine the applicant company’s access‑to‑court complaint under Article 13 of the Convention, it could do so only by linking it to the interference in respect of which a violation of Article 1 of Protocol No. 1 was not alleged, namely the decision ordering the applicant company to pay the tax debt.
25. Doing so would lead the Court to rule beyond the scope of the case and exceed its jurisdiction as it would have to base its decision on facts not complained of by the applicant company (see Radomilja and Others, cited above, §§ 123-25, and Grosam v. the Czech Republic [GC], no. 19750/13, §§ 51-100, 1 June 2023).
26. It follows that this part of the application, whether examined under Article 6 § 1 or Article 13 of Convention, is also inadmissible for being incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a), and that it must be rejected, pursuant to Article 35 § 4 thereof.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 20 March 2025.
Dorothee von Arnim Gediminas Sagatys
Deputy Registrar President