The obligation to cover the expenditures of storing removed property complies with Article 92 and Article 105 of the Satversme

17.12.2018.

On 14 December 2018, the Constitutional Court passed the judgement in case No. 2018-09-0103 “On Compliance of the Eighth Part of Section 257 of the Latvian Administrative Violations Code and Para 74 of the Cabinet Regulation of 7 December 2010 No.1098 “Regulation on Handling of Property and Documents Removed in a Case of Administrative Violation” with Article 92 and Article 105 of the Satversme of the Republic of Latvia”.

 The Contested Norms

The Eighth Part of Section 257 of the Latvian Administrative Violations Code, in the wording that was in force until 4 July 2018: “A person upon whom an administrative sanction is imposed, shall, according to the procedures and in the amount specified by the Cabinet, cover the expenditures, which have arisen in relation to the transfer for storage, storage and destruction of the removed property and documents in the administrative violation matter.”

Para 74 of the Cabinet Regulation of 7 December 2010 No.1098 “Regulation on Handling of Property and Documents Removed in a Case of Administrative Violation”:

“The amount of expenditure for storing the removed property or document, if an administrative sanction has been imposed in a case of administrative violation, shall be calculated from the date when the property or the document was removed until the day:

74.1. when the person received the removed property or document;

74.2. when the owner of the removed property or document has relinquished the removed property or document;

74.3. when the removed property was destroyed or sold;

74.4. when the decision on confiscation of the property or document removed in a case of administrative violation has entered into force.”

The Norms of Higher Legal Force

Article 92 of the Satversme of the Republic of Latvia (hereafter –the Satversme): “Everyone has the right to defend his or her rights and lawful interests in a fair court. Everyone shall be presumed innocent until his or her guilt has been established in accordance with law. Everyone, where his or her rights are violated without basis, has a right to commensurate compensation. Everyone has a right to the assistance of counsel.”

 Article 105 of the Satversme: “Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.”

The Facts

The case has been initiated with respect to an Application submitted by the Supreme Court. An applicant turned to the administrative court; by the decision of the Provision State Agency, the applicant had been imposed the obligation to cover the expenditures for storing property removed in a case of administrative violation. The amount of expenditures calculated by the Agency for storing the property exceeds several times the amount of administrative fee imposed upon the person.

The Supreme Court holds that the contested norms impose upon a person, who has been made administratively liable, an obligation to cover the expenditures of storing property removed in an administrative case until the moment when the ruling to make a person administratively liable becomes enforceable; i.e. until the moment when the person has exhausted legal remedies and the final ruling has entered into force. The contested norms do not envisage a possibility, in some cases, to release a person from the obligation to cover these expenditures or to reduce the amount thereof. Hence, allegedly, the contested norms are incompatible with the right to a fair trial enshrined in Article 92 of the Satversme and the right to property enshrined in Article 105 of the Satversme.

 The Court’s Findings

On the content of the contested norms

The institutions, which issued the contested norms, expressed different opinions on the interpretation and application of the contested norms. Hence, the Constitutional Court, first and foremost, established independently the content and legal consequences thereof. The Constitutional Court found that the property removed in a case of administrative violation is recognised as being reversed to the State at the moment when the final decision on making a person administratively liable entered into force. There might be cases, where a person, who has been imposed a sanction in a case of administrative violation, has to cover the expenditures incurred in connection with storing the removed property for this period. [8.–9.]

Hence, the Constitutional Court recognised that in this case, in accordance with the request made by the Supreme Court, it would review the contested norms insofar the obligation is derived from them for a person, who had been made administratively liable, to cover the expenditures for storing the property removed in the case of administrative violation until the moment when the decision of making this person administratively liable becomes enforceable (hereafter also – the contested regulation). [9.]

The Constitutional Court recognised that the basic matter in the case pertained to the right to property included in Article 105 of the Satversme. Hence, it reviewed the compliance of the contested regulation with Article 105 of the Satversme and afterwards – with Article 92 of the Satversme. [10.]

On the restriction on Article 105

The Constitutional Court recognised that the contested regulation restricted the right to property established in Article 105 of the Satversme as it aimed to ensure that in the case, where a person had been made administratively liable and property had been removed, the costs of storing this property would be covered by the person who had been made administratively liable. Hence, covering the expenditures of storing the property removed in a case of administrative violation causes adverse financial consequences for the person. [11.]

The Constitutional Court recognised that the restriction on the right to property had been established by legal regulation adopted in due procedure and it had a legitimate aim – protection of public welfare. The restriction is appropriate for reaching the legitimate aim, and it cannot be reached by other measures, less restrictive upon a person’s rights and lawful interests. [12.–14.2.]

The Constitutional Court noted that the principle of expedience was important in the administrative liability law. This means that the measures chosen by the institution or the official in charge should be targeted and proportional to the threat for public order and nature thereof in each particular case. Hence, the institution or the official in charge enjoy discretion regarding removing property, placing it in storage and storing it, whereas the administrative court has the jurisdiction to review how correctly the institution has exercised its discretion. [14.3.]

The institution or the official in charge must comply with such principles as proportionality and lawful exercise of discretion. It must assess the intensity and importance of the infringement on rights and should place into storage only such property that is necessary to prevent an infringement of law or which could serve as evidence in investigating an infringement of law; moreover, it should control the proportionality of the storage costs. [14.3.]

Although the legislator has chosen to provide that the procedural costs are calculated in separate proceedings, the costs of storing the removed property are closely linked to the expedience of storing it. The legal consequences for a person that follow from the contested regulation directly depend on the way, in which the institution or the official in charge as well as the institution that stores the removed property, have acted during the period of its storage. In applying the contested regulation, the party applying it, should assess, whether the legal consequences caused to a person due to the length of storing the removed property, are reasonable and proportional to the restriction on a person’s fundamental rights. Hence, the contested regulation, in interconnection with the regulation on the procedure of storing removed property, comprises the obligation to make considerations regarding expedience and to comply with the principle of proportionality. [14.3.]

The institution and the administrative court have the obligation to ensure that in calculating the expenditures of storing property removed in a case of administrative violation and in claiming compensation for them the restrictions on a person’s fundamental rights are proportional. Thus, in applying the contested regulation, the proportionality principle must be complied with. The obligation to comply with the principle of proportionality means that, in each case, the institution and the court must assess the proportionality of costs of storing the property removed in a case of administrative violation, taking into account, inter alia, the sanction applied to a person, the person’s financial situation, actions in the course of proceedings as well as considering, whether it had been necessary to keep the property at the State’s disposal at all. By proper application of the contested regulation, compliance with the proportionality principle in each particular case would be ensured. [14.4.]

In view of the above, the Constitutional Court recognised that the contested regulation complied with the proportionality principle and the first three sentences of Article 105 of the Satversme. [14.4.]

On Article 92:

The Constitutional Court recognised that the contested regulation restricted a person’s right to free access to court since it envisaged the obligation of a person, who had been made administratively liable, to cover the procedural costs, which could increase, depending on the way the case of administrative violation was proceeded with in the court. [15.]

The Constitutional Court recognised that the restriction on the right to a fair trial had been established by regulation adopted in due procedure and had a legitimate aim – protection of other persons’ rights. The restriction is appropriate for reaching the legitimate aim, and it cannot be reached by other measures, less restrictive upon a person’s rights and lawful interests. [16.–18.2.]

The Constitutional Court recognised that, in assessing the proportionality of the restriction on the right to a fair trial, included in the contested regulation, the Constitutional Court’s findings with respect to the compliance of the restriction on the right to property, included in the contested regulation, with the proportionality principle should be taken into account. They are substantial and are applicable also to the assessment of the proportionality of the restriction on the right to a fair trial. Proper application of the contested regulation would ensure compliance with the proportionality principle in each particular case. [18.3.]

In view of the above, the Constitutional Court recognised that the contested regulation complied with the proportionality principle and the first sentence of Article 92 of the Satversme. [18.3.]

The Constitutional Court held:

to recognise the eighth part of Section 257 of the Latvian Administrative Violations Code, in the wording that was in force until 4 July 2018, and Para 74 of the Cabinet Regulation of 7 December 2010 No.1098 “Regulation on Handling of Property and Documents Removed in a Case of Administrative Violation , insofar the obligation was derived from them for a person, who had been made administratively liable, to cover the expenditures of storing the property removed in the case of administrative violation until the moment when the decision of making this person administratively liable became enforceable, as being compatible with Article 105 and Article 92 of the Satversme of the Republic of Latvia.

The judgement by the Constitutional Court is final and not subject to appeal, it shall enter into force on the day it is published. The judgement will be published in the official journal “Latvijas Vēstnesis” within the term set in Section 33 (1) of the Constitutional Court Law.

The text of the judgement in Latvian is available on the homepage of the Constitutional Court:
http://www.satv.tiesa.gov.lv/web/viewer.html?file=http://www.satv.tiesa.gov.lv/wp-content/uploads/2018/03/2018-09-0103_Spriedums.pdf#search=2018-09-0103

Linked case: 2018-09-0103