F.R. v. SWITZERLAND

THE FACTS

The applicant, a Swiss citizen born in 1941, is a businessman residing in Gersau in Switzerland.

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicant's son founded the R.AG, a construction company, whereby the applicant acted as guarantor (Bürge) for a credit. He also assisted his son in various administrative tasks concerning the company.

In 1994, the R.AG company went bankrupt. The Compensation Office (Ausgleichskasse) of the Canton of Schwyz suffered losses in particular as to contributions of the company to the old age insurance scheme. The Compensation Office regarded the applicant as being the administrative and commercial manager of the company and therefore liable for the sum of 13,925.05 Swiss Francs (CHF).

The applicant objected, whereupon on 28 January 1995 and 3 January 1996 the Compensation Office introduced a compensation action against the applicant.

The action was upheld on 11 December 1996 by the Administrative Court (Verwaltungsgericht) of the Canton of Schwyz.

In its decision, the Administrative Court referred, inter alia, to the statement of a certain R.H., a former member of the board of the company, according to which the applicant had granted the company an advance payment. The Court then examined whether the applicant had in fact had the position of an executive (Organ) of the company and whether in this respect it was necessary to hear the witnesses Ch.R and R.H. The decision referred, inter alia, to two letters of the applicant to the Compensation Office, i.e., of 24 December 1993 in which he stated that the company no longer had any assets, and of 27 July 1994 in which he had signed "as a representative". As a result, the Court concluded that the applicant had in fact had the position of an executive of the company, for which reason further evidence need not be taken.

On 31 January 1997 the applicant filed an administrative law appeal (Verwaltungsgerichtsbeschwerde) with the Federal Insurance Court (Eidgenössisches Versicherungsgericht), contesting the action, and requesting the hearing of various witnesses, inter alia, Ch.R., H.R., and the March District Court where he had introduced proceedings against a certain R.H.

The applicant's appeal was transmitted for observations (Vernehmlassung) to the Administrative Court of the Canton of Schwyz, the Compensation Office of the Canton of Schwyz, and the Federal Social Insurance Office (Bundesamt für Sozialversicherung).

On 28 February 1997, the Administrative Court of the Canton of Schwyz submitted its observations on the applicant's administrative law appeal to the Federal Insurance Court, the statement numbering five pages. The Administrative Court proposed in particular the dismissal of the applicant's administrative law appeal.

In its statement the Administrative Court commenced with a "preliminary remark" according to which the applicant had not, in the administrative proceedings, referred to the separate procedure before another court concerning a certain R.H. As a result, the Court had not regarded it necessary to consult that case-file, and it could not be said that the Administrative Court had not sufficiently examined the facts. The Administrative Court further stated that the applicant had implicitly admitted that he was an executive of the R. AG company when filing the letters of 24 December 1993 and 27 July 1994.

According to the submissions of the Administrative Court, it further transpired from separate execution proceedings that various foreign currency deals had been transacted by the applicant's family over the R.AG, leading to returns of 65,989.40 CHF. However, the R.AG was concerned with constructions, not with foreign currency deals. It could not be said that the applicant had not been in a position to take decisions with binding legal effect. The Administrative Court also considered it unnecessary to hear the witnesses Ch.R. and R.H. Thus, in its decision it had considered that the two witnesses were quarrelling with each other, and the applicant had now not shown in what respect the hearing of these witnesses would be useful.

The Compensation Office submitted a similar statement, whereas the Federal Social Insurance Office did not file any submissions.

On 2 May 1997 the Federal Insurance Court transmitted the statement of the Administrative Court of the Canton of Schwyz to the applicant for information, expressing its regret that it had by mistake not done so earlier on.

On 15 May 1997 the applicant submitted a statement on the submissions of the Administrative Court of 28 February 1997. On the front page, he stated:

"the observations contain three important new points which were not contained in the decision of the Administrative Court. I could not therefore make any observations thereupon in my administrative law appeal of 31 January 1997. As a result, it must be possible for me now to make such observations which I am herewith submitting."

The applicant then pointed out that the Administrative Court had stated that he had never mentioned a further set of proceedings against a certain R.H. This was a new point. He had only found out about R.H. in the decision of the Administrative Court itself, for which reason he could not have commented thereupon in the proceedings before the Administrative Court. The applicant also complained that the Administrative Court had made new submissions when stating that in view of his letters of 24 December 1993 and 27 July 1994 he had effectively accepted having the position of an executive of the R.AG company.

Finally, the applicant complained that the Administrative Court's submissions were also new to the extent that reference was made to foreign currency deals. This information came from the separate proceedings before another District Court, the March District Court, and not from him. To the extent that the Administrative Court concluded on the basis of this information that the applicant had, in fact, had the position of an executive, he should have been permitted to comment on this point.

The Federal Insurance Court dismissed the applicant's administrative law appeal on 10 June 1997.

The decision first recalled the procedure before the Federal Insurance Court, noting in particular that the applicant had submitted further observations on 15 May 1997 without being requested to do so (unaufgefordert). The court then noted that according to Section 110 § 4 of the Federal Judiciary Act (Organisationsgesetz; see below, Relevant domestic law and practice), observations were only exchanged a second time between the parties in exceptional cases. The decision continued:

"(Such a second exchange of observations) will be required for reasons of a fair hearing if in the observations new factual statements have been made, the correctness of which does not immediately transpire from the case-file and which are of relevance for the decision. As regards new legal arguments it must be borne in mind that the Federal Insurance Court is called upon ex officio to apply the correct law. The mere fact that these observations refer to supporting arguments in addition to those mentioned in the contested decision cannot justify the possibility to reply thereto. It would be different, if the Federal Insurance Court were of the opinion that the contested decision could be upheld, not with the reasons originally given, but with other reasons, now mentioned in the observations ...

In the light of these principles the applicant's request along these lines, namely to have a second exchange of observations, appears unfounded. It is irrelevant in this respect that the observations of the Administrative Court were only submitted belatedly (nachträglich). Thus, in those observations no new factual or legal points were raised: Rather, the circumstances mentioned by the applicant (statement of R.H. about advances paid to the capital of the company; profits from currency deals) disclose that they were already known in the case-file stemming from the proceedings of the Gersau and Lachen execution authorities and thus clearly transpired from the file. Therefore, the applicant could, and ought to, have prepared everything necessary in order to avoid a second exchange of observations ... Furthermore, the new point of the previous court which he has mentioned, regarding his executive position, merely concerns an additional argument which further supports the grounds mentioned in the contested decision. This does not warrant the possibility of a further reply. As a result, the applicant's observations, submitted without being so requested, cannot be legally considered ..."

Insofar as the applicant complained that certain witnesses had not been heard, the Federal Insurance Court considered, inter alia, that the Administrative Court had pertinently mentioned the circumstances under which a company executive became liable for the company's debts. In respect of the witnesses Ch.R. and H.R., the hearing of which had been requested by the applicant, the Court referred to the observations of the Administrative Court of 28 February 1997.

According to Section 128 of the Federal Judiciary Act (Organisationsgesetz), the Federal Insurance Court is called upon to examine administrative law complaints (Verwaltungsgerichtsbeschwerde) against cantonal decisions in last resort concerning matters of social insurance. In principle, the court is free to establish the facts. However, according to Section 105 § 2 of the Act, it considers itself bound by the facts if the lower instance which determined them was a court to the extent that the determination is not manifestly incorrect, incomplete or in breach of essential procedural rules. As a result, there is only a limited possibility to put forward new facts in the proceedings before the Federal Insurance Court (see Arrêts du Tribunal Fédéral [ATF] 120 V 485). A party may in principle only submit new facts before the Federal Insurance Court which it could, and should, have raised before the lower court (ATF 121 II 99).

In the administrative law proceedings before the Federal Insurance Court there is, in principle, only one exchange of statements in which the other parties and instances concerned may file their observations on the administrative law appeal (Section 110 § 4 of the Federal Judiciary Act). According to the practice of the Federal Insurance Court, a second exchange of statements will take place if new facts transpire in the observations the correctness of which cannot be established in the case-file and which observations appear pertinent for the final decision. If new legal considerations are raised for the first time in these observations, a second exchange of statements will take place if the contested decision can no longer be based on the reasons given by the lower court (see ATF 119 V 323; 114 Ia 314; 111 Ia 3; 94 I 662).

COMPLAINTS

The applicant raises various complaints under Article 6 § 1 of the Convention.

1. He submits that he was not properly heard. Thus, during the entire proceedings he pointed out that he had no executive position in the R. AG company.

2. He further complains that certain witnesses, in particular Ch.R. and R.H., were not heard.

3. The applicant also complains of a breach of the equality of arms. He points out that the Administrative Court, in its observations of 28 February 1997, mentioned three new points. The Federal Insurance Court did not consider his statement of 15 May 1997 and in its judgment implicitly relied on the observations of the Administrative Court.