F.M.Z. Gesellschaft Mbh & Co. Kg F.M.Z. v. Austria



AS TO THE ADMISSIBILITY OF

Application No. 18411/91

by F.M. Z. Gesellschaft mbH & Co. KG

F.M. Z.

against Austria

The European Commission of Human Rights sitting in private on

12 January 1994, the following members being present:

MM. S. TRECHSEL, President

H. DANELIUS

G. JÖRUNDSSON

J.-C. SOYER

H.G. SCHERMERS

Mrs. G.H. THUNE

MM. F. MARTINEZ

L. LOUCAIDES

J.-C. GEUS

M.A. NOWICKI

I. CABRAL BARRETO

J. MUCHA

D. SVÁBY

Mr. K. ROGGE, Secretary to the Chamber

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 10 June 1991 by

F.M. Z. mbH & Co. KG and F.M. Z. against Austria and registered on 24

June 1991 under file No. 18411/91;

Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

Having deliberated;

Decides as follows:

THE FACTS

The facts of the case, as submitted by the applicants, may be

summarised as follows.

The first applicant is a commercial firm at Dornbirn in Austria

established as a limited partnership (Kommanditgesellschaft) under

Austrian law. The second applicant, an Austrian citizen, resides at

Dornbirn and is the owner of the first applicant. Before the

Commission both applicants are represented by Mr. W. L. Weh, a lawyer

practising in Bregenz.

A. Particular circumstances of the case

Since 1985 the first applicant company has operated a food stuff

super market in Wels (Austria), organised principally as a wholesale

market selling to retailers and on 600 square metres of the whole

selling area of 7.200 square metres as a retail market selling to

consumers. In spring 1987 the selling area reserved to retailers was

opened up to consumers.

In July 1987 three associations for the protection of fair

competition, the "VSW-Verein für sauberen Wettbewerb", the "WSV-

Wettbewerbsschutzverband" and the "Schutzverband gegen den unlauteren

Wettbewerb", instituted civil proceedings under Section 1 of the Unfair

Competition Act (Bundesgesetz gegen den unlauteren Wettbewerb) against

the first applicant. The last mentioned association also requested an

interim injunction (einstweilige Verfügung) against the first

applicant.

On 14 August 1987 the Wels Regional Court (Kreisgericht) issued

an interim injunction against the first applicant ordering it to

refrain from granting access to consumers at its premises on a selling

area exceeding 600 square metres while the main proceedings were

pending. The Regional Court held that the first applicant operated a

retail market on premises where this was not allowed. The first

applicant company had a trading licence (Gewerbeschein) issued by the

Mayor of Wels (Bürgermeister) which allowed wholesaling on an unlimited

selling area and retailing on a selling area of a maximum of 600 square

metres. Also the industrial plant permission (Betriebsanlagen-

genehmigung) and the building permit (Baugenehmigung) referred to a

wholesale market. According to the Upper Austrian Regional Planning

Act (Raumplanungsgesetz) retail markets with a selling area of more

than 600 square metres could only be constructed on land marked in the

Area Zoning Plan (Flächenwidmungsplan) as "area for commercial centres"

(Gebiet für Geschäftsbauten). The first applicant company's super

market, however, was situated on land marked in the Area Zoning Plan

as "industrial area" (Betriebsbaugebiet). According to Section 15

para. 1 of the Industrial Code (Gewerbeordnung), a trade must not be

exercised on a location where its exercise is forbidden by law. Thus,

the first applicant did not comply with Section 15 of the Industrial

Code and, by doing so, had gained an advantage contrary to public

policy vis-à-vis law abiding competitors which constituted unfair

competition contrary to Section 1 of the Unfair Competition Act.

On 1 October 1987, the Linz Court of Appeal (Oberlandesgericht)

upon the first applicant's appeal (Rekurs) quashed the decision of

14 August 1987 for procedural reasons. The Court of Appeal held that

in the meantime the plaintiff had amended its claim and no longer

alleged that the first applicant operated a wholesale market also

opened to consumers but that it now exclusively operated a retail

market. Therefore, the interim injunction requested by the plaintiff

no longer corresponded to its claim in the main proceedings.

On 23 February 1988 the Supreme Court (Oberster Gerichtshof),

upon the third plaintiff's appeal, quashed the Court of Appeal's

decision and granted the interim injunction. The Supreme Court found

that the plaintiff only had supplemented its pleadings but not amended

its claim. The Supreme Court furthermore confirmed the findings of the

Regional Court.

In the meantime, the Mayor (Bürgermeister) of Wels acting as

industrial authority (Gewerbebehörde) and the Wels City Council

(Stadtsenat) acting as building authority (Baubehörde), had conducted

administrative and criminal proceedings against the second applicant

as the person responsible for the first applicant company as regards

the Wels Super market.

In particular, on 19 October 1987 the Mayor of Wels issued a

penal order (Straferkenntnis), by which the second applicant was fined

for retailing to consumers although the industrial plant permission

only allowed it to operate a wholesale market. On 28 March 1988 the

Upper Austrian Regional Governor (Landeshauptmann) quashed this penal

order and found that the industrial plant permission did not contain

any such express condition and as an industrial plant permission was

independent from a trading licence it was irrelevant whether the

trading licence contained such a restriction.

On 12 August 1988 the Mayor of Wels accepted the notification

under the Industrial Code of the "familia" Handelsgesellschaft AG,

another company of the Zumtobel group, that it intended to operate on

the whole selling area of the Wels super market a retail market. The

Mayor found inter alia that the provisions of the Regional Planning Act

only concerned the regional and local planning authorities but did not

regulate the behaviour of citizens. Therefore, it did not contain any

prohibition against retailing on the premises of the Wels super market,

which the Mayor could take into account under Section 15 para. 1 of the

Industrial Code.

On 10 February 1989, in the unfair competition proceedings, the

Wels Regional Court found against the first applicant in the main

proceedings. It held that from the first applicant's trading licence,

issued by the Major of Wels on 25 July 1985, it appeared that the

company was not allowed to do retailing on a selling area larger than

600 square metres. The Regional Court further found that the Regional

Governor's decision of 28 March 1988, to which the first applicant had

referred, had no bearing on the present proceedings as the Regional

Governor, in his decision, had not examined whether there had been a

violation of the provisions of the Regional Planning Act and of Section

15 para. 1 of the Industrial Code. The Regional Court concluded that

the first applicant operated in Wels a retail market in a location

where, according to the Area Zoning Plan, only a wholesale market was

allowed, and hereby contravened Section 15 para. 1 of the Industrial

Code. The disregard of the relevant provisions of the Regional

Planning Act was imputable to the first applicant ("der Beklagten

subjektiv vorzuwerfen") and thus constituted unfair competition

contrary to Section 1 of the Unfair Competition Act.

On 14 January 1990 the Linz Court of Appeal dismissed the first

applicant's appeal. The Court of Appeal, having regard to various

decisions of the Supreme Court including the decision of

23 February 1988 in the interim injunction proceedings, confirmed the

findings of the Regional Court.

On 4 April 1990 the first applicant introduced a further appeal

with the Supreme Court. It also challenged the Supreme Court's

Chamber, which had decided on the interim injunction, for bias. The

first applicant submitted that the Court of Appeal was biased as it

found itself bound by the Supreme Court's decision in the interim

injunction proceedings. It further referred to the Wels Municipal

Authority's decision of 12 August 1988 and submitted that the Courts

had wrongly interpreted the provisions of the Regional Planning Act and

the Industrial Code.

On 12 July 1990 the Supreme Court rejected the challenge for

bias. It found in particular that the mere fact that members of the

Court had already decided on an interim injunction was not sufficient

to raise doubts as to their impartiality.

On 23 October 1990 the Supreme Court, in another composition than

in the interim proceedings, rejected the first applicant's appeal. The

Supreme Court found no indication in the judgment of the Court of

Appeal that the latter regarded itself bound by the Supreme Court's

decision on the interim injunction; it had only followed the legal

opinion of the Supreme Court as expressed in this decision. The

Supreme Court, referring to its case-law, held further that in deciding

whether the exercise of a trade was prohibited on a given location by

Section 15 para. 1 of the Industrial Code, also the Regional Planning

Acts had to be taken into account; the decision of the Mayor of Wels

of 12 August 1988 had no bearing on the present proceedings as it did

not concern the first applicant.

B. Relevant domestic law

Section 1 of the Unfair Competition Act (Bundesgesetz gegen den

unlauteren Wettbewerb) reads as follows:

"Any person who in the course of business commits, for purposes

of competition, acts contrary to honest practices, may be

enjoined from further engaging in those acts and held liable for

damages."

Section 15 para. 1 of the Industrial Code (Gewerbeordnung) reads

as follows:

"A trade or business must not be conducted

1 in a location where the exercise of this activity, at the time

of the notification of the trade or the decision on the request

for a licence, is prohibited by provisions of law, ..."

COMPLAINTS

1 The applicants complain under Article 6 para. 1 of the Convention

about the unfairness of the proceedings in that, in the interim

injunction proceedings, the Supreme Court decided without a public

hearing in the presence of the parties, and without taking evidence and

in that the Linz Court of Appeal considered in the main proceedings

that, for reasons of uniformity of law, it was bound by the Supreme

Court's decision in the interim injunction proceedings. Moreover, the

judges of the Court of Appeal, deciding on the first applicant's appeal

in the main proceedings, had already decided on the interim injunction.

2 The applicants further complain under Article 6 para. 2 of the

Convention about a violation of the principle of presumption of

innocence. They submit that in the proceedings regarding unfair

competition the Austrian courts found that a violation of provisions

of administrative law was imputable to the first applicant, and thus

made a statement on its guilt, although it was up to the administrative

authorities to make such a determination in administrative criminal

proceedings. Criminal responsibility was therefore determined by a

court which had no such jurisdiction.

THE LAW

1 The applicants complain that the unfair competition proceedings

were unfair and the Austrian courts biased. They rely on Article 6

para. 1 (Art. 6-1) of the Convention.

Article 6 para. 1 (Art. 6-1) of the Convention, insofar as

relevant, provides that "in the determination of his civil rights and

obligations ..., everyone is entitled to a fair and public hearing

within a reasonable time by an independent and impartial tribunal

established by law".

a. As regards the applicants' complaints about the interim

injunction proceedings, the Commission finds that in these proceedings,

the first applicant's rights and obligations were not determined, but

only an interim decision taken pending the main proceedings. The

interim injunction proceedings therefore fall outside the scope of

Article 6 para. 1 (Art. 6-1) of the Convention (cf., mutatis mutandis,

No. 7990/77, Dec. 11.5.81, D.R. 24 pp. 57, 61 and No. 17200/91, Dec.

2.12.91, unpublished). The applicants' complaint is accordingly

incompatible ratione materiae with the provisions of the Convention and

must be rejected under Article 27 para. 2 (Art. 27-2) of the

Convention.

b. With regard to the applicants' complaints about the main

proceedings, the Commission finds no indication that the first

applicant, represented by counsel, could not properly argue its case,

or that the proceedings were otherwise unfairly conducted.

In particular, the Commission does not find it arbitrary that the

courts, in the main proceedings, did not deviate from the legal

approach previously taken by the Supreme Court (see No. 17200/91, Dec.

2.12.91, unpublished).

As regards the complaint that the judges of the Court of Appeal

were biased, the Commission, even assuming that the applicants had

exhausted domestic remedies in this respect, finds that the mere fact

that the judges of the Court of Appeal deciding upon the merits of the

action, had already been involved in the interim injunction

proceedings, is not in itself sufficient to give rise to legitimate

doubts as to their impartiality (cf. mutatis mutandis, Eur. Court H.R.,

Gillow judgment of 24 November 1986, Series A no. 109, p. 28, para.

73).

It follows that the applicants' complaints under Article 6

para. 1 (Art. 6-1) of the Convention concerning the main proceedings

are manifestly ill-founded within the meaning of Article 27 para. 2

(Art. 27-2) of the Convention.

2 Under Article 6 para. 2 (Art. 6-2) of the Convention the

applicants complain about a violation of the principle of presumption

of innocence. They submit that in the proceedings regarding unfair

competition the Austrian courts found that a violation of provisions

of administrative law was imputable to the first applicant company, and

thus made a statement on its guilt, although it was up to the

administrative authorities to make such a determination in

administrative criminal proceedings.

The Commission recalls that despite the wording of Article 6

para. 2 (Art. 6-2), which secures the presumption of innocence to

"everyone charged with a criminal offence", this provision has been

consistently interpreted as also applying to situations where the

person concerned is not or no longer formally charged with a criminal

offence (cf. Eur. Court H.R., Lutz, Englert and Nölkenbockhoff

judgments of 25 August 1987, Series A no. 123, p. 23, para. 56; p. 54,

para. 35; p. 79, para. 35).

The Commission notes that the proceedings before the Austrian

courts were instituted by three associations for the protection of fair

competition as plaintiffs against the first applicant and that the

issue in these proceedings was whether the first applicant had engaged

in commercial practices which were to be considered as unfair

competition within the meaning of Section 1 of the Unfair Competition

Act. The Commission notes further that, in these proceedings, the

Austrian courts considered as a preliminary question whether the first

applicant had disregarded provisions of the Industrial Code and the

Regional Planning Act.

The Commission considers that, in deciding these issues, the

Austrian courts established the civil responsibility of the first

applicant company for its commercial practices. These findings do not

amount to a statement of guilt regarding criminal responsibility in

violation of Article 6 para. 2 (Art. 6-2) of the Convention (see No.

9295/81, X. v. Austria, Dec. 6.10.82, D.R. 30 p. 227).

It follows that this part of the application is also manifestly

ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

For these reasons, the Commission, unanimously

DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the Second Chamber President of the Second Chamber

(K. ROGGE) (S. TRECHSEL)