Guarantee of 495,000 euros! Disproportionate amount of guarantee without sufficient justification. Violation of article 5 § 3 of the ECHR
JUDGMENT
Istomina v. Ukraine 13.01.2022 (app. no. 23312/15)
SUMMARY
Warranty. Too disproportionate amount of guarantee. Insufficient reason for imposing a precautionary measure.
The applicant was prosecuted for tax evasion, participation in a fictitious enterprise and forgery of documents through fictitious companies which she founded and managed. As head of this group of companies, the applicant falsified the financial documents and instructed the accountants of the above companies to draw up the necessary reference documents. The investigator considered that the applicant had thought and organized this financial crime, which had caused damage of 12,250,479 UAH (Ukrainian national currency).
The District Court decided to set a guarantee for the applicant as a precautionary measure. It also found that there were risks to the applicant avoiding investigation and trial, obstructing the disclosure of the truth, influencing witnesses or continuing to be involved in criminal activities. The bail was set at 12,249,426 UAH (approximately EUR 495,000), which was 125 times the amount of the bail that could be set for the type of offense for which the applicant was charged. The court then decided to replace the precautionary measure of the guarantee with that of the temporary detention.
In both cases, the applicant complained that those measures were disproportionate and that her financial and family situation had not been taken into account by the court. Relying on Article 5 (right to personal liberty and security) of the ECHR, the applicant complained that the grounds and justification for her detention were insufficient and the guarantee was excessive.
The ECtHR found that the national courts had not complied with their obligation to provide relevant and sufficient reasons for their bail decisions, as required by Article 5 § 3 of the ECHR.
The Court found a violation of Article 5 § 3 of the ECHR and awarded EUR 1,000 for non-pecuniary damage and EUR 1,000 for costs.
PROVISION
Article 5
PRINCIPAL FACTS
In February and March 2015 criminal proceedings were initiated against the applicant on suspicion of tax evasion, involvement in a sham business and forgery of documents. According to the investigator, the applicant created and managed a number of sham companies with the aim of tax evasion. As the head of the group of sham companies, the applicant forged the financial documents and instructed the accountant officers of the above companies to prepare necessary reporting documentation. The investigator considered that the applicant had been an organiser of those offences, which had caused damage amounting to 12,250,479 Ukrainian hryvnias[1] (UAH). In his submissions the investigator requested that the court set bail in that amount in respect of the applicant who was at liberty at that time.
On 21 March 2015 the Zhovtnevyy District Court of Dnipropetrovsk (“the District Court”) decided to set bail for the applicant as a preventive measure. It also found that there existed risks that the applicant might evade the investigation and trial, hinder the establishment of the truth, influence witnesses or continue engaging in criminal activity. The District Court further considered that since the applicant was accused of a serious offence, the maximum amount of bail that could be set for that type of offence under domestic law could not ensure the applicant’s compliance with procedural obligations. Having regard to the gravity of the charges and the amount of damage allegedly caused in the criminal proceedings, the court set bail at UAH 12,249,426 (about EUR 495,000) which was 125 times higher than the amount of bail that could be set for the type of offence the applicant was accused of.
On 25 March 2015 the applicant asked the District Court to change the preventive measure from bail to house arrest, arguing that the amount of bail was excessive and disproportionate to her income over the previous two years. On 6 April 2015 the District Court rejected the applicant’s request as unfounded.
The applicant appealed, arguing that the amount of bail had been excessive. She asked to have the bail reduced to UAH 24,360,[2] which would correspond to the amount of bail permitted by domestic law in respect of a serious offence. On 10 April 2015 the Dnipropetrovsk Regional Court of Appeal (“the Court of Appeal”) rejected the applicant’s appeal and upheld the District Court’s decision.
On 7 April 2015 the District Court found that the applicant had failed to pay bail and had therefore breached the preventive measure ordered on 21 March 2015. Given these circumstances, the risk that she could influence witnesses, in particular subordinates involved in her business activities, and the risks indicated in paragraph 6 above, it decided to place the applicant in pre-trial detention. As an alternative preventive measure, it maintained her bail in the same amount. The applicant was detained on the same day.
The applicant appealed, arguing that there were no reasonable grounds for suspecting her of any crime and that the District Court had not considered her family situation (she had a minor child) and her level of income when determining the amount of bail.
On 17 April 2015 the Court of Appeal dismissed the applicant’s appeal and upheld the District Court’s decision. It noted that the applicant had failed to pay bail, that there was a risk that she could influence witnesses and that she might abscond given the gravity of the charges. It also held that the District Court had lawfully determined the amount of bail. The Court of Appeal observed that there was nothing apparent in her family situation which would call for any reassessment of the preventive measure. At the applicant’s request, it examined her medical file and found no indication of any health reasons precluding her from being held in custody. The Court of Appeal lastly found that there was sufficient material in the criminal case file to substantiate the suspicions against her.
On 15 May 2015 the District Court rejected as unfounded a further request from the applicant to change the preventive measure from pre-trial detention to house arrest.
On 22 May 2015 the Court of Appeal upheld the decision of 15 May 2015. It noted that the amount of bail had been determined properly in view of the amount of damage that the applicant had allegedly caused, the risks justifying the preventive measure, which had neither diminished nor disappeared, the fact that the applicant had been provided with medical assistance in pre-trial detention and the fact that her family or personal situation could not justify changing the preventive measure.
On 3 June 2015 the District Court decided to extend the applicant’s detention until 20 July 2015, maintaining the same amount of bail and the same reasons for her detention as in its previous decisions. On 3 July 2015 that decision was upheld on appeal.
On 17 July 2015 the District Court again extended the applicant’s pre‑trial detention until 15 September 2015 on the grounds that the risks justifying the preventive measure given previously persisted. As an alternative preventive measure, it maintained her bail in the same amount.
On 29 July 2015 the Court of Appeal found that the extension of the applicant’s detention had not been justified. It therefore quashed the decision of 17 July 2015 and placed the applicant under house arrest, ordering her to stay in her home from 7 p.m. to 7 a.m. every day.
On 15 September 2015 the applicant’s house arrest expired and no other preventive measure was applied to her.
THE DECISION OF THE COURT…
Having regard to the material before it and to the parties’ observations as regards the justification given for the applicant’s detention at the earliest stages of the proceedings against her, the Court finds that the main reason for the applicant’s detention was the risk that she could influence witnesses, in particular subordinate people involved in her business activities. In this connection the Court notes that the applicant was accused of forgery of documents and tax evasion with involvement of more than twenty sham and real companies during the period from January 2013 to February 2015. Given the character and scale of the crime imputed to the applicant, it would therefore appear indispensable for the authorities to ensure the availability of documentary evidence in the case and of witnesses’ testimonies given without pressure.
In the light of the foregoing, although the reasons for the detention complained of, which lasted from 7 April to 29 July 2015, might appear to be repetitive and general, the domestic courts reviewed the issue on six occasions, reassessing the arguments provided by the parties to the proceedings. In view of the above, the Court is prepared to accept that the domestic courts gave “relevant” and “sufficient” reasons for the applicant’s measure of restraint.
Nonetheless, the Court will analyse whether the domestic courts sufficiently justified their decisions fixing the amount of bail to meet the requirements of Article 5 § 3 of the Convention.
]It appears that in setting bail, the domestic courts did not make an assessment of the applicant’s wealth or assets at the time. The applicant consistently argued that the amount of bail was excessive and disproportionate to her income and asked the domestic courts to reduce it referring, in particular, to her family situation. However, all her submissions to that effect were rejected by the courts as unsubstantiated without any explanation being given. It appears from the domestic courts’ decisions that the amount of damage allegedly caused by the applicant was the principal reason referred to by the courts in substantiating their decisions setting bail.
The Court observes that the amount of bail set by the District Court was 125 times higher than the maximum amount that could be set for the type of offence the applicant was accused of. It notes in this connection that although the domestic legislation allowed the court to set higher amounts of bail in “exceptional cases” , such a decision shall provide a thorough analysis of the circumstances of the case to justify its “exceptional” character.
In these circumstances, referring to the principles in the case-law outlined above, the Court finds that by focussing on the amount of damage allegedly caused by the applicant, failing to provide a thorough assessment of all relevant factors including her ability to pay the bail set, and absent satisfactory explanation why bail was set at such exceptionally high level, the domestic courts did not comply with their obligation to provide relevant and sufficient justification for their decisions setting bail, as required by Article 5 § 3 of the Convention. There has accordingly been a violation of that provision.
