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legal matters

Our story on the change of ownership of ATV is a big hit in the justice system

Requests for corrections and lawsuits against a press product are part of the normal media business. At Atlatszo, we do not bore our readers with the details of this, because we can defend the vast majority of disputed reports before the courts and authorities without any particular difficulty. However, for the first time in the ten years of Átlátszó’s existence, the majority of our ongoing press law cases – six different proceedings in total – have been brought against a single article. Therefore, we thought that it would not be uninteresting to report on the status of the litigation between the Faith Congregation (and Sándor Németh) and Átlátszó.

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In May 2020, Átlátszó published an investigative article – after fact-finding work with Magyar Hang – about the phenomenon that while “the average amount of one percent donations to the Faith Congregation is far below that of other churches, the business empire established alongside the Pentecostal-Charismatic New Protestant denomination, recognized as an established church by the Hungarian state, is still prospering spectacularly”.

Wealthy pro-Orbán pastor secretly took over ownership in opposition-leaning TV channel ATV

Despite the flourishing business empire developed by the legally accredited Pentecostal church in the past decades, the amount of funds which Faith Church receives from the 1% tax donations is well behind the average of other religious organizations’ in Hungary.

The article by Csaba Lukács (Magyar Hang) and Tamás Bodoky (Átlátszó) also revealed the process by which Sándor Németh gained decisive influence over ATV Zrt. at the end of a series of transactions involving a complex network of companies, with the involvement of an offshore company in Liechtenstein. The majority of the shares of the company, which also operates the ATV television channel, was previously owned by the Faith Congregation.

The cover photo of the article shows Sándor Németh, the leader of the church, being interviewed by his daughter Alexandra Németh (Kauzál). The photo is from the Hit Radio Facebook page. Embedded in the article is a drone video with aerial footage of the Németh family villa and the ATV headquarters.

The report was also published in English by Átlátszó, and the article was also published with similar content in the online and print editions of Magyar Hang.

The Faith Congregation has filed a lawsuit for rectification in relation to all four publications. Sándor Németh and Alexandra Németh (Kauzál) also sued Átlátszó in a fifth action (alleging unlawful use of their images). In addition, a case was also brought before the NAIH (the Hungarian Data Protection Authority) over the drone footage of Sándor Németh’s villa, which we published in the same article. No decision has yet been made on the drone recording, the cases in the previous five proceedings have been largely closed by final judgement, but many of them are still pending before the Curia (the Hungarian Supreme Court).

So far, the panels of two courts have handed down a total of eight judgments in the cases, rejecting seven of the claims, and the last one ordering rectification in one of three requests for rectification.

Many lawsuits = bad lawsuits?

So, six proceedings have been launched on three legal grounds, eight court judgments have been handed down so far, and judging by the determination of the plaintiffs, we may not even be halfway there yet. The intense litigation by several plaintiffs on several pleas against articles with largely identical content, which so far seems largely unsuccessful, brings to mind the SLAPP phenomenon.

The acronym, derived from the term Strategic Lawsuit Against Public Participation, refers to the phenomenon of strategic litigation against civilians participating in public issues. It is a mass legal attack against the press or a civil society organization by one of the actors involved (for example, the subject of a fact-finding report), using all possible legal means, even launching proceedings that it does not see any realistic chance of success.

This type of strategic litigation is not about winning the case. The desired effect can be achieved by overloading the press with lawsuits and by forcing it to allocate huge amount of its resources for the legal defence. Lawyers of the Atlatszo have so far had to invest at least 50 man-hours in this one case alone.

The real aim is to silence, exhaust the target and to force it to self-censorship with typically finite reserves. Several jurisdictions have already introduced regulations to discourage bad faith strategic litigation. And more than 60 NGOs and journalists’ associations working for transparency in public life have called for effective action by the European Union.

Of course, a very important consideration for any regulation is that bona fide judicial redress, genuinely aimed at redressing the grievance, should not be hindered by these reforms.

The lawsuits for rectification

In the lawsuits for rectification, the Faith Congregation contested three claims: first, that the “congregational property had become private property”, second, that the articles contained the untrue allegation that “the Faith Congregation Church received billions of forints in state subsidies that became private property”.

Thirdly, the civil action states that the reports misrepresented the fact that the church had received State aid for public education and public service over the past ten years, to the effect that the church had not used it for its intended purpose but to create private property. Since none of the seven court judgments that have examined this issue so far have found the latter appearance to be apparent from the article, we will focus on the two specific statements that are challenged.

One interesting feature of the cases is that the courts had to deal with essentially identical contents in parallel proceedings. The following is an overview of the position taken by each court on each of the claims.

a) Allegations concerning the private ownership of State aid

One of the issues in the lawsuits is whether the assertion in the articles that the church’s property became private property and that it was financed by state aid is untrue or not.

In the lawsuit against the Magyar Hang’s online article, the court of first instance dismissed the action brought by the Faith Congregation. The reasoning of the judgement points out that “the article does not contain a statement of fact that the state support granted to the plaintiff church “became private property”, i.e. it served to directly or indirectly acquire property of Sándor Németh, or provided the cover for it”. In addition, the court added that the part of the article highlighted by the church bringing the action “is not only an assumption in its wording, but also in its content, i.e. an expression of opinion, which cannot be subject to rectification”.

Nothing was misrepresented in the article either. In this context, the judge proceeding in the case emphasised that “[the] allegation or assumption made in the article is not even a statement of fact in its content, and the entire content of the article does not contain any statement of fact as to the source of the payment of the consideration for the share by Sándor Németh”, stressing that the report also provided the Faith Congregation with an opportunity to react, which it faithfully reported. The Church appealed, but the Court of Appeal of the Metropolitan Court of Appeal upheld the first instance decision.

In the case against the print version of Magyar Hang, another judge of the Fővárosi Törvényszék (Metropolitan Court of Budapest) ruled at first instance, also finding that the article “did not allege that the plaintiff received billions of forints in state aid that turned into private property, nor that the state aid was not used for the purpose for which it was received”.

The judgment dismissing the action brought by the Faith Congregation points out that the ‘article in question highlights the problem that the management of churches in Hungary is largely hidden from the public. Donations, bush money and state subsidies are not known to the general public. The tracking of donations and bush money is impossible”.

The Court of Appeal agreed with the dismissal of the action and the reasoning of the General Court and dismissed the appeal of the Church.

The article in Atlatszo, in relation to the assets of the Congregation of the Faith, stated that “[h]ow this money will become private property is a public matter”. A third judge of the Court of First Instance also found the church’s action to be unfounded in this matter. The Court of Appeal agreed with the Metropolitan Court in its assessment of the sentences concerned.

With regard to the English version of the article – the rectification of which is procedurally separate from the main articles and is still at first instance stage – the General Court found that its content was identical to the English version.

b) “The church property has become private property”

The Church of Faith lost both the first and second instance in a lawsuit challenging this sentence in the Magyar Hang online article. According to the judgement of the Metropolitan Court, it is clear from the article that by congregational property the article referred to the ATV television. The ‘change that occurred as a result of the series of transactions involving several companies described in the article […] both directly and indirectly […] increases Sándor Németh’s ‘share’ of ownership in ATV’, and at the same time reduces the ‘share’ of ownership of the Faith Congregation.

The Church appealed against the judgment. The court of second instance stressed that “the focus of the writing is on the development of Sándor Németh’s financial situation” and that the personal presence of the “leader and emblematic representative of the Faith Congregation in the economic company that owns the television” is “an event of public interest”. And when reporting on such an event, the press’s ‘primary responsibility is essentially to inform the public properly’.

According to the summary of the panel of the Court of Appeal, there is no room for correction of the contested sentence, since the Faith Congregation “cannot dispose of its own assets without Sándor Németh as a shareholder, whereas Sándor Németh can do so without the [Faith Congregation].”

In a lawsuit against the print version of the Magyar Hang article, the same panel of the Metropolitan Court of Appeal also ruled that the action was unfounded. According to the judgment of the first instance, the sentence contested by the Congregation of the Faith is “a conclusion drawn from the facts” and the article “contains a detailed reasoning as to which facts establish the basis of the [statement] made in the article”.

The final judgment of the Metropolitan Court of Appeal – as well as the reasoning of the online article – agreed with the decision of the Metropolitan Court on the merits and emphasized that the disputed sentence is a mixed statement of fact with value judgments, in relation to which rectification of facts may not be ordered.

In the action brought against the English-language article in Átlátszó, the Metropolitan Court dismissed the action brought by the Faith Congregation at first instance, holding that the sentence in question was not unlawful.

The case against the Hungarian-language article in Átlátszó was also lost by the Faith Congregation at first instance. The judge of first instance ruled that the sentence in question “has the meaning that the property of the plaintiff church has been transformed into private property, i.e. specifically, Sándor Németh’s property has increased and that of the plaintiff church has decreased”. The judgment states that “the article deals in detail with the question of how Sándor Németh could have financed this, and also presents a video recording of the transactions in which the person concerned himself makes a statement. So the article’s claim that the church’s assets have become private property is true, and there is no room for correction of facts.”

However, the panel of the Metropolitan Court of Appeal in this case – which is not the same as the panel that ruled on behalf of the same court in the case of the Magyar Hang articles – took a position contrary to the uniform judicial practice which until then had appeared to be unanimous, that although “Sándor Németh’s share [in the Liechstein offshoring company] had obviously increased with the purchase of his shares, this does not mean that at the same time […] the assets of the plaintiff church had decreased, the church’s assets had become private property”.

According to this panel the expressions of „came under the influence and became private property do not have identical meaning, taking influence or control is not the same as acquisiton of property, and obtaining majority influence is not equivalent to enrichment at expense of the church”.

Thus, even the second-instance judgement establishes the Sándor Németh unquestionably obtained decisive influence over the ATV which previously was true for the Faith Congregation.

At the same time, the Metropolitan Court of Appeal held that the decisive aspect in this respect is that the increased influence did not result in the decrease of the property of the Church. However, in the opinion of the Court, the meaning of the article is that Sándor Németh was enriched “at the expense” of the church.

The Átlátszó has challenged this interpretation contrary to all other court judgments before the Curia in a review procedure

In our opinion, the disputed content, based on the entire article detailing the company history and company structure, has the meaning that ATV Zrt, which was previously under the indirect majority influence of the Faith Church, has now come under the indirect majority influence of Sándor Németh.

However, this turn of the article certainly does not imply the content attributed to it by the final (partial) judgment that Sándor Németh’s property has increased “at the expense” or “to the detriment” of the applicant’s property. The article itself, which describes the series of transactions in detail, stressed that the acquisition of influence was effected by means of a capital increase. The essence of this process is that the amount of the former owner’s share capital is not reduced, but his ownership share in the company, i.e. his voting rights, i.e. his influence on the decisions that the company can take, is reduced.

This is the process described in this article. While in February 2013 the Congregation of Faith had a majority stake in ATV Zrt., the series of operations including the capital increase has resulted in Sándor Németh having a majority stake.

Portrait of Sándor Németh and his daughter

The leading pastor of the Faith Congregation, Sándor Németh and his daughter, Alexandra Németh (Kauzál) sent a notice to the editorial staff of Átlátszó, claiming unlawful data processing, and after refusing to delete the picture, they filed a lawsuit claiming infringement of the right to their image. They argued that they had not consented to the publication of the image of them by Átlátszó, without which the publication was unlawful.

The Metropolitan Court held that although the image depicted public figures in an interview situation (published by them on the Facebook page of Radio Hit), this means that the publication without their consent was lawful only in the case of an article reporting on that particular appearance. In his judgment, the presiding judge – the fourth judge in our court to deal with the article – agreed with the secondary defense of the Átlátszó and pointed out that in other cases the test of the European Court of Human Rights in von Hannover v. Germany (No. 2) should be applied. Relevant in this context:

a.) the contribution of the publication of the image to the debate on public affairs,

b.) the prominence of the persons depicted,

c.) their past conduct in relation to the media,

d.) the overall content, form and impact of the article, and

e) the circumstances in which the picture was taken.

Applying this test, the General Court found that the use of the image was lawful and dismissed the applicants’ action in its entirety.

The applicants have appealed to the Court of Appeal and the appeal is still pending.

Data protection procedure

In addition, Sándor Németh has also brought an administrative procedure before the National Authority for Data Protection and Freedom of Information because of the publication of a drone image of his villa in the article in question. The issue in the proceedings is whether we acted lawfully in processing personal data or, in other words, whether we violated Sándor Németh’s right to the protection of personal data by showing his luxury villa with a drone footage.

Az ATV Zrt. épületei és a Németh család villája Budapesten – drónfelvételek from atlatszo.hu on Vimeo.

No decision has been taken here yet. In response to the NAIH’s request, we explained that the property in question was presented as the villa of the Németh family, without any indication of the property’s address or any further written or verbal commentary that would allow us to identify the exact location of the property.

Apart from the existence of ownership, no other conclusions can be drawn from the recordings regarding the identity of Sándor Németh or his family members other than that they live in a very beautiful and certainly very valuable property.

This, however, is essential information closely related to the public affairs covered by the illustrated article, since it is certain, for example, that Sándor Németh did not have to spend all his money to buy ATV, the only public television station in the country with a national coverage and no declared government party orientation. Indeed, the size of Sándor Németh’s personal fortune became a clear factor in the public debate by acquiring a majority stake in the media company, as the article itself reports.

And why do we think we had a right to do so without the consent of Sándor Németh? We believe that we have the right to do so for having legitimate interest under the EU rule governing the processing of personal data under Article 6 (1) (f), i.e. the GDPR. The legitimate interest for processing the personal data, in essence, is the legitimate interest of the general public and its members for a free and informed discussion of public affairs, as well as the legitimate interest of Átlátszó as press publisher and media service provider to freedom of expression protected freedom of press and expression of opinion.

The NAIH’s position can be learned from its decision yet to be delivered. In any case, in a much similar case, in connection with the drone footage of the villa of Gyula Balásy, this argument was accepted by the authority. That decision was challenged by Gyula Balásy at the Metropolitan Court, but his action was dismissed by a final decision of the court.

Written by Gergely Gönczi, Balázs Tóth and Tibor Sepsi, the original Hungarian language article is available here. English translation by János Konrád.

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