FIFTH SECTION        CASE OF BUDCHENKO v. UKRAINE (Application no. 38677/06)       JUDGMENT   STRASBOURG 24 April 2014 FINAL 24/07/2014 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Budchenko v. Ukraine,The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of: Mark Villiger, President, Angelika Nußberger, Boštjan M. Zupančič, Ann Power-Forde, Ganna Yudkivska, Helena Jäderblom, Aleš Pejchal, judges,and Claudia Westerdiek, Section Registrar,Having deliberated in private on 1 April 2014,Delivers the following judgment, which was adopted on that date:PROCEDURE1. The case originated in an application (no. 38677/06) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Ukrainian national, Mr Vladimir Vasilyevich Budchenko (“the applicant”), on 11 September 2006.2. The applicant, who had been granted legal aid, was represented by Mr M. Tarakhkalo, a lawyer practising in Kharkiv, Ukraine. The Ukrainian Government (“the Government”) were represented by their Agent, most recently Mr N. Kulchytskyy, of the Ministry of Justice of Ukraine.3. The applicant alleged, in particular, that the courts had failed to grant him an exemption from electricity and gas payments as required by law.4. On 25 August 2011 the application was communicated to the Government.THE FACTSI. THE CIRCUMSTANCES OF THE CASE5. The applicant was born in 1932 and lives in the town of Gorlivka, Ukraine.6. From 1953 to 1966 the applicant worked in a mine.7. In 2001-2002 the applicant asked the Lenin Mine (his former employer) and the State mining enterprise Artemvugillya (the Lenin Mine’s legal successor) to explain to him how section 43 of the Mining Act (“Гірничий закон”) (see “Relevant domestic law” below) was to be implemented, and to pay his electricity and gas costs in accordance with this provision. In reply he was informed that persons who were entitled to receive coal free of charge but were living in houses with central heating had the right to exemption from electricity and gas payments, such costs being borne by the mining companies. However, no appropriate legal mechanisms implementing “the methods of calculation and the sources of financing” had been adopted by the Cabinet of Ministers.8. In 2003 the applicant complained to a prosecutor’s office that his requests to have his electricity and gas payments covered had been ignored. In a letter dated 13 February 2003 from the Tsentralno-Miskyy District Prosecutor’s Office, the applicant was informed that he was entitled to exemption from electricity and gas payments. Since the Lenin Mine had refused to accept his claims owing to the lack of funds and no compensation mechanism was provided for by law, the applicant was advised to lodge his claims with the court.9. In April 2003 the applicant instituted proceedings in the Tsentralno-Miskyy District Court against the State mining enterprise Artemvugillya and local communal heating and gas providers. He claimed that under section 43 of the Mining Act the mine should cover his electricity and gas costs by means of contributions paid into the local budget. He also claimed reimbursement of amounts already paid and asked that the State mining enterprise Artemvugillya settle his heating and gas debts. The applicant also claimed compensation for non-pecuniary damage. He updated his claims in 2004.10. On 7 April 2004 the Tsentralno-Miskyy District Court found against the applicant. The court held that the applicant had worked in a mine for more than ten years and thus was entitled to receive free coal for everyday domestic needs. As he lived in a house with central heating, section 43-8 of the Mining Act should apply in his case. However, no mechanism was in place for the implementation of that provision. In particular, there was no procedure for transferring funds from mining enterprises to the local budget. The court also held that the applicant’s request for reimbursement of the amounts already paid had no basis in law.11. On 29 July 2004 the Donetsk Regional Court of Appeal upheld that decision.12. On 4 April 2006 the Supreme Court rejected an appeal on points of law by the applicant.13. In a decision of 1 December 2006 the Tsentralno-Miskyy District Court ordered the applicant to settle his heating debts, noting that section 43 of the Mining Act did not exempt him from paying for heating services. That decision was upheld on 26 June 2007 by the Donetsk Regional Court of Appeal. On 23 October 2007 the Supreme Court of Ukraine rejected a request by the applicant for leave to appeal on points of law.14. In a letter dated 4 November 2008 the Gorlivka Town Council informed the applicant that at that date no mechanism had been set up to handle the compensatory payments requested by him.15. In letters dated 14 May and 2 July 2009 the Ministry of the Coal Industry of Ukraine informed the applicant that the mechanism for implementing section 43-8 of the Mining Act would be set up pursuant to a corresponding decision by the Cabinet of Ministers of Ukraine.16. In a letter dated 17 August 2009 the Ministry of Labour and Social Policy of Ukraine informed the applicant that on 12 August 2009 the Cabinet of Ministers had adopted the corresponding decision, which was subject to approval by the Ministry of Finance.17. In a letter dated 4 August 2010 the Ministry of Labour and Social Policy informed the applicant that he had no right to any compensation payments as the mine where he had been working in was in liquidation.18. In October 2010 the applicant instituted court proceedings against the Tsentralno-Miskyy Department of Labour and Social Policy of the Gorlivka Town Council requesting recognition of his rights under sections 43-7 and 43-8 of the Mining Act and a declaration that the Department’s inactivity was unlawful.19. On 1 November 2010 the Donetskyy Regional Administrative Court refused to examine the applicant’s claim and informed him that it should be lodged before a court of general jurisdiction. That decision was upheld on 7 December 2010 and on 28 September 2011 by the Donetsk Administrative Court of Appeal and by the Higher Administrative Court respectively.II. RELEVANT DOMESTIC LAWMining Act, 199920. The Mining Act entered into force on 1 December 1999. Parts 7 and 8 of section 43 of the Act that were in force before 2 September 2008 read as follows:Section 43. Rights and social guarantees of employees of mining enterprises“Coal-mining enterprises shall provide free coal for everyday domestic needs in the amount determined by collective agreement for the following categories of persons:pensioners who have worked in coal-mining enterprises for 10 years (men) and 7.5 years (women)...Persons who have the right to receive free coal but live in houses with central heating shall be exempted from paying for electricity and gas, those costs being borne by the coal-mining (processing) enterprises, which shall transfer the funds to cover the costs to the local budget.”21. Pursuant to the “Transitional provisions” Chapter of the Mining Act, the Cabinet of Ministers of Ukraine had to adopt the relevant legal mechanisms with a view to implementing the Act’s provisions within four months of the date of the Act’s entry into force.22. In 2008 section 43-8 was amended as following:“Persons who have a right to receive free coal but live in houses with central heating shall receive compensation for electricity, gas and heating payments by way of contributions paid from the State budget to the local budget.”23. The procedure for granting the above compensation was determined by a decision of the Cabinet of Ministers of Ukraine (no. 887 of 12 August 2009).THE LAWI. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION24. The applicant complained that on 7 April 2004 the Tsentralno-Miskyy District Court had rejected his claim unlawfully. In his application he invoked Article 6 of the Convention.25. The Court, which is master of the characterisation to be given in law to the facts of the case, finds that the above complaint falls to be examined under Article 1 of Protocol No. 1 to the Convention, which reads as follows:“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”A. Admissibility26. The Government did not submit any observations regarding the admissibility of the above complaint.27. The Court notes, in view of the “significant disadvantage” admissibility criterion, that the exact amount of the applicant’s electricity and gas payments he requested reimbursement and exemption of, has been never specified in the national proceedings. Before this Court the applicant submitted only some of his bills for the period between December 1999 and April 2004 equalling 65 euros.28. The Court reiterates that the above criterion hinges on the idea that a violation of a right, however real from a purely legal point of view, should attain a minimum level of severity to warrant consideration by an international court (see Korolev v. Russia (dec.), no. 25551/05, 1 July 2010). The assessment of this minimum level is, in the nature of things, relative and depends on all the circumstances of the case (see Korolev, cited above). The severity of a violation should be assessed taking account of both the applicant’s subjective perceptions and what is objectively at stake in a particular case.29. In the present case the Court considers that, since the applicant had presented only part of his bills, it cannot speculate on the total amount of losses sustained by the applicant as a result of the alleged violation.The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.B. Merits1. The parties’ submissions30. The Government submitted that there had been no court decision by which the applicant’s claims had been satisfied and the applicant therefore had no “legitimate expectations” that might be considered to constitute a “possession” in the sense of Article 1 of Protocol No. 1.31. In his observations in reply, the applicant submitted that, according to the Court’s case-law, the concept of “possessions” was not limited to existing possessions but could also cover assets, including claims, in respect of which could be argued that the applicant had at least a “legitimate expectation” of obtaining effective enjoyment of a property right (see Prince Hans-Adam II of Liechtenstein v. Germany [GC], no. 42527/98, § 83, ECHR 2001‑VIII).32. Taking the above principles into account, the applicant noted that the Tsentralno-Miskyy District Court had, in its decision, acknowledged that, pursuant to the Mining Act, he should be exempted from electricity and gas payments – with such costs being borne by the mine – and had found against him merely because there had been no mechanism for covering those costs. No such mechanism had been adopted for four years, even though the Act itself provided that this should have happened within four months.33. The applicant concluded that his proprietary interest had been recognised under Ukrainian law and was thus subject to the protection of Article 1 of Protocol No. 1.34. The applicant noted that the State had positive obligations under Article 1 of Protocol No. 1 (see Kotov v. Russia [GC], no. 54522/00, §§ 109-113, 3 April 2012). He further asserted that the failure to adopt the necessary legal mechanisms with a view to implementing section 43 of the Mining Act had constituted an interference with his right to peaceful enjoyment of his possessions because his right to be exempt from electricity and gas payments had been breached.35. The applicant thus argued that there had been a violation of Article 1 of Protocol No. 1.2. The Court’s assessment36. The Court reiterates that if a Contracting State has in force legislation providing for the payment as of right of a welfare benefit ‒whether conditional or not on the prior payment of contributions ‒that legislation must be regarded as generating a proprietary interest falling within the ambit of Article 1 of Protocol No. 1 for persons satisfying its requirements (see Stec and Others v. the United Kingdom (dec.), § 54, no. 65731/01 and 65900/01, ECHR 2005-X)).37. In the present case the applicant was employed in the mining industry for approximately thirteen years. The domestic law in force at the material time exempted him from electricity and natural gas payments.38. The Court notes that the fact that the applicant was entitled to such an exemption was confirmed by the national authorities and, in particular, by the national courts (see paragraphs 8 and 10 above). Therefore, the applicant had a recognised pecuniary interest under Article 1 of Protocol No. 1.39. The Court further notes that the applicant’s claim for exemption from payments was, however, rejected since there was no mechanism for implementing the relevant legal provision, and this constitutes an interference with the applicant’s right under Article 1 of Protocol No. 1.40. The Court reiterates that the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions must be lawful. This principle presupposes that the applicable provisions of domestic law are sufficiently accessible, precise and foreseeable in their application (see Beyeler v. Italy [GC], no. 33202/96, §§ 108-109, ECHR 2000‑I).41. The Court also reiterates that it is primarily for the national authorities to interpret and apply domestic law. However, the Court is required to verify whether the way in which the domestic law is interpreted and applied produces consequences that are consistent with the principles of the Convention, as interpreted in the light of the Court’s case-law (see Scordino v. Italy (no. 1) [GC], no. 36813/97, §§ 190-191, ECHR 2006‑V).42. The Court notes that the legal provision in question contains an explicit right to exemption from electricity and gas payments and does not make it contingent on the existence of a compensatory mechanism. It could be argued, however, that – given the Court’s subsidiary role – in the present case it was for the national courts to interpret the domestic law, which they did by establishing that the applicant’s claim could not be granted in the absence of a compensatory mechanism for his employer.43. Assuming that such approach falls within the margin enjoyed by the domestic courts in interpretation of the national law, the Court accepts that in this case the requirement for the existence of a compensatory mechanism could be regarded as pursuing a legitimate aim, such as protection of the applicant’s employer’s property rights (see, mutatis mutandis, Kirovogradoblenergo, PAT v. Ukraine, no. 35088/07, 27 June 2013).44. The Court notes, however, that in the present case the applicant was employed by a State enterprise. The Government did not provide any evidence to show to what extent the above entity had financial independence from the State (see, mutatis mutandis, Mykhaylenky and Others v. Ukraine, nos. 35091/02 and foll., § 44, ECHR 2004‑XII).45. The Court further notes that the relevant provision exempting the applicant from certain payments was adopted in 1999 and according to that legislation the relevant mechanism for reimbursement had to be put in place within four months (see paragraph 21 above). However, it was introduced only ten years later. No arguments were provided to explain this inactivity.46. Given the State’s prolonged failure to act and given that the applicant was employed by a State enterprise, the Court considers that, by failing to secure the exemption from payment to which the applicant was entitled by law within a reasonable delay, the State has put an excessive and disproportionate burden on him, thus falling short of its obligations under Article 1 of Protocol No. 1 (see, Klaus and Iouri Kiladzé v. Georgia, no. 7975/06, § 76, 2 February 2010).47.

Outcome for Article P1-1: violation