FIFTH SECTIONCASE OF SHEBALDINA v. UKRAINE(Application no. 75792/11)      JUDGMENT STRASBOURG18 June 2020 This judgment is final but it may be subject to editorial revision.In the case of Shebaldina v. Ukraine,The European Court of Human Rights (Fifth Section), sitting as a Committee composed of: Mārtiņš Mits, President, Ganna Yudkivska, Lәtif Hüseynov, judges,and Anne-Marie Dougin, Acting Deputy Section Registrar,Having regard to:the application 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, Ms Alla Petrivna Shebaldina (“the applicant”), on 1 December 2011;the decision to give notice of the complaints under Article 1 of Protocol No. 1 and Article 13 of the Convention to the Ukrainian Government (“the Government”) and to declare inadmissible the remainder of the application;the parties’ observations;Having deliberated in private on 26 May 2020,Delivers the following judgment, which was adopted on that date:INTRODUCTIONThe present case concerns the applicant’s complaint under Article 1 of Protocol No. 1 regarding the domestic courts’ refusal to award her a social allowance, to which she was entitled under domestic law. The applicant also raised a related complaint under Article 13 of the Convention.THE FACTS1.  The applicant was born in 1959 and lives in Bilgorod-Dnistrovskyy, Odessa Region. The applicant, who had been granted legal aid, was represented by Mr Y. Boychenko, a lawyer practising in Strasbourg, France.2.  The Government were represented by their Agent, Mr I. Lishchyna.3.  The facts of the case, as submitted by the parties, may be summarised as follows.4.  From 1988 until 2006 the applicant was employed as a teacher in a State institution, a specialised child-care centre (“the centre”). Under Article 57 of the 1991 Education Act, as in force at the material time, she was entitled to seniority and recreation allowances. However, between 1997 and 2002 she did not receive those allowances.5.  On 3 December 2007 the applicant lodged a claim with the domestic courts against the centre and the regional department of the State Treasury for the recovery of the arrears in the payment of the allowances (2,244.30 Ukrainian hryvnias (UAH)), an index-linked adjustment (amounting to UAH 4,336.17), compensation for non-pecuniary damage (UAH 10,000), and the recovery of costs and expenses (UAH 1,484).6.  On 28 October 2010 the Bilgorod-Dnistrovskyy Town Court (“the Town Court”) partly allowed the claim, found that the applicant was entitled to the seniority and recreation allowances and that the centre was in arrears in respect of the sum due to her, and ordered it to pay her UAH 2,244.30 in arrears, UAH 4,336.17 (by way of an index-linked adjustment), and UAH 1,400 in legal costs. The court held that since the failure on the part of the centre to pay to the applicant the above arrears had been due to a lack of funding from the State budget, the centre was in turn entitled to lodge a claim with the courts for the recovery of the arrears in question from the State budget. The applicant’s claim for compensation for non-pecuniary damage was dismissed.7.  On 29 April 2011 the Odessa Regional Court of Appeal (“the Court of Appeal”) quashed the above judgment and dismissed the applicant’s claim. It found that (i) from 1988 until 2006 the applicant had worked in the centre, which under domestic law had dual status as a healthcare and an educational institution, and (ii) in 1997-2002 she had not received the allowances due to her under Article 57 of the Education Act; the resulting arrears owed to her amounted to UAH 2,244.30.[1] It furthermore held that under the 2004 Act on the Restructuring of Indebtedness under Article 57 of the Education Act (“the 2004 Act”), payments provided for by Article 57 in respect of the relevant period were recognised as a debt to be paid by the State from the State budget. The arrears due to the applicant recovered from the centre by the Town Court had therefore constituted a debt to be paid from the State budget and not by the centre, which had not received the relevant funds from the budget. As regards the regional department of the State Treasury, the court found that it was not a proper defendant, suggesting that its authority did not extend to that of making the above-mentioned payments. Lastly, the court dismissed the part of the applicant’s claim relating to the index-linking of the arrears and the compensation for non-pecuniary damage, stating that such payments were not provided by the 2004 Act.8.  On 21 July 2011 the Higher Specialised Civil and Criminal Court declined to examine the merits of an appeal lodged by the applicant on points of law.relevant legal frameworkDomestic law9.  Article 57 of the 1991 Education Act (repealed on 5 September 2017) provided at the material time for a seniority allowance for teachers, depending on the length of employment, as well as a recreation allowance.Domestic case-law10.  The applicant provided copies of decisions delivered by the Court of Appeal dated 12 February 2004 and 22 February 2011, by which it had upheld judgments given by the Town Court allowing the claims of two employees of the centre against it for the recovery of seniority and recreation allowance arrears due to them under Article 57 of the Education Act for periods between 1997 and 2003. The Court of Appeal held that the Education Act did not provide that the payment of the allowances under Article 57 was conditional on the availability of the relevant funds in the State budget and ordered the centre to make the payments to the claimants.THE LAWALLEGED VIOLATION OF ARTICLE 1 of protocol no. 111.  The applicant complained under Article 1 of Protocol No. 1 that the courts’ refusal to award her the above-mentioned arrears in the seniority and recreation allowances had amounted to a breach of her property rights. The above provision 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.”The parties’ submissions12.  The Government submitted that, even if the Court of Appeal had agreed with the Town Court as regards the part relating to the awarding the claimed allowance arrears to the applicant, she would still have been awarded UAH 2,244.30 (amounting to, according to the Government, EUR 204). In their view, that amount was beyond the threshold of “significant disadvantage” within the meaning of Article 35 of the Convention. They furthermore submitted that the applicant had lodged her application on 1 February 2012 – that is to say more than six months from the date of the final domestic decision. Lastly, the Government argued that domestic legislation (as interpreted and applied by the courts in the present case) showed that the applicant, as a pedagogical employee of a healthcare institution, had not been entitled to the claimed allowances, because that right had only been provided for in respect of pedagogical employees of educational institutions. The domestic legislation had not therefore contained any provisions that could lead to the conclusion that the applicant had had a right to receive – or at least a legitimate expectation of receiving – the claimed allowances.13.  The applicant emphasised that the unpaid allowances had constituted 30% of her monthly salary, which had not therefore constituted a negligible amount for her – especially given the economic situation in the country during the period from 1997 until 2002. Furthermore, she submitted that the Government had not specified the date on which the amount of unpaid allowances had been equivalent to EUR 204. However, in 2002 (the end of the period during which the amount was not paid) UAH 2,244.30 had amounted to EUR 450. The applicant furthermore noted that she had lodged the application on 1 December 2011 by sending a letter setting out the subject matter of her future application, as envisaged by the Rules of Court at the material time. She had therefore complied with the six-month rule. Lastly, she submitted that she had had the “possession” under Article 1 of Protocol No. 1, as her right to the allowances in question had been provided by domestic law. Moreover, both the Town Court and the Court of Appeal had confirmed that the State had guaranteed the payment of the above allowances and that the fact that it had not been paid amounted to an unpaid debt on the part of the State. The only reason for the Court of Appeal to reject her claim had been a lack of budgetary funds. However, the State could not refer to that lack of funds as an excuse for not honouring its obligations.The Court’s assessmentAdmissibility14.  As to the Government’s objection that the applicant had not suffered a significant disadvantage, given that the amount that she could have claimed had amounted to UAH 2,244.30 (the equivalent of EUR 204), the Court notes that the question of whether the applicant had suffered a “significant disadvantage” can be determined with reference to criteria such as the financial impact of the matter in dispute or the importance of the case for the applicant (see Korolev v. Russia (dec.), no. 25551/05, ECHR 2010). The Court does not find any indication in the case file that the amount that the applicant sought to recover, which represented 30% of her monthly salary, was insignificant for her. Nor did the Government claim otherwise. Moreover, as noted by the applicant, the equivalent of the above amount in euros would have been much higher in 2002, had she received the allowance arrears on time (see paragraph 13 above). Indeed, the Court considers that the applicant cannot be blamed for the fact that after a lengthy period, during which the authorities failed to pay her the arrears that they owed, the exchange rate between the euro and the Ukrainian hryvnia has significantly changed and the relevant equivalent in euros has become much lower. Accordingly, this objection is dismissed.15.  As regards the Government’s submission regarding the applicant’s alleged failure to comply with the six-month rule, the Court notes that the applicant sent her first letter to it on 1 December 2011 (that is to say within six months from the date of the final domestic decision) and the fully completed application form on 1 February 2012 (within the time-limit set by the Court for the applicant in reply to her first letter, pursuant to the rules in force at the material time). Accordingly, the Court considers that the applicant submitted her application on time and in compliance with Article 35 § 1 of the Convention and dismisses the Government’s objection in that respect.16.  Lastly, as regards the Government’s submission that the applicant, as a pedagogical employee of a healthcare institution, was not entitled under domestic law to receive the claimed allowances (as allegedly interpreted by the domestic courts in the present case), the Court notes that the court decisions adopted in the applicant’s case do not support that submission. On the contrary, the Court of Appeal acknowledged the State’s debt towards the applicant, in the amount claimed by her. Moreover, it stated that under domestic law the centre had the dual status of both a healthcare and an educational institution (see paragraph 7 above). That meant that the applicant was to be considered as an employee of an educational institution entitled to the seniority and recreation allowances. Lastly, the Court notes that it was never alleged by any of the domestic authorities that the applicant did not satisfy any of the stipulated conditions for receiving the allowances in question, that her status did not entitle her to those allowances, or that any legal conditions had changed in such a way that she failed to satisfy any of those conditions (see, mutatis mutandis, Fedulov v. Russia, no. 53068/08, § 71, 8 October 2019). Accordingly, it dismisses the Government’s submission and concludes that the applicant had been entitled under domestic law to receive the allowances in question. Article 1 of Protocol No. 1 is therefore applicable.17.  The Court concludes that the applicant’s complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention; nor is it inadmissible on any other grounds. It must therefore be declared admissible.Merits18.  As the Court has found above, the applicant, as a pedagogical employee of a State educational institution, was entitled under domestic law to receive the claimed allowances (see paragraph 16 above). However, the Court of Appeal dismissed her claim for the recovery of the arrears owed to her by the State on the grounds that the debt in question was payable from the State budget and not by the centre, which had not received the relevant funds from the State budget (see paragraph 7 above). The Court considers that the above-mentioned refusal by the Court of Appeal to award the applicant the arrears in the seniority and recreation allowances owed to her by the State – despite its acknowledgement of her entitlement to those allowances and of the relevant arrears owed to her – constituted an interference with her right under Article 1 of Protocol No. 1. It remains to be ascertained whether that interference was justified.19.  In this connection 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 should be lawful. When speaking of “law”, Article 1 of Protocol No. 1 requires the measure complained of to be based on adequately accessible and sufficiently precise domestic legal provisions. Moreover, the rule of law, one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention. Thus, the issue of whether a fair balance has been struck between the demands of the general interest of the community and the requirements regarding the protection of the individual’s fundamental rights becomes relevant only once it has been established that the interference in question satisfied the requirement of lawfulness and was not arbitrary (see, for instance, Fedulov, cited above, § 75; and the authorities cited therein).20.  As stated above, while not calling into doubt the applicant’s entitlement under domestic law to receive the seniority and recreation allowances, the Court of Appeal justified its refusal to award them to her by stating that neither the State educational institution (which had been her employer but which had not received the relevant transfer of funds from the State budget) nor the regional department of the State Treasury had been liable to pay her the arrears owed to her by the State. At the same time, it did not rely on any legal provision that would have made the award of the allowances in question conditional on any budgetary transfers and that provided for any discretion on the part of the authorities to refuse that allowance in the event that the budgetary transfers were not made, or on any similar provision that could have formed a legal basis for such a decision (see, mutatis mutandis, Fedulov, cited above, § 76). Nor did it indicate any other legal avenue through which the applicant could recover the allowances to which she was entitled and which was acknowledged as being owed to her by the State. It is also noteworthy that in other decisions that it delivered, the Court of Appeal agreed with the Town Court to allow similar claims lodged by other employees against the centre and to order that it was for the latter to pay them the allowance arrears in question (see paragraph 10 above).21.  The Court furthermore reiterates that it is within the State’s discretion to determine what benefits are to be paid to its employees out of the State budget. However, once a legal provision is in force which provides for the payment of certain benefits, that provision 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 Béláné Nagy v. Hungary [GC], no. 53080/13, § 82, 13 December 2016), and the authorities cannot deliberately refuse their payment while that provision remains in force (see Kechko v. Ukraine, no. 63134/00, § 23, 8 November 2005, and Suk v. Ukraine, no. 10972/05, § 23, 10 March 2011).22.  The Court thus considers that, given the circumstances, the appellate court’s refusal – further upheld by the cassation court – to award the allowances claimed by the applicant (even while acknowledging the State’s debt towards her in that regard), was impossible to foresee and is ultimately difficult to reconcile with the rule of law. It further reiterates that neither the complexity of the State budgetary system, nor a lack of funds or other resources can relieve the State of its relevant obligations under the Convention. It is for the Contracting States to organise their legal systems in such a way that the relevant authorities can meet their obligations in this regard (see, mutatis mutandis, Burdov v. Russia (no. 2), no. 33509/04, § 70, ECHR 2009).23.  In view of the above, the Court concludes that the domestic courts’ ultimate refusal to award the seniority and recreation allowances to the applicant – essentially owing to a lack of budgetary funds – appeared to be arbitrary and not based on law (see, mutatis mutandis, the above-cited cases of Suk, § 24, and Fedulov, § 80). This conclusion makes it unnecessary for it to ascertain whether a fair balance has been struck between the demands of the general interest of the community on the one hand, and the requirements of the protection of the individual’s fundamental rights on the other (see, among other authorities, Grudić v. Serbia, no. 31925/08, § 81, 17 April 2012).24.  There has accordingly been a breach of Article 1 of Protocol No. 1.ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION25.  The applicant also complained of a violation of Article 13 of the Convention, stating that no effective remedy was available in her case.26.  The Government contested that argument.27.  Having regard to its findings relating to Article 1 of Protocol No. 1 (see paragraphs 18-24 above), the Court considers that it has examined the main legal question raised in the present application and that it is not necessary to examine whether, in this case, there has also been a violation of Article 13 of the Convention (see, for example, Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).APPLICATION OF ARTICLE 41 OF THE CONVENTION28.  Article 41 of the Convention provides:“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”Damage29.  In respect of pecuniary damage, the applicant claimed 1,647 euros (EUR), this amount including EUR 450 in the allowance arrears (the equivalent of 2,244.30 hryvnias (UAH) in 2002) and EUR 1,197 in inflation losses (the equivalent of UAH 13,821.02 which, according to her, was calculated on the basis of the average UAH to EUR exchange rate between 2002 and 2018). In respect of the latter amount, the applicant submitted a calculation covering the period between 2002 and 2018. She also claimed EUR 5,000 in respect of non-pecuniary damage.30.  The Government submitted that the above claims should be rejected, as the complaint under Article 1 of Protocol No. 1 was inadmissible.31.  The Court has found a violation of Article 1 of Protocol No. 1 on account of the domestic courts’ refusal to award the applicant the allowance arrears (the applicant’s right to which they nevertheless acknowledged). Thus, in its judgment of 29 April 2011 the Court of Appeal acknowledged the arrears in the amount of UAH 2,244.30 (see paragraph 7 above), which was the equivalent of EUR 188 at the time of adoption of that judgment. The Court therefore accepts that there is a causal link between this amount and the violation found and awards it to the applicant. As to the claimed inflation losses, the Court notes that the calculation submitted by the applicant includes the period starting from 2002, even though the debt owed to the applicant was acknowledged – albeit not awarded – only on 29 April 2011. Nevertheless, it is clear that the applicant must have incurred some inflation losses in the period between 2011 and 2018. Therefore, the Court considers it reasonable to award her a lump sum of EUR 500 in this respect. Lastly, the Court awards the applicant EUR 900 in respect of non-pecuniary damage, plus any tax that may be chargeable (see, mutatis mutandis, Sukhanov and Ilchenko v. Ukraine, nos. 68385/10 and 71378/10, § 65, 26 June 2014).Costs and expenses32.  The applicant claimed EUR 257 (the equivalent of UAH 2,567.11 at the material time) for the reimbursement of costs and expenses incurred by her in the domestic proceedings and those before the Court. In particular, she claimed the reimbursement of the legal fees incurred during the domestic proceedings (submitting a confirmation of work undertaken in the amount of UAH 1,400 and two payment receipts) and the reimbursement of her postal and travel expenses and court fees (submitting relevant receipts).33.  The Government contested the claim for legal fees, stating that the applicant had not provided a contract for legal assistance, the applicable hourly rates and a description of the scope of work performed by the lawyer in question; they accordingly invited the Court to reject the claim. As to the claim for reimbursement of other costs and expenses, they left the issue to the Court’s discretion.34.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these were actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession, which it considers sufficient to support the applicant’s claims, and the above criteria, the Court allows the claim for costs and expenses in full, plus any tax that may be chargeable.Default interest35.  The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.FOR THESE REASONS, THE COURT, UNANIMOUSLY,Declares the complaint under Article 1 of Protocol No. 1 to the Convention admissible;Holds that there has been a violation of the above provision;Holds that there is no need to examine the complaint under Article 13 of the Convention;Holds(a)  that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:(i)  EUR 688 (six hundred and eighty-eight euros), plus any tax that may be chargeable, in respect of pecuniary damage;(ii)  EUR 900 (nine hundred euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;(iii)  EUR 257 (two hundred and fifty-seven euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period, plus three percentage points;Dismisses the remainder of the applicant’s claim for just satisfaction.Done in English, and notified in writing on 18 June 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Anne-Marie Dougin Mārtiņš MitsActing Deputy Registrar President[1] 188 euros (EUR) at the material time