FOURTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 33898/96
by Kullervo LEINONEN
against Finland
The European Court of Human Rights (Fourth Section), sitting on 7 June 2001 as a Chamber composed of
MrG. Ress, President,
MrA. Pastor Ridruejo,
MrL. Caflisch,
MrJ. Makarczyk,
MrI. Cabral Barreto,
MrsN. Vajić,
MrM. Pellonpää, judges,
and Mr V. Berger, Section Registrar,
Having regard to the above application introduced with the European Commission of Human Rights on 21 September 1996 and registered on 18 November 1996,
Having regard to Article 5 § 2 of Protocol No. 11 to the Convention, by which the competence to examine the application was transferred to the Court,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
The applicant is a Finnish national, born in 1921 and living in Helsinki. He is represented before the Court by Mr Markku Fredman, a lawyer practising in Helsinki. The respondent Government are represented by Mr Holger Rotkirch, Director General for Legal Affairs, and Mr Arto Kosonen, Director, both of the Ministry for Foreign Affairs.
The circumstances of the case, as submitted by the parties, may be summarised as follows.
On 11 February 1985 the State Treasury (valtiokonttori, statskontoret) of the Ministry of Finance awarded the applicant a full state pension based on his public service. The pension amount would be reviewed annually by the Ministry of Social Welfare and Health with reference to an index based on the national salary and price level. Such index adjustments took place up to and including 1992.
On 25 February 1986 the applicant was awarded, as from 1 April 1986, a national old-age pension with a supplementary award for his war-time service.
In 1992 and 1993 Parliament exceptionally amended the legislation on the index-based protection of pension benefits (Acts nos. 1343/1992 and 1074/1993). With these amendments the index figure to be used for 1993 and 1994 was 1688, as opposed to the respective figures fixed by ministerial order (1714 and 1736).
On 30 July 1993 the State Treasury refused the applicant's demand that the amount of his state pension be adjusted with reference to the index fixed by the Ministry for 1993. Reference was made to the exceptional legislation enacted in 1992. According to the notice of appeal attached to the decision, it could be challenged before the State Pension Board (valtion eläkelautakunta, statens pensionsnämnd). The applicant's appeal was refused on 9 March 1994. The State Pension Board considered that the notice of appeal had been incorrect but nonetheless examined the merits of the appeal, finding that the State Treasury had correctly applied the exceptional legislation in force. On the applicant's further appeal the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen), on 4 June 1996, quashed and nullified the decision of the State Pension Board to which the applicant had incorrectly been advised to appeal. The Supreme Administrative Court nevertheless found that the State Treasury had had to refuse the applicant's demand on the grounds stated in its decision and with reference to the legal provisions invoked therein. The Supreme Administrative Court was furthermore of the view that the decision in question could not be considered to violate provisions of the Convention. The applicant was later informed by the legal secretary on his case that, in 1994, an opinion on his appeal had been obtained from the State Pension Board.
On 18 April 1994 the State Treasury, relying on the exceptional legislation enacted in 1993, refused the applicant's demand that the amount of his state pension be based on the index figure fixed by the Ministry for 1994. On 4 June 1996 his appeal was refused by the Supreme Administrative Court essentially for the same reasons as those stated in its decision of the same date with regard to the requested index adjustment for 1993. The applicant was later informed that, in 1994, an opinion on his appeal had been obtained from the State Treasury.
In the beginning of 1994 the applicant requested the Helsinki Taxation Board (verotuksen oikaisulautakunta, skatterättelsenämnden) to review the imposition on him of a national social insurance fee for 1992. He argued that no such fee had been provided by the 1986 decision to grant him old-age pension. The imposition of the fee was upheld on 14 April 1994. The applicant's appeal was refused by the County Administrative Court (lääninoikeus, länsrätten) of Uusimaa on 27 July 1995 with reference to Act no. 1697/1991 which had temporarily amended the National Pension Act (kansaneläkelaki, folkpensionslagen 347/1956) by no longer excluding pensioners from the imposition of a national insurance fee. The applicant sought leave to appeal to the Supreme Administrative Court, arguing, inter alia, that his annual fee was higher than his old-age pension. The imposition of the fee, taken together with the exceptional legislation blocking index-based increases in his state pension, was effectively depriving him of yet further property to which he had a legitimate claim. Having granted leave to appeal, the Supreme Administrative Court, on 28 October 1996, refused the appeal, considering that the 1986 pension decision had been silent as to the conditions for imposing a national social insurance fee on a pensioner who had reached the age of 63. Act no. 1697/1991, which provided for such imposition, had been enacted on 30 December 1991 and had been applied during 1992. Its wording had not been ambiguous and its application could not be affected by the constitutional provisions protecting private property and prohibiting discrimination. Nor did Article 1 of Protocol No. 1 to the Convention have any impact on the collection of a fee with the character of a tax.
On 17 January 1996 the Helsinki Taxation Board refused the applicant's demand that the national social insurance fee imposed on him for 1993 be lifted as being unconstitutional. On 19 June 1997 his appeal was refused by the County Administrative Court with reference to Act no. 1660/1992, which had prolonged the temporary amendment to the National Pension Act (Act no. 1697/1991), and on the grounds of principle relied on by the Supreme Administrative Court in its decision of 28 October 1996 concerning the imposition of the insurance fee for 1992. On 26 November 1997 the Supreme Administrative Court refused the applicant leave to appeal.
In 1995 the National Pension Act was amended to the effect that, in 1997, the national pension (e.g., the old-age pension) was to be replaced by a pension calculated with reference to new criteria. Those whose total income in the form of other pensions and various compensations exceeded certain ceilings would no longer be entitled to a national pension. In such a case the so-called basic amount (pohja-osa, basdel) of their national pension would be reduced by 20 per cent annually between 1996 and 2001 (Act no. 1491/1995).
On 24 May 1996 the Social Insurance Institution (kansaneläkelaitos, folkpensionsanstalten) refused the applicant's demand that he should continue receiving the basic amount of his old-age pension as adjusted in accordance with the relevant index figure to be applied according to the provisions in force when the pension was granted. On 28 November 1996 the Appellate Board for Social Insurance (tarkastuslautakunta, prövningsnämnden) dismissed his appeal with reference to Act 1491/1995. The decision further referred to an opinion obtained from the Social Insurance Institution. This opinion was not communicated to the applicant for possible comments. No further appeal lay open.
COMPLAINTS
1.The applicant complains that his pensions were retroactively reduced despite the binding 1985 and 1986 decisions according to which the value of the pensions would be protected by index-related increases. The deprivation of the applicant's property further discriminated against him as a pensioner. He invokes Articles 1 of Protocol No. 1 both separately and in conjunction with Articles 14 and 17 of the Convention.
2.The applicant further complains that the various proceedings were unfair in that the courts failed to provide adequate reasons for their refusals of his appeals. In particular, in the two sets of proceedings ending on 4 June 1996 the Supreme Administrative Court, being simply “of the view” that the State Treasury's decisions did not violate the Convention, failed to take a reasoned stand on the applicant's argument that the exceptional legislation was in violation of the Constitution and fundamental legal principles and should not therefore be applied. In those sets of proceedings the Supreme Administrative Court, moreover, obtained opinions from the State Pension Board and the State Treasury without affording the applicant the opportunity to comment thereon.
Finally, in the proceedings ending on 28 November 1996 the document sent by the Social Insurance Institution, and purported to be a decision, was merely a copy of a letter which it had previously sent to him. Although accompanied by a notice of appeal, this copy was not a proper decision in response to his arguments. The Appellate Board failed to hear the applicant in respect of the opinion obtained from the Social Insurance Institution. The Appellate Board also failed to provide adequate reasons for its decision. The applicant further questions whether the dispute in question in these proceedings was at all examined by a “tribunal” within the meaning of Article 6 § 1 of the Convention. He also invokes Article 13.
3.The applicant finally complains that the proceedings were unreasonably lengthy. In particular, those ending on 4 June 1996 and concerning the refused index adjustment for 1993 were unreasonably delayed by the incorrect notice of appeal provided by the State Treasury. The applicant again invokes Article 6 of the Convention.
THE LAW
1.The applicant has first complained that his pensions were retroactively reduced despite the binding 1985 and 1986 decisions according to which the value of the pensions would be protected by index-related increases. This deprivation of his property further discriminated against him as a pensioner. He invokes Articles 1 of Protocol No. 1 both separately and in conjunction with Articles 14 and 17 of the Convention.
Article 1 of Protocol No. 1 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.”
Article 14 of the Convention reads as follows:
“The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
Article 17 of the Convention reads as follows:
“Nothing in this Convention may be interpreted as implying for any State, group or person any right to engage in any activity or perform any act aimed at the destruction of any of the rights and freedoms set forth herein or at their limitation to a greater extent than is provided for in the Convention.”
The Government submit that the complaint is manifestly ill-founded. While leaving it to the Court's discretion whether the applicant's pension from the State constituted a possession within the meaning of Article 1 of Protocol No. 1, the Government argue that any interference with those possessions was justified under the second sentence of the first paragraph. This provision cannot be interpreted as entitling someone to a pension of a particular amount, unless it be substantially reduced so as to affect the very substance of the right to property. As any other pension, the applicant's State pension is dependent on the general salary level and may be raised or reduced every year. During the period in question his pension was effectively reduced by merely 1-2 per cent on an annual basis. The freezing of the index adjustments aimed at maintaining the relation between the subsistence provided by pensions and the relative diminution in the income of the working population during the deep recession in 1993-94. In sum, there was a strong public interest to interfere with the fixed index. The means employed to that end were based on law and proportionate to the aim sought to be achieved. The adjustments had no retroactive effect and the applicant was not made to bear an individual and excessive burden.
The right to a national pension, or to a certain amount of such a pension, is not dependent on whether the pensioner has paid a national social insurance fee. In these circumstances the national pension cannot be considered a pension earned by the pensioner himself, but a public benefit. The applicant's national pension cannot therefore be regarded as his “possession” for the purposes of Article 1 of Protocol No. 1. Even assuming the contrary, any interference with this property right of the applicant was based on law and taken in the public interest as an austerity measure required by the exceptionally deep recession at the relevant time. Since the State's tax revenues had decreased in 1992 due to the recession, it was considered necessary that pensioners also participate, on a temporary basis, in the financing of the national pension scheme by paying a national social insurance fee, regardless of whether they were entitled to a national pension. This obligation was based on legislation in force for only one year at a time and enacted in the procedure required for imposing tax legislation. The gradual reduction of the national pension had no retroactive effect and the applicant was not made to bear an individual and excessive burden. In sum, any interference with his property rights emanating from his obligation to pay the social insurance fee was justified under the second paragraph of Article 1 of Protocol No. 1.
According to the Government, the total effect of the index adjustment of the applicant's State pension, the gradual reduction of his national pension and his obligation to pay a national social insurance fee during the years in question was the most significant in 1994, when his net income was reduced by approximately 6.5 per cent. The overall interference with the applicant's property rights nonetheless remained proportionate to the legitimate aim sought to be achieved.
The applicant contends that his State pension was a personal entitlement the amount of which had been laid down in the 1985 pension decision which furthermore tied the pension to an index increment. The 1993 and 1994 laws allowed for a divergence from the index figure approved by the Ministry for those years, as required by the pension decision concerning the applicant. His pension was thus reduced retroactively, which was also in violation of the Constitution Act. Since employment-based pensions are taxable income, the State lost more than it saved by enacting the 1993 and 1994 laws. The purported austerity measure represented a political solution which was not justified by any genuine economic necessity or other genuine public interest. The index adjustment effectively deprived the applicant of a total sum of at least FIM 70,000 (almost EUR 11,800) from 1993 to 2000, which was a significant and unreasonable interference with his property rights. The interference was in part retroactive and will continue to add up during the years to come. It also discriminated against the applicant as a pensioner, since the index differed from that applied to younger persons.
The applicant furthermore contends that his national pension likewise constitutes a “possession” acquired by him by means of having paid a national pension insurance contribution throughout his working life. The decision awarding him this pension is final and binding. According to the law in force at the relevant time, that pension was at all times to include the basic amount, which was FIM 2,676 per year. The gradual phasing out of this pension was retroactive and disproportionate to its purported aim.
The same legislation which formed the basis for the decision concerning the applicant's national pension also stipulated that no insurance contribution should be imposed against an insured person who had reached the age of 63 at the beginning of the income year. The applicant's obligation to pay a national social insurance fee as from 1992 was a retroactive and disproportionate interference with his property rights. For example, during that year his national pension after income tax amounted to FIM 5,423, whereas the national social insurance fee payable by him amounted to FIM 6,814.
The Court notes that the applicant may be considered to have participated in the financing of his pensions. It will therefore assume that he had a property interest eligible for protection under Article 1 of Protocol No. 1. The interference with that right throughout the period in question amounted to a control of the use of those possessions, within the meaning of the second paragraph of Article 1 of Protocol No. 1.
The Court finds, essentially for the reasons invoked by the Government, that the aforementioned interference was justified, being lawful and pursuing, by means proportionate to that aim, the legitimate general interest in attempting to maintain the relation between the subsistence provided by pensions and the diminution in the subsistence deriving from the income of the working population during the 1993-94 recession. In particular, the diminution in the applicant's subsistence cannot be said to have been disproportionate, bearing in mind his overall national and employment-based pension income.
The Court further recalls that while Article 1 of Protocol No. 1 guarantees to the applicant a right to derive benefit from the relevant pension system in his capacity as a contributor, this provision cannot be interpreted as giving him a right to a pension of a particular amount (cf. application no. 10671/83, 4.3.1985, D.R. 42, p. 229).
Assuming that the applicant's further complaint under Article 14 of the Convention were to enter into the ambit of Article 1 of Protocol No. 1, the Court finds that any differential treatment of the applicant if compared with others in a similar situation was objectively and reasonably justified. The Court notes, in particular, that the amendments to the legislation concerning, inter alia, the index-based protection of the applicant's earned pension benefits was only one out of a number of measures implemented by the respondent State with a view to decreasing public spending and increasing public funding and focusing on various population groups (cf., mutatis mutandis, application no. 12947/87, 12.7.1989, D.R. 62, pp. 226, 236).
In the particular circumstances and taking into account the wide margin of appreciation which the Contracting States enjoy in matters of social policy, the Court therefore finds no appearance of any violation of Article 1 of Protocol No. 1 either separately or in conjunction with Article 14 of the Convention. No issue arises under Article 17 of the Convention.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
2.The applicant further complains that the various proceedings were unfair. In the two sets of proceedings ending on 4 June 1996 the Supreme Administrative Court failed to take a reasoned stand on his argument that the exceptional legislation was in violation of the Constitution and fundamental legal principles, and should therefore not be applied. The same court, moreover, obtained opinions from the State Pension Board and the State Treasury without affording the applicant the opportunity to comment thereon.
In the proceedings ending on 28 November 1996 the document sent by the Social Insurance Institution, and purported to be a decision, was merely a copy of a letter which it had previously sent to the applicant. Although accompanied by a notice of appeal, this copy was not a proper decision in response to his arguments. In addition, the Appellate Board failed to hear him in respect of the opinion obtained from the Social Insurance Institution. The Appellate Board also failed to provide adequate reasons for its decision. The applicant finally questions whether the dispute in question in these proceedings was at all examined by a “tribunal” within the meaning of Article 6 § 1 of the Convention. He also invokes Article 13 of the Convention.
Article 6 § 1 reads in its relevant part as follows:
“In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing within a reasonable time by an independent and impartial tribunal established by law. ...”
Article 13 reads as follows:
“Everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
In the Government's opinion the complaint is largely manifestly ill-founded. The Government admit that the reasons stated by the Supreme Administrative Court and the Appellate Board in the different sets of proceedings were rather narrow in scope. They did, however, suffice to address the essential issues submitted to their jurisdiction. As one of the challenged decisions concerned index-based pension adjustments of a technical and numerical nature, it was somewhat difficult for the Supreme Administrative Court to provide a more detailed reasoning than the one given in its decision of 4 June 1996.
As for the Supreme Administrative Court's failure to communicate the two opinions obtained ex officio prior to its decision of 4 June 1996, it is the Government's contention that neither of those documents contained a reasoned opinion on the merits of the appeal. The non-communication did not adversely affect the applicant's capability of challenging the decision he had appealed against and any comments on his part on the opinions in question would not have affected the outcome of the case.
The Government advance the same argument with respect to the non-communication of one opinion in the proceedings before the Appellate Board for Social Insurance which ended on 28 November 1996. Moreover, being a lawyer himself, the applicant could be expected to understand from the clear notice of appeal that the Social Insurance Institution would forward its own opinion on his appeal. Once that opinion had arrived to the Appellate Board the applicant could have acquainted himself with it. In the Government's opinion the Appellate Board was a “tribunal” within the meaning of Article 6 § 1 of the Convention.
Finally, the Government recall that the Supreme Administrative Court's refusal of leave to appeal in the proceedings ending on 26 November 1997 did not involve a “determination” of a “civil right” or “obligation” of the applicant. In this respect the complaint is incompatible ratione materiae with the provisions of the Convention.
The applicant contends that it should have been for himself to assess whether the opinions obtained ex officio required his reaction. Moreover, since the Social Insurance Institution's decision had not been properly reasoned, it was difficult for him to appeal against it. Whether a court procedure is fair must not be left to depend on whether the appellant is legally trained. The Social Insurance Institution and the Appellate Board for Social Insurance failed in their obligation actively to enable the applicant to participate properly in the proceedings ending on 28 November 1996.
In the applicant's opinion the competence of the Appellate Board for Social Insurance was not clearly described at the relevant time. Although established to decide on sickness insurance matters, it had also been designated as an appellate body acting under the National Pension Act.
The Court has first ascertained whether there was a dispute over a "right" within the meaning of Article 6 § 1 which can be said, at least on arguable grounds, to be recognised under domestic law. The dispute must be genuine and serious; it may relate not only to the actual existence of a right but also to its scope and the manner of its exercise, and the result of the proceedings must be directly decisive for the right in question. Finally, the right must be of a "civil" character (see, e.g., the Zander v. Sweden judgment of 25 November 1993, Series A no. 279-B, p. 38, § 22).
Article 6 § 1 of the Convention is not aimed at creating new substantive rights without a legal basis in the Contracting State, but at providing procedural protection of rights already recognised in domestic law (see, e.g., W. v. the United Kingdom judgment of 8 July 1987, Series A no. 121-A, p. 32-33, § 73). The term "right" must nevertheless be given an autonomous interpretation under Article 6 § 1 of the Convention (see, e.g., König v. Germany judgment of 28 June 1986, Series A no. 27, pp. 29-30, §§ 88-89).
The Court notes that the 1985 decision awarding the applicant a state pension stipulated that its amount would be reviewed annually with reference to a national index. Such adjustments indeed took place up to and including 1992. The 1986 decision awarding the applicant a national old-age pension contained no such clause and would indeed seem to have conferred on him an individual and economic “right” to receive pension in a certain amount. This right was thus of a "civil" nature. Once Acts nos. 1343/1992 and 1074/1993 entered into force, however, the applicant could no longer arguably claim a "right" to collect pension adjusted in accordance with that index.
Finally, in so far as the applicant had to pay a national social insurance fee, the Court notes that this obligation was based on unequivocal provisions of Acts nos. 1697/1991 and 1660/1992. Accordingly, no serious dispute could arise in respect of this obligation (cf., mutatis mutandis, the Torgny Gustafsson v. Sweden judgment of 25 April 1996, Reports of Judgments and Decisions 1996-II, pp. 658-659, §§ 61-66).
In sum, Article 6 § 1 of the Convention is not applicable in the present case.
It follows that these aspects of the complaint are incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.
As for the complaint under Article 13 of the Convention, the Court considers that the applicant had no arguable claim of a violation of his rights under the Convention or its Protocols which would have required a remedy within the meaning of that provision.
It follows that this aspect of the complaint is manifestly ill-founded within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.
3.The applicant has finally complained, under Article 6 § 1 of the Convention, that the proceedings were unreasonably lengthy. In particular, those ending on 4 June 1996 and concerning the refused index adjustment for 1993 were unreasonably delayed by the incorrect notice of appeal provided by the State Treasury.
The Court has just found Article 6 § 1 of the Convention inapplicable to the proceedings in question. It follows that the present complaint is likewise incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected in accordance with Article 35 § 4.
For these reasons, the Court unanimously
Declares the application inadmissible.
Vincent BergerGeorg Ress
RegistrarPresident
Full & Egal Universal Law Academy