European Court of Human Rights

 

 

 

FOURTH SECTION

 

 

 

 

 

 

CASE OF M.Z. v. HUNGARY

 

(Application no. 42597/13)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JUDGMENT

 

 

STRASBOURG

 

18 July 2017

 

 

This judgment is final but it may be subject to editorial revision.




In the case of M.Z. v. Hungary,

The European Court of Human Rights (Fourth Section), sitting as a Committee composed of:

          Vincent A. De Gaetano, President,
          Georges Ravarani,
          Marko Bošnjak, judges,
and Andrea Tamietti, Deputy Section Registrar,

Having deliberated in private on 27 June 2017,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1.  The case originated in an application (no. 42597/13) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Hungarian national, Mr M. Z. (“the applicant”), on 24 June 2013. The President of the Section acceded to the applicant’s request not to have his name disclosed (Rule 47 § 4 of the Rules of Court).

2.  The applicant was represented by Mr D.A. Karsai, a lawyer practising in Budapest. The Hungarian Government (“the Government”) were represented by Mr Z. Tallódi, Agent, Ministry of Justice.

3.  On 21 September 2016 the applicant’s complaint under Article 1 of Protocol No. 1 to the Convention concerning the imposition of 98% tax on his severance payment was communicated to the Government and the remainder of the application was declared inadmissible pursuant to Rule 54 § 3 of the Rules of Court.

THE FACTS

4.  The applicant was born in 1974 and lives in Vác.

5.  The applicant was employed at a State-owned company from 1 January 2010 until 19 February 2013. Part of his severance payment was taxed at a 98% rate in the amount of 19,349,120 Hungarian forints (HUF) (approximately 64,500 euros (EUR)).

THE LAW

I.   ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

6.  The applicant complained that the imposition of 98% tax on part of his remuneration due on termination of his employment had amounted to a deprivation of property in breach of Article 1 of Protocol No. 1 to the Convention.

The Government did not dispute the applicant’s allegations.

7.  The Court notes that the 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.

8.  The Court observes that virtually identical circumstances gave rise to a violation of Article 1 of Protocol No. 1 in the case of R.Sz. v. Hungary (no. 41838/11, §§ 54-62, 2 July 2013); and is satisfied that there is no reason to hold otherwise in the present application.

It follows that there has been a violation of Article 1 of Protocol No. 1.

II.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

9.  Relying on Article 41 of the Convention, the applicant claimed HUF 19,349,120 (approximately EUR 64,500) in respect of pecuniary and non-pecuniary damages combined.

The Government argued that the applicant’s claim was excessive.

10.  Having regard to the fact that, in the absence of the 98% tax rate, the applicant’s severance would have been in all likelihood subject to the general personal income taxation, the Court awards the applicant EUR 36,600 in respect of pecuniary and non-pecuniary damage combined.

11.  The applicant claimed the reimbursement of costs and expenses incurred before the Court to be awarded in the amount of EUR 1,500.

The Government argued that the applicant’s cost claim was excessive.

12.  Having regard to all materials in the case file, the Court finds it reasonable to award the applicant EUR 500, plus any tax that may be chargeable.

13.  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,

1.  Declares the application admissible;

 

2.  Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;

 

3.  Holds

(a)  that the respondent State is to pay the applicant, within three months, the following amounts, to be converted into Hungarian forints at the rate applicable at the date of settlement:

(i)  EUR 36,600 (thirty-six thousand six hundred euros), plus any tax that may be chargeable, in respect of pecuniary and non-pecuniary damage; and

(ii)  EUR 500 (five hundred 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;

 

4.  Dismisses the remainder of the applicant’s claim for just satisfaction.

Done in English, and notified in writing on 18 July 2017, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Andrea Tamietti                                                            Vincent A. De Gaetano
Deputy Registrar                                                                       President