CASE OF FRENKEL AND OTHERS v. RUSSIA (European Court of Human Rights) Applications nos. 22481/18 and 38903/19

INTRODUCTION. The applications belong to a series of cases concerning a Russia‑specific issue: a possibility by the State to reclaim real property from a bona fide purchaser.

THIRD SECTION
CASE OF FRENKEL AND OTHERS v. RUSSIA
(Applications nos. 22481/18 and 38903/19)
JUDGMENT
STRASBOURG
6 April 2021

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

In the case of Frenkel and Others v. Russia,

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

Darian Pavli, President,
Dmitry Dedov,
Peeter Roosma, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the applications (nos. 22481/18 and 38903/19) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by three Russian nationals, Ms Galina Vasilyevna Frenkel, Ms AnfisaMikhaylovnaLinkova and Ms Anna Vladimirovna Leontyeva (“the applicants”), on the various dates indicated in the appended table;

the decision to give notice to the Russian Government (“the Government”) of the complaints concerning the annulment of the Ms Frenkel’s and Ms Leontyeva’s respective titles to real property and Ms Frenkel’s and Ms Linkova’s eviction and to declare inadmissible the remainder of the applications;

the parties’ observations;

Having deliberated in private on 16 March 2021,

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

INTRODUCTION

1. The applications belong to a series of cases concerning a Russia‑specific issue: a possibility by the State to reclaim real property from a bona fide purchaser.

THE FACTS

2. The applicants are Russian nationals. The first and third applicants bought flats from private parties. It was later established that the original owners of the flats had died intestate with no surviving kin. The authorities considered the flats bona vacantia and successfully reclaimed them from the applicants. The applicants’ titles to the real property in question were annulled. The details pertaining to each application appear in Appendices I and II below.

3. The Government were represented by Mr M. Galperin, Representative of the Russian Federation to the European Court of Human Rights.

4. On 17 October 2018 the President of the Section to which the cases had been allocated decided to give notice of the applications to the Government.

5. On 22 June 2020 the third applicant lodged a complaint under Article 8 of the Convention concerning her eviction.

6. On 7 July 2020 the first applicant informed the Court of the death of her mother, the second applicant.

THE LAW

I. JOINDER OF THE APPLICATIONS

7. Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.

II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION

8. The first and third applicants complained that they had been deprived of their property in violation of Article 1 of Protocol No. 1 to the Convention, which provides, in so far as relevant, 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. Admissibility

9. The Court notes that this complaint is neither manifestly ill-founded nor inadmissible on any other grounds listed in Article 35 of the Convention. It must therefore be declared admissible.

B. Merits

1. Parties’ submissions

10. The first applicant submitted that the annulment of her title to the flat had amounted to an interference with her rights set out in Article 1 of Protocol No. 1 to the Convention and that such interference had not been proportionate to the legitimate aim of securing social housing for underprivileged population, as indicated by the Government. She further pointed out that the all the transactions in respect of the flat had been controlled by state authorities. In particular, the notary and the state registration authorities had approved the transfer of the title to the flat to Z. in the absence of legal proof of her rights. Subsequently, the domestic courts had not explained why the state authorities’ failure to detect the fraud should have been remedied at the first applicant’s expense. The authorities had not done even attempted to investigate the fraud allegedly committed by Z. Nor had they tried to recover any damages caused by her actions to the State. In fact, they had shifted the burden of consequences of Z.’s illegal actions to the first applicant.

11. The third applicant maintained that she had bought the flat in good faith and that she should not have born the consequences of the fraudulent actions committed by unidentified perpetrators. She further submitted that the loss of the property title in the absence of any compensation had been an excessive burden on her.

12. The Government conceded that the recovery of the real property from the first and third applicants by the authorities had amounted to an interference with their possessions within the meaning of Article 1 of Protocol No. 1 to the Convention. However, they considered that such interference had been in accordance with law, had pursued a legitimate aim and had been necessary in a democratic society. After the death of the lawful owners of the flats, the real property had become bona vacantia and the State (municipality) had been its lawful owner which had lost its possessions as a result of fraud committed by third parties. The State had recovered the property from the first and third applicants in order to redistribute as social housing for the underprivileged. Lastly, the Government argued that it remained open to the applicants to recover damage, if any, from the persons who had sold the flats to them. They also submitted that the first applicant could not claim to have bought the flat in good faith. The frequency with which the flat had changed hands prior to her purchase should have been a red flag for her.

2. The Court’s assessment

(a) General principles

13. The general principles concerning protection of property are well established in the Court’s case-law (see Gladysheva v. Russia, no. 7097/10, 6 December 2011, §§ 64-68).

(b) Application of these principles to the present case

14. The Court has, on a number of previous occasions, examined cases in which the Russian State or municipal authorities have been successful in recognising the flats as bona vacantia and reclaiming them from bona fide owners once it had been established that one of the prior transactions in respect of such property had been fraudulent (see, among other authorities, Gladysheva, cited above, §§ 77-83; Stolyarovav. Russia, no. 15711/13, §§ 47-51, 29 January 2015; Andrey Medvedevv. Russia, no. 75737/13, §§ 42-47, 13 September 2016; Kirillova v. Russia, no. 50775/13, §§ 33-40, 13 September 2016; and Anna Popovav. Russia, no. 59391/12, §§ 33-39, 4 October 2016). Having examined the specific conditions and procedures under which the State had alienated its assets to private individuals, the Court noted that they were within the State’s exclusive competence and held that the defects in those procedures resulting in the loss by the State of its real property should not have been remedied at the expense of bona fide owners. The Court further reasoned that such restitution of property to the State or municipality, in the absence of any compensation paid to the bona fide owner, imposed an individual and excessive burden on the latter and failed to strike a fair balance between the demands of the public interest on the one hand and the applicants’ right to the peaceful enjoyment of their possessions on the other.

15. Turning to the circumstances of the present case, the Court sees no reason to hold otherwise. The Court notes that the flats, which should have been considered bona vacantia following their owners’ death, were forfeited by the City (town) authorities as a result of the fraud committed by third parties. The Court also notes that there were safeguards in place to ensure that the flats changed hands in accordance with the domestic law. The lawfulness of the transaction and title in respect of each flat were subject to control by the State registration authorities. The Government, however, did not proffer any explanation as to why those safeguards had not been effective in detecting the fraud and protecting the City (town) administration’s interests. In particular, the Government did not elaborate as to why the State registration authorities had failed to detect the fraud in respect of the flat purchased by the first applicant, had accepted the forged judgment as authentic and had approved the transactions concerning the flat. Nor did they justify why, in the third applicant’s case, while being aware of the death of the owner of the flat, the authorities condoned the sale of his flat carried out on his behalf after his death. In such circumstances, the Court cannot but conclude that it was a faulty registration procedure that led to the City (town) administration’s loss of the titles to the flats.

16. Lastly, the Court accepts that, as suggested by the Government, it was open to the first applicant to mitigate her losses by bringing an action for damages against the seller of the flat. However, the Court is not convinced that the Government have demonstrated that such an action would have had any prospect of success. In this respect, the Court notes that the City administration chose not to sue any of the sellers of the flat, including, in particular, Z., who had fraudulently acquired the flat, to recover its own losses. In any event, the Court reiterates that any compensation the applicant might receive from such an action could only be relevant for the evaluation of her losses, for the purposes of Article 41 of the Convention if a violation were found.

17. The Court also rejects the Government’s argument that the first applicant was responsible for her situation, because she had failed to act diligently when buying the flat. In the Court’s view, the frequency of the transactions with the flat referred to by domestic courts and the Government is not sufficient to justify such assertion in the circumstances when the validity of the transactions with the flat and their frequency were verified and endorsed by the State registration authorities.

18. Regard being had to the above, the Court considers that it was not for the first and third applicants to assume the risk of the titles to the flats being revoked on account of the said omissions on the part of the authorities in procedures specially designed to prevent fraud in real-property transactions. The Court reiterates that the consequences of any mistake made by a State authority must be borne by the State and errors must not be remedied at the expense of the individuals concerned (see Stolyarova, cited above, § 49). The Court therefore concludes that the forfeiture of the title to the flats by the applicants and the transfer of the ownership of the flats to the City (Town) authorities, in the circumstances of the case, placed a disproportionate and excessive burden on them. There has therefore been a violation of Article 1 of Protocol No. 1 to the Convention.

III. Alleged violation of article 8 of the convention

19. The applicants complained that the domestic courts’ decision to evict them had constituted a violation of their right set out in Article 8 of the Convention, which, in so far as relevant, reads as follows:

“1. Everyone has the right to respect for … his home … .

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

20. The Government discerned no violation of the applicants’ rights. They submitted that the domestic courts had suspended the enforcement of the judgment ordering the applicants’ eviction.

21. The first and third applicants maintained their complaints.

22. As regards the first applicant, the Court notes that the complaint is linked to the one examined above and must therefore likewise be declared admissible. However, having regard to the findings relating to Article 1 of Protocol No. 1 to the Convention (see paragraphs 14-18 above), the Court considers that it is not necessary also to examine the same facts from the standpoint of Article 8 of the Convention (see Anna Popova, cited above, § 43).

23. As to the second applicant, the Court notes that in 2020 the first applicant informed the Court of her death. No heirs or close relatives have expressed the wish to pursue the application on her behalf within the meaning of Article 37 § 1 (a) of the Convention. Furthermore, in accordance with Article 37 § 1 in fine, the Court finds no special circumstances regarding respect for human rights as defined in the Convention and the Protocols thereto which require the continued examination of the application. Accordingly, this part of the application should be struck out of the list.

24. As to the third applicant, the Court notes that this complaint was not a part of her initial submissions on which the parties have commented. However, even if the Court was to assume that it could fall within the scope of the case to be examined (compare Udaltsov v. Russia, no. 76695/11, §§ 185-87, 6 October 2020), she raised this complaint on 22 June 2020, that is, more than six months after the final decision on the matter.

25. It follows that this part of the application has been lodged out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention (compare Hambálek v. the Czech Republic (dec.), no. 38132/03, 9 May 2006).

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

26. 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.”

A. Damage

1. Pecuniary damage

(a) Third applicant

27. The third applicant did not submit a claim in respect of pecuniary damage. Accordingly, the Court considers that there is no call to award her any sum on that account.

(b) First applicant

28. The first applicant asked the Court to reserve the issue of pecuniary damage and to invite the Government to restore the first applicant’s title to the flat.

29. The Government submitted that no pecuniary damage should be awarded.

30. The Court notes the applicant’s request to reserve the question of the application of Article 41. However, in view of the materials in its possession, it considers that the question is ready for decision and it will deal with the first applicant’s request to restore her title to the flat (compare Bimer S.A. v. Moldova, no. 15084/03, § 67, 10 July 2007).

31. The Court takes into account that in the present case it has found a violation of the rights guaranteed by Article 1 of Protocol No. 1 to the Convention in respect of the first applicant. It considers that there is a clear link between the violations found and the damage caused to her.

32. The Court reiterates that, normally, the priority under Article 41 of the Convention is restitutio in integrum, as the respondent State is expected to make all feasible reparation for the consequences of the violation in such a manner as to restore as far as possible the situation existing before the breach (see, among other authorities, Piersack v. Belgium (Article 50), 26 October 1984, § 12, Series A no. 85; Tchitchinadze v. Georgia, no. 18156/05, § 69, 27 May 2010; Fener Rum Patrikliği (Ecumenical Patriarchy) v. Turkey (just satisfaction), no. 14340/05, § 35, 15 June 2010; and Stoycheva v. Bulgaria, no. 43590/04, §§ 75-76, 19 July 2011). Consequently, having due regard to its findings in the instant case and to the fact that the first applicant did not receive compensation for loss of title to the flat in the domestic proceedings, the Court considers that the most appropriate form of redress would be to restore her title to the flat. Thus, the first applicant would be put as far as possible in a situation equivalent to the one in which she would have been had there not been a breach of Article 1 of Protocol No. 1 to the Convention (compare, Gladysheva, cited above, § 106). In the alternative, if the State no longer owns the flat, or if it has been otherwise alienated, the Government should ensure that the applicant receives title to an equivalent flat.

2. Non-pecuniary damage

33. As regards non-pecuniary damage, the first and third applicants claimed 20,000 euros (EUR) and EUR 45,000 respectively.

34. The Government considered the applicants’ claims excessive and unreasonable.

35. The Court has no doubt that the applicants have suffered distress and frustration on account of the deprivation of their possessions. Making its assessment on an equitable basis, the Court awards to the first and third applicants each EUR 5,000 in respect of non-pecuniary damage, plus any tax that may be chargeable on that amount.

B. Costs and expenses

1. Third applicant

36. The third applicant did not seek reimbursement of costs and expenses. Accordingly, there is no call to make an award under this head.

2. First applicant

37. The first applicant also claimed 50,000 Russian roubles (RUB) in respect of the legal fee incurred in the domestic proceedings, RUB 100,000 in connection with the legal expenses incurred in the proceedings before the Court, RUB 6,600 in respect of the notary fee for the issuance of the authority forms for 11 representatives in the domestic proceedings, RUB 5,000 in respect of the bailiff’s fee resulting from her failure to comply with the bailiff’s order and RUB 3,700 as postage expenses.

38. The Government considered that the expenses claimed by the first applicant in connection with the domestic proceedings were not relevant for the proceedings before the Court and the claims should be dismissed. They further opined that the claims in connection with the legal expenses incurred in the course of the proceedings before the Court should be also dismissed given that the facts complained of by the first applicant discerned no violation of her rights set out in the Convention. Nor should the Court grant the first applicant’s claims in respect of the lawfully imposed bailiff’s fee. Lastly, the Government submitted that it had not been necessary for the applicant to use express courier service for correspondence with the Court.

39. 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 have been actually and necessarily incurred and are reasonable as to quantum. Regard being had to the documents in the Court’s possession and the above criteria, the Court considers it reasonable to award EUR 2,138 to the first applicant in respect of her claims for costs and expenses under all heads.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Decides to join the applications;

2. Decides to strike Ms Linkova’s complaint under Article 8 of the Convention out of its list (application no. 22481/18);

3. Declares the complaints under Article 8 of the Convention and Article 1 of Protocol No. 1 to the Convention lodged by Ms Frenkel (application no. 22481/18) and the complaint under Article 1 of Protocol No. 1 to the Convention lodged by Ms Leontyeva (application no. 38903/19) admissible and the remainder of application no. 38903/19 inadmissible;

4. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention in respect of the first and the third applicants;

5. Holdsthat there is no need to examine the complaint under Article 8 of the Convention lodged by Ms Frenkel (application no. 22481/18);

6. Holds

(a) that the respondent State shall ensure, by appropriate means, full restitution of the first applicant’s title to the flat. In the alternative, if the State no longer owns the flat, or if it has been otherwise alienated, the Government should ensure that the applicant receives title to an equivalent flat;

(b) that the respondent State is to pay the applicants, 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 5,000 (five thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage to each of the first and third applicants;

(ii) EUR 2,138 (two thousand one hundred and thirty-eight euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses to the first applicant;

(c) 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;

7. Dismisses the remainder of the applicants’ claim for just satisfaction.

Done in English, and notified in writing on 6 April 2021, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Olga Chernishova                          DarianPavli
Deputy Registrar                             President

_________

Appendix I


No.
Application No. Lodged on Applicant name
year of birth
place of residence
Represented by
1. 22481/18 04/05/2018 Galina Vasilyevna FRENKEL
Born in 1959
Moscow
Anfisa Mikhaylovna LINKOVA
Born in 1926
Moscow
According to the information submitted by the first applicant in 2020, her mother Ms. Linkova died.
Ilyas VAKHITOV, a lawyer practising in the Moscow Region
2. 38903/19 13/07/2019 (complaint under Article 1 of Protocol No. 1)
22/06/2020 (complaint under Article 8)
Anna Vladimirovna LEONTYEVA
Born in 1981
Chelyabinsk
Vyacheslav CHULKOV, a lawyer practising in Chelyabinsk

Appendix II

Facts in respect of each application

No. Application no. Address of the flat Annulment of the applicants’ title to the flats on the ground that the flats constituted bona vacantia
Background information concerning the applicant’s real property Acquisition of the flat by the applicant Proceedings before the court at first level of jurisdiction Appeal proceedings
1. 22481/18 Ulitsa Musy Dzhaliliya, Moscow On 24 June 2013 L., the owner of the flat, died intestate and without heirs. On 18 November 2014 Z. contacted the notary as L.’s heir. She presented a certified copy of the court judgment of 16 September 2014 restoring the time-limit for her to accept inheritance.
On 24 November 2014 the notary issued Z. with a certificate confirming her title to L’s flat.
On 16 February 2015 Z. sold the flat to R.
On 9 June 2015 R. sold the flat to the first applicant.
The state authorities registered all the above transfers of the title to the flat.
On 13 July 2016 the Nagatinskiy District Court of Moscow dismissed the City Property Department’s claims in respect of the flat recognising that the first applicant had bought the flat in good faith. On 4 April 2017 the Moscow City Court quashed the judgment of 13 July 2016 and granted the Property Department’s claims in full. It recognised the Moscow City’s title to the flat and ordered the applicants’ eviction. The court established that the court judgment presented by Z. to the notary had been forged and declared all the transactions in respect of the flat null and void. It refused to recognise that the first applicant had bought the flat in good faith referring to the frequency of the transactions with the flat.
On 5 December 2018 the City Court refused to grant the applicant leave to bring a cassation appeal.
On 17 November 2017 and 18 January 2018 the City Court and the Supreme Court of the Russian Federation respectively dismissed the first applicant’s cassation appeals.
On 15 August 2019 the District Court suspended the enforcement of the judgment of 4 April 2017 until 15 August 2021.
2. 38903/19 Prospekt Pobedy, Chelyabinsk On an unspecified date in March 2017 P., the owner of the flat, died intestate with no surviving kin. His body was discovered by the police on 1 April 2017. On 21 April 2017 the applicant bought P.’s flat. According to the contract, P. personally sold the flat to the applicant. The state authorities registered the applicant’s title to the flat.
On 31 March 2018 the police opened investigation into the fraudulent sale of P.’s flat. It established that an unidentified person had sold P.’s flat to the applicant using P.’s passport.
On 31 August 2018 the Kalininskiy District Court of Chelyabinsk annulled the sale of the flat, recognised the town’s title to the flat and ordered the applicant’s and her son’s eviction. On 13 December 2018 the Chelyabinsk Regional Court upheld the judgment of 31 August 2018 on appeal.
On 7 March and 25 April 2019 the Regional Court and the Supreme Court of the Russian Federation respectively dismissed the applicant’s cassation appeals.

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