YAKOBSON v. UKRAINE (European Court of Human Rights)

Last Updated on November 22, 2019 by LawEuro

Communicated on 24 September 2019

FIFTH SECTION
Application no. 77736/12
Lev LvovychYAKOBSON and others
against Ukraine
lodged on 29 November 2012
STATEMENT OF FACTS

The present application is submitted by a family of four. The first applicant, Mr Lev LvovychYakobson born in 1962, and the second applicant, Mrs Inna FedorivnaYakobson born in 1963, are spouses. The third applicant, Mr Yeveniy Lvovych Yakobson born in 1986 and the fourth applicant, Mr ArturLvovychYakobson born in 1993, are the sons of the first two applicants. At the time of lodging of the application the applicants were Ukrainian nationals residing in Bratkivtsi, Ivano-Frankivsk Region, Ukraine. In December 2016 the first applicant informed the Court that he had acquired Belorussian nationality and moved to Baranovychi, Belarus.

A.    The circumstances of the case

The facts of the case, as submitted by the applicants, may be summarised as follows.

1.   Background of the case

In March 2001 Mr P. issued a power of attorney to Mrs P., his wife, empowering her to manage, sell or otherwise dispose of his house in the Bratkivtsi village and perform various transactions in its respect, including pledging it as collateral for a loan.

In October2001 MrsP. took a loan of 1,500dollars (USD)[1] from commercial bank “Privatbank” (“the Bank”) and pledged the aforementioned house as collateral.

InSeptember2003, MrsP. having failed to repay the loan, the Bank obtained an executive writ from a private notary allowing it to start the foreclosure procedure.

In December2003 the Ivano-Frankivsk State Bailiffs Service (“the Bailiffs”) commissioned State Company “Ukrspetsjust” to sell the house at a public auction.

On 18 December 2003 the applicants’ family sold their flat for 17,172 hryvnias (UAH)[2] and decided to participate in the public auction with a view to buying the house.

On 23 December 2003 the first applicant bought the aforementioned house at the public auction for UAH 15,700.[3] Out of this amount UAH 11,646 was remitted to the Bank as the amount still payable on Mrs P.’s loan with interest. The remaining sum of UAH 4,054 was retained by the Bailiffs as their fee.

On 14 January2004 the first applicant registered his ownership of the house and soon afterwards the applicants’ family established their home in it.

On an unspecified date Mrs P. challenged the sale as unlawful.

On 11 November 2004 the Ivano-Frankivsk City Court left her claim without consideration in view of her repeated failures to attend the hearings. Based on the case file, this decision was not appealed against.

2.   Reclamation proceedings

On 30 May 2005 Mr P. instituted civil proceedings against Mrs P., the Bank, the notary, the Bailiffs, the “Ukrspetsjust” Company, and the applicants, seeking to reclaim his house and have the applicants’ family evicted.

In September 2006, following Mr P.’s death, his adult daughter, Ms M., replaced him in these proceedings as his heir.

On 2 December 2011, after several rounds of proceedings, the Tysmenytsky District Court rejected Ms M.’s claims. It found that the first applicant had acquired the house lawfully and in good faith and noted that it was his family’s only home after the sale of their flat, and there were no grounds for evicting or dispossessing them.

On 31 January 2012 the Ivano-Frankivsk Court of Appeal allowed Ms M.’s appeal and reversed the aforementioned judgment. It annulled the first applicant’s title to the house and ordered eviction of the applicants’ family. By way of restitution, it ordered the Bank and the Bailiffs to reimburse the first applicant the sums received from him as the house purchase price, that is, UAH 11, 646 and UAH 4,054 respectively.

In its reasoning, the court referred to Articles 48 and 62 of the Civil Code of 1963, which had been in force at the time, when Mrs P. had pledged the house, and found that as Mr P.’s agent, she had been empowered to manage the house in the interests of Mr P. Accordingly, she had no right to secure her own loan with it and the collateral contract was therefore null and void. The court further found that the notary had acted unlawfully in authorising the foreclosure, notably, because he had been provided with insufficient documentary proof that both, Mr and Mrs P. had been duly notified of the Bank’s intent to proceed with the foreclosure. In addition, the sale of the house at the public auction had also been unlawful, in particular, because the organiser had not collected necessary information concerning the property status of the land on which it was located, and because the sale price was too low.

The applicants appealed on points of law. They submitted that their family had acquired the disputed house lawfully and in good faith, having bought it from an entity administering the State functions. Referring to Article 145 of the Civil Code of 1963, they argued that the house could be reclaimed from them, as good-faith acquirers, only if it were established that Mr P. had lost possession of it against his will. In fact, quite to the contrary, Mr P. had directly authorised Mrs P. to conclude various transactions concerning the house, including pledging it as collateral. More so, it could not be said that Mrs P. had abused Mr P.’s trust by pledging the house. First of all, it was evident from the file that the disputed house had been acquired by Mr P. during his marriage to Mrs P. and so had, by default, been their common conjugal property, regardless that only Mr P. had been registered as its owner. In addition, from the explanations given in court by Mrs P., it was evident that she had taken the impugned loan to finance the needs of the couple’s daughter, that is, in the interests of the family. Consequently, the house, which had been owned by the P. spouses, had been pledged as collateral for a loan taken in the interests of the family by one of them and with implicit consent of the other, who had issued power of attorney to this effect. Therefore, the good-faith acquirer protection should apply to the applicants’ situation. The applicants also argued that the Appeal Court had erred in stating that there was no evidence that Mr and Mrs P. had been duly and timely informed by the Bank about the forthcoming foreclosure, as the relevant documents were in fact in the case file.

On 6 June 2012 the Higher Specialised Court in Civil and Criminal Cases rejected the applicants’ appeal on points of law, reiterating the reasoning of the Court of Appeal.

By January 2013 the applicants were evicted from the house.

On an unspecified date the first applicant received the sum of UAH 11,646 due to him from the Bank.

As regards the remaining sum of UAH 4,054 due from the Bailiffs, on 22 January 2013 they refused to institute the enforcement proceedings with a view to collecting it on the ground that the writ of execution issued by the court did not contain an identification number of the debtor.

On 1 October 2013 the Bailiffs again refused to institute the enforcement proceedings, having stated that according to applicable law, the demand had to be submitted to the State Treasury.

On 23 January 2014 the Ivano-Frankivsk Department of the State Treasury returned the writ of execution to the first applicant as unenforceable.

It appears that the UAH 4,054 payable to the first applicant from the Bailiffs remains outstanding.

3.   The first applicant’s compensation proceedings against Ms M.

On an unspecified date the first applicant instituted civil proceedings against Ms M., seeking UAH 169,258[4] in compensation for increase in the value of the house reclaimed from his family. He submitted that this sum represented the difference between the expert valuation of the house at UAH 64,012[5] in 2003, when he had acquired it, and its valuation in 2013, when his family had been evicted, at UAH 233,870[6], minus the UAH 15,700 awarded to him by the courts in compensation for the purchase price.

On 18 October 2013 the Tysmenytskyy District Court awarded the first applicant UAH 33,107[7] in compensation for the renovation expenses, which were supported by documentary evidence. The remainder of the first applicant’s claim was dismissed as unsubstantiated.

On 18 June 2014 the Higher Specialised Court in Civil and Criminal Cases reduced the compensation due to the first applicant from Ms M. by UAH 5,752[8], the price of metal grids, which had not been installed and could have been reclaimed in-kind.

4.   The first applicant’s compensation proceedings against the Bailiffs

On 23 October 2012 the first applicant instituted administrative proceedings against the Bailiffs and the State Treasury seeking compensation for selling him the house, in respect of which the sale had been annulled as unlawful.

On 16 January 2014 the Ivano-Frankivsk District Administrative Court found that the matter fell within jurisdiction of the civil courts.

In May 2015 the first applicant updated his statement of claim re-lodged in civil proceedings. He submitted that the pecuniary damage suffered by him and his family in connection with the loss of the house was equal to this house’s value as of January 2013, which was UAH 233,870, according to expert assessment, as stated in his proceedings against Ms M. The domestic courts had already awarded him UAH 15,700 in purchase price and UAH 27,355 in renovation expenses. Accordingly, as it had also been established by the courts that the house had been sold unlawfully under the authority of the State Bailiffs, the State Treasury was liable to compensate the difference between the value of the house and the sums awarded to the applicant, multiplied by 1,51 – the inflation index. In addition, the first applicant claimed moral damages and submitted that following eviction from the house, his entire family had lost its only dwelling.

On 3 December 2015 the Ivano-Frankivsk Court rejected the first applicant’s claim. It found that, while the first applicant’s family might have suffered non-pecuniary damage on account of having been deprived of their home, it had not been demonstrated that this damage had resulted from the Bailiffs’ faulty and unlawful acts.

The first applicant appealed. He noted that the court had not resolved in any manner his claim for pecuniary damage. He also noted that unlawfulness of the Bailiffs’ acts had already been established, notably, in the judgment of the Court of Appeal of 31 January 2012, and it was precisely on this ground that the results of the public auction had been invalidated.

On 10 February 2016 the Ivano-Frankivsk Regional Court of Appeal gave the first applicant a time-limit for rectifying the shortcomings of his appeal, namely, for the payment of a court fee of UAH 4,175[9].

The first applicant refused to pay the fee, referring to Section 3-2-13 of the Court Fee Act, in accordance to which no court fee was payable for claiming compensation of damage caused by unlawful acts of the bodies of State power or municipal authorities.

On 19 February 2016 the Ivano-Frankivsk Regional Court of Appeal refused to initiate the appeal proceedings and returned the appeal to the first applicant, having found as follows:

“… [the first applicant] challenges the acts of the Department of the State Bailiff Service of the Ivano-Frankivsk City Department of Justice … which is neither the body of the State power nor that of municipal self-governance … The defendant … is … a body of the executive power …”

The first applicant appealed on points of law, arguing, in particular, that the court’s position excluding the State Bailiffs from the list of bodies of “State power” was totally frivolous and arbitrary.

On 18 March 2016 the Higher Specialised Court in Civil and Criminal Cases rejected the first applicant’s request for leave to appeal on points of law as unsubstantiated.

B.     Relevant domestic law

1.   Constitution of Ukraine (1996)

Article 6 of the Constitution reads as follows:

“State power in Ukraine is exercised on the principles of its division into legislative, executive and judicial power.

Bodies of legislative, executive and judicial power exercise their authority within the limits established by this Constitution and in accordance with the laws of Ukraine.”

2.   Civil Code of 1963 repealed as of 2004

Relevant provisions of the Code, as worded at the material time, read as follows:

Article 48.  Invalidity of a transaction, which is not in accordance with the requirements of the law

“Invalid shall be a transaction, which is not in accordance with the requirements of the law. …”

Article 62.  Agency

“… An agent may not conclude transactions on behalf of the person, whom he/she represents, either concerning himself/herself personally, or in respect of another person, whose agent he/she simultaneously is.”

Article 145.  Reclamation of property by the owner from a bona fide acquirer

“If an item is acquired against payment from a person, who had no right to alienate it, [and] the acquirer did not know and had no reason to know about this (a bona fide acquirer), then the owner shall be entitled to reclaim the item from the acquirer only if it was lost by him/her or by a person, to whom he/she entrusted its possession, or was stolen from one or the other, or otherwise left their possession against their will. …”

3.   Law of Ukraine “On Court Fees” no. 3674-VI of 8 July 2011 (“Court Fee Act”)

Section 3 of the Act, insofar as relevant, reads as follows:

Items to which court fees are applicable

“… 2.  Exempt from a court fee shall be the submission:

13)  of a claim for compensation of damage caused to a person by unlawful decisions, acts or inaction of a body of the State power, body of … local self-governance, their official or agent …”

4.   Law of Ukraine “On State Bailiff Service” no. № 202/98-ВР of 24 March 1998 (“State Bailiffs Act”) repealed in 2016

Relevant provisions of the Act, as worded in the material time, read as follows:

Section 1.  Mission of the State Bailiffs Service

“State bailiffs service is part of the system of bodies of the Ministry of Justice of Ukraine …”

Section 4.  State Bailiffs

“… AStatebailiffisanofficeroftheState (представник влади) …”

COMPLAINTS

Theapplicantscomplainthatthey were unlawfully and unfairly evicted from their home and deprived of their property. They invoke Articles 6 § 1, 8 and 13 of the Convention and Article 1 of Protocol No. 1in this respect.

They also complain under Article 6 of the Convention that the length of the reclamation proceedings against them was excessive.

The first applicant additionally complains under Article 6 § 1 of the Convention that he was deprived of access to the appeal court in his proceedings against the Bailiffs in view of his refusal to pay an unlawfully imposed court fee.

QUESTIONS TO THE PARTIES

1.  Has there been a violation of the applicants’ right to enjoy their possessions guaranteed by Article 1 of Protocol No. 1? In particular,

(a)  Did the house bought by the first applicant at a public auction also constitute “possession” of the second, third and fourth applicants within the meaning of Article 1 of Protocol No. 1 (see Tuleshov and Others v. Russia, no. 32718/02, § 40, 24 May 2007)?

(b)  Have(s) the applicants/first applicant been deprived of the house in the public interest, and in accordance with the conditions provided for by law? Notably, was it foreseeable that the “bona-fide acquirer” protection claimed by them under the Civil Code would not apply in the present case?

(c)  Was the deprivation necessary in a democratic society? Notably, were/was the applicants/first applicant paid adequate compensation for the house? (see, in particular, Tuleshov and Others, citedabove, §§ 43-45 and 47-48 and Šidlauskas v. Lithuania, no. 51755/10, § 47, 11 July 2017)?

2.  Has the applicants’ eviction amounted to a violation of their right to respect for home, contrary to Article 8 of the Convention?

3.  Did the applicants have a fair hearing in the determination of their civil rights in the reclamation proceedings in accordance with Article 6 § 1 of the Convention? In particular, did the judicial authorities provide adequate response to their argument that the house could not be reclaimed from them as “bona-fide” acquirers (see, mutatis mutandis, Surikov v. Ukraine, no. 42788/06, §§ 101-103, 26 January 2017)?

4.  Was the length of the reclamation proceedings in the applicants’ case in breach of the “reasonable time” requirement of Article 6 § 1 of the Convention?

5.  Did refusal of the Court of Appeal to examine the first applicant’s appeal against the first-instance court’s judgment rejecting his compensation claim against the Bailiffs amount to a breach of his right of access to court protected by Article 6 § 1 of the Convention? Notably, was it sufficiently foreseeable that court fee exemption stipulated in Section 3-2-13 of the Court Fee Act did not apply in the present case?

______________

[1].  Around 1,650 euros at the material time.
[2].  Around 2,500 euros at the material time.
[3].  Around 2,300 euros at the material time.
[4].  Around EUR 15,700 in January 2013.
[5].  Around EUR 11,200 in January 2003.
[6].  Around EUR 21,750 in January 2013.
[7].  Around EUR 2,930 as of the date of the judgment.
[8].  Around EUR 350 as of the date of the judgment.
[9].  Around 150 euros at the material time.

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