THIRD SECTION
DECISION
Application no. 11350/05
Aleksandra Panteleymonovna BESETSKAYA
against Russia
The European Court of Human Rights (Third Section), sitting on 5 February 2019 as a Committee composed of:
Alena Poláčková, President,
Dmitry Dedov,
Jolien Schukking, judges,
and Stephen Phillips, Section Registrar,
Having regard to the above application lodged on 7 February 2005,
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
1. The applicant, Ms Aleksandra Panteleymonovna Besetskaya, is a Russian national, who was born in 1940 and lives in Chernyanka.
2. The Russian Government (“the Government”) were represented initially by Mr G. Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr M. Galperin.
A. The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows.
1. The applicant’s contract with the private company
4. In 1994 the applicant concluded a contract for construction of a house with private company DSK Kottedzh (“the DSK”). The company undertook to build the house, and the applicant to pay its services. The applicant paid the amount due. The company built the house which did not comply with construction norms, as well as technical and sanitary requirements.
2. The 1996 agreement between the company And the GUP and the company’s liquidation
5. In April 1996 the DSK and the State Unitary Enterprise (GUP) “Belgorod Regional Fund of Support of Individual Housing Construction” (hereinafter, “the GUP”) agreed that the DSK be restructured in the form of merger with the GUP. In accordance with the agreement M., the head of the DSK acting for the company, transferred the entirety of the company’s assets to the GUP. The former director of the GUP accepted to pay the DSK’s debts towards its creditors and became the private company’s successor. The GUP paid the debts towards creditors with both monetary amounts and assets.
6. In July 1996 the DSK was liquidated without legal successors and ceased to exist.
3. The judgment in the applicant’s favour and its enforcement status
7. On 14 October 1997 the Chernyanskiy District Court of the Belgorod Region (the district court) found that numerous defects of the applicant’s house were to be repaired. It ordered the GUP, as the DSK’s successor, (1) to pay the applicant 5,000,000 non-denominated Russian roubles (RUB) in interest, RUB 2,000,000 in respect of non-pecuniary damage and RUB 750,000 in respect of legal expenses, as well as (2) to perform various works to eliminate multiple construction defects. On 18 December 1997 the judgment entered into force.
8. The amounts due under the judgment were paid to her at some point before 2005. According to the applicant, the works “were performed with delay and were incomplete and of poor quality”.
4. Annulment of the 1996 transaction between the DSK and the GUP
9. At a later stage the GUP claimed to declare the 1996 transaction invalid (see paragraph 5 above)
10. On 3 February 2003 the district court confirmed that the GUP was the DSK’s legal successor. At some point the regional court upheld the judgment on appeal.
11. On 29 January 2004 the Presidium of the Belgorod Regional Court quashed the judgment of 3 February 2003 and the appeal decision and remitted the case for a fresh examination.
12. On 15 March 2004 the district court ruled that the 1996 transaction could not be considered as a succession agreement as it was, in essence, a reciprocal contract under which the GUP had undertaken to pay the creditors’ debts and did so with both money and assets (see paragraph 5 above). Therefore, the transaction constituted a sale and purchase agreement in respect of the DSK’s assets which had been transferred under the GUP’s economic control. The court declared the 1996 transaction invalid in the part concerning the legal succession.
13. On 18 May 2004 the regional court upheld those findings on appeal.
5. The applicant’s claim for demolition of the house and dissolution of the agreement
14. In 2000 the applicant sued the GUP as the DSK’s legal successor in court under the Consumers’ Protection Act, claiming dissolution of the construction contract (see paragraph 4 above), payment of pecuniary and non-pecuniary damage, demolition of the house and landscaping the land plot.
15. In 2001 the experts concluded that the applicant’s house was unsuitable for living, due to multiple serious construction defects.
16. On 25 September 2003 the district court granted her claim in part. It found that the house had been built in violation of the technical requirements and in the absence of due documentation, and that numerous construction defects made it unsuitable for living. The court ordered to discontinue the construction agreement between the DSK and the applicant. With reference to the judgment of 3 February 2003 (see paragraph 10 above) the court further obliged the GUP as the DSK’s legal successor to pay the applicant damages and to demolish the house, to remove the construction waste and to landscape the plot.
17. On 2 December 2003 the Belgorod Regional Court upheld the judgment on appeal.
18. On 19 February 2004 the district court on the GUP’s request quashed the judgment of 25 September 2003 on account of the newly‑established circumstances, namely the annulment of the judgment of 3 February 2003 concerning the legal succession in the supervisory-review proceedings (see paragraph 11 above). The court ordered a new examination of the case. The applicant was present at the hearing and made submissions.
19. In June 2004 the applicant amended her claims and sued both the GUP and Mr M., the ex-head of the liquidated DSK, for damages. In particular, according to her new submissions, she had been persuaded that she had concluded the construction contract with the State enterprise.
20. On 22 July 2004 the district court considered the case afresh and dismissed the applicant’s claims against both co-defendants in full. As regards the GUP, the court noted with reference to the judgment of 15 March 2004 (see paragraph 12 above), that it was not the DSK’s legal successor, as the 1996 transaction had been declared invalid in the relevant part. Further, the court established no grounds for M.’s subsidiary liability for the liquidated DSK’s debts. The court found that the DSK had had obligations towards he applicant pursuant to the 1994 contract, and the GUP was to perform renovation works under the judgment of 14 October 1997; otherwise, the respondents had had no obligations towards the applicant.
21. On 14 September 2004 the Belgorod Regional Court upheld the judgment on appeal.
22. The applicant challenged the decision of 19 February 2004 and the judgments of 22 July and 14 September 2004 by way of the supervisory‑review procedure.
23. On 19 January 2006 the Presidium of the Belgorod Regional Court in the supervisory-review proceedings ruled in the applicant’s favour. It found that the applicant had not been a party to the proceedings of 15 February 2004 concerning the legal succession issue, and therefore the court’s findings in those proceedings could not have been accepted as res judicata in the civil proceedings brought by the applicant. The Presidium quashed the decision of 19 February 2004 and the judgments of 22 July and 14 September 2004 and referred the matter for a fresh examination.
24. On 15 March 2006 the district court considered the parties’ arguments, including the succession issue, afresh. Having studied the 1996 agreement, the court noted that under its terms the GUP had undertaken to pay the DSK’s debts towards its creditors and did so both with money and assets (see paragraph 5 above). Thus, the transaction clearly constituted a sale and purchase agreement in respect of the DSK’s assets which had been transferred under the GUP’s economic control. Further, the GUP’s former director had not been competent to decide on the restructuring of the GUP in accordance with the GUP’s charter. It was for the local administration, the owner of the GUP’s assets, to take such decision; however, none had been taken by either the administration or, on the private company’s part, by the DSK’s founder. Further, in case of a merger, a transfer and acceptance act containing provisions on succession in respect of all obligations of the company towards its creditors had had to be established – however, that mandatory document had not been compiled by the parties in 1996. Therefore, the agreement had not given rise to legal succession and had been invalid in the relevant part. Accordingly, the GUP was not liable for the DSK’s debts. Further, it had never accepted any responsibility for them.
25. The court further found no ground to believe that the applicant had been misled in 1994 as to the contractor: the agreement clearly read that she had concluded the agreement with the DSK, and, further, she had raised this argument for the first time in 2004 in the amended set of claims, whilst the proceedings had been pending since 2000. The court further found that M. could not be held liable for the DSK’s debts as his company had been liquidated in 1996 and the applicant was not listed as its creditor at the time of the liquidation. She had only raised the issue of M’s responsibility in 2000, that is four years after the company had ceased to exist and its claims had been considered as settled. Finally, the court found that the applicant’s claims for interest in respect of the failure to execute the judgment of 14 October 1997 could not be examined under the Consumers’ Protection Act. The court rejected the applicant’s action in full.
26. On 2 May 2006 the Belgorod Regional Court endorsed the lower court’s reasoning and upheld the judgment on appeal.
6. Latest available submissions on the enforcement status of the judgment of 14 October 1997 and relevant proceedings
27. In 2005 the GUP requested the Sverdlovskiy District Court of Belgorod to discontinue the enforcement proceedings under the judgment of 14 October 1997. It argued, in particular, that on 22 July 2004 the district court had rejected the applicant’s “similar” claims in full.
28. On 14 March 2005 the Sverdlovskiy District Court of Belgorod rejected the request, having found, in particular, that the judgment of 1997 in the applicant’s favour had not been quashed or amended. The court considered the references to the subsequent proceedings as irrelevant.
29. According to the Government, on 18 February 2008 the district court established, in an unspecified set of proceedings, that the monetary award of 14 October 1997 had been paid to the applicant in full, whilst the works ordered by the same judgment had been performed in part. The parties did not submit a copy of that judicial decision.
30. According to the Government, on 11 March 2009 the district court, in an unspecified set of proceedings, granted the applicant’s claim against the GUP in part and awarded her RUB 200,000 (approximately 4,470 euros at the material time) in respect of non-pecuniary damage resulting from the lengthy non-enforcement. The parties did not submit a copy of that judicial decision and did not specify the exact scope of the applicant’s claims in the remaining part.
31. It appears that the judgment of 14 October 1997 has not been enforced in full in so far as an obligation to perform various works is concerned.
B. Relevant domestic law and practice
32. The relevant provisions and case-law governing unitary companies with the right of economic control are described in the judgments of Liseytseva and Maslov v. Russia (nos. 39483/05 and 40527/10, §§ 54-127, 9 October 2014), and Samsonov v. Russia (dec.) (no. 2880/10, 16 September 2014).
COMPLAINTS
33. The applicant complained under Article 6 of the Convention about the non-enforcement of the judgment of 14 October 1997, about the quashing on 19 February 2004 of the judgment of 25 September 2003 in her favour and about the unsuccessful outcome of the proceedings for compensation which ended on 2 May 2006.
THE LAW
34. The case was communicated in respect of the applicant’s non‑enforcement complaint under Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention, which read as follows:
Article 6
“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”
Article 1 of Protocol No. 1
“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.”
35. The Government submitted that the authorities diligently assisted the applicant in enforcement of the judgment.
36. The applicant maintained in her observations that the judgment in her favour had remained unenforced. She stressed, however, that its execution would not make any sence for her as the domestic court had ordered to renovate the house which was unsuitable for living. She insisted that the crux of her complaint was the quashing of the judgment of 25 September 2003 awarding her damages and ordering the GUP to demolish the house.
A. Complaint about the annulment of the judgment of 25 September 2003
37. The applicant complained about the annulment of the judgment of 25 September 2003 in her favour.
38. The Court observes that the judgment was quashed on account of the newly-established circumstances on 19 February 2004. It further notes that the decision of 19 February 2004 was, in its turn, set aside on the applicant’s request in the supervisory-review proceedings (see paragraph 23), and the supervisory-review court expressly acknowledged the violation of the applicant’s right and remitted the matter for fresh consideration. However, in the subsequent proceedings her claims were rejected by the courts. The Court does not need to decide on the applicant’s victim status for the following reason. In any event, the Court reiterates that the quashing of a final and binding judgment is an instantaneous act (see, among many other authorities, Sardin v. Russia (dec.), no. 69582/01, 12 February 2004). The applicant has not argued that she was unaware of the annulment proceedings and their result – on the contrary, she was present at the hearing of 19 February 2004 (see paragraph 18 above) and participated in the subsequent proceedings in 2004. In view of the foregoing, the complaint about the quashing on 19 February 2004 of the judgment of 25 September 2003 lodged on 7 February 2005 falls outside the six-month time-limit set out in the Convention.
39. It follows that this part of the application must be declared inadmissible in accordance with Article 35 §§ 1 and 4 of the Convention.
B. Complaint about the outcome of the proceedings concerning the GUP’s succession and the scope of the GUP’s obligations towards the applicant
40. Without referring to any Convention provision, the applicant complained about unfairness of the courts’ refusal to grant her claims in the compensation proceedings which ended on 2 May 2006.
41. In so far as her complaint falls to be examined under Article 6 of the Convention, the Court reiterates that it is not its task to act as an appeal court of “fourth instance” by calling into question the outcome of the domestic proceedings. The Court finds no indication that the procedures or decisions adopted by domestic courts in this case infringed the fairness requirement at the heart of Article 6 § 1 of the Convention. It follows that this part of the application must be declared inadmissible in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
42. Further, in so far as the applicant may be understood to complain about the breach of her property rights in the context of the refusal of compensation, the Court reiterates that, where a proprietary interest is in the nature of a claim, the person in whom it is vested may be regarded as having a “legitimate expectation” if there is a sufficient basis for the interest in national law (see Kopecký v. Slovakia [GC], no. 44912/98, § 52, ECHR 2004-IX). However, no legitimate expectation can be said to arise where there is a dispute as to the correct interpretation and application of domestic law and the applicant’s submissions are subsequently rejected by the national courts (idem., § 50). In the present case, the domestic courts established, in essence, that the claim against a private person had been introduced years after his company’s liquidation, and that the GUP did not have any obligations towards the applicant other than those established by the 1997 judgment in her favour – but the claims in respect of its non‑enforcement fell outside the scope of the dispute under the Consumers Protection Act. The Court notes in that respect that, indeed, the 1997 judgment has remained enforceable (see paragraph 28 above), and that the applicant was able to claim and receive compensation of non-pecuniary damage for its delayed enforcement in a different set of proceedings (see paragraph 30 above). However, as regards her pecuniary claims apart from those arising out of the non-enforcement, the domestic courts analysed them in detail and rejected them as having no basis in the domestic law. In the absence of any evidence of arbitrariness in the domestic courts’ findings, the Court is not satisfied that the applicant’s claims in the proceedings which ended in 2006 were sufficiently established to constitute a “possession” falling within the ambit of Article 1 of Protocol No. 1.
43. It follows that the complaint under Article 1 of Protocol No. 1 is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 (a) and must be rejected in accordance with Article 35 § 4.
C. Complaint about the non-enforcement of the judgment of 14 October 1997
44. It remains to be ascertained whether the authorities were liable for the non-enforcement of the judgment of 14 October 1997 in the applicant’s favour.
45. The Court notes that the judgment given against the GUP had apparently remained unenforced in part by at least 2009 (see paragraph 30 above). The Court notes the applicant’s argument that the enforcement of the judgment did not make sense to her, as her core wish was to have the uninhabitable house demolished and to receive an adequate compensation.
46. In the Court’s view, the applicant’ submissions do not amount to an unequivocally established withdrawal of the complaint. The Court considers, however, that the non-enforcement complaint is in any event inadmissible on the following grounds.
47. The debtor company was incorporated as a State unitary enterprise under domestic law at the material time. In Liseytseva and Maslov (cited above, §§ 183‑92) the Court held that in order to decide on the operational and institutional independence of a given unitary enterprise having the right of economic control the Court had to assess the nature of the enterprise’s functions and the degree of the State or municipal authorities’ actual involvement in the management of the enterprise’s assets.
48. In so far as the Court is competent ratione temporis to decide on the matter, it notes that the parties did not provide any information on the scope and nature of the GUP’s activities after 5 May 1998, the date of the Convention’s entry into force in respect of Russia. The Court does not have sufficient information to conclude that the debtor company had exercised public functions or provided services of vital importance. Nor did the parties maintain that during the impugned period the State had interfered with the company’s activities, either by issuing compulsory instructions, or by assets’ transfer and withdrawal, or otherwise (see Samsonov, cited above; Stupin and Razina and Others v. Russia (dec.), nos. 43121/05 and 10 others, 22 September 2015; and, by contrast, Liseytseva and Maslov, cited above). The Court notes in addition that, unlike in Liseytseva and Maslov, the debtor company in the present case was not insolvent or subject to liquidation at the time of the events, and it has not been argued that it lacked sufficient funds or operational capacity to enforce the judgment in the applicant’s favour. The Court has already found in respect of the monetary awards that, as long as the company had sufficient assets on its balance, the State cannot be held responsible for its failure to pay its debts (see, mutatis mutandis, Zhdanov and Others v. Russia (dec.), nos. 48028/07 and 15 others, §§ 63-64, 28 June 2016), and does not see any specific reason to depart from this approach in this case. Therefore, the Court does not have sufficient information in its possession to conclude that the GUP at the time of the events “did not enjoy sufficient institutional and operational independence from the authorities”.
49. Accordingly, the State’s responsibility for the company’s failure to execute the judgment should be assessed in the light of the principles related to the non-enforcement of the judgments against private parties (see Kunashko, no. 36337/03, §§ 38-40, 17 December 2009, and Samsonov, cited above, §§ 82-85).
50. As regards the State responsibility for the enforcement authorities’ acts, the applicant did not maintain that the bailiffs had been inactive or that their service had been inadequate – indeed, the parties did not provide any information about the enforcement proceedings, let alone the bailiffs’ possible inaction or omissions (see, mutatis mutandis, Samsonov, cited above, §§ 82-85, and Kuznetsov and Gorbacheva (dec.), nos. 15948/04 and 30610/08, §§ 32-35, 11 October 2016).
51. In view of the above, the Court finds that the non-enforcement complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 7 March 2019.
Stephen PhillipsAlena Poláčková
RegistrarPresident
Full & Egal Universal Law Academy