THIRD SECTION
CASE OF FOKS v. RUSSIA
(Application no. 5582/12)
JUDGMENT
STRASBOURG
16 October 2018
This judgment is final but it may be subject to editorial revision.
In the case of Foks v. Russia,
The European Court of Human Rights (Third Section), sitting as a Committee composed of:
Alena Poláčková, President,
Dmitry Dedov,
Jolien Schukking, judges,
and Fatoş Aracı, Deputy Section Registrar,
Having deliberated in private on 25 September 2018,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 5582/12) 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 an Israeli national, Mr David Foks (“the applicant”), on 13 January 2012.
2. The Russian Government (“the Government”) were represented initially by Mr G. Matyushkin, former Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr M. Galperin.
3. On 6 September 2017 the application was communicated to the Government.
THE FACTS
THE CIRCUMSTANCES OF THE CASE
4. The applicant was born in 1967 and lives in Moscow.
A. Purchase of the flat by the applicant
5. S. was the owner of a one-room flat located at 6-60, Smolenskaya Street, Moscow. On 7 February 2008 S. died.
6. An unidentified person presenting a passport in the name of M. and claiming that she was S.’s sister and heir applied to G., a notary, seeking the recognition of her rights in respect of the flat. In support of her claim she submitted a copy of her birth certificate.
7. On 18 March 2009 G. issued a certificate confirming, inter alia, M.’s title to the flat. The city authorities registered M.’s title to the flat in the State land register.
8. On 19 May 2009 an unidentified person posing as M. sold the flat to the applicant. According to the documents submitted by the applicant, the purchase price was 6,499,999 Russian roubles (RUB). The city authorities registered the sale of the flat and the applicant’s title to it in the State land register.
9. On an unspecified date the police opened a criminal investigation into the fraudulent acquisition of the flat. It was established that the document presented to the notary as M.’s birth certificate had been forged.
10. On 23 September 2009 the police informed the Department of Housing and Housing Policy of the City of Moscow (the “Housing Department”) of the pending criminal investigation.
B. City’s action against the applicant
11. On 1 December 2009 the Housing Department brought an action seeking the transfer of the applicant’s flat to the City of Moscow (“the City”).
12. On 11 March 2010 the criminal investigation was suspended.
13. On 27 December 2010 the Presnenskiy District Court of Moscow allowed the Housing Department’s action. It reasoned that M. had died intestate with no surviving kin and that her flat should have been considered bona vacantia. It annulled the applicant’s title to the flat and ordered its transfer to the City of Moscow.
14. Following an appeal by the applicant, on 14 July 2011 the Moscow City Court upheld the judgment of 27 December 2010.
15. On an unspecified date the judgments of 27 December 2010 and 14 July 2011 were enforced. Subsequently the City of Moscow sold the flat to a private party under a social assistance scheme that permitted the buyer to pay the purchase price in instalments.
16. On 12 October 2017 the criminal investigation into the fraudulent acquisition of the flat was reopened.
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION
17. The applicant complained that he had been deprived of his flat in violation of Article 1 of Protocol No. 1 to the Convention, which 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.”
A. Admissibility
1. Compatibility ratione personae
18. The Government submitted that the applicant had lost his property as a result of the unlawful actions of the above-mentioned private notary and that, accordingly, the State could not be held responsible for his loss.
19. The applicant did not comment.
20. The Court observes that it has already examined and rejected the same argument advanced by the Government in an earlier case against Russia (see Titova and Others v. Russia [Committee], no. 4919/16 and two others, § 20-22, 15 May 2018). The Court sees no reason to hold otherwise in the present case. It observes that the applicant’s complaint is directed against the City of Moscow, a municipality for whose actions the Russian Federation may be held responsible. It was the action brought by the City that led to the revocation of the applicant’s property title and its transfer to the City. The fact that the City had earlier lost its possession as a result of the actions of third parties, including the notary, has no bearing on the respondent State’s standing. Accordingly, the Court dismisses the Government’s objection regarding the compatibility ratione personae of the applicant’s complaint.
2. Exhaustion of domestic remedies
21. The Government considered that the complaint should be dismissed for the applicant’s failure to bring an action for damages against (1) the insurance company which had provided coverage in respect of the notary’s professional actions or (2) the State registration authorities.
22. The applicant did not comment.
23. The Court notes that it has already examined the issue of exhaustion of effective domestic remedies in a number of cases where an applicant was deprived of his or her housing as a result of the revocation of his or her title to a flat by a final and enforceable judgment (see, for example, Gladysheva v. Russia, no. 7097/10, §§ 60-62 and 89, 6 December 2011). The Court concluded that under Russian law there was no further recourse against the judgment that might potentially lead to the reinstatement of the applicant’s title to the flat. It furthermore noted that the possibility of bringing an action for damages could be regarded as necessary for compliance with the rule of exhaustion of domestic remedies within the meaning of Article 35 § 1 of the Convention.
24. The Court considers that those findings hold true within the context of the present case. The Government have not put forward any fact or argument capable of persuading it to reach a different conclusion. Accordingly, it was not incumbent on the applicant to pursue the civil remedies referred to by the Government. The Government’s objection in this regard is therefore dismissed.
3. Conclusion
25. The Court notes that the complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It furthermore notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B. Merits
1. The parties’ submissions
26. The applicant maintained his complaint.
27. The Government considered that the flat had never constituted a “possession” (for the purposes of Article 1 of Protocol No. 1 to the Convention) of the applicant. Following the death of the flat’s owner, it should have been considered bona vacantia, and the title to it should have been transferred to the City of Moscow. The applicant had bought the flat in bad faith, given that his intent had been to resell it. Moreover, on several other occasions the applicant had been a party to civil proceedings in which the City of Moscow had contested the validity of transactions in respect of real property that he had acquired. The Government furthermore submitted that the recovery of the flat by the City of Moscow had pursued a legitimate aim. The City was responsible for providing affordable housing to people on low incomes. Accordingly, the City had reclaimed the flat in the interests of those people. Lastly, the Government argued that the national courts had correctly applied the national laws when adjudicating the dispute between the applicant and the City of Moscow. Those decisions had ensured a fair balance between the needs of society and the applicant’s private interests. The fact that the applicant had disagreed with the findings of the domestic courts was insufficient for an issue to be raised under the Convention. In any event, the flat recovered by the City of Moscow had not been the applicant’s sole home. He had established his permanent residence in Israel and a temporary one in Moscow.
2. The Court’s assessment
(a) General principles
28. The general principles concerning the protection of property are well established in the Court’s case-law (see Gladysheva, cited above, §§ 64-68).
(b) Application of these principles to the present case
(i) Whether there was a “possession”
29. The Court notes that the State recognised the applicant as the lawful owner of the flat (see paragraph 8 above). Accordingly, the Court accepts that the flat constituted the applicant’s “possession” for the purposes of Article 1 of Protocol No. 1 to the Convention and dismisses the Government’s argument to the contrary.
30. The Court furthermore notes that the complexity of the factual and legal position in the present case prevents it from falling into any of the categories covered by the second sentence of the first paragraph or by the second paragraph of Article 1 of Protocol No. 1 to the Convention (see Beyeler v. Italy [GC], no. 33202/96, § 98, ECHR 2000‑I). The Court therefore considers that it should examine the situation complained of in the light of the general rule set forth in the first sentence of the first paragraph of Article 1 of Protocol No. 1 (compare Gladysheva, cited above, § 71).
(ii) Compliance with Article 1 of Protocol No. 1 to the Convention
31. The Court has on a number of previous occasions examined cases in which the Russian State or municipal authorities have been successful in reclaiming housing from bona fide owners once it had been established that such real property should have been considered bona vacantia and that one of the prior transactions in respect of the property had been fraudulent (see Alentseva, no. 31788/06, §§ 55-77; Kirillova v. Russia, no. 50775/13, §§ 33‑40, 13 September 2016; and Zimonin and Others v. Russia [Committee], nos. 59291/13 and 2 others, §§ 58-61, 16 May 2017). Having examined the specific conditions and procedures under which the State ensured the compliance and legitimacy of the housing transactions between private individuals, the Court noted that they fell within the State’s exclusive competence and held that the defects in those procedures preventing the State from obtaining title to bona vacantia housing should not have been remedied at the expense of such housing’s bona fide owners. The Court furthermore reasoned that the restitution of such property to the State or relevant municipality without any compensation being paid to the respective 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 applicants’ right to the peaceful enjoyment of their possessions on the other.
32. Turning to the circumstances of the present case, the Court sees no reason to hold otherwise. It notes that the City was prevented from obtaining title to the flat (which should have been considered bona vacantia following S.’s death) owing to fraud committed by an unidentified perpetrator/perpetrators. In this connection, the Court observes that it was the responsibility of the State registration authorities to make sure that the transfers of title to real property in question had been carried out in accordance with the law. The Government’s submissions do not address the question of why the City authorities did nothing, after S.’s death, to regularise the status of the real property in question. Nor did the Government furnish any explanation as to when and how the fraud had been discovered and why the authorities had not applied for the transfer of the property to the City but had instead condoned its resale.
33. The Court also rejects the Government’s argument that the applicant had acted in bad faith when he had bought the flat; this fact was not established in the domestic proceedings and the relevant allegation was made for the first time in the proceedings before the Court.
34. Given the circumstances, the Court considers that it was not for the applicant to assume the risk of the title to the flat 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 individual concerned (see Stolyarova v. Russia, no. 15711/13, § 49, 29 January 2015). The Court therefore concludes that the forfeiture of title to the flat by the applicant and the transfer of the ownership of the flat to the City of Moscow, under the circumstances described above and in the absence of any compensation to be paid to the applicant, placed a disproportionate and excessive burden on the latter. There has therefore been a violation of Article 1 of Protocol No. 1 to the Convention.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
35. 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
36. The applicant claimed 218,700.79 euros (EUR) (the value of the flat as at the date on which the claims were submitted) and EUR 138,965.24 (the accrued interest on that amount at an interest rate of 9.56% per annum) in respect of the pecuniary damage and 30,000 euros (EUR) in respect of non-pecuniary damage. The applicant submitted an excerpt from the State property register according to which the value of the flat was estimated at 15,250,006.28 Russian roubles (RUB) as at 29 September 2017.
37. The Government submitted that the applicant’s claims in respect of the value of the flat should be dismissed for his failure to exhaust the relevant domestic remedies. It remained open to him to bring the relevant action against the City authorities at the national level. As to the accrued interest, they considered his claims unsubstantiated. Lastly, the Government submitted that the applicant’s claims in respect of non-pecuniary damage were excessive and unreasonable.
38. The Court considers that in the present case there is a clear link between the violation found and the damage caused to the applicant. Having due regard to its findings in the instant case, and, in particular, taking into account the purchase price the applicant paid for the flat and the effects of the inflation, the Court grants the applicant’s claims in part and awards him EUR 144,977, plus any tax that may be chargeable, in respect of pecuniary damage and EUR 5,000, plus any tax that may be chargeable, in respect of non-pecuniary damage. It dismisses the remainder of the applicant’s claims for just satisfaction.
B. Costs and expenses
39. The applicant did not submit a claim for costs and expenses. Accordingly, the Court considers that there is no call to award him any sum on that account.
C. Default interest
40. 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 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 144,977 (one hundred forty-four thousand nine hundred and seventy-seven euros), plus any tax that may be chargeable, in respect of pecuniary damage;
(ii) EUR 5,000 (five thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;
(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 applicants’ claim for just satisfaction.
Done in English, and notified in writing on 16 October 2018, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş AracıAlena Poláčková
Deputy RegistrarPresident
Full & Egal Universal Law Academy