CASE OF PCHELINTSEVA AND OTHERS v. RUSSIA

FIRST SECTION

CASE OF PCHELINTSEVA AND OTHERS v. RUSSIA

(Applications nos. 47724/07, 58677/11, 2920/13, 3127/13 and 15320/13)

JUDGMENT

This version was rectified on 11 January 2017

under Rule 81 of the Rules of the Court

STRASBOURG

17 November 2016

FINAL

24/04/2017

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Pchelintseva and Others v. Russia,

The European Court of Human Rights (First Section), sitting as a Chamber composed of:

András Sajó, President,
Mirjana Lazarova Trajkovska,
Khanlar Hajiyev,
Paulo Pinto de Albuquerque,
Linos-Alexandre Sicilianos,
Erik Møse,
Dmitry Dedov, judges,
and Abel Campos, Section Registrar,

Having deliberated in private on 13 October 2015, 6 September 2016 and 11 October 2016,

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

PROCEDURE

1. The case originated in five applications (nos. 47724/07, 58677/11, 2920/13, 3127/13 and 15320/13) 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”). Their details appear in Appendix I below.

2. Ms Pchelintseva, Ms Dedik, who was granted legal aid, Ms O. Polevoda, Mr Yu. Polevoda and Ms N. Polevoda, Mr F. Karim, Ms S. Karim, Mr G. Karim and Mr T. Karim were represented by Ms M. Samorodkina, a lawyer practising in Moscow. Ms Dergacheva was represented by Mr A. Samoryadov, a lawyer practising in the Moscow Region. The Russian Government (“the Government”) were represented by Mr G. Matyushkin, Representative of the Russian Federation at the European Court of Human Rights.

3. The applicants alleged, in particular, that they had been deprived of their flats in contravention of Article 1 of Protocol No. 1 and that their eviction amounted to a violation of Article 8 of the Convention.

4. On 7 January 2014 the President of the First Section decided to grant the applications priority under Rule 41 of the Rules of the Court and to give the Government notice of the applicants’ complaints under Article 1 of Protocol No. 1 to the Convention and Article 8 of the Convention. The remainder of the applications were declared inadmissible.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicants are Russian nationals. They were owners of flats in Moscow. The State authorities reclaimed the flats, and the applicants’ title to the real property in question was annulled. To date, some of the applicants have been evicted from the property. In other cases, the eviction proceedings are still pending or were discontinued.

A. Application no. 47724/07

6. The applicant in this case is Mariya Nikolayevna Pchelintseva, who was born on 15 June 1979 and lives in Moscow.

1. Transactions in respect of the flat later purchased by the applicant

7. Prior to its privatisation, the flat at 4-78 Angarskaya Ulitsa, Moscow, had been owned by the City of Moscow. Kor. had resided there as a tenant under the social housing agreement with the City.

8. On 22 February 2002 Kor. signed a power of attorney authorising G., inter alia, to conduct transactions on her behalf in respect of the said flat.

9. On 29 May 2002 the title to the flat was transferred to Kor. under a privatisation scheme.

10. On 2 June 2002 Kor. died.

11. On 6 September 2002, acting by virtue of the power of attorney, G. sold the flat to A.

12. On 12 November 2002 A. exchanged the flat for another one located at 20-2-144 Angarskaya Ulitsa, Moscow, owned by the Housing Department.

13. On 21 November 2002 A. sold the 38.8 square metre flat at 20-2-144 Angarskaya Ulitsa, Moscow, to the applicant.

2. Annulment of the applicant’s title to the flat and eviction proceedings

14. On 29 March 2006 the prosecutor’s office opened a criminal investigation into the above-mentioned property transactions.

15. On an unspecified date the prosecutor lodged civil claims on behalf of the City of Moscow, seeking: (1) invalidation of the power of attorney allegedly signed by Kor.; (2) invalidation of all of the above-mentioned property transactions; and (3) the applicant’s eviction.

16. On 29 November 2006 the Timiryazevskiy District Court of Moscow granted the prosecutor’s claims in full. The court conceded that the applicant was a bona fide purchaser of the flat. However, it ruled that the case fell under one of the two exceptions to the protection of a bona fide purchaser’s title, which required that precedence be given to the previous owner. The applicant’s title to the flat was annulled and the title was transferred to the City of Moscow. The court also ordered the applicant’s eviction. The applicant appealed.

17. On 20 March 2007 the City Court upheld the judgment of 29 November 2006 on appeal.

18. In October 2010 the applicant was evicted from the flat. On 21 October 2010 the bailiff discontinued the eviction proceedings.

3. Claim for damages against a real estate agency

19. On 24 February 2010 the Koptevskiy District Court of Moscow granted a claim for damages lodged by the applicant against the real estate agency which had represented her in the flat purchase. The District Court awarded her, inter alia, pecuniary damages in the amount of RUB 928,000.

20. The judgment of 24 February 2010 was not enforced because the agency had been declared insolvent.

B. Application no. 58677/11

21. The applicant in this case is Tatyana Stanislavovna Dedik, who was born on 22 April 1973 and lives in the Moscow Region.

1. Transactions in respect of the flat later purchased by the applicant

22. Prior to its privatisation, the flat at 14-73 Ulitsa Grishina, Moscow, had been owned by the City of Moscow. Ye. had resided there as a tenant under the social housing agreement with the City. On 2 July 2008 Ye. died.

23. On an unspecified date An. pasted her photograph in Ye.’s passport and applied for the privatisation of the flat where Ye. used to live. Her request was granted and title to the flat was transferred to her.

24. On 12 January 2008 An., posing as Ye., sold the flat to the applicant.

25. On an unspecified date the Housing Department brought a civil claim seeking restitution of the flat. In their opinion, the flat belonged to the City of Moscow and the applicant should be divested of her ownership rights in respect of it.

26. On 30 November 2010 the Kuntsevskiy District Court of Moscow granted the authorities’ claims in full. The court conceded that the applicant was a bona fide purchaser of the flat. However, it ruled that the case fell under one of the two exceptions to the protection of a bona fide purchaser’s title, which required that precedence be given to the previous owner. The applicant’s title to the flat was annulled and title was transferred to the City of Moscow. The court also ordered the applicant’s eviction. The applicant appealed.

27. On 14 March 2011 the Moscow City Court upheld the judgment of 30 November 2010 on appeal.

28. According to the Government, the applicant was evicted from the flat on 25 September 2012.

2. Social housing agreement

29. On 14 November 2014 the City of Moscow entered into a social housing agreement with the applicant, who now resides in the flat as a tenant.

C. Application no. 2920/13

30. The applicants in this case are Oksana Aleksandrovna Polevoda, who was born on 14 June 1974, and her two children, Yuriy Aleksandrovich Polevoda, born on 11 February 1999, and Natalya Aleksandrovna Polevoda, born on 28 November 2002. The applicants live in Moscow.

1. Transactions in respect of the flat later purchased by the first applicant

31. Prior to its privatisation the flat at 27-3-50 Kastanayevskaya Ulitsa, Moscow, had been owned by the City of Moscow. V. had resided there as a tenant under the social housing agreement with the City. On 1 November 2001 V. died.

32. On 10 September 2002 the local housing authorities authorised an exchange of flats between V. (whom they presumed was still alive) and S. The latter moved into the flat.

33. On 24 December 2002 the local housing authorities authorised another exchange of flats between S. and K. On 16 April 2003 the City housing authorities transferred title to the flat to K. under the privatisation scheme.

On 8 May 2003 K. sold the flat to the first applicant.

2. Annulment of the first applicant’s title to the flat and eviction proceedings

34. On an unspecified date the Housing Department brought a civil action against the applicants. The housing authorities alleged that, in view of the fraudulent nature of the first transaction in respect of the flat, the first applicant’s title to the flat should be annulled and the flat repossessed by the City.

35. On 24 December 2010 the Dorogomilovskiy District Court of Moscow dismissed the City’s claims.

36. On 26 August 20011 the Moscow City Court quashed the judgment of 24 December 2010 and remitted the matter for fresh consideration.

37. On 13 December 2011 the District Court granted the claims against the applicants. It recognised the City’s title to the flat and ordered the applicants’ eviction. The court conceded that the first applicant was a bona fide purchaser of the flat. However, it ruled that the case fell under one of the two exceptions to the protection of a bona fide purchaser’s title, which required that precedence be given to the City of Moscow as the previous owner of the flat.

38. On 26 October 2012 the City Court upheld the judgment of 13 December 2011 on appeal.

39. According to the Government, the applicants were not evicted and continue to reside in the flat. The City of Moscow is considering the possibility of entering into a social housing agreement with them.

3. Claim for damages against K.

40. On 20 June 2013 the Timiryazevskiy District Court of Moscow granted the first applicant’s claim for damages against K. and awarded her, inter alia, RUB 7,649,000. K. appealed.

41. On 16 October 2013 the Moscow City Court upheld the judgment of 20 June 2013 on appeal.

42. According to the Government, the enforcement proceedings are still pending and offer a sufficient prospect of success, given the activities carried out by the bailiffs with the aim of recovering the debt from K.

D. Application no. 3127/13

43. The applicant in this case is Svetlana Alekseyevna Dergacheva, who was born on 29 September 1960 and lives in Moscow.

1. Transactions in respect of the flat later purchased by the applicant

44. Prior to its privatisation, the flat at 13-2-113 Belomorskaya Ulitsa, Moscow, had been owned by the City of Moscow. On 21 February 2007 the local municipal authorities assigned the flat to Yo. and her family under the social housing agreement.

45. On 4 December 2007 the City housing authorities transferred ownership of the flat to Yo. under the privatisation scheme.

46. On 25 February 2009 Yo. sold the flat to the applicant.

2. Annulment of the first applicant’s title to the flat and eviction proceedings

47. On 13 October 2010 the Koptevskiy District Court of Moscow found Yo. guilty of fraud. The court established that Yo. had fraudulently acquired the tenancy rights in respect of the flat.

48. On an unspecified date the Housing Department brought a civil action seeking, inter alia, the return of the flat to the City and the applicant’s eviction. The Housing Department further claimed that the applicant should not be recognised as a bona fide purchaser of the flat given that she had been Yo.s’ colleague and knew her quite well and that the price she had paid for the flat had been below its market value.

49. On 14 February 2012 the Golovinskiy District Court of Moscow granted the claims against the applicant. The court noted that the Housing Department had failed to substantiate, with any evidence, their allegations that the applicant had bought the flat in bad faith and rejected them. However, it ruled that the case fell under one of the two exceptions to the protection of a bona fide purchaser’s title, which required that precedence be given to the City of Moscow, as the previous owner of the flat. Lastly, the court ordered that Yo. return to the applicant the purchase price paid by her.

50. On 26 June 2012 the Moscow City Court upheld on appeal the part of the judgment of 14 February 2012 concerning the restitution of the City’s title to the flat and the applicant’s eviction and discontinued the proceedings as regards the repayment by Yo. of the purchase price to the applicant.

51. The eviction proceedings are still pending.

E. Application no. 15320/13

52. The applicants in this case are Fakir Mukhamad Gulom Mukhamad Karim, who was born on 10 May 1968, his wife Svetlana Aleksandrovna Karim, who was born on 6 July 1979[1], and their sons Gleb Fakirovich Karim, born on 17 October 2008, and Timofey Fakirovich Karim, born on 16 June[2] 2010. The applicants live in Moscow.

1. Transactions in respect of the flat later purchased by the first applicant

53. Prior to its privatisation, the flat at 9-13 Yartsevskaya[3] Ulitsa, Moscow, had been owned by the City of Moscow. Z. had resided there as a tenant under the social housing agreement with the City. On 2 August 2007 Z. died.

54. Acting by virtue of a power of attorney issued on 1 April 2008, V. signed a flat privatisation agreement on behalf of Z. on 28 April 2008 and then sold the flat to P. on 2 June 2008.

55. On 19 August 2008 P. sold the flat to the first applicant.

2. Annulment of the first applicant’s title to the flat and eviction proceedings

56. On an unspecified date the Housing Department brought a civil claim seeking restitution of its title to the flat.

57. On 17 January 2012 the Kuntsevskiy District Court of Moscow granted the claim. It restored the City’s ownership of the flat and ordered the applicants’ eviction. The court conceded that the first applicant was a bona fide purchaser of the flat. However, it ruled that the case fell under one of the two exceptions to the protection of a bona fide purchaser’s title, which required that precedence be given to the City of Moscow as the previous owner of the flat.

58. On 8 August 2012 the Moscow City Court upheld the judgment of 17 January 2012 on appeal.

59. According to the Government, the applicants were not evicted and continue to reside in the flat. On 24 October 2014 the City authorities entered into a social tenancy agreement with the first and fourth applicants.

II. RELEVANT DOMESTIC LAW AND PRACTICE

A. A. Federal Law on State registration of titles to, and transactions in respect of, real property

60. Pursuant to the Federal Law On State registration of titles to, and transactions in respect of, real property, adopted on 21 July 1997 (as amended), the State confirms the acquisition, transfer or termination of the title to real property by means of state registration (Article 2). Once the state registration authorities receive the application for state registration of the title to real property, they are under obligation to conduct an expert review as regards the lawfulness of the transactions underlying the acquisition, transfer or termination of the title. They are further required to establish that there are no conflicting interests in respect of such property and verify whether the application should be accepted (Article 13 § 1). When applying for state registration, the parties to the transaction underlying the acquisition, transfer or termination of the title to real property should present a valid ID. If the application is lodged by the parties’ representative(s), he or she should submit a duly notarised authority form (power of attorney) (Article 16 §§ 1 and 2).

B. Civil Code of the Russian Federation

61. The relevant provisions of the Civil Code of the Russian Federation provide as follows:

Article 167. General provisions on the consequences of declaring
a transaction invalid

“1. The invalidation of a transaction shall have no legal consequences except for those connected with the invalidation, and the transaction shall be considered invalid from the date of the transaction.

2. If a transaction has been declared invalid, each of the parties shall return to the other the consideration it has received under the transaction, and if the return is impossible in kind (including where the transaction concerns the use of property, work performed or services rendered), its cost shall be reimbursed in the form of money - unless other consequences of the invalidity of the transactions have been stipulated by law.

3. If it follows from the content of the disputed transaction that it may not be terminated until a future date, the court, while declaring the transaction invalid, shall fix a future date for its termination.”

Article 302. Reclaiming property from a bona fide purchaser

“1. If a property has been purchased from a person who had no right to sell it, and the purchaser is unaware and could not have been aware [of this fact] (the bona fide purchaser), the owner shall have the right to reclaim this property from the purchaser, if the said property was lost by the owner or by the person into whose possession the owner has conveyed the property, or if it was stolen from either of them, or if it left their possession in another way against their will.

2. If the property has been acquired gratuitously from a person who had no right to convey it, the owner shall have the right to reclaim the property in all cases.

3. Money and bearer securities shall not be reclaimed from a bona fide purchaser.”

C. Ruling of the Constitutional Court of the Russian Federation

62. By its ruling of 21 April 2003, 6-P, the Constitutional Court of the Russian Federation interpreted Article 167 of the Code as not allowing the original owner to reclaim his property from a bona fide purchaser unless there is a special legislative provision to this effect. Instead, a claim vindicating prior rights (виндикационный иск) could be lodged under Article 302 of the Code if the conditions indicated in paragraphs 1 and 2 are met, in particular if the property has left the owner’s possession without his or her intention to divest himself of it, or if the property has been acquired gratuitously.

D.  Ruling of the Plenary of the Supreme Court and the Plenary of the High Commercial Court of the Russian Federation

63. Further interpretation of Article 302 of the Civil Code was provided by the Plenary of the Supreme Court of the Russian Federation and the Plenary of the High Commercial Court of the Russian Federation. Their joint ruling of 29 April 2010, no. 10/22 “On certain questions arising in judicial practice in respect of resolution of disputes connected with the protection of property rights and other real rights” stated as follows:

“39. Article 302 § 1 of the Civil Code of the Russian Federation provides that the owner may reclaim his property ... regardless of the respondent party’s claim that he or she is a bona fide purchaser, if he proves that the property has left his possession ... against his will.

The fact that the transaction ... has been declared invalid does not by itself signify that the property left the [owner’s] possession against his or her will. It is incumbent on the court to establish whether the owner expressed his or her will to convey [the property] to another person.”

64. In its ruling no. 188‑O‑O of 27 January 2011, the Constitutional Court relied on the interpretation of Article 302 provided by the Plenaries when verifying the said Article’s compliance with the Constitution.

E. Overview of the case-law concerning vindication claims lodged by State and municipal bodies against bona fide owners of housing

65. On 1 October 2014 the Presidium of the Supreme Court of the Russian Federation approved the Overview of the case-law concerning vindication claims lodged by State and municipal bodies against bona fide owners of housing. It stated, in particular, as follows:

“...

Where a property transaction has been declared invalid, this shall not be construed as meaning that the Russian Federation, a constituency of the Russian Federation or a municipality lost ownership of the property against its will.

For example, a District Court dismissed the municipality’s claims against M., as regards the vindication of the flat and transfer of the ownership rights, for the following reasons.

It was established that the flat had been assigned to L. under the social housing agreement. L. had submitted a false certificate alleging that [he was eligible for priority assignment of social housing]. Later on, the title to the flat was transferred to L. under the privatisation agreement. Subsequently, L. sold the flat to M.

Regard being had to the fact that the municipality was a party to both the social housing agreement and the privatisation agreement, and had an opportunity to verify the validity of the documents submitted by L. but failed to do so with due diligence, the court concluded correctly that the municipality had transferred the disputed flat to L. wilfully and, pursuant to Article 302 § 1 of the Civil Code of the Russian Federation, could not reclaim the flat from the bona fide purchaser M., who had bought the flat from L.

...

If the respondent party bought the real property from a person who had no right to sell it, and the plaintiff and the respondent are not parties to the same transaction in respect of the real property, Articles 301 and 302 of the Civil Code of the Russian Federation apply, regardless of the type of civil claim lodged by the plaintiff (vindication of the housing, claim that the transaction in respect of the housing should be declared null and void, or both).

For example, a District Court considered a civil action lodged by the prosecutor on behalf of a municipality against M., S. and N., claiming that the social housing agreement and the [subsequent] privatisation, gift and sale [of the flat] should be recognised as null and void, and the flat vindicated.

The court established that the disputed flat had been owned by the municipality, and had been classified as special housing which could be assigned only to persons on the housing list under the gratuitous use agreement. However, [the management agency] entered into a social housing agreement with M. who later became the flat’s owner under the privatisation scheme.

M. gave the flat, under the gift agreement, to S. who sold it to N.

According to [the Ruling of the Plenary of the Supreme Court and the Plenary of the High Commercial Court of the Russian Federation], in the event the plaintiff brings an action, seeking the invalidation of the property transaction, against, inter alia, the person who bought the property from the party who had no right to sell, Articles 301 and 302 of the Civil Code of the Russian Federation apply.

The court took into consideration that the plaintiff was seeking vindication of the flat and applied Articles 301 and 302 of the Civil Code of the Russian Federation when considering the dispute. Having established that the disputed flat had been transferred by its owner to the [management agency]; that the latter disposed of the flat of its own will. and that N. purchased the flat for a consideration and in good faith from a person who did not have a legal right to sell it, the court dismissed the claims that the transactions for the gift and sale of the flat ... should be declared null and void and ... the flat returned to the municipality.

At the same time ... the court accepted that the prosecutor’s request that the social housing and privatisation agreements be declared null and void ... should be granted, given that the said agreements had been executed in contravention of the applicable legislation.

The court further noted that the municipality had a legal interest in having the said transactions declared null and void ..., because it had a right to claim damages from the person who had interfered with its possession.”

F. Consideration of the case of Gladysheva (see Gladysheva v. Russia, no. 7097/10, 6 December 2011) by the national courts

66.  On an unspecified date the City of Moscow brought an action against Ms Gladysheva and the previous owners of the flat, V. and Ye., seeking the repossession of the flat that the applicant had bought and her eviction. The matter was considered twice by the national courts at two levels of jurisdiction. The relevant facts are described in detail in the case of Gladysheva (see Gladysheva v. Russia, no. 7097/10, §§ 18-34, 6 December 2011).

67. On 30 August 2011 the Supreme Court of the Russian Federation quashed the judgments of 9 July 2009 and 13 May 2010, holding as follows:

“The court cannot agree with the findings set out in [the judgments of 9 July 2009 and 13 May 2010] given that they are not based on a correct interpretation of the applicable rules of substantive law.

...

Pursuant to Article 302 § 1 of the Civil Code of the Russian Federation, if [a person] acquires, for a consideration, property from another person who did not have a right to convey it, which fact was unknown and could not have been known to the purchaser (a bona fide purchaser), the owner may reclaim the property from the purchaser in the event that the property was lost by the owner ... or was stolen from [him or her] or if he or she lost [his or her] possession in any other way against [his or her] will.

Regard being had to the above, it is incumbent on the court to establish that the property left the owner’s possession ... in the above circumstances; that the purchaser acquired the property for a consideration; and that he or she did not know and could not have known that he or she had purchased the property from a person who did not have a right to convey it. The purchaser cannot be recognised as acting in good faith if, at the time of purchase of the property, he or she knew of the existence of the third parties’ claims in respect of the property and those claims were later recognised as valid.

...

... the [lower] courts failed to refer to the evidence confirming that the flat had left the [City’s] possession against its will.

...

... the [District] [C]ourt returned the flat to the City of Moscow and indicated that the said property had left the [City’s] possession against the latter’s will. However, the court failed to take into account that the transfer of the title to the [flat] had been carried out by way of a transfer of the flat from the City’s ownership to Ye.’s ownership. Accordingly, [the City of Moscow] had been a party to the contested transaction ... and had expressed its will to convey the flat to Ye.”

68. On 10 February 2012 the Cheremushkinskiy District Court of Moscow considered the matter de novo. It dismissed the Housing Department’s claims against Ms Gladysheva, holding as follows:

“... in order to consider the property vindication claims, it is incumbent on [the courts], in particular, to establish whether the forfeiture of the property by the owner was effected notwithstanding his or her will.

... the [Housing Department] argues that Ye. did not marry M. and, therefore, could not have moved into the flat as a member of his family and ... did not have a right to have it privatised.

However, the court considers that this fact alone is not relevant for the consideration of the dispute because it does not confirm that [the Housing Department] had no intention of transferring the property to [Ye.].

The court has established ... that Ye. moved into the flat, obtained her registered address there, signed a social housing agreement, a privatisation agreement, had her title to the flat registered upon authorisation of the state authorities which were under an obligation to verify the relevant documents submitted by the parties in order to have their transactions approved.

... [T]he Housing Department did not deny that the authorised officials had verified the documents submitted by Ye. for the purposes of signing the social housing and privatisation agreements and that they had not doubted their authenticity.

Accordingly, the transfer of the title to the flat from the City of Moscow to Ye. was carried out by way of privatisation. [The Housing Department] was a party to that transaction ... and expressed its consent to the transfer of [the flat] to Ye.

...

Whereas it has been established that the Housing Department willingly transferred the title to the flat [to Ye.], the court cannot accept the plaintiff’s reliance on Articles 301 and 203 of the Civil Code of the Russian Federation ... . Given that Ye. has legitimately acquired the title to the flat, there are no grounds to nullify [the earlier transactions] in respect of the flat.

...

On 30 March 2005 the Housing Department willingly signed a social housing agreement with Ye. in respect of the flat.

When granting the flat to Ye. under the social housing agreement, the Housing Department had a duty to verify why the previous tenant M. had left the flat and why Ye. had moved into the flat ... However, the Housing Department failed to verify the said circumstances and, by allowing Ye. to move into the flat, has discontinued the City’s title to the flat.

The [District] Court does not accept the Housing Department’s argument that it was not incumbent on the Housing Department to verify [the above circumstances]. Pursuant to [the applicable legislation] the Housing Department had a duty to check whether the [the housing transactions] were in compliance with the law, which it failed to do.

...

The [District] Court [further] considers that the Housing Department has failed to comply with the [three years’] statute of limitations for its claims. Nor has it provided any justification for that failure. Accordingly the [District] Court accepts Ms Gladysheva’s argument that the statute of limitations should be applied.

Regard being had to the above, the [District] Court considers that the Housing Department’s claims ... should be dismissed.”

69. On 5 April 2012 the Cheremushkinskiy District Court of Moscow dismissed, without consideration, the statement of appeal lodged by the Housing Department against the judgment of 10 February 2012 for the latter’s failure to comply with the applicable time-limit.

70. On 29 June 2012 the Moscow City Court upheld the decision of 5 April 2012 on appeal.

G. Application of Article 302 of the Civil Code by the Supreme Court of the Russian Federation in a civil dispute between the Housing Department and a bona fide purchaser

71. On 3 November 2015 the Supreme Court of the Russian Federation, acting as a cassation court, considered the case of V., whose flat had been repossessed by the City of Moscow despite the fact that V. was its bona fide purchaser. The Supreme Court quashed the earlier judgments in favour of the City of Moscow and indicated as follows:

“The errors in application of substantive and procedural laws committed by the courts, which considered the present case and adopted, as a result [of such application], unlawful judicial acts, can be summarised as follows.

When considering the dispute and granting the [Housing Department’s] claims seeking [annulment of V.’s title to the flat, the flat’s transfer to the City of Moscow, eviction of V.’s family], the court took into account that K. [to whom the flat had been originally assigned under the social tenancy agreement] had died on 7 May 2008. Accordingly, all transactions in respect of the flat under dispute that were carried out after K’s death and in the absence of his will, should be considered null and void. Given that K. had not consented to the flat where he had been residing as tenant being privatised, the court concluded that the flat under dispute should be considered as municipal property and as having left the City of Moscow’s possession against the latter’s will. The Housing Department had not been aware and could not have been aware that the privatisation of the flat in K.’s favour had been carried out on the basis of forged documents. Regard being had to the above, it had been necessary to protect the City of Moscow’s rights by means of applying Article 302 of the Civil Code of the Russian Federation.

The appeal court upheld the findings of the court at the first level of jurisdiction.

The Supreme Court of the Russian Federation considers that the courts’ findings are based on an incorrect application of substantive law to the circumstances of the case. The courts failed to take into consideration certain facts, which resulted in the adoption of unlawful judicial acts.

Pursuant to Article 302 § 1 of the Civil Code of the Russian Federation, if a property has been purchased from a person who had no right to sell it, and the purchaser is unaware and could not have been aware [of this fact] (the bona fide purchaser), the owner has the right to reclaim this property from the purchaser, if the said property was lost by the owner or by the person into whose possession the owner has conveyed the property, or if it was stolen from either of them, or if it left their possession in another way against their will.

As explained in section 39 of Joint Ruling No. 10/22 of the Plenary of the Supreme Court and the Plenary of the High Commercial Court of the Russian Federation ..., pursuant to Article 302 § 1 of the Civil Code of the Russian Federation, an owner may reclaim his or her property ... regardless of the respondent party’s claim that he or she is a bona fide purchaser, if he proves that the property has left his possession ... against his will.

The fact that the transaction ... has been declared invalid does not by itself signify that the property left the [owner’s] possession against his or her will. It is incumbent on the court to establish whether the owner expressed his or her will to convey [the property] to another person.

The courts, however, failed to take into consideration the above interpretation provided by the Plenary of the Supreme Court of the Russian Federation.

When considering the dispute, the court established that the privatisation of the flat in K.’s favour had been carried out on the basis of forged documents, which fact, in the court’s opinion, rendered the relevant transaction null and void. The court failed to determine whether the City of Moscow, being the flat’s owner, had expressed the will to convey the flat to [K.] and concluded that the City of Moscow had not intended to do so.

Such a finding is erroneous. As a party to both a social housing agreement and a privatisation agreement, the Housing Department was under an obligation and had an opportunity to verify the authenticity of the documents submitted in support of the said agreements but failed to do so.

It follows from the materials in the case file that on 14 November 2008, that is prior to the date of the social housing agreement (1 and 27 October 2009) ... and prior to the date of the privatisation agreement (3 November 2009), K.’s name was put on the missing persons list and on 2 September 2008 ... the flat under dispute was put on the special information control.

The above information was accessible to the officers of the Housing Department. Nevetherless, on 3 November 2009 the flat was privatised ... , i.e., on the same day as the Housing Department received an application for privatisation of the said flat. This fact shows that the Housing Department did not carry out the required mandatory check in respect of the documents submitted for [the privatisation of the flat].

Accordingly, the failure on the part of the Housing Department to exercise due care when carrying out the transactions in respect of the flat under dispute ... , shows that the owner of the flat expressed the will to divest itself of its property.

Regard being had to the above and in accordance with Article 302 § 1 of the Civil Code of the Russian Federation, the flat could not have been reclaimed from V. who had purchased it in good faith on 5 August 2011.”

THE LAW

I. JOINDER OF THE APPLICATIONS

72. In accordance with Rule 42 § 1 of the Rules of the Court, the Court decides to join the applications, given their similar factual and legal background.

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

73. The applicants complained that they had been deprived of their possessions 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

1. Compatibility ratione materiae

74. The Court notes from the outset that it has to satisfy itself that it has jurisdiction in any case brought before it, and is therefore obliged to examine the question of its jurisdiction at every stage of the proceedings (see Blečić v. Croatia [GC], no. 59532/00, § 67, ECHR 2006‑III). Accordingly, even though the Government in their observations raised no plea of inadmissibility concerning lack of jurisdiction ratione materiae, the Court nevertheless has to examine, of its own motion, whether the applicants had a “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention and whether that Article is consequently applicable in the instant case (compare Štokalo and Others v. Croatia, no. 15233/05, § 44, 16 October 2008).

75. In this connection the Court reiterates that the concept of “possessions” in the first paragraph of Article 1 of Protocol No. 1 to the Convention has an autonomous meaning which is not limited to the ownership of material goods and is independent from the formal classification in domestic law. In the same way as material goods, certain other rights and interests constituting assets can also be regarded as “property rights”, and thus as “possessions” for the purposes of this provision. In each case the issue that needs to be examined is whether the circumstances of the case, considered as a whole, conferred on the applicant title to a substantive interest protected by Article 1 of Protocol No. 1 (see, among the recent authorities, Centro Europa 7 S.r.l. and Di Stefano v. Italy [GC], no. 38433/09, § 171, ECHR 2012).

76. Turning to the circumstances of the present case, the Court observes that Ms Pchelintseva (application no. 47224/07), Ms Dedik (application no. 58677/11) and Ms Dergacheva (application no. 3127/13) were the lawful owners of the flats later reclaimed by the State. The Court concludes that these applicants enjoyed a property right in respect of the flats which constituted their “possession” for the purposes of Article 1 of Protocol No. 1 to the Convention. The said provision is therefore applicable.

77. The situation is, however, different as regards certain applicants in the remainder of the applications. While Ms O. Polevoda (application no. 2920/13) and Mr F. Karim (application no. 15320/13) were the lawful owners of the flats later reclaimed by the State and enjoyed a property right in respect of the flats which constituted their “possession” for the purposes of Article 1 of Protocol No. 1 to the Convention, the remaining applicants (Ms N. Polevoda, Mr Yu. Polevoda, Ms S. Karim, Mr G. Karim and Mr T. Karim) were not the owners of the flats and resided there only as members of the owner’s family.

78. The Court does not exclude a possibility that a person who has a right to use the housing without being its owner might have a proprietary right or interest, recognised under the domestic law, in respect of the housing, and such interest will constitute his or her “possession” attracting the protection of Article 1 of Protocol No. 1. However, as a general rule, the right to live in a particular property not owned by an applicant does not as such constitute a “possession” within the meaning of the said provision (see Durini v. Italy, no. 19217/91, Commission decision of 12 January 1994, Decisions and Reports (DR) 76B, pp. 76-79; H.F. v. Slovakia (dec.), no. 54797/00, 9 December 2003; Bunjevac v. Slovenia (dec.), no. 48775/09, 19 January 2006; Gaćeša v. Croatia (dec.), no. 43389/02, 1 April 2008; and Babenko v. Ukraine (dec.), no. 68726/10, 4 January 2012).

79. The Court further notes that in their observations Ms N. Polevoda, Mr Yu. Polevoda, Ms S. Karim, Mr G. Karim and Mr T. Karim did not refer to any national law or factual information that would allow the Court to conclude that their occupancy right constituted a “possession” within the meaning of Article 1 of Protocol No. 1 to the Convention (see, by contrast, Mago and Others v. Bosnia and Herzegovina, nos. 12959/05, 19724/05, 47860/06, 8367/08, 9872/09 and 11706/09, § 78, 3 May 2012). Accordingly, the Court is not satisfied that those applicants can claim that the said Article is applicable in their case. It follows that the complaint lodged by the applicants indicated in the first sentence of this paragraph is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 and must be rejected pursuant to Article 35 §4.

2. Exhaustion of domestic remedies

(a) The parties’ submissions

80. As regards applications nos. 58677/11, 3127/13 and 15320/13, the Government considered that the applicants had not made recourse to existing effective domestic remedies. It had been open to them to bring a civil action for damages against the persons who had sold the flats to them with fraudulent intent. The Government relied on the actions brought by Ms Pchelintseva (application no. 47724/07) and Ms Polevoda (application no. 2920/13) who had successfully sued their counterparties for damages resulting from void transactions.

81. Ms Dergacheva (no. 3127/13) challenged the Government’s objection. In her opinion, lodging an action for damages against Yo., who had sold the flat to her, would have been futile and offered no prospect of success. Had such an action been effective, the authorities should have made use of it instead of recovering the property from its bona fide purchaser.

82. Ms Dedik (no. 58677/11), and Mr F. Karim (no. 15320/13) did not comment.

(b) The Court’s assessment

83. The Court notes that it has already examined the issue of exhaustion of effective domestic remedies in a case where the applicant had been deprived of her housing as a result of the revocation of her title to a flat by a final and enforceable judgment (see Gladysheva, cited above, §§ 60-62 and 89). The Court concluded that, under Russian law, there was no further recourse against that judgment that might potentially lead to reinstatement of the applicant’s title to the flat. It further noted that a possibility to bring an action for damages, in those circumstances, could not deprive the applicant of victim status for the purposes of complaints under Article 1 of Protocol No. 1 to the Convention. Nor could it be regarded as necessary for compliance with the rule of exhaustion of domestic remedies within the meaning of Article 35 § 1 of the Convention. Lastly, the Court considered that any damages that the applicants might have been able to recover against the seller of the flat might only be taken into account for the purposes of assessing the proportionality of the interference and, calculation of pecuniary damage if a violation of Article 1 of Protocol No. 1 to the Convention was found by the Court, and if just satisfaction was awarded under Article 41 of the Convention (ibid., § 62).

84. The Court considers that these findings hold true in 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 applicants to pursue the civil remedies referred to by the Government. The Government’s objection in this regard is, therefore, dismissed.

3. Conclusion

85. The Court notes that the complaint under Article 1 of Protocol No. 1 to the Convention introduced by Ms Pchelintseva (application no. 47224/07), Ms Dedik (application no. 58677/11), Ms O. Polevoda (application no. 2920/13), Ms Dergacheva (application no. 3127/13), and Mr F. Karim (application no. 15320/13) 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.

B. Merits

1. The parties’ submissions

(a) The applicants

86. The applicants considered that the interference with their property rights had not been in accordance with the applicable laws. Relying on the Supreme Court’s findings in the case of Ms Gladysheva (see paragraph 67 above), the applicants asserted that the City of Moscow had decided of its own will to cede its ownership in respect of the flats and convey them to others. It had verified and authorised all the transactions in respect of the flats. Accordingly, the City had not had standing under Article 302 of the Civil Code of the Russian Federation to reclaim the flats from the applicants. The only remedy to which the City had recourse, in the circumstances, was a civil action for damages against the perpetrators who had fraudulently acquired rights in respect of the flats.

87. Referring to the Court’s findings in the case of Gladysheva, (see Gladysheva, cited above, §§ 77-83), the applicants claimed that the loss of their real property had amounted to a disproportionate interference with their rights set out in Article 1 of Protocol No. 1 to the Convention. The authorities had placed an excessive burden on them and failed to ensure a fair balance between their decision to reclaim the property from the applicants who had acquired it in good faith and the applicants’ interests. They further noted that the State bore responsibility for the fraudulent transactions in respect of the real property later purchased by the applicants. It had been incumbent on the authorities to verify the compliance of those transactions with the applicable laws. However, the authorities had failed to do so in a timely and diligent manner and had managed to recover the property from the bona fide owners only by flagrantly disregarding the latter’s interests.

(b) The Government

88. The Government considered that the interference with the applicants’ property rights had been “in accordance with the law” and that it pursued the legitimate aim of protecting the interests of others, notably of persons in need of housing. The transfer of the flats to the State should not be viewed as having been carried out in the State’s interests only. The City of Moscow was responsible for providing affordable housing to people on low income. Accordingly, the City had reclaimed the flats in the interests of those people. The Government conceded that the applicants had sustained a certain financial loss as a result of the State’s actions. However, their losses had been caused by the fraudulent acts of other individuals and the applicants could recover the damage by bringing a civil action for damages against them. In the Government’s opinion, the loss of the real property in such circumstances did not amount to a disproportionate burden for the applicants. If they considered themselves in need of social housing, they could lodge a relevant application with the authorities.

89. As regards application no. 3127/13, the Government, relying of the same arguments raised by the Housing Department in the domestic proceedings (see paragraph 48 above) suggested that the applicant should not be recognised as a bona fide purchaser of the flat.

2. The Court’s assessment

(a) General principles

90. The general principles concerning protection of property are well established in the Court’s case-law and have been summarised as follows (see Gladysheva, cited above):

“64. The Court refers to its established case-law on the structure of Article 1 of Protocol No. 1 and the manner in which the three rules contained in that provision are to be applied (see, among many other authorities, J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 52, ECHR 2007‑III; Bruncrona v. Finland, no. 41673/98, §§ 65-69, 16 November 2004; and Broniowski v. Poland [GC], no. 31443/96, § 134, ECHR 2004‑V).

65. It reiterates that in order to be compatible with the general rule of Article 1 of Protocol No. 1, an interference must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to the aim sought to be realised (see, for example, Beyeler v. Italy [GC], no. 33202/96, §§ 108-14, ECHR 2000-I).

66. An interference with the peaceful enjoyment of possessions must therefore strike a “fair balance” between the demands of the public or general interest of the community and the requirements of the protection of the individual’s fundamental rights. The concern to achieve this balance is reflected in the structure of Article 1 as a whole, which is to be read in the light of the general principle enunciated in the first sentence. In particular, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions or controlling their use. Compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance, and, notably, whether it imposes a disproportionate burden on the applicant (see Former King of Greece and Others v. Greece [GC], no. 25701/94, § 89, ECHR 2000-XII).

67. In this connection, the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference that cannot be justified under Article 1 of Protocol No. 1. This provision does not, however, guarantee a right to full compensation in all circumstances, since legitimate “public interest” objectives may call for reimbursement of less than the full market value (see, among other authorities, Papachelas v. Greece [GC], no. 31423/96, § 48, ECHR 1999-II).

68. Although Article 1 of Protocol No. 1 contains no explicit procedural requirements, the proceedings at issue must also afford the individual a reasonable opportunity to put his or her case to the responsible authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by this provision. In ascertaining whether this condition has been satisfied, a comprehensive view must be taken of the applicable procedures (see, among other authorities, Jokela v. Finland, no. 28856/95, § 45, ECHR 2002-IV).”

(b) Application of these principles in the present case

(i) Whether there was a “possession”

91. The Court takes note of its earlier findings as regards the admissibility of the complaint (see paragraphs 74-77 above) and accepts that the flats constituted the applicants’ possessions for the purposes of Article 1 of Protocol No. 1 to the Convention.

92. The Court further 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) Whether there was an interference

93. The Court observes that it is common ground between the parties that the revocation of the applicants’ ownership in respect of the flats amounted to an interference with their rights set out in Article 1 of Protocol No. 1 to the Convention. The Court sees no reason to hold otherwise.

94. The Court’s task in the present case is, accordingly, to determine whether the interference satisfied the requirement of lawfulness and was not arbitrary and whether it struck a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see Beyeler, cited above, § 107).

(iii) As to whether the interference was lawful

95. Regarding the lawfulness of the revocation of the applicants’ title to the flats, the Court cannot rule out the possibility that there may have been a certain deficiency in the application of the domestic law, as argued by the applicants. Noting, however, that its power to review compliance with domestic law is limited (see Gashi v. Croatia, no. 32457/05, § 29, 13 December 2007, and Allan Jacobsson v. Sweden (no. 1), 25 October 1989, § 57, Series A no. 163), the Court considers that it may dispense with resolving this issue because, irrespective of the domestic lawfulness of the interference, it fell short of the requirement of proportionality, as set out below (see Gladysheva, cited above, §§ 72-75).

(iv) As to whether there was the legitimate aim

96. As to the legitimate aim of the impugned measure, the Court reiterates that, because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is “in the public interest”. Under the system of protection established by the Convention, it is thus for the national authorities to make an initial assessment as to the existence of a matter of public concern warranting measures of deprivation of property. Here, as in other fields to which the safeguards of the Convention extend, the national authorities accordingly enjoy a certain margin of appreciation (see, among many authorities, Edwards v. Malta, no. 17647/04, § 64, 24 October 2006). With this in mind, the Court may accept the Government’s argument that the revocation of the applicants’ title to the flats pursued the public interest, in that it catered for the needs of those in need of housing.

(v) As to the fair balance

97. Turning to the assessment of whether the impugned measure satisfied the requirement of proportionality, despite the margin of appreciation given to the State, the Court must nevertheless, in the exercise of its power of review, determine whether the requisite balance was maintained in a manner consonant with the applicants’ right to property (see Rosiński v Poland, no. 17373/02, § 78, 17 July 2007).

98. The Court observes that the applicants’ title was invalidated because the procedures by which the flats had been privatised by a third party had been fraudulent. The Court notes in this connection that it was within the State’s exclusive competence to define the conditions and procedures under which it alienated its assets to persons it considered eligible and to oversee compliance with those conditions. It was also within the State’s exclusive competence to legalise the transfer of title to flats through a registration procedure specifically aimed at providing extra security to the title holder. With so many regulatory authorities having granted clearance to the title to the flats, it was not for the applicants, or any other third-party buyer of the flats, to assume the risk of ownership being revoked on account of defects which should have been eliminated in procedures specially designed to do so. The authorities’ oversight could therefore not justify subsequent retribution against the applicants (see Gladysheva, cited above, § 79).

99. The Court further notes that the applicants have been stripped of ownership without compensation. As regards the Government’s argument that the applicants’ loss could be mitigated if they sued the individuals, who had fraudulently acquired the flats, for damages, the Court notes that the Government did not elaborate as to the prospects of successful outcome of the enforcement proceedings. In that connection the Court takes into account the argument advanced by Ms Dergacheva and notes that, in none of the cases under consideration, the authorities themselves tried to recover damages from the individuals found guilty of fraud. The Court considers that, in the circumstances of the case, shifting the possibility to recover damages from the perpetrators to the applicants would not improve the balance between the public interest and the need to protect individuals’ rights.

100. Having regard to the foregoing factors, the Court considers that the state authorities failed to ensure a proper expert review as regards the lawfulness of the real-property transactions which resulted in revocation of the applicants’ title to the flats. In its view, the conditions under which the applicants were stripped of their title to the flats imposed an individual and excessive burden on them and that the authorities have 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 (compare, Gladysheva, cited, above, §§ 77-83).

101. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.

III. ALLEGED VIOLATION OF ARTICLE 8 OF THE CONVENTION

102. The applicants complained that their eviction, or the order for their eviction, had amounted to a violation of their right to respect for home. They relied on Article 8 of the Convention, which reads as follows:

“1. Everyone has the right to respect for his private and family life, his home and his correspondence.

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.”

103. The Government admitted that the national courts’ decisions to order the applicants’ eviction had constituted an inference with their rights set out in Article 8 of the Convention. They considered that such interference had been lawful, pursued the legitimate aim of protecting the rights of persons eligible to social housing and that it had been proportionate to that aim.

104. The applicant maintained their complaints.

105. Having regard to the findings relating to Article 1 of Protocol No. 1 to the Convention (see paragraphs 90-101 above), the Court considers that it is not necessary to examine separately the admissibility or the merits the complaint under Article 8 of the Convention (see, mutatis mutandis, Güler and Uğur v. Turkey, nos. 31706/10 and 33088/10, §§ 58-59, 2 December 2014).

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

106. 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

107. The applicants’ claims in respect of pecuniary and non-pecuniary damage are summarised in the table below:

Application no.

Pecuniary damage (RUB)

Non-pecuniary damage (EUR)

47724/07

6,750,000

15,000

58677/11

8,575,000

60,000

2920/13

8,146,950

35,000

3127/13

90,000

15320/13

6,707,630

75,000

108. The Government contested these sums as excessive, unsubstantiated and unreasonable.

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

110. 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, § 198; and Stoycheva v. Bulgaria, no. 43590/04, 19 July 2011). Consequently, having due regard to its findings in the instant case and to the fact that the applicants 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 the applicants’ title to the flats. Thus, the applicants would be put as far as possible in a situation equivalent to the one in which they 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 Government no longer own the flats, or if they have been otherwise alienated, the Government should ensure that the applicants receive equivalent flats.

111. In addition, 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 applicant in each application EUR 5,000 in respect of non-pecuniary damage, plus any tax that may be chargeable on that amount.

B. Costs and expenses

112. Ms Dergacheva (application no. 3127/13) did not claim costs and expenses. Accordingly, there is no call to make an award under this head.

113. As regards the claims for costs and expenses submitted by the other applicants, they can be summarised as follows:

Application

Costs and expenses

Court fee

Issuance of authority forms

Legal fee

Expert appraisal of the flat

Postal /

Translation

Domestic proceedings

Proceedings before the Court

47724/07

RUB 8,910

RUB 2,470

RUB 42,000

EUR 2,000

RUB 3,000

RUB 457.70

58677/11

RUB 700

RUB 118,770

EUR 2,000

RUB 4,000

RUB 282.93

2920/13

RUB

92,190

RUB 357,875

EUR 2,000

RUB 56,000

RUB 5,300

RUB 13,469

15320/13

RUB 340

RUB 1,900

RUB

192,254.54

EUR 2,000

RUB

150,000

RUB 3,000

RUB 24,421

114. The Government asked the Court to reject the applicants’ claims for costs and expenses incurred in connection with the domestic proceedings (legal and court fees), as they considered them irrelevant to the consideration of their complaints before the Court. They pointed out that some of the expenses claimed by the applicants had not been confirmed by appropriate receipts.

115. 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 the first applicant in each application the following sums in respect of their claims for costs and expenses:

Application

Amount awarded

47724/07

EUR 2,075

58677/11

EUR 1,243 (EUR 850 has already been paid to the applicant by way of legal aid

2920/13

EUR 2,075

15320/13

EUR 2,075

C. Default interest

116. 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

1. Decides to join the applications;

2. Declares, unanimously, the complaint lodged under Article 1 of Protocol No. 1 to the Convention by Ms Pchelintseva, Ms Dedik, Ms O. Polevoda, Ms Dergacheva and Mr F. Karim admissible and the complaint lodged under the same provision by the remaining applicants inadmissible;

3. Holds, by six votes to one, that there has been a violation of Article 1 of Protocol No. 1 to the Convention;

4. Holds, unanimously, that there is no need to examine the admissibility or merits of the complaint under Article 8 of the Convention;

5. Holds, by six votes to one,

(a) that the respondent State shall ensure, by appropriate means, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, full restitution of the applicants’ title to the flat and the annulment of their eviction orders. In the alternative, if the flats are no longer the State’s property, or if they have been otherwise alienated, the respondent State shall ensure that the first applicant in each application receives an equivalent flat;

(b) that the respondent State is to pay the first applicant in each application, within three months of the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the amounts as indicated in Appendix II, plus any tax that may be chargeable to the applicants, to be converted into the currency of the respondent State at the date of settlement;

(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;

6. Dismisses, unanimously, the remainder of the applicants’ claim for just satisfaction.

Done in English, and notified in writing on 17 November 2016, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Abel CamposAndrás Sajó
RegistrarPresident

In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the separate opinion of Judge Sajó is annexed to this judgment.

A.S.
A.C.

DISSENTING OPINION OF JUDGE SAJÓ

To my regret, I have to dissent in these cases for the reasons set out in the case of Ponyayeva and others v. Russia (no. 63508/11).

I would just like to mention a few facts below which are particularly problematic.

1. In the case of Pchelintseva and others v. Russia (no. 47724/07) the fraudulent facts became public knowledge four years after the purchase. The applicant was clearly aware of the risk she undertook: she asked for a professional title check. A final judgment assigned responsibility to the company having checked the title. According to Government she recovered her loss but the Court found that the damages could not be enforced for reasons of insolvency.

2. In the case of Dedik v. Russia (no. 58677/11), the forgery became established after the conclusion of the purchase. The applicant was entitled to continue to reside in the apartment as social tenant. It is of relevance that this “bona fide” purchaser bought the property below the market price. Should that not be a consideration even for the majority which finds a violation in this case, at least as regards just satisfaction? Could someone who obtains property below the market price not assume that there are serious risks?

3. In the case of Polevoda v. Russia (no. 2920/13), the fraudulent transaction was authorised by the Moscow City Bar Association “Exchange”. The Court considered that the State authorities were responsible for the failure to check and discover the fraud. Is the Court extending State responsibility to the acts of the Bar (and in a number of cases to the Notary)? I assume (although this is not discussed at all in the judgment) that the “Exchange” service to some extent operates on the State’s behalf. However, this is not made clear, and even assuming that this is the case, the special responsibilities and the statutory duty of care are not specified. It is highly problematic to attribute State responsibility to acts adopted by lawyers (and notaries) without further consideration and specification, even if their acts are a matter of public trust.

In this case, the fraudulent vendor was ordered to reimburse the plaintiff, measures to safeguard the assets that could be used for recovery were taken by the bailiff, and the State’s obligation in that regard was limited to assisting the creditor in enforcing the relevant court order. This matter is not even considered in the judgment. The Court noted that “a possibility to bring an action for damages ... could not deprive the applicant of victim status” (see paragraph 82). What we have here, however, is no mere possibility: the applicant successfully lodged the claim with a court, and the reason given in a different context that recovery is impossible because the assets of the vendor were confiscated does not apply in this case.

4. As to the case of Ms Dergacheva (Dergasheva v. Russia, no. 3127/13), she worked at Moscow Housing Stock Department, like Mr Yo. who embezzled and sold the property to Ms Dergacheva. Mr Yo. was convicted for the crime. Ms Dergacheva paid a price far below the market price (which fact was contested by the applicant).

APPENDIX I

Details of the applications

No.

Application no.

Date of introduction

Applicants’ details

(family relations, date of birth, place of residence) 

47724/07

19/09/2007

Mariya Nikolayevna PCHELINTSEVA

15/06/1979

Moscow

58677/11

02/08/2011

Tatyana Stanislavovna DEDIK

22/04/1973

Moscow Region 

2920/13

25/12/2012

Oksana Aleksandrovna POLEVODA

14/06/1974

Moscow

Natalya Aleksandrovna POLEVODA

(first applicant’s daughter) 28/11/2002

Moscow

Yuriy Aleksandrovich POLEVODA

(first applicant’s son) 11/02/1999

Moscow 

3127/13

21/12/2012

Svetlana Alekseyevna DERGACHEVA

29/09/1960

Moscow 

15320/13

06/02/2013

Fakir Mukhamad Gulom Mukhamad KARIM

10/05/1968

Moscow

Svetlana Aleksandrovna KARIM

(first applicant’s wife) 06/07/1979

Moscow

Gleb Fakirovich KARIM

(first applicant’s son) 17/10/2008

Moscow

Timofey Fakirovich KARIM

(first applicant’s son) 16/06/2010[4]

Moscow

APPENDIX II

Awards made by the Court under Article 41 of the Convention

Application number and name of the applicant who receives the award

Non-pecuniary damage

Costs and expenses

1

47724/07

Pchelintseva

EUR 5,000

EUR 2,075

2

58677/11

Dedik

EUR 5,000

EUR 2,093

3

2920/13

Oksana Polevoda

EUR 5,000

EUR 2,075

4

3127/13

Dergacheva

EUR 5,000

5

15320/13

Fakir Karim

EUR 5,000

EUR 2,075

[1] Rectified on 11 January 2017: the text was “1967”.

[2] Rectified on 11 January 2017: the text was “October”.

[3] Rectified on 11 January 2017: the text was “27-3-50 Kastanayevskaya”.

[4] Rectified on 11 January 2017: the text was “16/10/2010”.

Full & Egal Universal Law Academy