Loss of property due to illegal title. Bad faith pwner. Non violation of the right to respect of property

JUDGMENT

Belova v. Russia 15.09.2020 (app. no. 33955/08)

see here 

SUMMARY

Respect for property. Loss of property due to illegal title and acquisition of it in bad faith.

The property was returned to the State several years after its purchase by the applicant by intermediate individuals, who were not legalized to enter into the sale. The State Property Service after many years requested the return of the property for reasons of public interest and specifically to be used in the 2014 Winter Olympics. The Supreme Court finally found that the applicant had not acquired the property in good faith and annulled her title.

According to the ECtHR, the buyer must carefully investigate the origin of the property in order to avoid possible foreclosure or expropriation claims. The Court agrees with the Supreme National Court that, if the applicant had done so, she would have found that the property she was purchasing was the subject of a dispute. In addition, the applicant should have been more cautious due to the fact that the property changed ownership for the third time in a year. The ECtHR also held that the applicant had not shown that her private interests in the use of the property outweighed the apparently important public interests of hosting the Olympic Games and protecting the environment.

Non-violation of the right to respect for property (Article 1 of the First Additional Protocol to the ECHR).

Fair trial. Right of access to court

The trial of the Application for Annulment of the State against her took place without her presence. According to the ECtHR, there was no evidence that the notifications were served on the applicant or her representative, who lived in different cities in relation to the seat of the national court.

Violation of the right to a fair trial (Article 6 § 1 of the ECHR).

PROVISIONS

Article 6 par. 1

Article 1 of the First Additional Protocol

PRINCIPAL FACTS

The applicant, Nina Aleksandrovna Belova, is a Russian national who was born in 1972 and lives in
Sochi.

The case concerned recovery of property under the laws on good-faith purchase. The property in
question used to belong to the State and was managed by a State-owned company. In 2003 the
company had signed over the property to a private person in settlement of a debt. The property was
then sold twice, and in 2004 came into the hands of the applicant. Each transaction was registered
with the Property Registration Authority (ЕГРП) and deeds were issued.

In 2012 the State Property Agency sought recovery of the property for construction for the 2014
Winter Olympics. After proceedings on several levels, the Supreme Court finally found that the
applicant had not acquired the property in good faith and annulled her title to it.

In a parallel case in 2011, the applicant had sought cadastral survey of the property. After
proceedings at two levels, a cassation appeal had been heard on the matter following an appeal by
the State Property Agency. The applicant alleged that she had not been informed of those
proceedings and that she had asked the court for a postponement of the hearing. The court
nevertheless had heard the case in her absence and holds that the land belonged to the State and
would be used to build a five-star hotel to host Olympic Committee members, alongside a bird
reserve.

Relying on Article 1 of Protocol No. 1 (right of property) to the European Convention on Human
Rights, Ms Belova complained that her property had been wrongfully taken from her. Relying on
Article 6 § 1 (fair trial) of the Convention she also complained that the domestic courts had not
informed her of the cassation proceedings and had carried them out in her absence.

THE DECISION OF THE COURT…

Article 1 of the First Additiona Protocol

The Court finds that the applicants property – recoverable though it proved to be – should be considered her “possession” within the meaning of Article 1 of Protocol No. 1 because she had her title to it officially registered (see Gladysheva v. Russia, no. 7097/10, § 69, 6 December 2011).

The Court also finds that the order to return the applicants property to the State was an interference with her right to the peaceful enjoyment of that possession (see, mutatis mutandisGladysheva).

The Court agrees with the Government that the interference was subject to the conditions provided for by law, namely Articles 301 and 302 of the Civil Code as interpreted by the domestic courts.

The Court further finds that the interference was in the public interest because, as explained by the domestic authorities and the Government, the State intended to regain the property it had lost through mismanagement and to use it for hosting a major international sporting event and protecting nature.

It remains to be determined whether the interference was proportionate to the above-mentioned interest and whether the applicant had to bear an excessive individual burden (ibid., § 82).

The parties made no submissions on this point. For its part, the Court reiterates that an interference with the peaceful enjoyment of possessions must strike a fair balance between the general interests of the community and the individuals rights. This means that a measure must be both appropriate for achieving its aim and not disproportionate to that aim. The requisite balance will be upset if the person concerned has had to bear “an individual and excessive burden” (see, among other authorities, James and Others v. the United Kingdom, 21 February 1986, § 50, Series A no. 98). Authorities should be able to correct their mistakes, but not in a situation where the individual concerned is required to bear an excessive burden (see Vukušić v. Croatia, no. 69735/11, § 64, 31 May 2016, with case-law cited therein). The search for a balance is reflected in the structure of Article 1 of Protocol No. 1 as a whole, regardless of which paragraphs are concerned in each case; there must always be a reasonable relationship of proportionality between the means employed and the aim pursued. Ascertaining whether such a balance existed requires an overall examination of the various interests in issue (see Perdigão v. Portugal [GC], no. 24768/06, §§ 67-68, 16 November 2010), which may call for an analysis of such elements as the terms of compensation and the conduct of the parties to the dispute, including the means employed by the State and their implementation, such as the requirement for the authorities to act in good time, in an appropriate manner and with utmost consistency (see, mutatis mutandisBeyeler v. Italy [GC], no. 33202/96, §§ 114 and 120, ECHR 2000I).

The Court also reiterates that “the attenuation of past injustices [should] not create new wrongs” and “persons who acquired their possessions in good faith [should not be] made to bear the burden of responsibility which is rightfully that of the State” (see Pincová and Pinc v. the Czech Republic, no. 36548/97, § 58, ECHR 2002-VIII).

The Court notes in that regard that it is hardly open to the State to claim that it did not know that its property had been lost due to mismanagement. The Registration Authority had registered three transfers of the property and had issued three sets of title deeds. Under the terms of the Law of 21 July 1997, those deeds served as the States recognition and confirmation of the transfer.

Nevertheless, the most recent domestic decision given in the case denied the applicant the status of a good-faith acquirer.

The Court considers that an acquirer of property should carefully investigate its origin in order to avoid possible confiscation claims. The Court agrees with the Supreme Court that, had the applicant done this, she would have discovered that the property she was buying was the subject of a dispute and that on the eve of the purchase the Presidium of the Regional Court had set aside the agreement between the enterprise and K. Furthermore, the applicant should have been put on her guard by the fact that the property was changing hands for the third time in a year.

In addition, although the State did not compensate the applicant, there is nothing to suggest that she would not be able to claim compensation for her loss from those responsible for it.

Finally, the applicant has not explained how she used the property and the Court cannot therefore conclude that her private interests outweighed the self-evidently significant public interests of hosting the Olympics and protecting nature.

It follows that the applicant did not have to bear an excessive individual burden.

There has accordingly been no violation of Article 1 of Protocol No. 1.

Article 6 § 1

The Court has no reason to doubt the authenticity of the notifications furnished by the Government in the present case. They do not, however, provide any indication that they were delivered to either the applicant or her representative.

Furthermore, they were sent only eight days before the hearing, which was not enough notice given that the applicant and her lawyer lived in different cities to where the court was located.

In addition, nothing shows that the Presidium had duly considered the postponement request which had been faxed by the applicants lawyer on the eve of the hearing and which contained seemingly valid reasons for the postponement.

There has accordingly been a violation of Article 6 § 1 of the Convention.

Just satisfaction: 5,200 euros (EUR) in respect of non-pecuniary damage.


ECHRCaseLaw

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