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PONOMARYOV v. UKRAINE - 3236/03 [2008] ECHR 255 (3 April 2008)
URL: http://www.bailii.org/eu/cases/ECHR/2008/255.html
Cite as:
[2008] ECHR 255
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FIFTH
SECTION
CASE OF PONOMARYOV v. UKRAINE
(Application
no. 3236/03)
JUDGMENT
STRASBOURG
3
April 2008
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Ponomaryov v. Ukraine,
The
European Court of Human Rights (Fifth Section), sitting as a Chamber
composed of:
Peer Lorenzen,
President,
Snejana Botoucharova,
Volodymyr
Butkevych,
Rait Maruste,
Renate
Jaeger,
Isabelle Berro-Lefèvre,
Mirjana
Lazarova Trajkovska, judges,
and of Claudia Westerdiek, Section
Registrar,
Having
deliberated in private on 11 March 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
The
case originated in an application (no. 3236/03) against Ukraine
lodged with the Court under Article 34 of the Convention for the
Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Ukrainian national, Mr Viktor Vasylyovych
Ponomaryov (“the applicant”), on 17 January 2003.
The
Ukrainian Government (“the Government”) were represented
by their Agent, Mrs V. Lutkovska, and the Head of the Government
Agent's Office Mrs I. Shevchuk, of the Ministry of Justice.
On
21 January 2005 the Court decided to give notice of the application
to the Government. Under the provisions of Article 29 § 3 of the
Convention, it decided to examine the merits of the application at
the same time as its admissibility. On 11 October 2005 the Court put
additional questions to the parties.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
The
applicant, Mr Viktor Vasylyovych Ponomaryov, is a Ukrainian national
who was born in 1953 and lives in the village of Rogan, Kharkiv
region, Ukraine.
On
18 February 1991 the applicant was dismissed from the State-owned
farm KhTZ.
After
numerous unsuccessful attempts to receive salary and other payments
arrears due to him from the farm, in February 1999 the applicant
lodged a civil claim against the farm seeking the above
payments and compensation for the delay in their payment.
In
January 2001 the defendant was transformed into the Sad Joint-Stock
Company (hereafter “the Company”) in which 25% of shares
belonged to the State.
On
5 October 2001 the Chuguyiv Town Court (hereafter “the
Chuguyiv Court”) awarded the applicant 42,086
Ukrainian hryvnas (UAH) in salary arrears, compensation and other
payments from the Company. The judgment was not appealed against
within the one-month statutory time-limit and became final on 5
November 2001.
On
30 November 2001 the Company lodged an appeal against the judgment of
5 October 2001.
On
10 December 2001 the bailiff service initiated enforcement
proceedings.
By a ruling of 10 December 2001 the Chuguyiv Court
left the appeal of the Company unexamined for failure to comply with
procedural requirements, namely having been lodged outside the
statutory time-limit without a request for renewal, failure to pay a
court fee and shortcomings in the form and content of the appeal. The
Company was given ten days to bring its appeal into compliance with
relevant procedural law.
By
a ruling of 10 January 2002, following the Company's failure to
comply with the court's ruling of 10 December 2001, the Chuguyiv
Court returned its appeal unexamined.
On
18 November 2002 the enforcement proceedings were suspended due to
the insolvency proceedings against the Company initiated by the
Commercial Court of Kharkiv on 25 October 2002.
On
12 December 2002 the State's share in the Company was reduced from 25
% to 19.99 %.
By
a letter of 18 December 2002, the Ordzhonikidzevsky
District Bailiffs' Service informed the applicant that the defendant
Company had no funds in its account and that the procedure for the
forced sale of assets belonging to the debtor was blocked by the
Forced Sale of Property Moratorium Act of 26 November 2001.
On 4 March 2003 the Commercial Court of Kharkiv region
approved a friendly settlement between the Company and its creditors
and discontinued the insolvency proceedings.
On
24 March 2003 the enforcement proceedings were resumed.
On
30 January 2004, on a complaint by the applicant, the
Ordzhonikidzevsky Prosecutor's Office instituted criminal proceedings
against bailiff V. for fraud in relation to the enforcement of the
judgment in the applicant's favour.
On
10 February 2004 the defendant Company again lodged an appeal against
the judgment of 5 October 2001. It also requested that the time-limit
for the appeal be renewed, on the ground that at the time of the
impugned judgment of the first-instance court it had been in a
difficult economic situation and had been using all its funds to pay
off debts to avoid insolvency and, therefore, it had not been able to
afford the court fees for an appeal.
On 20 February 2004 the Chuguyiv Court allowed
the Company's request for renewal of the time-limit and issued a
ruling in which it repeated the Company's grounds for the request and
added that “the court considers it necessary to renew the
time-limit for appeal”. The court also noted that its ruling of
20 February 2004 was not subject to appeal.
On
1 April 2004, on the basis of the ruling of 20 February 2004, the
Ordzhonikidzevskiy Bailiffs' Service returned the writ of execution
to the Chuguyiv Court.
On
21 April 2004 the Kharkiv Court of Appeal reviewed the judgment of 5
October 2001, found in part against the applicant and in the other
part reviewed the calculation of the requested compensation and
awarded the applicant UAH 3.09.
On
29 April 2004 the debtor transferred to the bailiff service the
amount awarded from it under the decision of 21 April 2004. According
to the Government, on 22 June 2004 the applicant was informed that
this amount was available for him. According to the applicant he did
not receive any such information at that time.
On
7 September 2004 the criminal proceedings against bailiff V. were
discontinued for lack of proof of a crime.
On
15 October 2004 the applicant lodged a cassation appeal against the
decision of 21 April 2004 and requested that the time-limit for
lodging an appeal be renewed on the ground that he had not been
present before the Court of Appeal and he had learned about the above
decision only on 6 October 2004. By a ruling of 29 October 2004,
the Chuguyiv Court allowed the applicant's request and renewed the
time-limit for lodging a cassation appeal.
On
9 November 2005 the Supreme Court quashed the decision of 21 April
2004 on the ground that the court of appeal had considered the case
in the applicant's absence and remitted the case to the court of
appeal for a fresh consideration.
On 1 March 2006 the Kharkiv Court of Appeal issued a
new decision along the same lines as its previous decision of 21
April 2004.
On
12 May 2006 the Supreme Court refused the applicant's request for
leave to appeal in cassation.
II. RELEVANT DOMESTIC LAW
A. Legislation concerning enforcement proceedings
1. Forced Sale of Property Moratorium Act of 29
November 2001
The
Act (Закон України
“Про введення
мораторiю на
примусову
реалiзацiю майна”)
aims at protecting State interests in the sale of assets belonging to
undertakings in which the State holds at least 25% of the share
capital. A moratorium on the enforcement of judgment debts has been
introduced until such time as the mechanism for the forced sale of
the property of such undertakings has been improved. No time-limit
has been set. Section 2 of that Act provides that the prohibition on
the forced sale of property includes the execution of writs by the
State Bailiffs' Service on property belonging to such companies. The
Act therefore stays the execution of all writs by the State Bailiffs'
Service against the assets of undertakings in which the State holds
at least 25% of the share capital.
2. Enforcement Proceedings Act of 21 April 1999
Under
section 2 of the Act (Закон України
“Про виконавче
провадження”),
the enforcement of judgments is entrusted to the State Bailiffs'
Service. Under section 85 of the Act, a creditor may make a complaint
against actions or omissions of the State Bailiffs' Service with the
head of the competent department of that Service or with a local
court. Section 86 of the Act entitles a creditor to institute court
proceedings against a legal person, entrusted with the enforcement of
a judgment, for the inadequate enforcement or non-enforcement of that
judgment, and to receive compensation.
3. State Bailiffs' Service Act of 24 March 1998
Section
11 of the Act (Закон України
“Про державну
виконавчу
службу”) provides for
the liability of bailiffs for any inadequate performance of their
duties, and compensation for damage caused by a bailiff when
enforcing a judgment. Under section 13 of the Act, acts and omissions
of the bailiff can be challenged before a superior official or the
courts.
B. Legislation concerning time-limits
1. The Code of Civil Procedure, 1963 (replaced by a new
Code on 1 January 2005)
Article
68 of the Code provided for delayed payment of the court fees or
their payment by instalments. These methods of court fee payment
could be allowed by a judge with regard to the property status of a
party. Such an extension or delay in payment could be granted for a
maximum period of three months.
Article
89 of the Code provided that the procedural time-limits could be
extended or renewed if the court found valid reasons for such an
extension or renewal. A refusal to renew a time-limit was subject to
appeal.
Article
292 of the Code provided for a one-month period for lodging appeals
against decisions of the first-instance court and a fifteen-day
period for appeal against its rulings. It further provided that these
periods could be renewed if the court found valid reasons for their
renewal.
2. Other procedural codes
The
new Code of Civil Procedure, as well as the Code of Criminal
Procedure and the Code of Administrative Justice provide similar
provisions as to the renewal of the procedural time-limits. The Code
of Commercial Procedure, however, limits the possibility of renewal
to three months.
THE LAW
I. THE REOPENING OF THE JUDICIAL PROCEEDINGS AND QUASHING
OF THE JUDGMENT
The
applicant complained under Article 6 § 1 of the
Convention that the renewal of the time-limit for an ordinary appeal
after a considerable lapse of time and the consecutive quashing of
the judgment of 5 October 2001 had violated the principle of legal
certainty and unlawfully prolonged the judicial proceedings. He
further complained under Article 1 of Protocol No. 1 to the
Convention of an interference with his right to the peaceful
enjoyment of possessions. The relevant parts of these provisions read
as follows:
Article 6 § 1
“In the determination of his civil rights and
obligations ..., everyone is entitled to a fair ... hearing within a
reasonable time... by [a]... tribunal...”
Article 1 of Protocol No. 1
“Every natural or legal person is entitled to the
peaceful enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law...”
A. Admissibility
The
Court notes that this complaint is not manifestly ill-founded within
the meaning of Article 35 § 3 of the Convention. It further
notes that it is not inadmissible on any other grounds. It must
therefore be declared admissible.
B. Merits
1. Arguments by the parties
The
Government maintained that the ruling of 20 February 2004 had not
changed the judgment of 5 October 2001 but only allowed a review of
it. They further submitted that the decision of 21 April 2004 by the
court of appeal quashing the judgment of 5 October 2001 was
subsequently quashed by the Supreme Court.
The
applicant disagreed. He maintained that the reasons for renewal
advanced by the defendant Company had been unfounded, since the
financial situation of the defendant at the end of 2001 had been more
than satisfactory, which could be proved by relevant documents. He
further noted that the defendant Company had previously used its
right to appeal against the judgment of 5 October 2001. The applicant
considered that by renewing the time-limit for a repeated appeal
after a considerable lapse of time the domestic court had violated
the principle of legal certainty and unlawfully prolonged the
judicial proceedings.
2. The Court's assessment
(a) Article 6 of the Convention
The
Court reiterates that the right to a fair hearing before a tribunal
as guaranteed by Article 6 § 1 of the Convention must be
interpreted in the light of the Preamble to the Convention, which
declares, in its relevant part, the rule of law to be part of the
common heritage of the Contracting States. One of the fundamental
aspects of the rule of law is the principle of legal certainty, which
presupposes respect for the principle of res judicata, that is
the principle of the finality of judgments. This principle underlines
that no party is entitled to seek a review of a final and binding
judgment merely for the purpose of obtaining a rehearing and a fresh
determination of the case. Higher courts' power of review should be
exercised to correct judicial errors and miscarriages of justice, but
not to carry out a fresh examination. The review should not be
treated as an appeal in disguise, and the mere possibility of there
being two views on the subject is not a ground for re-examination. A
departure from that principle is justified only when made necessary
by circumstances of a substantial and compelling character (see,
mutatis mutandis, Ryabykh v. Russia, no. 52854/99, §
52, ECHR 2003-X).
The
Court notes that the present case concerns not an extraordinary
review of the final and binding judgment under supervisory review
proceedings or in the light of newly discovered circumstances (see
among other authorities, Tregubenko v. Ukraine, no. 61333/00,
§§ 34-38, 2 November 2004; and Pravednaya
v. Russia, no. 69529/01, §§ 27-34,
18 November 2004), but the reopening of the proceedings after a
considerable lapse of time by renewing the time-limit for an ordinary
appeal. The Court notes that the legal systems of many member States
provide for a possibility to extend procedural time-limits if there
are valid reasons to do so. At the same time, if the time-limit for
ordinary appeal procedure is renewed after a considerable lapse of
time and for reasons which do not appear to be particularly
persuasive, like in the present case an allegedly difficult economic
situation preventing the defendant from paying the court fees (see
paragraphs 19 and 20 above), such a decision can infringe the
principle of legal certainty, in a similar way to the extraordinary
review proceedings. The Court acknowledges that it is primarily
within the domestic courts' discretion to decide on the renewal of
the time-limit for an appeal, but such discretion is not unlimited.
The courts shall be required to indicate the reasons. One of such
reasons could be, for instance, a failure by the State authorities to
inform parties of decisions taken with respect to their cases. Even
then, however, the possibility of renewal would not be unlimited,
since the parties should take steps within reasonable intervals to
learn about the state of judicial proceedings of which they are aware
(see, mutatis mutandis, Aleksandr Shevchenko v. Ukraine,
no. 8371/02, § 27, 26 April 2007 and Trukh v. Ukraine
(dec.), no. 50966/99, 14 October 2003) ). In every case, the
domestic courts should verify whether the reasons for renewal of a
time-limit for appeal could justify the interference with the
principle of res judicata, especially, as in the present case,
when the domestic legislation does not limit the courts' discretion
either on the time or on the grounds for the renewal of the
time-limits.
The
Court notes that the renewal of the time-limit for the opposing party
in the proceedings had been granted although the Company had been
aware of the judgment of 5 October 2001 shortly if not immediately
after its adoption. It had lodged a first appeal in November 2001,
but it was not considered for a number of reasons, a failure to pay a
court fee being only one of them (see paragraph 11 above). Two years
later, the Company lodged a new appeal, maintaining that it could not
afford the court fees at the time the decision of the first-instance
court was open to appeal under the law. The Court notes that the
Company did not refer to lack of funds, but to lack of free funds to
pay the court fees. Furthermore, there is no indication that the
Company ever asked for delay of payment of the court fees or for
payment by instalments, which it could have done under domestic law
(see Relevant domestic law above). In such a situation, allowing the
Company to lodge a repeated appeal after a considerable lapse of time
and after execution of judgment had started for reasons which, in the
Court's opinion, are not exercised for correction of serious judicial
errors and miscarriages of justice, but merely for the purpose of a
rehearing and a fresh decision of the case, the domestic courts
infringed the principle of legal certainty and the applicant's “right
to a court” under Article 6 § 1 of the Convention. There
has accordingly been a violation of that Article.
(b) Article 1 of Protocol No. 1
The
Court reiterates that the existence of a debt confirmed by a binding
and enforceable judgment furnishes the judgment beneficiary with a
“legitimate expectation” that the debt will be paid and
constitutes the beneficiary's “possessions” within the
meaning of Article 1 of Protocol No. 1. Quashing such a judgment
amounts to an interference with his or her right to peaceful
enjoyment of possessions (see, among other authorities, Brumărescu
v. Romania [GC], no. 28342/95, § 74).
The
Government agreed that the judgment of 5 October 2001 constituted a
“possession”, but maintained that there had been no
violation of Article 1 of Protocol No. 1, since the decision of the
Kharkiv Court of Appeal, quashing the above judgment, had in its turn
been quashed by the Supreme Court.
The
applicant disagreed.
The
Court finds that in the present case as a result of the reopening of
the proceedings the amount of the judgment award was considerably
reduced. The quashing of the enforceable judgment frustrated the
applicant's reliance on a binding judicial decision and deprived him
of an opportunity to receive the money he had legitimately expected
to receive (see paragraphs 20 and 27 above).
In
these circumstances, the Court considers that the reopening of the
proceedings and the quashing of the judgment of 5 October 2001 placed
an excessive burden on the applicant and was therefore incompatible
with Article 1 of Protocol No. 1. There has therefore been a
violation of that Article.
II. THE LENGTH OF THE ENFORCEMENT PROCEEDINGS
The
applicant complained that the State authorities had not enforced the
judgment of 5 October 2001 in due time. He relied on Article 6 § 1
of the Convention and Article 1 of Protocol No. 1.
The
Government maintained that the State could not be held responsible
for the debts of the Company, since the latter was a separate legal
entity and the State had a minor share in it. Moreover this share had
been reduced from 25% to 19.99% in December 2002. Therefore, the
Forced Sale of Property Moratorium Act no longer protected the
debtor's funds from the enforcement proceedings. They further
maintained that the applicant had not exhausted the remedies
available to him under the domestic law.
The
applicant maintained that he had worked for the State-owned farm and
that its consequent transformation into a joint-stock company did not
relieve the State of the obligation to pay off its debts to him.
The
Court notes that at the time the judgment in the applicant's favour
was adopted the State was only a minor shareholder (25%) of the
defendant Company. After the judgment of 5 October 2001 had become
final the debtor Company had been protected by the law on moratorium
for a relatively short period of time – about thirteen months –
until the State's share had been reduced to 19.99 %. After this
period the responsibility of the State extended no
further than the involvement of State bodies in enforcement
proceedings (see Shestakov v. Russia
(dec.), no. 48757/99, 18 June 2002).
The
applicant challenged the bailiff's actions under the criminal law but
the investigation established no fault of the bailiff in the
non-enforcement of the judgment. Nevertheless, the applicant has
failed to challenge the decision of 7 September 2004 on termination
of criminal proceedings against the bailiff before the courts.
Neither has he lodged a civil claim seeking damages from the bailiff
service for non-enforcement of the judgment in his favour.
The
Court reiterates that, as it has already held in similar cases,
Ukrainian legislation provides for a possibility to challenge before
the courts the lawfulness of actions and omissions of the State
Bailiffs' Service in enforcement proceedings and to claim damages
from that Service for delays in payment of the amount awarded (see,
for instance, Kukta v. Ukraine (dec.), no. 19443/03,
22 November 2005). In the present case, the applicant failed to
do so and, accordingly, cannot be regarded as having exhausted the
domestic remedies available to him under Ukrainian law.
It
follows that this complaint must be rejected pursuant to
Article 35 §§ 1, 3 and 4 of the Convention.
IV. OTHER COMPLAINTS
In
so far as the applicant complained under Article 6 § 1 of the
Convention that he was absent from the hearing at the court of
appeal, the Court notes that the decision of the Court of Appeal of
21 April 2004 was quashed by the Supreme Court for that very reason.
Therefore, the applicant could no longer claim to be a victim with
respect to this complaint. It follows that this complaint is
manifestly ill-founded and must be rejected in accordance with
Article 35 §§ 3 and 4 of the Convention.
The
applicant also relied on Articles 8 and 14 of the Convention with
respect to the enforcement proceedings. The Article 8 complaint was
based on the applicant's allegation that the judgment debt could have
been used by him to ensure better treatment for his son, who had been
suffering from leukaemia and had subsequently died, in March 2003.
The Court notes that the applicant did not raise these complaints
before the domestic courts. In any event, his allegations are
unsubstantiated and do not lay a basis for an arguable claim of a
breach of this provision. It follows that this part of the
application is manifestly ill-founded too and must be rejected in
accordance with Article 35 §§ 3 and 4 of the Convention.
V. APPLICATION OF ARTICLE 41 OF THE CONVENTION
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
The
applicant claimed UAH 103,110 (equivalent to 14,133 euros (EUR),
which corresponded to UAH 42,086.06 plus inflation losses, in respect
of pecuniary damage. He also claimed EUR 100,000 in respect of
non-pecuniary damage, stating that his son had died of cancer because
the applicant lacked the awarded sum for better medical treatment for
his son.
The
Government found these claims groundless and irrelevant.
As
to the pecuniary damage claimed, the Court notes that the amount
awarded to the applicant by the domestic court on 1 March 2006 is
negligible in comparison with the originally awarded amount under the
judgment of 5 October 2001. The Court considers it appropriate to
award the applicant EUR 5,780,
which is the equivalent of the amount awarded to him by the domestic
court under the quashed judgment.
As
to non-pecuniary damage claimed, the Court takes the view that the
applicant has suffered some non-pecuniary damage as a result of the
violations found which cannot be made good by the Court's mere
finding of a violation (Tregubenko v. Ukraine, cited above,
§ 63). Nevertheless, the amount claimed is excessive.
Making its assessment on an equitable basis, as required by Article
41 of the Convention, the Court awards the applicant the sum of EUR
1,000 in respect of non-pecuniary damage.
B. Costs and expenses
The
applicant did not submit any claim under this head within the set
time-limit; the Court therefore makes no award in this respect.
C. Default interest
The
Court considers it appropriate that the default interest 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
Declares the complaint concerning of the
reopening of the proceedings and the quashing of the judgment of 5
October 2001 admissible and the remainder of the application
inadmissible;
Holds that there has been a violation of Article
6 § 1 of the Convention and Article 1 of Protocol No. 1;
Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention,
-
EUR 5,780 (five thousand seven hundred and eighty Euros) in respect
of pecuniary damage;
-
EUR 1,000 (one thousand Euros) in respect of non-pecuniary damage,
plus any tax that may be chargeable;
- to
be converted into the currency of the respondent State at the rate
applicable on the date of settlement;
(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;
Dismisses the remainder of the applicant's claim
for just satisfaction.
Done in English, and notified in writing on 3 April 2008, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Claudia Westerdiek Peer
Lorenzen
Registrar President
