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Cite as: [2009] ECHR 801

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FIFTH SECTION

CASE OF SHYLKIN AND POBEREZHNYY v. UKRAINE

(Applications nos. 6924/06 and 8252/06)

JUDGMENT

STRASBOURG

28 May 2009

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 Shylkin and Poberezhnyy v. Ukraine,

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

Peer Lorenzen, President,
Rait Maruste,
Karel Jungwiert,
Renate Jaeger,
Mark Villiger,
Mirjana Lazarova Trajkovska, judges,
Stanislav Shevchuk, ad hoc judge,
and Claudia Westerdiek, Section Registrar,

Having deliberated in private on 5 May 2009,

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

PROCEDURE

The case originated in two applications (nos. 6924/06 and 8252/06) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Ukrainian nationals, Mr Volodymyr Ivanovych Shylkin and Mr Anatoliy Grygorovych Poberezhnyy (“the applicants”), on 28 January and 15 February 2006 respectively.

Mr Poberezhnyy was represented by Mr I. Melnyk, a lawyer practising in Kamyanets-Podilsky, Khmelnytsky region, Ukraine.

The Ukrainian Government (“the Government”) were represented by their Agent, Mr Y. Zaytsev.

On 10 January and 11 September 2007 the Court decided to communicate the applicants' complaints under Article 13 of the Convention and Article 1 of Protocol No. 1 to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the applications at the same time as their admissibility.

THE FACTS

I.  THE CIRCUMSTANCES OF THE CASE

A.  Mr Shylkin

The applicant was born in 1950 and lives in Pervomaysk, Mykolayiv region, Ukraine.

On 19 May 2003, after several rounds of court proceedings, the Pervomaysk District Court of Mykolayiv Region ordered the Pervomaysk Town Centre of Municipal Companies (Комбінат комунальних підприємств міста Первомайська), a municipal entity owned by the local council, to pay the applicant the total amount of 7,498.94 Ukrainian hryvnyas (UAH)¹ in damage caused to his apartment and other property.

This judgment was not appealed against and became final. On 23 November 2003 the State Bailiffs' Service instituted enforcement proceedings. According to the Government, in the course of these proceedings the amount of UAH 1,500 had been transferred to the bank account indicated by the applicant. However, because the bank details provided by the applicant were inaccurate that sum was withdrawn. The applicant, in turn, denied that any sum had ever been paid into his bank account. He provided the relevant bank statement to support his claim.

On 19 May 2004 the local council decided to liquidate the debtor entity and the liquidation proceedings were initiated. In this respect, on 1 June 2004 the State Bailiffs' Service terminated the enforcement proceedings and transferred the writ of enforcement to the liquidation commission for further processing. The liquidation proceedings apparently are still pending.

The applicant complained to various State authorities about lengthy non-enforcement of the judgment in his favour but to no avail.

The judgment of 19 May 2003 remains unenforced.

B.  Mr Poberezhnyy

The applicant was born in 1952 and currently resides in the village of Dovzhok, Khmelnytsky region, Ukraine.

On 13 April 2000 the local city council decided to liquidate the applicant's employer, the Kamyanets-Podilsky Maintenance Municipal Company (Кам'янець-Подільське ремонтно-виробниче комунальне підприємство) owned by this council, and liquidation proceedings were initiated. Subsequently the applicant resigned.

On 11 July 2001 the Kamyanets-Podilsky City Court awarded the applicant UAH 3,385.42² in salary arrears and other payments due to him by his former employer.

14.  In so far as this judgment became final, on 15 October 2001 the State Bailiffs' Service instituted proceedings to enforce it. In the course of these proceedings the total amount of UAH 2,195 was paid to the applicant.

On 17 August 2003 the State Bailiffs' Service terminated the enforcement proceedings and transferred the writ of enforcement to the liquidation commission for further processing. The liquidation proceedings are apparently still pending.

On 10 April 2003 the applicant requested the local Prosecutor's Office to institute criminal proceedings against L. and M., the head of the liquidation commission of the debtor company and the bailiff respectively, for lengthy non-enforcement of the judgment given in his favour. Apparently the proceedings are still pending.

The applicant also complained to various State authorities but to no avail.

The judgment of 11 July 2001 remains unenforced.

II.  RELEVANT DOMESTIC LAW

The general provisions of domestic legislation on enforcement of judicial decisions are set out in the judgment of 27 July 2004 in the case of Romashov v. Ukraine (no. 67534/01, §§ 16-18).

The provisions of the Civil Code of 18 July 1963 (repealed on 1 January 2004) and the Civil Code of 16 January 2003 (in force since 1 January 2004) on owners' liabilities for the obligations of their legal entities are set out in the case of Mykhaylenky and Others v. Ukraine, nos. 35091/02 and foll., §§ 25-26, ECHR 2004 XII).

21.  Article 143 of the 1996 Constitution of Ukraine provides:

“Territorial communities of a village, settlement and city, directly or through the bodies of local self-government established by them, manage the property that is in municipal ownership; [...] establish, reorganise and liquidate municipal enterprises, organisations and institutions, and also exercise control over their activity; [...].”

22.  Section 31 of the Property Act 1991 (repealed by the Act of 27 April 2007) provides that State property includes State property itself and the property of administrative-territorial units (municipal property).

By a letter of 27 December 2004 the Ministry of Justice of Ukraine, having analysed the then current legislation, concluded, inter alia, that State and municipal property were different types of property.

Article 78 “Municipal unitary enterprises” of the Commercial Code of Ukraine (in force since 1 January 2004) provides that municipal unitary enterprises are set up by a competent body of local self-government and are managed by it. A municipal unitary enterprise holds assets under the right of economic management (for municipal commercial enterprises) or operative management (for municipal non-commercial enterprises). A municipal unitary enterprise is managed by the head of that enterprise appointed by the body to which it is subordinate.

THE LAW

I.  JOINDER OF THE APPLICATIONS

The Court considers that, pursuant to Rule 42 § 1 of the Rules of Court, the applications should be joined, given their common factual and legal background.

II.  ALLEGED VIOLATIONS OF ARTICLE 13 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL No. 1 IN RESPECT OF THE LENGTHY NON-ENFORCEMENT OF THE JUDGMENTS IN THE APPLICANTS' FAVOUR

The applicants complained about the State authorities' failure to enforce the judgments taken in their favour in due time. In this regard they invoked Article 1 of Protocol No. 1. Mr Shylkin also complained under Article 13 of the Convention that he had no effective remedy in that respect. These provisions provide, in so far as relevant, as follows:

Article 13

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

Article 1 of Protocol No. 1

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest ....”

A.  Admissibility

Relying on the provisions of national legislation (among others, the 1963 and 2003 Civil Codes and the 1997 Local Self-Government Act), the Government submitted that they were not responsible for the debts of the municipal enterprises. They further submitted that Mr Shylkin had failed to exhaust domestic remedies as required by Article 35 § 1 of the Convention. In particular, they maintained that he had not availed himself of the opportunity to challenge the liquidation commission's inactivity before the relevant commercial court or to apply to any domestic court against the Bailiffs' Service to challenge the allegedly inadequate enforcement of the judgment in his favour. Additionally, the Government challenged the victim status of Mr Shylkin, as, according to them, he had failed to provide the State Bailiffs' Service with proper bank details (see paragraph 7 above)

The Court notes that the debtor enterprises in the applicants' cases were owned and controlled by local authorities (see paragraphs 6, 8 and 12, respectively). According to the established case-law of the Convention organs, agencies of local self-government are State organisations in the sense that they are governed by public law and exercise public functions vested in them by the Constitution and the laws. The Court reiterates that under the international law the term “State organisation” is not limited only to organs of the central Government. In cases where State power is decentralised it extends to any national authority which exercises public functions (see, for example, Mikryukov v. Russia, no. 7363/04, § 21, 8 December 2005 with further references). It follows that the actions and/or omissions of the local authorities are attributed to the respondent State and for these reasons the Court concludes that the latter is accountable for the debts of municipal enterprises to the same extent as it is accountable for the debts of State-owned enterprises. Accordingly, the Court dismisses the Government's objection.

As regards the Government's objection that Mr Shylkin had failed to exhaust domestic remedies, the Court notes that similar objections have already been rejected in a number of judgments adopted by the Court (see Sokur v. Ukraine (dec.), no. 29439/02, 16 December 2003; Sychev v. Ukraine, no. 4773/02, §§ 42-46, 11 October 2005; and Trykhlib v. Ukraine, no. 58312/00, §§ 38-43, 20 September 2005). The Court considers that these objections must be rejected in the instant case for the same reasons.

As to the Government's objection to the victim status of Mr Shylkin, the Court observes that, irrespective of the parties' disagreement as to whether the sum of UAH 1,500 was transferred to the applicant's bank account, even if it had been transferred and accepted, that sum would not in itself have enforced the judgment at issue and therefore the applicant would have in any case retained his victim status. Accordingly, the Court dismisses the Government's objection.

The Court notes that these complaints are not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. It further notes that they are not inadmissible on any other grounds. They must therefore be declared admissible.

B.  Merits

In their observations on the merits of the applicants' claims, the Government contended that there had been no violation of Article 13 of the Convention or Article 1 of Protocol No. 1.

The applicants disagreed.

The Court notes that the judgments in the applicants' favour remained unenforced for at least six years.

The Court reiterates that it has already found violations of Article 13 of the Convention and Article 1 of Protocol No. 1 in cases like the present applications (see, among other authorities, Kucherenko v. Ukraine, no. 27347/02, § 27, 15 December 2005).

Having examined all the materials in its possession, the Court considers that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case.

There has, accordingly, been a violation of Article 1 of Protocol No. 1 in respect of the lengthy non-enforcement of the judgments in the applicants' favour in the present applications and a violation of Article 13 of the Convention in respect of the lack of an effective remedy for the complaints of Mr Shylkin.

III.  OTHER ALLEGED VIOLATIONS OF THE CONVENTION

Mr Shylkin additionally complained under Article 8 of the Convention and Article 1 of Protocol No. 1 that the State authorities had failed to prevent damage to his property and to mitigate the consequences thereof. After communication of his application to the Government, the applicant added his submissions, stating that the respondent State had breached his right of access to a court, as guaranteed by Article 6 of the Convention, during the judicial proceedings against the debtor entity. All these grievances had caused suffering and humiliated him in breach of Article 3 of the Convention.

Mr Poberezhnyy additionally complained under Article 4 § 1 of the Convention that he had been subjected to slavery due to the fact that his work had not been remunerated. He also invoked Article 17 of the Convention.

Having carefully considered the applicants' submissions in the light of all the material in its possession, the Court finds that, in so far as the matters complained of are within its competence, they do not disclose any appearance of a violation of the rights and freedoms set out in the Convention.

It follows that this part of the applications must be declared inadmissible as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.

IV.  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

Mr Shylkin claimed the total amount of UAH 30,988.90 in respect of pecuniary damage, consisting, inter alia, of UAH 9,830 for damage caused to his property, UAH 6,000 for funeral expenses in respect of the burial of his aunts, and UAH 7,858.90 for his medical expenses. The applicant also claimed EUR 35,000 in respect of non-pecuniary damage.

Mr Poberezhnyy claimed the outstanding debt under the judgment in his favour and EUR 5,000 in respect of non-pecuniary damage.

The Government contested these claims as excessive and unsubstantiated.

The Court finds, at the outset, that the Government should pay the applicants the respective judgment debts, where they remain outstanding, by way of compensation for pecuniary damage. It does not, however, discern any causal link between the violations found and the pecuniary damage alleged; it therefore rejects the remainder of the claims in respect of pecuniary damage.

The Court further finds that the applicants must have suffered non-pecuniary damage on account of the violations found. Ruling on an equitable basis, it awards Mr Shylkin EUR 1,800 and Mr Poberezhnyy EUR 2,600 under this head.

B.  Costs and expenses

The pecuniary damage claims by Mr Shylkin mentioned above also included the costs and expenses he had incurred before the domestic authorities and the Court: in particular, UAH 1,700 for his legal representation before the domestic authorities; UAH 11,450³ for his legal representation before the Court (in support the applicant provided a contract with a Mr B., signed on 10 February 2008, under which the latter undertook to study the applicant's case and prepare his observations in reply to the Government's; the applicant, in his turn, paid Mr B. 150 US dollars in advance and would pay an additional 2,000 US dollars should the Court award him more than EUR 30,000); UAH 1,717.08 in transportation costs; UAH 1,263.44⁴ in postal and other (copying and typing of documents) expenses, including UAH 43.44⁵ for postal expenses before the Court; the latter, however, were substantiated with pertinent vouchers to the amount of UAH 4.9⁶ only.

Mr Poberezhnyy claimed UAH 123.48⁷ in respect of costs and expenses he had incurred before the Court. In this connection he provided the necessary vouchers amounting in total to UAH 134.18⁸.

The Government contested these claims as excessive and unsubstantiated. They did not object to the sum claimed by Mr Poberezhnyy for costs and expenses being awarded to him.

The Court reiterates that, in order for costs and expenses to be included in an award under Article 41, it must be established that they were actually and necessarily incurred in order to prevent or obtain redress for the matter found to constitute a violation of the Convention and are reasonable as to quantum (see, among many other authorities, Nilsen and Johnsen v. Norway [GC], no. 23118/93, § 62, ECHR 1999-VIII).

The Court considers that these requirements have not been met in the case of Mr Shylkin. In particular, the costs of the domestic proceedings have no connection with the violation found in the present case. The Court further notes that Mr Shylkin was not legally represented before it and, as his case is not particularly complex, he was not required to be. His transportation costs cannot be regarded as necessarily incurred whereas his postal and other (copying and typing of documents) expenses are substantiated with pertinent vouchers to the amount of less than EUR 1 only. However, it is obvious that he has incurred postal expenses in relation to making his application to the Court.

As to the claims by Mr Poberezhnyy, the Court takes into account that the applicant substantiated them to the amount of EUR 20 and that the Government did not object to this sum being awarded.

Regard being had to the information in its possession and to the above considerations, the Court awards the applicants EUR 20 each and rejects the remainder of the claims under this head.

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

1.  Decides to join the applications;

Declares the complaints under Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention in respect of the lengthy non-enforcement of the judgments in the applicants' favour and the lack of effective remedy for the complaints of Mr Shylkin admissible and the remainder of the applications inadmissible;

Holds that there has been a violation of Article 1 Protocol No. 1 to the Convention;

Holds that there has been a violation of Article 13 of the Convention in case of Mr Shylkin;

Holds

(a)  that the respondent State is to pay, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention,

(i)  the outstanding debts under the judgments given in the applicants' favour;

(ii)  EUR 1,800 (one thousand eight hundred euros) to Mr Shylkin and EUR 2,600 (two thousand six hundred euros) to Mr Poberezhnyy in respect of non-pecuniary damage and EUR 20 (twenty euros) each in respect of costs and expenses, to be converted into the national currency of the respondent State at the rate applicable at the date of settlement, plus any tax that may be chargeable to the applicants;

(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 applicants' claim for just satisfaction.

Done in English, and notified in writing on 28 May 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Claudia Westerdiek Peer Lorenzen
Registrar President