KULBASHIN v. RUSSIA - 25895/05 (Judgment : Article 6 - Right to a fair trial : Third Section Committee) [2018] ECHR 1028 (18 December 2018)

In the case of Kulbashin v. Russia,

The European Court of Human Rights (Third Section), sitting as a Committee composed of:

Alena Poláčková, President,
Dmitry Dedov,
Jolien Schukking, judges,
and Fatoş Aracı, Deputy Section Registrar,

Having deliberated in private on 27 November 2018,

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

PROCEDURE

1. The case originated in an application (no. 25895/05) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention") by a Russian national, Mr Aleksey Pavlovich Kulbashin ("the applicant"), on 22 June 2005.

2. The Russian Government ("the Government") were represented initially by Mr G. Matyushkin, the Representative of the Russian Federation to the European Court of Human Rights, and then by his successor in that office, Mr M. Galperin.

3. On 8 April 2009 the application was communicated to the Government.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

4. The applicant was born in 1940 and lives in Pervomayskiy, the Krasnodar Region.

A. The State Resettlement Program and the applicant's contract with the State unitary enterprise

5. In 1967-95 the applicant worked in the Far North of Russia. His family was entitled to assistance in resettlement from the Kamchatka Region pursuant to the Federal Target Program "Construction of housing for persons moving from the Far North Areas".

6. The program was adopted on 10 July 1995 by the Government of Russia, in accordance with the Decree of the President of the Russian Federation no. 1122 of 23 September 1992. It provided, inter alia , for construction of housing for persons wishing to resettle from the Far North to various Russian regions. The program was financed by the federal and regional budgets. The client for the entire program was a state scientific and production company S.M.

7. In 1994 S.M. and the State Unitary Enterprise "United Direction for Construction of the Kamchatka Region" (the GUP) concluded a co-�operation agreement. S.M. undertook to build an apartment block in Inzhavino of the Tambov Region, provide assistance with residence registration and compensate 30 per cent of the flats' price in case they were occupied. The GUP undertook to pay for the housing.

8. At a later stage in 1994 the applicant and the GUP concluded a shared-construction agreement in respect of a flat in the apartment block in Inzhavino. The GUP undertook to provide the applicant with the flat and to transfer it to the applicant's ownership once it was accepted for exploitation, and the applicant was to pay the price of the flat. He paid the amount due.

9 . In 1995 S.M. built the flats and transferred them to the GUP, which was acting for the administration of the Kamchatka Region, to be registered as the administration's property. The GUP then transferred the flat to the applicant, whose title to the flat was registered. However, expert examinations in respect of the adjacent flats in the same apartment block revealed a number of serious breaches of the sanitary and construction which made the apartment block unsuitable for living.

B. Civil proceedings against the GUP

10. On 2 February 2001 the applicant brought a court action against the GUP for non-compliance with contractual obligations and provision of appropriate housing in accordance with the contract, instead of the flat initially provided to him.

11. On 21 June 2001 he modified the claims asking to dissolve the shared-construction agreement, declare the apartment block to be not in compliance with the construction norms, and pay him damages. On 22 June 2001 the expert examination was ordered by the court, and in December 2001 the expert report was submitted to the court. In the meantime, the case was joined with a number of similar cases against the same defendant.

12 . On 13 February 2002 the Inzhavinskiy District Court of the Tambov Region ("the District Court") rejected the claim. On 25 March 2002, acting on the applicant's appeal, the Tambov Regional Court ("the Regional Court") quashed the lower court's judgment and remitted the case for a new examination, for the court's failure to establish substantial facts of the case and to examine some items of evidence referred to in the judgment.

13. On 15 July 2002 the District Court again rejected the claim. On 21 August 2002 the Regional Court allowed the applicant's appeal and found that the lower court had incorrectly applied the domestic law provisions on statutory limitations. It quashed the first-instance judgment and remitted the case for a new examination.

14. On 11 September 2002 the District Court allowed the claim in part and ordered the defendant to pay the applicant an amount of money. On 23 October 2002 the Regional Court granted the applicant's appeal and found that the lower court had raised and examined issues falling outside the scope of the applicant's claims. It annulled the first-instance judgment and sent the case for a fresh consideration by the first-instance court.

15. On 28 January 2003 the District Court allowed the claim in part and awarded the applicant a sum of money which was larger than that pursuant to the judgment of 11 September 2002. On 26 March 2003, on the appeal of the applicant's counsel, the Regional Court quashed the judgment, in particular, for a failure to address the important circumstances of the case, and remitted the case for a fresh examination.

16. On 20 June 2003 the District Court allowed the claim in part and declared the contract at issue null and void. On 22 July 2003 the District Court supplemented its judgment of 20 June 2003. Both parties appealed. On 20 August 2003 the Regional Court annulled the judgments, having found that the lower court had incorrectly applied the norms of substantive law, and ordered a new examination of the case by the first-instance court.

17. On 1 December 2003 the District Court allowed the claim in full. On 10 March 2004, on the appeal of the defendant, the Regional Court set aside the judgment as it contained an incorrect interpretation of the substantive law, and remitted the case for a fresh examination.

18. The applicant modified his claim, requesting replacement of the flat by a new one of appropriate quality, in line with the consumer protection law.

19 . On 5 May 2005 the District Court rejected the claim. The applicant appealed. On 27 July 2005 the Regional Court upheld the District Court's judgment. The applicant applied for supervisory review proceedings.

20 . On 20 April 2006 the Presidium of the Regional Court granted his request, quashed the judgments of 5 May and 27 July 2005 as issued in breach of procedural and substantive law, and ordered that the case be re-�examined by the first-instance court.

21. The applicant modified the scope of the claims. He claimed the dissolution of the shared-construction agreement, as well as pecuniary and non-pecuniary damage and court expenses.

22 . By a judgment of 17 July 2006 the District Court allowed the claim in part. It established that the flat built for the applicant by the company did not comply with the sanitary and technical requirements. The court ordered the dissolution of the shared-construction agreement between the applicant and the State Unitary Enterprise "United Direction for Construction of the Kamchatka Region" concerning the construction of housing. The court further obliged the respondent enterprise to pay the applicant 644,570 Russian roubles (RUB) [1] in damages, RUB 300,000 [2] in penalty and RUB 12,277 [3] in costs and expenses. The court further ordered that the flat be transferred in the local administration's ownership. The applicant appealed. On 20 December 2006 the Regional Court upheld the judgment of 17 July 2006.

C. Enforcement of the judgment of 17 July 2006

23. On 31 January 2007 the writs of execution were sent by the district court to the applicant.

24. According to the Government, on 2 November 2007 the applicant applied to the bailiffs' service with a request to open the enforcement proceedings and enclosed a copy of the writ of execution. On the same date the enforcement proceedings were opened.

25 . Between 28 April and 25 September 2008, by several instalments, the debtor company transferred the amounts due under the writs to the applicant's known banking account. However, the money returned to the company as the account had been closed in the meantime.

26 . On 19 September and 7 November 2008 the bailiffs requested that the applicant updates his banking account information. On 31 October 2008 the bailiffs' service informed the applicant that the debtor had paid the amount due under the judgment, and re-invited him to submit his banking details.

27 . On 6 February 2009 the applicant provided the requested information. On the same date the amount awarded by the domestic court was paid to him in full.

D. Information about the debtor GUP

28. The State Unitary Enterprise "United Direction for Construction of the Kamchatka Region" (the GUP) was set up by a decision of the administration of the Kamchatka Region. The company, incorporated as a unitary enterprise at the material time, had "the right of economic control" ( право хозяйственного ведения ) over the assets allocated to it by the administration in order to carry out its statutory activities. The founder was the owner of the assets.

29 . It appears that at the material time the GUP was involved in the construction of socially-important objects in the Kamchatka Region. It used to be a client for construction, major overhaul and reconstruction, represented the regional administration in the respective transactions and was in receipt of the relevant budgetary funds. In particular, in 2002-2005 the company on several occasions became a client and managed funds in respect of construction projects under various Federal Targeted Programs related to housing provision, including resettlement from the Far North, housing for orphans and veterans, and received funds from the regional budget for that purpose. Since August 2004 the company was "a regional State client" ( областной государственный заказчик ) in respect of the housing subsidies' allocation for citizens leaving the Far North areas.

II. RELEVANT DOMESTIC LAW AND PRACTICE

30. The relevant provisions and domestic case-law on the legal status of State and municipal unitary enterprises with the right of economic control are summarised in Liseytseva and Maslov , nos. 39483/05and 40527/10, §§ 55-127, and Samsonov v. Russia (dec.), no. 2880/10, 16 September 2014).

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION ON ACCOUNT OF THE LENGTH OF THE CIVIL PROCEEDINGS

31 . The applicant complained that the length of the proceedings had been incompatible with the "reasonable time" requirement, laid down in Article 6 § 1 of the Convention, which reads as follows:

Article 6 § 1

"In the determination of his civil rights and obligations ..., everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ..."

32. The Government contested that argument. They submitted that there were no significant periods of inaction attributable to the authorities. The case was factually and legally complex, it required an expert examination which lasted for a reasonable period of six months, and, furthermore, the applicant failed to appear in court on a number of occasions, and had contributed to the length of the proceedings by amending his claims and by constantly challenging the judgments adopted.

33. The applicant maintained his complaint.

A. Admissibility

34. The Court notes this complaint 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

35. The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicants and the relevant authorities and what was at stake for the applicants in the dispute (see Frydlender v. France [GC], no. 30979/96, § 43, ECHR 2000-VII).

36. In the leading case of Kormacheva v. Russia (no. 53084/99, 29 January 2004) the Court already found a violation in respect of issues similar to those in the present case.

37. Having examined all the material submitted to it, the Court has not found any fact or argument capable of persuading it to reach a different conclusion. Having deduced the period when the case was pending before the supervisory instance after the entry into force of the judgment of 27 July 2005 (see paragraphs 19-20 above), the Court notes that the proceedings in the present case lasted for approximately five years and three months at three levels of jurisdiction. The Court notes, in particular, that the case was eight times remitted to the first-instance court for a fresh examination, as the lower court incorrectly applied the substantive and procedural law (see paragraphs 12-22 above). The Court reiterates that the right to have one's claim examined within a reasonable time would be devoid of all sense if domestic courts examined a case numerous times, by shifting it from one court to another, even if at the end the accumulated length of proceedings did not appear particularly excessive (see Svetlana Orlova v. Russia, no. 4487/04, § 47, 30 July 2009, and Palacheva v. Russia , no. 39814/04, §§ 68-69, 19 June 2014). Further, the Court does not detect any significant delays attributable to the applicant. The Court considers that in the instant case the length of the proceedings was excessive and failed to meet the "reasonable time" requirement.

38. The complaint therefore discloses a breach of Article 6 § 1 of the Convention.

II. ALLEGED VIOLATION OF ARTICLES 6 AND 13 OF THE CONVENTION AND ARTICLE 1 OF PROTOCOL No. 1 ON ACCOUNT OF THE DELAYED ENFORCEMENT

39. The applicant complained of the non-enforcement of the judgment of 17 July 2006 given in his favour against the State unitary enterprise and of the lack of any effective remedy in domestic law. He relied on Article 6 § 1, cited in paragraph 31 above, as well as on Article 13 of the Convention and on Article 1 of Protocol No. 1, which, in so far as relevant, read 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 or to secure the payment of taxes or other contributions or penalties."

40. The Government argued that the unitary enterprise in question was a commercial organisation independent from the authorities and that the debts of the enterprise were not attributable to the State for the same reasons as in Liseytseva and Maslov (cited above, §§ 137-41). The company was operating at the material time and enforced the judgment. The bailiffs provided the requisite assistance to the applicant in the execution of the judicial award. The applicant delayed execution as he had not provided his updated banking information in good time. They further noted that he could have applied for the index-linking of the amounts paid with a delay.

41. The applicant maintained that the debtor enterprise was a State company. It was responsible for the construction of social housing for citizens resettling from the Far North of Russia, acted within the relevant State program and was in receipt of State funds. The flat built by the company for the applicant but not compliant with the technical requirements was transferred to the State ownership pursuant to the court's judgment.

A. As regards the non-enforcement complaint

42. The Court notes that the company was heavily involved in a variety of the social housing programs under the authority of the regional administration, represented the administration in the housing transactions (see paragraph 9 above), acted as a client and funds manager within various State Target Programs, including the Far North Resettlement, built and maintained the socially important items of real estate, and received budgetary funds for those purposes (see paragraph 29 above). The Court has no doubt that the company performed a public function. The Court notes in addition that, even though the GUP was a party to the proceedings, the title to the flat was transferred to the State, the owner of the assets put under the company's economic control. On the other hand, turning to the authorities' actual involvement in the company's activities, the Court observes that, unlike in Liseytseva and Maslov (cited above), neither the Government nor the applicant alleged that the State had in any way interfered with the enterprise's business at the time of the events. Unlike in Liseytseva and Maslov , the debtor company in the present case was not insolvent or subject to liquidation at the time of the enforcement of the judicial award in the applicant's favour. The Court has already found in similar circumstances that, as long as the company had sufficient assets on its balance, the State cannot be held responsible for its failure to pay its debts (see Zhdanov and Others v. Russia (dec.), nos. 48028/07and 15 others, §§ 63-64, 28 June 2016).

43. The Court does not need to decide whether the GUP's debts were attributable to the State in the present case. Even assuming that they were, the Court cannot hold the authorities liable for the delayed enforcement, for the following reasons.

44. The Court observes that the judgment of 17 July 2006, which became final on 20 December 2006, was enforced on 6 February 2009, that is within two years, one month and eighteen days. It was not disputed by the applicant that during nine months of that period the writ of execution remained with him (see paragraph 26 above), and the enforcement proceedings were opened, on his request, on 2 November 2007 only (ibid.). The Court has already found that if the applicant for any reason obtains himself the writ of execution from the trial court, it would appear logical to require that he submits it to the competent authority with a view to enforcement of the judgment (see, mutatis mutandis , Gadzhikhanov and Saukov v. Russia , nos. 10511/08and 5866/09, § 26, 31 January 2012). In the absence of any explanation from the parties, the authorities cannot to be held responsible for the applicant's unexplained failure to follow the domestic enforcement procedure and, notably, for his deliberate refusal to provide the writ of enforcement (see, mutatis mutandis , Gadzhikhanov and Saukov , cited above, §§ 27-31). Accordingly, the period between early February 2007 and 2 November 2007 is attributable to the applicant. The Court further accepts the Government's argument that the period after 25 September 2008 (see paragraph 25 above) was also attributable to the applicant, as he failed to provide his correct banking details and only replied to the bailiffs' repeated requests for an update in February 2009. The remaining period did not exceed ten months, which does not amount to a breach of the Convention requirements (see, mutatis mutandis, Belkin and Others v. Russia (dec.), no. 14330/07, 5 February 2009).

45. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

B. Complaint under Article 13

46. The Court has found above that the non-enforcement complaint did not give rise to an arguable claim of a breach of a Convention right. Accordingly, Article 13 of the Convention does not apply.

47. It follows that this part of the application is manifestly ill-founded incompatible ratione materiae and must be rejected in accordance with Article 35 § § 3 (a) and 4 of the Convention.

III. OTHER ALLEGED VIOLATIONS OF THE CONVENTION

48. Lastly, the applicant raised other complaints under Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1.

49. The Court considers that, in the light of all the material in its possession and in so far as the matter complained of is within its competence, the complaints do not disclose any appearance of a violation of the rights and freedoms enshrined in the Convention or the Protocols thereto.

50. It follows that this part of the application must be rejected in accordance with Article 35 §§ 3(a) and 4 of the Convention.

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

51. 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

52. The applicant claimed 1,569,430 Russian roubles (RUB) (approximately 37,870 euros (EUR) in respect of pecuniary damage. That amount represented the price of a flat of 90 sq.m. due to the applicant's family under the federal program, less the amount awarded to him by the judgment of 17 July 2006. He further claimed RUB 5,000,000 (EUR 207,206) in respect of non-pecuniary damage.

53. The Government contested the claim as excessive and unreasonable.

54. The Court does not discern any causal link between the violation found and the pecuniary damage alleged. It therefore rejects this claim. On the other hand, it awards the applicant EUR 750 in respect of non-pecuniary damage, and rejects the remainder of his claims under this head.

B. Costs and expenses

55. The applicant also claimed RUB 80,000 (EUR 3,315) for the costs and expenses incurred before the domestic courts.

56. The Government contested the claim, as the applicant had failed to produce any receipts, invoices or other documents or detailed information in respect of the claims.

57. Regard being had to the documents in its possession and to its case-�law, the Court accepts the Government's argument and rejects the claim for costs and expenses.

C. Default interest

58. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares the complaint under Article 6 § 1 of the Convention concerning the length of the civil proceedings admissible and the remainder of the application inadmissible;

2. Holds that there has been a violation of Article 6 § 1 of the Convention on account of the excessive length of the civil proceedings;

3. Holds

(a) that the respondent State is to pay the applicant, within three months, EUR 750 (seven hundred and fifty euros), plus any tax that may be chargeable, in respect of non-pecuniary damage, to be converted into the currency of the respondent State at the rate applicable at 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 amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;

4. Dismisses the remainder of the applicant's claim for just satisfaction.

Done in English, and notified in writing on 18 December 2018, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Fatoş Aracı Alena Poláčková
Deputy Registrar President

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