The existence of a legal dispute concerning real estate precludes the Ministry of Justice from considering an appeal against the decision of the state registrar regarding the state registration of rights to such real estate - SC GC

If there is a legal dispute (dispute about a right) in relation to real estate, this circumstance, in accordance with para. 1, part 2 of Article 37 of the Law of Ukraine ‘On State Registration of Real Property Rights and Encumbrances’, makes it impossible for the Ministry of Justice of Ukraine to consider an appeal against the decision of the state registrar on state registration of rights in relation to this real estate.

Pursuant to para. 4, part 8, Article 37 of the said Law, the Ministry of Justice of Ukraine and its territorial bodies shall reject an appeal against decisions, actions or inaction in any area of state registration of rights if there is information about court proceedings between the same parties, on the same subject matter and grounds.

If there are grounds for applying the provisions of para. 1, part 2, Article 37 of the Law of Ukraine ‘On State Registration of Real Property Rights and Encumbrances’, there is no need to analyse information on court proceedings in connection with a dispute between the same parties, on the same subject matter and grounds.

This legal conclusion was made by the Grand Chamber of the Supreme Court.

In this case, an LLC filed a lawsuit to declare unlawful and cancel the order of the Ministry of Justice of Ukraine on satisfaction of an individual's complaint, which cancelled all decisions of state registrars made on all real estate objects located in one residential building, including decisions on the basis of which a part of the real estate object was registered as part of the LLC's charter capital.

The plaintiff claimed that the actions of the Ministry of Justice violated the LLC's ownership of real estate and stated that the defendant had violated the procedure for considering complaints in the field of state registration, as at the time of issuing the disputed order, the court was considering a civil case in a dispute between individuals regarding the recognition of the validity of the sale and purchase agreements for apartments in a residential building.

The court of first instance, whose conclusions were upheld by the court of appeal, upheld the claim because, given the existence of a court dispute between individuals regarding the same real estate at the time the challenged order was issued, the defendant did not have the authority to consider the complaint.

In considering the case, the SC GC noted that in accordance with the provisions of part 2 of Article 37 of the Law of Ukraine ‘On State Registration of Real Property Rights and Encumbrances’ (as amended at the time of issuing the order), the Ministry of Justice of Ukraine considers complaints, in particular, against the state registrar's decision on state registration of rights (except when such a right is acquired on the basis of a court decision, as well as when there is a court dispute over real property).

Thus, the Ministry of Justice of Ukraine does not have the authority to consider an appeal against a decision of the state registrar on state registration of rights in the presence of any court dispute over immovable property.

Instead, pursuant to para. 4, part 8, Article 37 of the Law, the Ministry of Justice of Ukraine and its territorial bodies shall dismiss the complaint if there is information about court proceedings in connection with a dispute between the same parties, on the same subject matter and grounds.

In other words, it is necessary to distinguish between the consequences provided for in part 2 and part 8 of Article 37 of the Law of Ukraine ‘On State Registration of Real Property Rights and Encumbrances’. After all, part 2 of Article 37 of this Law defines the limits of the powers of the Ministry of Justice of Ukraine to consider complaints against decisions of the state registrar on state registration of rights, so the existence of a court dispute over real estate makes it impossible for the Ministry of Justice of Ukraine to consider the complaint. At the same time, part 8 of Article 37 of this Law provides for grounds for refusal to satisfy complaints in the field of state registration (if the authority to consider it is available).

Pursuant to para. 4, part 8, Article 37 of the Law, the Ministry of Justice of Ukraine and its territorial bodies shall reject an appeal against decisions, actions or inaction in any area of state registration of rights if there is information about court proceedings between the same parties, on the same subject matter and grounds.

If there are grounds for applying the provisions of para. 1, part 2, Article 37 of the Law, there is no need to analyse information on court proceedings in connection with a dispute between the same parties, on the same subject matter and grounds (para. 4, part 8, Article 37 of the Law).

As the courts found, at the time the challenged order was issued, a civil case was pending in a dispute between individuals over the recognition of validity of contracts for the sale and purchase of shares in a residential building.

In other words, the courts of previous instances found that a civil case was pending as of the date the Ministry of Justice of Ukraine issued the disputed order, and therefore concluded that there was a legal dispute over the disputed real estate.

In view of the above, the SC GC agreed with the conclusions of the courts of previous instances that the Ministry of Justice of Ukraine did not have the authority to consider the complaint of an individual in view of the provisions of para. 1, part 2, Article 37 of the Law of Ukraine ‘On State Registration of Real Property Rights and Encumbrances’ (as amended at the time of issuing the order).

Resolution of the Grand Chamber of the Supreme Court of 3 April 2024 in case No. 916/4093/21 - https://reyestr.court.gov.ua/Review/118393664.

This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.