Destroyed or altered property cannot be returned through a vindicatory claim — Supreme Court

Recovery of property is possible only for an object that has been preserved in its original form and is in the illegal possession of the defendant. In case of modification, alteration, or destruction of the property, a vindicatory claim is not subject to satisfaction, and ownership rights are protected by recovering its value. This conclusion was made by the Supreme Court composed of a panel of judges of the Second Judicial Chamber of the Cassation Civil Court.

On May 6, the SCC SC considered in simplified proceedings the cassation appeals of JSC "Closed Non-diversified Venture Corporate Investment Fund" and LLC_1 in the case of a claim by a person against the JSC, third parties: OK, LLC_2, LLC_3, LLC_1, regarding the cancellation of state registration of ownership rights and recovery of an apartment from unlawful possession by others.

To substantiate the claims, the plaintiff referred to the fact that she concluded a contract for participation in construction and fully paid the share contribution to receive the apartment, but the object was not completed, and ownership rights were subsequently registered to third parties and later alienated.

Considering the alienation illegal and violating her rights as an investor, the plaintiff requested the recovery of the disputed apartment in her favor.

The court of first instance partially satisfied the claim, canceled the state registration of ownership rights to the apartment in favor of the defendant, as such registration violated the plaintiff's rights as the holder of property rights. At the same time, the court held that having property rights to the apartment does not grant the plaintiff the right to recover the property.

The appellate court disagreed with the conclusions of the first instance court regarding the refusal to satisfy the claim, canceled the decision in this part, and adopted a new decision satisfying the claim for recovery of the apartment from unlawful possession by others. The court noted that the plaintiff, as an investor, fully paid the funds and acquired property rights, so the claim for recovery is justified.

The Supreme Court did not agree with the appellate court's conclusions, canceled the ruling, and sent the case for a new hearing to the appellate court due to the following.

A vindicatory claim is a method of protecting ownership rights only regarding property that exists and is actually in the illegal possession of the defendant.

If the property in someone else's possession has been modified, altered, or destroyed, and the plaintiff has proven that the property belongs to them, it cannot be recovered, and the proper way to protect rights is compensation for its value.

When resolving a dispute about property recovery, the court must first establish the good faith or bad faith of the acquirer, as this affects the application of Articles 387, 388 of the Civil Code of Ukraine and the possibility of property recovery.

Only property that exists and is actually in the possession of the defendant can be recovered. If the property has been modified or altered, a vindicatory claim cannot be satisfied, and only the value of the property is recovered.

The defendants indicated that the apartment in which the plaintiff invested funds and the apartment registered to the defendant are not identical real estate objects.

The appellate court did not establish the factual circumstances regarding the good faith of the acquirer and the identity of the disputed apartment, which is a violation of procedural law and hinders the adoption of a correct decision.

More details and the text of the Supreme Court ruling dated May 6, 2026, in case No. 359/11538/23 (proceeding No. 61-8444sv25) can be found at this link.

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