Arrest Cannot Hinder Inheritance Registration After Completion of Enforcement Proceedings — Civil Cassation Court of the Supreme Court
The Supreme Court confirmed that, if the enforcement proceedings are completed and the arrest unjustifiably obstructs the inheritance registration, an heir may demand through the court the removal of an arrest on inherited property. At the same time, such a restriction should not be maintained for an excessive period of time, as this would violate a person's right to peaceful possession of property.
The plaintiff applied to the court after being unable to obtain a certificate of inheritance rights. The notary refused to register her inheritance rights due to an arrest imposed on all the deceased relative's real estate in 2020. The property was then successively passed to the plaintiff's husband and, after his death, to her.
The arrest was imposed within debt collection enforcement proceedings. Subsequently, the enforcement proceedings were terminated due to the debtor's death. However, the arrest record remained in the state register, effectively blocking the inheritance registration.
The courts of first and appellate instances lifted the arrest. However, the Main Department of the State Tax Service in the Poltava region appealed against these decisions, insisting that the tax authority was not the correct defendant and referring to the deceased's tax debt.
However, the Civil Cassation Court dismissed the cassation appeals and agreed with the lower courts' conclusions.
Case Circumstances
Upon her husband's death, the plaintiff accepted the inheritance, which included real estate he had inherited from his brother. However, none of the heirs had formally legalised their inheritance rights.
When the plaintiff approached the notary, it was discovered that all the original testator's property was under arrest. This encumbrance had been imposed in 2020 by a state enforcement officer as part of consolidated enforcement proceedings for the collection of tax arrears and other debts.
In 2021, the enforcement proceedings were terminated due to the debtor's death. Despite this, the state enforcement officer did not lift the arrest because, following the termination of enforcement proceedings due to a debtor's death, the Law "On Enforcement Proceedings" did not provide grounds for him to independently cancel an arrest if there was unpaid debt. In such situations, an arrest can only be removed by a court decision.
The existence of this arrest led to the notary's refusal to issue a certificate of inheritance rights. Consequently, the heir filed a lawsuit to have the arrest removed.
What the Supreme Court Noted
The Civil Cassation Court of the Supreme Court reiterated that an heir who has properly accepted an inheritance becomes the owner of the inherited property from the moment the inheritance is opened. The absence of a certificate of inheritance rights or state registration of ownership does not preclude the heir from protecting their property rights.
The court noted that the Law "On Enforcement Proceedings" stipulates that if, after the termination of enforcement proceedings, the state enforcement officer has no legal grounds to independently remove an arrest, it can be done by a court decision.
The panel of judges observed that in case No. 548/590/25, the enforcement proceedings were terminated due to the debtor's death; the relevant order was not appealed and remained valid; the plaintiff was not a debtor in these enforcement proceedings; and the arrest effectively prevented her from formalising her inheritance rights. Under these circumstances, the court recognised that the chosen method of protection—a claim to remove the arrest—was appropriate and effective.
The Supreme Court also emphasised that in the circumstances of this case, the continued existence of the arrest after the completion of enforcement proceedings, where the plaintiff is not a debtor and the arrest obstructs inheritance registration, constitutes unjustified interference with the right to peaceful possession of property, as guaranteed by Article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms. Such interference must comply with the principle of proportionality and cannot impose an excessive burden on the individual.
Why the State Tax Service Remained a Proper Defendant
One of the main arguments of the cassation appeal was that the defendant should have been solely the state enforcement service body.
The Supreme Court disagreed.
The panel noted that the arrest was imposed within consolidated enforcement proceedings, which included enforcement proceedings for the collection of tax arrears. The tax authority in such legal relations is the collecting body, so the dispute over the removal of such an arrest directly concerns its rights and obligations. Therefore, the Main Department of the State Tax Service in Poltava region is a proper co-defendant in this case.
Moreover, the Supreme Court noted that the case materials do not contain evidence that, after the debtor's death, the tax authority addressed the notary or heirs with demands to repay the debt within the terms provided by Article 1281 of the Civil Code of Ukraine, or initiated the replacement of the party in the enforcement proceedings. These circumstances were also considered when evaluating the arguments of the cassation appeal.
What the Civil Cassation Court Decided
The Civil Cassation Court upheld the decisions of the courts of first and appellate instances, which lifted the arrest from the inherited real estate.
The Supreme Court also upheld the additional appellate court ruling ordering the recovery of UAH 5,000 in costs for professional legal assistance in favour of the plaintiff. The court noted that the plaintiff provided proper evidence of incurring these costs, and their amount is reasonable and commensurate with the complexity of the case.
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