On November 17, 2021, the Supreme Court, as part of the panel of judges of the First Judicial Chamber of the Civil Court of Cassation in case No. 539/1509/20, satisfied the cassation appeal of the donor, against whom the recipient committed a crime.
The donor appealed to the court with a lawsuit against her son and his wife for the termination of the donation agreement and for the invalidation of the (fictitious) donation agreement, believing that the defendants entered into the donation agreement without the intention of creating legal consequences due to this deed.
A gift agreement was concluded between the plaintiff and the defendant (the donee), under the terms of which she gave him 1/2 share of the residential building.
Over time, her relationship with her son worsened, which was expressed in the form of quarrels and insults, for which the latter was repeatedly brought to administrative responsibility, and due to the fact that he caused her bodily harm, information about criminal proceedings was entered into the ERDR. After the indictment was submitted to the court, her son, realizing that in the event of his conviction, she (the donor) on the basis of part 1 of Art. 727 of the Civil Code of Ukraine will have legal grounds to demand termination of the contract of donation of a part of a residential building, concluded a contract of donation of his share in the house with his wife.
The lawsuit was satisfied by the decision of the city district court.
The appellate court, referring to the legal opinion of the Supreme Court of September 26, 2019 in case No. 464/1509/17 , canceled the decision of the city-district court and adopted a new court decision on the refusal to satisfy the claim due to the absence of the specified articles. 727 of the Civil Code of Ukraine grounds for terminating the contract and evidence to confirm that both defendants, when concluding the donation contract, acted intentionally without the goal of creating real legal consequences of the transaction.
Having considered the cassation appeal of the plaintiff, the Supreme Court indicated that according to part 1, 4, 5 Art. 727 of the Civil Code of Ukraine, the donor has the right to demand the termination of the contract of donation of immovable property or other particularly valuable property, if the recipient intentionally committed a crime against the life, health, property of the donor, his parents, wife (husband) or children.
The donor has the right to demand termination of the donation contract, if the gift is preserved at the time of making the demand. In case of termination of the donation contract, the recipient is obliged to return the gift in kind. The donor's right to terminate the donation contract is temporary, because it exists as long as the thing that is the subject of the contract exists.
If the item was alienated to a third party, its return is not possible. The donor may demand termination of the donation contract only if the gift at the time of making the claim is preserved, that is, it is owned by the recipient and its condition corresponds to its purpose. The fact that the donee has ownership of the object of the gift is an integral part of the preservation of the gift at the time of the donor's request to terminate the contract.
The preservation of the gift implies that the gift is in the possession of the recipient, and not only its physical presence as a thing – an object of the material world. The absence of the gift in the property of the recipient will not meet the criterion of preservation of the gift (Part 4 of Article 727 of the Civil Code of Ukraine).
Thus, if the giftee does not own the gift at the time of termination of the gift contract, then in the absence of the thing (preserved property), the legal consequences for the return of the gift in kind on the basis of Part 1 of Art. 727 of the Civil Code of Ukraine do not arise.
A similar legal opinion was expressed by the Supreme Court in the resolutions: dated September 26, 2019 in case No. 464/1509/17 and dated October 21, 2020 in case No. 357/10458/18 .
At the same time, according to the content of Art. 234 of the Civil Code of Ukraine, a fictitious deed is a transaction made without the intention of creating legal consequences that were determined by this deed. The fictitious deed is declared invalid by the court.
In substantiating the requirements for the invalidation of the (fictitious) donation contract, the plaintiff referred to the fact that such a deed was committed between spouses, at the time of its execution both her son and his wife were aware of the consideration of the criminal proceedings by the city district court on the accusation of the plaintiff's son in the commission of a criminal the offense provided for in Part 2 of Art. 125 of the Criminal Code of Ukraine, and that is why they were aware of the future negative consequences in the event of the court's adoption of a guilty verdict, namely, the acquisition by the donor (son of the plaintiff) of the right on the basis of Art. 727 of the Civil Code of Ukraine to demand the termination of the gift contract and the return of the gift.
However, the appellate court did not apply the provisions of Art. 234 of the Civil Code of Ukraine, and did not take into account the legal conclusions of the Grand Chamber of the Supreme Court, set out in the decision of July 3, 2019 in case No. 369/11268/16-ts , which agreed with the conclusions made in the decision of the Supreme Court of February 28, 2019. in case No. 646/3972/16-ts . Similar conclusions are also stated in the decision of the Supreme Court dated February 27, 2018 in case No. 910/4088/17 .
The court of first instance correctly noted that an invalid deed does not create legal consequences for the parties, except for those related to its invalidity, and therefore, as a result of invalidating the gift agreement, as having been committed without the intention of creating legal consequences (fictitious deed), the requirements are met regarding the preservation of the gift (Part 4 of Article 727 of the Civil Code of Ukraine).
Therefore, the Supreme Court overturned the decision of the appeals court and upheld the decision of the city-district court.