THE GRAND CHAMBER OF THE SUPREME COURT: LEGAL OPINION ON PAYMENT OF COURT FEE FOR CLAIMS FOR FORECLOSURE ON SECURITY INTEREST IN THE PROPERTY

The Grand Chamber of the Supreme Court (hereinafter – the “Grand Chamber”) derogated from the legal conclusion of the Civil Cassation Court of the Supreme Court (hereinafter – the “Civil Cassation Court”) that was set out in judicial decision dated January 23, 2018 in case No.2-340/461/16-ц, regarding payment and settlement of court fee for claims for foreclosure on security interest in the property.

Legal opinion of Grand Chamber on the said issue was set out in judicial decision dated February 26, 2019 in case No.907/9/17, trial proceeding No.12-76гс18 (registration number of file in Unified State Register of Judicial Decisions No.80522389).

The legal opinion of the Grand Chamber on payment of court fee for claims for foreclosure on security interest in the property was made in commercial proceeding and the legal conclusion of the Civil Cassation Court, which was derogated, was made in civil proceeding. However, according to paragraph 3 of Article 302 of Code of Commercial Procedure of Ukraine, judicial panel, chamber or united chamber of court that review case in cassation proceeding can transmit the case to the Grand Chamber if such judicial panel (chamber or united chamber) will consider necessary to derogate from legal conclusion about application of provision of law in similar legal relationships, that was previously set out in judicial decision of any other chamber of Supreme Court.

Civil Cassation Court in judicial decision dated January 23, 2018 in case No.2-340/461/16-ц, in accordance with court 15 of Resolution of Plenum of the Supreme Court of Ukraine No.10 dated October 17, 2014 “On application by courts of Law of Ukraine on court fees” and in accordance with clause 6 of Resolution of Plenum of the Supreme Court of Ukraine No.5 dated March 30, 2012 “On application by courts of legislation in credit-related disputes” came to the conclusion that for claims for foreclosure on mortgage a court fee must be paid as for non-monetary claim.

At the same time the Commercial Cassation Court of the Supreme Court during trial proceeding in case No.907/9/17 disagreed with the above-mentioned legal opinion of Civil Chamber and transmitted the case to the Grand Chamber.

The Grand Chamber decided to derogate from the legal opinion of Civil Cassation Court that was set out in judicial decision dated January 23, 2018 in case No.2-340/461/16. Such decision was based on next conclusions.

According to the Code of Commercial Procedure of Ukraine, if claims can be monetary evaluated lawsuit must contain amount of the claim and reasonable calculation of recoverable or disputed amounts (Articles 162, 163 of the Code of Commercial Procedure of Ukraine).

The amount of claim is determined, in particular, in claims for recovery of funds as the amount recovered or the amount disputed by the executive or another document under which the recovery is made on an uncontested (non-acceptance) basis. The Civil Procedural Code of Ukraine (Articles 175, 176 of the current edition) contains similar provisions.

Therefore existence of monetary valuation of substantive requirement indicates about the monetary grounds of claim, which must be reflected in lawsuit.

In this manner the main point of claim for foreclosure on security interest in the property is based on existence of monetary claims of the plaintiff against defendant based on a certain contract. Upholding of claim for foreclosure on security interest in the property will result in discharging of plaintiffs monetary claims.

So the claims for foreclosure on security interest in the property have monetary valuation and are of property character and the amount of court fee for their submission is determined according to Article 4 of the Law of Ukraine “On Court Fee” based on the amount of monetary claims of the plaintiff for which the claim is addressed.

Thus, when filing a claim for mortgage foreclosure the plaintiff must pay a court fee not as for a non-property claim but as for property claim, which is calculated on the basis of the amount of the monetary claims.

Igor Kalitventsev

Managing Partner

KPD Consulting

Should you have any questions with respect to above or require any additional information, please do not hesitate to contact Mr. Igor Kalitventsev    (i.kalitventsev@kpdconsulting.com.ua). We will be pleased to assist You. The information contained in this overview is not intended to provide legal advice and should not be relied on or treated as a substitute for specific advice concerning individual situations.