Here is a detailed legal analysis of the provided court decision:
1. **Subject Matter of the Dispute:** Declaration of invalidity of a real estate gift agreement concluded between a debtor (surety) and their daughter, as a transaction concluded to the detriment of a creditor (a “fraudulent” transaction).
2. **Court Arguments:**
– The court established that the gift agreement was concluded by the debtor at the stage of compulsory execution of a court decision regarding the recovery of a significant debt, which indicates the bad faith of the respondent’s actions.
– The Supreme Court emphasized that for the qualification of a transaction as fraudulent (concluded to the detriment of a creditor), it is irrelevant whether the property was actually transferred, as the primary objective of such actions is to render the recovery of the debtor’s assets impossible.
– The court noted that private-law instruments cannot be used to evade the performance of monetary obligations, and the actions of a debtor who alienates their sole property to a close relative constitute an abuse of right.
– The Supreme Court departed from its own previous position, set forth in the resolution dated July 3, 2019 (case No. 369/11268/16), clarifying that a plaintiff who is not a party to a transaction has the right to challenge it precisely on the basis of the general principles of civil legislation (Articles 3 and 13 of the Civil Code of Ukraine) as fraudulent, without the mandatory requirement to prove the fictitiousness of the transaction under Article 234 of the Civil Code of Ukraine.
– The court emphasized that the qualification of a transaction as fictitious is erroneous if the property was actually transferred; therefore, the courts of lower instances committed a legal error by combining the features of fictitiousness and fraudulence.
– The Supreme Court confirmed that a creditor has the right to independently choose the method of protecting their rights (debt collection from a surety or foreclosure on mortgaged property), and the absence of foreclosure on mortgaged property does not justify the debtor’s bad-faith actions regarding other property.
3. **Court Decision:** The Supreme Court partially satisfied the cassation appeal, amending the reasoning parts of the decisions of the courts of first and appellate instances by excluding references to the fictitiousness of the transaction while upholding the conclusion regarding the invalidity of the agreement as fraudulent.
