"The consequences of invalidating a fraudulent transaction were applied to the real estate donation agreement.
- 2021-09-14
As a result of the credit agreements concluded with the bank, the plaintiff had undertaken significant financial obligations, and in order to avoid the potential negative consequence of losing the property, a real estate donation agreement was concluded between the plaintiff and his sister, according to which the plaintiff transferred his apartment to his sister with the right of ownership.
Upon reviewing the facts of the case, the court concluded that the real estate donation agreement concluded between the parties was executed without the intention of generating legal consequences, meaning the transaction did not aim to create rights and obligations for the parties, and the real purpose of the agreement was for the plaintiff to avoid fulfilling his obligations to the bank.
The court's conclusion was based on the fact that the credit agreements between the bank and the plaintiff had been concluded earlier than the disputed donation agreement. Moreover, the claim of avoiding credit obligations was also substantiated by the examination of cash deposit records, which showed that the payments stemming from the plaintiff's credit agreements were made not by him but by another person.
The fraudulent nature of the donation agreement was further confirmed by the testimony of a witness, who stated that they were aware that the plaintiff had signed the donation agreement to avoid credit obligations and other financial issues, and that the plaintiff and his sister had agreed that once the plaintiff returned from abroad, the apartment would be returned to him.
Thus, the presence of these circumstances was deemed sufficient by the court to apply the consequences of invalidating a fraudulent transaction to the real estate donation agreement between the plaintiff and his sister, specifically to declare invalid the state registration of the property ownership in the name of the plaintiff’s sister and to recognize the plaintiff's ownership of the property in question."
Note:
Case No. ED/25391/02/19 - The decision of the Court of First Instance of Yerevan City has not been appealed and has entered into legal force.