The Application of Unjust Enrichment Provisions to a Void Transaction
- 2022-07-28
The Plaintiff approached the Court, stating that he had entered into a real estate lease agreement with the Defendant, under which he transferred the property into the Defendant’s temporary possession. According to the notary-certified agreement, the Defendant was obligated to pay 1,000,000 AMD per month as rent, but the Defendant failed to fulfill his obligation under the lease agreement, resulting in a debt of 7,200,000 AMD.
The right to use the mentioned property was subject to state registration at the Cadastre Committee of the Republic of Armenia, but neither party had fulfilled this requirement, making the transaction void from the moment it was concluded.
Under these circumstances, the Plaintiff filed a request for the application of the consequences of a void transaction. Specifically, referencing Article 304, part 2, of the Civil Code of the Republic of Armenia, the Plaintiff argued that the Defendant should return everything received under the transaction. However, since the benefit received was in the form of using the property, the Plaintiff requested compensation for the value of the benefit in monetary terms. To support this claim, the Plaintiff presented the notary-certified agreement as evidence, which contained information about the value of using the real estate.
The Court of General Jurisdiction of the Republic of Armenia initially granted the Plaintiff’s claim, but the Defendant appealed the decision. As a result, the appellate court, going beyond the grounds and arguments of the appeal, found that the provisions of unjust enrichment were applicable to the case. The appellate court annulled the decision and sent the case back for a new trial.
During the new trial, a crucial fact in resolving the case was the monthly value of using the real estate. As part of the proceedings, the Plaintiff requested an expert examination regarding the use of the property. It was important to note that the property in question was a greenhouse, and the Defendant’s statement regarding what had been cultivated in the greenhouse became a key point for evaluating the monthly value of its use.
Nonetheless, the Court found the amount demanded by the Plaintiff to be proven and fully granted the Plaintiff’s claim.
Note: The decision of the General Jurisdiction Court of Ararat and Vayots Dzor regions in Civil Case No. AVD2/0249/02/17 has entered into legal force.