If the user created the shelveset, but left everything checked out locally, you will receive this error. Since TFS usually allows only a single checkout for binary files, a shelveset can't be unshelved if it contains a binary file which is locked by another user.
You can attempt to unlock the file with the following command -
tf lock itemspec /lock:none /workspace:OtherUsersWorkspace
You should be able to determine the workspace from the error message, and you'll also need to specify the user - /workspace:WORKSPACE;userid