Cassation judgment no. 08/2008/DS-GDT dated may 14, 2008 regarding inheritance dispute

THE SUPREME PEOPLE’S COURT

CASSATION JUDGMENT NO. 08/2008/DS-GDT DATED MAY 14, 2008 REGARDING INHERITANCE DISPUTE

On May 14, 2008, the cassation trial was conducted at the office of the Supreme People’s Court to hear the civil case of inheritance dispute between the following litigants (according to the Appellate Judgment No. 87/2007/DSPT dated April 23, 2007 of the Court of Appeal of the Supreme People’s Court in Hanoi).

Petitioner:  Mrs. Le Thu Khue, born in 1943; residing in 2^nd Floor house No. 6, Cat Dai Street, (now is No. 8 Hai Ba Trung Street), Hai Phong City.

Respondent:  

1. Mr. Hoang Viet Pham, born in 1944; residing in Floor 1 house No. 6, Cat Dai Street, (now is No. 8 Hai Ba Trung Street), Hai Phong City.

2. Mrs. Hoang Thuy Phuong, born in 1947; residing in Floor 1 house No. 6, Cat Dai Street, (now is No. 8 Hai Ba Trung Street), Hai Phong City.

Persons with related interests and obligations:

1. Mr. Le Thi Ty, born in 1924; residing in No. 22/10 Nguyen Van Thanh Street (aka Huynh Dinh Hai), Ward 9, Binh Thanh District, Ho Chi Minh City.

2. Mr. Le Quang Tri, born in 1934, residing in French Republic.

3. Mr. Le Quang Minh, died in 2005, (used to reside in 120/10 Ngo Tung Chau, Ward 7, Binh Thanh District, Ho Chi Minh City)

4. Mr. Hoang Viet Thu, born in 1918, died in 2006, (used to reside in the house No. 63, Chau Long Street, Hanoi).

5. Mrs. Le Thu Bich, born in 1950; residing in 21, Block C21, collective quarter of glass factory, Alley 3B, Da Nang Street, Cau Tre Ward, Hai Phong City.

6. Mrs. Hoang Thuy Ngoc, born in 1954, working for People’s Committee of Ngo Quynh Ward, Phuc Yen Town, Vinh Phuc Province.

7. Mrs. Hoang Thuy Nga, born in 1940; residing at 149/42 Le Van Sy Street, Ho Chi Minh City.

FINDING THAT

 Representation of Mr. Le Quang Nhan (and Mrs. Le Thu Khue, Mr. Nhan's daughter, when Mr. Nhan died) in the lawsuit petition dated December 10, 1993 and during the lawsuit settlement: When his parents, Mr. Le Quang Thu and Mrs. To Thi Khang, were still alive, they had 6 children:

1. Mr. Le Thi Thin (died in 1991), her husband: Mr. Hoang Viet Thu (died), four children: Mrs. Hoang Thuy Nga, Mr. Hoang Viet Pham, Mrs. Hoang Thuy Phuong and Mrs. Hoang Thuy Ngoc;

2. Mr. Le Quang Nhan (died in 2005), his wife: Mrs. Vu Thi Hien and 9 children: Mrs. Le Thu Khue, Mrs. Le Thu Bich, Mrs. Le Thu Hanh, Mr. Le Quang Hiep, Mrs. Le Thu Ha, Mr. Le Quang Huy, Mrs. Le Thu Hai, Mr. Le Quang Dung and Mr. Le Quang Hung;

3. Mrs. Le Thi Ty (living in a pagoda);

4. Mrs. Le Thi Vy (settling in French Republic);

5. Mr. Le Quang Tri (settling in French Republic);

6. Mr. Le Quang Minh (died).

Mrs. Khang died in 1972, Mr. Thu died in 1977 and both of them left no will.

With reference to property: Before the State carried out the industrial and commercial renovation policy, Mr. Thu and Mrs. Khang had many houses for lease in Hai Phong. Complying with the industrial and commercial renovation policy, Mr. Thu handed over all the houses to the State. According to the “house transfer record” dated April 10, 1961, the representative of the State received and managed houses and land at No. 4, 6A, 6B Cat Dai Street, Hai Phong City; the State particularly left Mr. Thu and Mrs. Khang the house No. 6 Cat Dai Street, Hai Phong City (now is No. 8 Hai Ba Trung Street) for management and use, they did not have to pay the house rents. After that, Mr. Thu and Mrs. Khang, Mr. Nhan, Mrs. Thin, Mr. Nhan and Mrs. Thin’s children together managed and used the house. In 1972, Mrs. To Thi Khang died; in 1977, Mr. Le Quang Thu died.

After Mrs. Thu and Mr. Khang died, Mr. Nhan’s children has kept managing and using the 2^nd floor of this house, Mrs. Thin and Mrs. Thin’s children has kept managing and using the 1^st floor of this house so far. In 1991, Mrs. died, the conflict has arisen from the two families, so Mr. Nhan filed a lawsuit (after Mr. Nhan died, his daughter, Mrs. Khue, inherited his right and obligation to litigate), claiming the inheritance division of the house No. 8 Hai Ba Trung as the property of Mr. Thu and Mrs. Khang.

- Mrs. Thin’s children as the respondent (represented by Mr. Pham and Mrs. Phuong) claim that only the 2^nd floor is the estate of Mr. Thu and Mrs. Khang, the 1^st floor has been under management of the People’s Committee of Hai Phong City and is not the estate of Mr. Thu and Mrs. Khang, so they disagree with the petition of the petitioner.

In the course of lawsuit settlement, on July 23, 1986, Mr. Minh gave his estate portion to Mr. Nhan and Mrs. Thin. On June 27, 1992, Mrs. Ty gave her estate portion to Mr. Nhan (with confirmation of local government, and public notary office where Mr. Minh and Mrs. Thy lives). On September 20, 1996, Mrs. Vy gave her estate portion to Mrs. Thin's children (with signature of Mrs. Vy and authentication of Ministry of Foreign Affairs of French Republic, and certification of Public Notary Office No. 1 of Hai Phong City). On October 21, 1996, Mr. Tri gave his estate portion to Mr. Nhan and Mr. Nhan's children and Mrs. Thin (with certification of Ville d'Ecouflant of Ministry of Foreign Affairs of French Republic, and certification of Public Notary Office No. 1 of Hai Phong City).

In the First Instance Civil Judgment No. 02/DSST dated July 16, 1996, the People’s Court of Hanoi City judged:

- The house No. 8 with two floors on Cat Dai Street, Le Chan District, Hai Phong is under ownership of Mr. Le Quang Thu and Mrs. To Thi Khang.

- Mrs. Le Thi Thin is entitled to acquire ownership of the 1^st floor of the house No. 8 on Cat Dai Street, Le Chan, Hai Phong, valued at VND 316,837,000; but inherits the estate valued at VND 201,356,666 and is obliged to pay the difference of VND 115,030,333 to Mr. Le Quang Nhan. The estate portion of Mrs. Le Thi Thin will be divided as follows:        

1- Mr. Hoang Viet Thu inherits VND 40,271,333.

2- Mrs. Hoang Thuy Nga inherits VND 40,271,333

3- Mr. Hoang Viet Pham inherits VND 40,271,333.

4- Mrs. Hoang Thuy Phuong inherits VND 40,271,333

5- Mrs. Hoang Thuy Ngoc inherits VND 40,271,333

Hand over the 1^st floor of the house No. 8 on Cat Dai Street, Le Chan, Hai Phong to Mr. Hoang Viet Pham and Mrs. Hoang Thuy Phuong for management and use and Mr. Pham and Mrs. Phuong must jointly pay the difference of VND 115,030,333 to Mr. Le Quang Nhan, each person must pay VND 57,515,166 (fifty seven million five hundred fifteen thousand one hundred sixty six dong).

- Mr. Le Quang Nhan is entitled to acquire ownership of the 2^nd floor of the house No. 8 on Cat Dai Street, Le Chan, Hai Phong, valued at VND 166,869,000; but inherits the estate valued at VND 281,899,334 and receives the difference of VND 115,030,333 from Mr. Pham and Mrs. Phuong.

The estate portion left by Mr. Nhan to Mrs. Le Thu Khue includes: the construction area of the 2^nd floor is 91.84m2, including 15.43m2 of the stair area of 1^st floor. Except for the passage for the stair and window-opening of the 1^st floor, valued at VND 166,869,000 (according to the valuation report of Department of Construction dated May 10, 1995) and she may receive the difference of VND 115,030,333 from Mr. Pham and Mrs. Phuong.

In addition, the Court of First Instance decided the court fee and announced the appeal right to litigants as per the law.

- On July 25, 1996, Mrs. Khue filed an appeal; on August 14, 1996, Mr. Pham and Mrs. Phuong filed an appeal; on September 20, 1996, Mrs. Vy filed an appeal for giving her estate portion to Mrs. Phuong, Mrs. Ngoc, Mr. Pham; on October 21, 1996, Mr. Tri filed an appeal for giving his estate portion to Mr. Nhan and Mrs. Nhan’s children. On August 16, 1996, Mr. Minh filed an appeal, making waiver of his estate portion.

In Decision No. 87/TDC dated August 9, 1997, the Court of Appeal of the Supreme People’s Court of Hanoi decided suspension of lawsuit settlement as prescribed in Section III of Resolution of 11^th session of the 9^th National Assembly dated May 10, 1997 and Official Dispatch No. 62/KHXX dated June 12, 1997 of the Supreme People’s Court until there are new provisions of Standing Committee of the National Assembly.

In Decision No. 57/TDC dated May 12, 1999, the Court of Appeal of the Supreme People’s Court of Hanoi decided continued suspension of lawsuit settlement awaiting new policies of the State concerning civil transactions involving foreign elements established before July 1, 1991.

- In Decision No. 1060/2007/QD-PT dated April 6, 2007, the Court of Appeal of the Supreme People’s Court brought the case to appellate trial as prescribed in Resolution No. 1037/2006/NQ-UBTVQH dated July 27, 2007 on housing-related civil transactions established before July 1, 1991 involving Vietnamese overseas. 

- In the Appellate Judgment No. 87/2007/DSPT dated April 23, 2007, the Appellate Court of the Supreme People’s Court in Hanoi judged:

Pursuant to Article 8 of Resolution No. 755/2005/NQ-UBTVQH dated April 2, 2005 of Standing Committee of the National Assembly and Clause 1 Article 8 of Decree No. 127/2005/ND-CP dated October 10, 2005 of the Government, the Trial Panel revises the First Instance Judgment as follows:

+ Refuse the claim for division of inheritance of the petitioner and claim for division of inheritance of litigants regarding the area of the 1^st floor of the house No. 6 Cat Dai Street, now is No. 8 Hai Ba Trung Street, Hai Phong City.

+ Mrs. Le Thi Thin (died) and Mrs. Thin’s children represented by Mr. Hoang Viet Pham, Mrs. Hoang Thuy Phuong are entitled to keep managing and using the entire area of the 1^st floor (except for the stair facing the road to go up to the 2^nd floor) of the house No. 6 Cat Dai Street, now is No. 8 Hai Ba Trung Street, Hai Phong City and complete paperwork with the competent authority to enable the certificate of housing and land to be granted as per the law.

+ Mrs. Le Quang Nhan (died) and Mr. Nhan’s children represented by Mrs. Le Thu Khue are entitled to keep managing and using the entire area of the 2^nd floor (except for the stair facing the road to go up to the 2^nd floor) of the house No. 6 Cat Dai Street, now is No. 8 Hai Ba Trung Street, Hai Phong City and complete paperwork with the competent authority to enable the certificate of housing and land to be granted as per the law.

 In addition, the Court of Appeal also decided the court fee.

 Following the appellate trial, on May 10, 2007, Mrs. Le Thu Khue filed a claim.

In the Decision No. 14/2008/KN-DS dated January 24, 2008, the Chief Justice of the Supreme People’s Court appealed the above Appellate Civil Judgment and requested the Council of Judges of the Supreme People’s Court to hear the case under cassation review, quash the above Appellate Judgment and quash the First Instance Judgment No. 02/DSST dated July 16, 1996 of People’s Court of Hai Phong Province; refer the case file to the People’s Court of Hai Phong Province for first instance re-trial as per the law.

At the cassation trial, the representative of the Supreme People’s Procuracy concurs with the appeal of the Chief Justice of the Supreme People's Court, requests the Council of Judges of the Supreme People’s Court to quash the First Instance Civil Judgment of People’s Court of Hai Phong City and the Appellate Civil Judgment of the Court of Appeal of the Supreme People’s Court in Hanoi; refer the case file to People’s Court of Hai Phong City for first-instance re-trial.

CONSIDERING THAT

The petitioner filed a lawsuit, claiming that the house No. 6, Cat Dai (now is No. 8 Hai Ba Trung) of Hai Phong City is under ownership of Mr. Le Quang Thu and Mrs. To Thi Khang left by the State after the industrial and commercial renovation policy, so it is their estate and the petitioner claims the division of the estate as per the law. The respondents claim that the State only left Mr. Thu and Mrs. Khang the 2^nd floor of this house, so only the 2^nd floor is their estate, the 1^st floor is still owned by the State, and the State allocated it the 1^st floor to Mrs. Le Thi Thin and her children for management and use, therefore, the 1^st floor is not the estate of Mr. Thu and Mrs. Khang, so they refuse the claim of the petitioner.

According to the “house transfer record” dated April 10, 1961, after Mr. Thu handed over the house No. 8 Hai Ba Trung to the State, he was allowed by the State to live without paying the house rent and may earn 35% of the proceeds from the house lease. However, in the house conditions section of the “house transfer record” dated April 10, 1961, it is stated that “the downstairs is the daughter’s family with 5 members. The upstairs is the family of Mr. Thu with 2 members”, but it is not stated that the house No. 8 Hai Ba Trung is handed over to Mr. Thu’s children but to Mr. Thu.

In the course of lawsuit settlement, Mr. Pham and Mrs. Khue presented the “house transfer record” dated April 10, 1961, which is a printed copy, there is another handwritten copy having the same content, except for the difference between the word “toan” and “tan”. According to this “house transfer record” (Part B - Rights), it only confirms actual area of the house No. 6 Cat Dai and confirms members in the family of Mr. Thu and Mrs. Khang when the State handed over them the house. In fact, before the industrial and commercial renovation, Mr. Thu and Mrs. Khang had many houses for lease in Hai Phong, so when they complied with the renovation policy of the State, they handed over the houses No. 6, 6A, 6B, 4 and 4A Cat Dai Street to the State for management.  Particularly the State did not manage the house No. 6 Cat Dai (now is No. 8 Hai Ba Trung) of Hai Phong City but handed it over to the owners Mr. Thu and Mrs. Khang for use without paying the house rent.

Pursuant to Decree No. 19-CP dated June 23, 1960 of Council of Government, “the owner is entitled to retain the house to live”. Pursuant to Circular No. 110/BTC dated May 26, 1961, the Central Board of Private Industry and Trade Renovation provided guidance “the area retained to the owner of the house after renovation should be regarded as the area entirely under their ownership, without paying the house rent”. On the other hand, pursuant to Decree No. 297/CP dated October 2, 1991 of the Government and guidelines in the Circular No. 383/BXD dated January 5, 1991 of the Ministry of Construction, “the area retained to the owner of the house after renovation is the area entirely under their ownership”. In the Official Dispatch No. 147 dated March 30, 1995, Department of Construction of Hai Phong City asserted: “the house No. 8 Hai Ba Trung is under ownership of Mr. Le Quang Thu and Mrs. To Thi Khang”.

In the course of lawsuit settlement, the representative of Hai Phong House Trading Company (the agency in charge of management and house lease of the State in Hai Phong) also confirmed that the house No. 8 Hai Ba Trung consists of the 1^st floor and 2^nd floor is the area allocated to the litigant, so the Company does not manage it. Accordingly, based on the above legal documents, there are valid grounds for determining that the State did not manage the house No. 8 Hai Ba Trung, Hai Phong when carrying out the socialist reform policy. In this case, it is necessary to determine that Mr. Thu and Mrs. Khang are owners of the house, so they have the ownership of the entire house, the content of the “house transfer record” dated April 10, 1961 (Part B - Rights) only confirms the actual area of the house No. 6 Cat Dai and confirms members of the family Mr. Thu and Mrs. Khang who was staying in the house when the State allocated the house. This confirmation does not constitute the grounds to prove that those who were living in the house have the ownership and a part of the house was leased out by the State to Mr. Nhan and his children.

Therefore, the Court of First Instance determined that the entire house was property of Mr. Thu and Mrs. Khang, because they died and left no will, so this estate shall be divided to their heirs and the Trial Panel recognized the voluntariness of the persons with relevant rights and obligations to give their estate portions and divided the property according to the reality and the need for dwelling. This decision is well-grounded and in accordance with laws and regulations. The Court of Appeal did not apply Article 8 of Resolution No. 755/2005/NQ-UBTVQH11 dated April 2, 2005 of Standing Committee of the National Assembly with its spirit and did not apply above regulations, and then the Court of Appeal determined that the estate of Mr. Thu and Mrs. Khang is only the 2^nd floor of the house No. 8 of Hai Ba Trung, but did not accept the claim for estate division of the petitioner and determined that the 1^st floor of the house No. 8 Hai Ba Trung is owned by the State, thereby specified that Mrs. Thin’s children and Mr. Nhan children have the right to complete the paperwork to enable the certificate of house and land ownership to be granted. This decision is poorly-grounded and not in accordance with laws and regulations. Moreover, the petitioner filed a lawsuit, claiming the division of inheritance, the respondent refuses it and makes no counterclaim, but the Court of Appeal determined that the respondent has the right to manage and use the house and complete the paperwork to enable the certificate of house and land ownership to be granted. This decision is wrong and beyond the request of the litigants.

In terms of court procedures:

When settling the case, the Court of First Instance, based on the request of the petitioner and the case file, determined this legal relation as the inheritance dispute. The Court of Appeal should have detected that the Court of First Instance determined wrong legal relation and have quashed the First Instance Judgment for re-trial as per the law. In this case, the Court of Appeal re-determined the legal relation different from the legal relation determined by the Court of First Instance but it did not quash the First Instance Judgment and continued resolving the case under appellate procedure. This is a procedural error.

On the other hand, while the petitioner claims that Mr. Le Quang Hung (Mrs. Khue’s young brother) is the person who has directly managed and used the space under stair before the dispute, the respondent claims that Mrs. Khue arbitrarily let Mr. Hung occupy the space under stair after the dispute arose. In addition, as claimed by Mrs. Khue, Mr. Hung is a mentally-ill demobilized soldier, meanwhile, Mr. Pham states that Mr. Hung does not serve in the army and is not a wounded soldier as claimed by Mrs. Khue; before moving to the space under the stair of this dispute house, Mr. Hung used to settle in another place.

Therefore, in order to have substantial grounds to resolve the case, it is necessary to clarify if since when Mr. Hung has lived in the space under stair, if he had another house before living in the space under stair, whether Mr. Hung is wounded soldier, and causes of his disease (if any). After verification, if Mr. Hung is determined as the person who directly manages and uses the space under stair, he must be brought into legal proceedings. If Mr. Hung has limited legal capacity, it is necessary to appoint a representative for Mr. Hung to participate in the legal proceedings.

In this case, as per the law, the Court has suspended the lawsuit settlement since 1997. In the course of lawsuit settlement, the Court of First Instance valuated the estate in 1995, the price of the house and land has fluctuated much so far, so it must be re-valuated in conformity with reality. Moreover, when conducting appellate trial, there are changes in litigants and their requests, so the case should be re-settled from the first instance procedure to thoroughly resolve the case. On the other hand, due to changes in laws and regulations, it is necessary to apply provisions of Resolution No. 1037/2006/NQ-UBTVQH11 dated July 27, 2006 of Standing Committee of the National Assembly on housing-related civil transactions established before July 1, 1991 with involvement of overseas Vietnamese to resolve the case to ensure the interests of the litigants. Therefore, it deemed essential to quash the Appellate Judgment and First Instance Judgment No. 02/DSST dated July 16, 1996 of People’s Court of Hai Phong City for first instance re-trial as per the law.

Pursuant to facts and matters mentioned above:

Pursuant to Clause 3 Article 291; Clause 3 Article 297; Clause 2 Article 299 of the Civil Procedure Code, Resolution No. 1037/2006/NQ-UBTVQH11 dated July 27, 2006 of Standing Committee of the National Assembly on housing-related civil transactions established before July 1, 1991 with involvement of overseas Vietnamese.

HEREBY DECIDES

1. Quash the Appellate Judgment No. 87/2007/DSPT dated April 23, 2007 of the Court of Appeal of the Supreme People’s Court in Hanoi and quash First Instance Judgment No. 02/DSST dated July 16, 1996 of People’s Court of Hai Phong City on civil case “inheritance dispute” between the petitioner: Mrs. Le Thu Khue and the respondent: Mr. Hoang Viet Pham and Mrs. Hoang Thuy Phuong; persons with relevant rights and obligations: Mrs. Hoang Thuy Ngoc, Mrs. Le Thu Bich, Mrs. Hoang Thuy Nga, Mrs. Le Thi Ty, Mr. Le Quang Minh, Mr. Le Quang Tri and Mr. Hoang Viet Thu.

2. Refer the case file to People’s Court of Hai Phong City for re-conducting the first-instance trial as per the law.

Grounds for quashing the Appellate Judgment and First Instance Judgment:

Because the case has been suspended since 1997 and was brought into trial in 2007, while the valuation of asset was conducted in 1995, it is necessary to re-valuate the property. Moreover, when the case is brought into appellate trial, there are changes in litigants and their requests, it deemed essential to re-try the case from the first instance procedure.