Cassation judgment No. 143/2013/DS-GDT dated november 13, 2013 regarding dispute over gift deed for land use right

THE SUPREME PEOPLE’S COURT

CASSATION JUDGMENT NO. 143/2013/DS-GDT DATED NOVEMBER 13, 2013 REGARDING DISPUTE OVER GIFT DEED FOR LAND USE RIGHT 

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On November 13, 2013, the cassation trial was conducted at the office of the Supreme People’s Court to hear the case of dispute over gift deed for land use right between:

Petitioner:  Mrs. Van Anh Muoi, born in 1955; residing at No. 4 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City; she authorizes Mr. Dinh Thanh Tam, born in 1979; residing at No. 16/8 Tay A, Dong Hoa commune, Di An district, Binh Duong province to act on her behalf (the letter of authorization dated December 24, 2010).

Respondent:  Mrs. Van Anh Kim (Van Kim Anh, Mrs. Van Anh Muoi’s sister), born in 1954; residing at Canada (address: 359 1^st Street 1 Brandon. R7A2W6 Mini ToBa. Canada); she authorizes Mr. Nguyen Hoang Lap, born in 1974; residing at 644A, zone 4, An Phu ward, district 2, Ho Chi Minh City to act on her behalf (letter of authorization dated June 6, 2010 and consular legalized on August 30, 2010 of Vietnamese Embassy in Canada).

Persons with related interests and obligations: Mr. Nguyen Thanh Binh, born in 1950 (Mrs. Kim’s husband); residing at No. 4 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City.

FINDING THAT

Representation of the petitioner Mrs. Van Anh Muoi (represented by Mr. Dinh Thanh Tam as authorized representative) in the petition filed on March 9, 2010 and in the course of proceedings:

On May 15, 2008, Mrs. Van Anh Muoi signed a gift deed for gifting Mrs. Van Anh Kim (Mrs. Muoi’s sister) the house and land at No. 04 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City (hereinafter referred to as the house No. 04 Le Van Huu), the gift deed was notarized at the Public Notary Office No. 3 of Ho Chi Minh City. Mrs. Muoi gifted this house to Mrs. Kim because at that time Mrs. Muoi suffered a fatal disease, the doctor did not expect her to last out, Mrs. Muoi has no husband or child; at that time, Mrs. Kim came back from Canada and told Mrs. Muoi to gift her the house for prevention of possible risks, if Mrs. Muoi cannot survive the deadly disease, Mrs. Kim would help her complete the paperwork; Mrs. Kim would only take care of the house on her behalf and promised not to transfer it to a third party, if Mrs. Muoi could survive the disease, they would cancel the gift deed. Putting the trust in Mrs. Kim, Mrs. Muoi signed the gift deed for gifting the house No. 04 Le Van Huu to Mrs. Kim. When signing the gift deed, Mrs. Muoi was not sound in mind. Her purpose for gifting the house No. 04 Le Van Huu was that if Mrs. Muoi passed away, the house would be distributed to her siblings. Mrs. Muoi did not know that Mrs. Kim transferred ownership of the house to Mrs. Kim until Mr. Nguyen Thanh Binh (Mrs. Kim’s husband) refused to let Mrs. Muoi stay in the house No. 04 Le Van Huu.

Thus, Mrs. Muoi claims cancellation of the gift deed associated with the house No. 04 Le Van Huu.

Representation of the respondent, Mrs. Van Anh Kim (authorized by Mr. Nguyen Hoang Lap):

The gift deed for gifting the house No. 04 Le Van Huu to Mrs. Kim was voluntarily signed by Mrs. Muoi in her sound mind and in the witness of all siblings in the family. In fact, the house No. 04 Le Van Huu is the property left to Mrs. Kim by their parents, Mrs. Muoi is entitled to own a piece of land in Thu Duc district. So, when the state allows an oversea Vietnamese to own the house and land use right, Mrs. Muoi transferred ownership of the house No. 04 Le Van Huu to Mrs. Kim.  Mrs. Kim was granted the certificate of house ownership (registration of change of house ownership) dated June 4, 2008. Hence, Mrs. Kim rejects the claim of Mrs. Muoi.

Representation of person with relevant rights and obligations, Mr. Nguyen Thanh Binh (Mr. Kim’s husband): The house No. 04 Le Van Huu is the private property of Mrs. Kim, he gives no opinion about this housing dispute.

In the First Instance Civil Judgment No. 762/2011/DS-ST dated June 1, 2011, the People’s Court of Ho Chi Minh City judged:

Reject the claim of Mrs. Van Anh Muoi for canceling the gift deed for land use right (with property thereon) in the parcel No. 18, the map No. 17 at 04 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City between the donor, Mrs. Van Anh Muoi, and the donee, Mrs. Van Anh Kim (Van Kim Anh), notarization No. 13184 on May 15, 2008 by Public Notary Office No. 3 of Ho Chi Minh City.

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

On June 10, 2011, Mrs. Van Anh Muoi made an appeal against the decision of the Court of First Instance.

In the Appellate Civil Judgment No. 29/2011/DS-PT dated November 9, 2011, the Court of Appeal of People’s Supreme Court in Ho Chi Minh City corrected the First Instance Judgment as follows:

Declare the civil transaction - the gift deed for land use right (with property thereon) in the parcel No. 18, the map No. 17 at 04 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City between the donor, Mrs. Van Anh Muoi, and the donee, Mrs. Van Anh Kim (Van Kim Anh), notarization No. 13184 on May 15, 2008 by Public Notary Office No. 3 of Ho Chi Minh City null and void.

Mrs. Van Anh Muoi is obliged to register land use right (with property thereon) with the competent authority as per the land law.

Mrs. Van Anh Muoi is obliged to reimburse a half of the registration fee (also known as stamp duty) to Mrs. Van Anh Kim (Van Kim Anh) of VND 11,871,550.

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

After appellate trial, Mr. Nguyen Hoang Lap (authorized by Mrs. Van Anh Kim) requests to review the Appellate Judgment under cassation procedure.

In the Decision No. 27/QD-KNGDT-V5 dated April 10, 2012, the Chief Procurator of the Supreme People’s Court appealed the Appellate Judgment No. 29/2011/DS-PT dated November 9, 2011 of the Appellate Court of the Supreme People’s Court of Ho Chi Minh City and requested the Council of Judges of the Supreme People’s Court in charge of cassation trial to quash the above Appellate Judgment and the First Instance Judgment No. 762/2011/DSST dated June 1, 2011 of People’s Court of Dong Nai City, remand the case back to People’s Court of Ho Chi Minh City for re-conducting the first instance trial as per the law with the following judgment:

The gift deed for land use right (with property thereon) in the parcel No. 18, the map No. 17 at 04 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City between the donor, Mrs. Van Anh Muoi, and the donee, Mrs. Van Anh Kim (Van Kim Anh) was made with notarization No. 13184 on May 15, 2008 by Public Notary Office No. 3 of Ho Chi Minh City. On June 4, 2008, Mrs. Van Anh Kim (Van Anh Kim) had her name included in the certificate of land use right. Mrs. Muoi claims that when signing the said gift deed, she was not in sound mind and she did not know that the house ownership was transferred to Mrs. Kim. Now, Mrs. Muoi claims cancellation of the gift deed for gifting the house and land at 4 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City to Mrs. Kim.

Deeming that Mrs. Muoi, when signing the gift deed, had full legal capacity and there is  no evidence that Mrs. Muoi was not in sound mind, was coerced or deceived; the gift deed was made at the Public Notary Office No. 3 of Ho Chi Minh City on their voluntary basis.  So, in terms of legal aspect, this gift deed is considered lawful. However, Mrs. Kim is an oversea Vietnamese (Canada), was granted the Visa Exemption Certificate No. AR0204833 on May 7, 2007 by Immigration Administration and had been granted multiple entries to Vietnam until July 20, 2012 and Mrs. Kim had registered temporary residence at the house No. 04 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City from May 4, 2008 to May 27, 2008, from February 10, 2009 to March 10, 2009, from June 23, 2009 to July 20, 2009 for the period of under 3 months. In consideration of Clause 1 Article 126 of the Law on the amendments to the Law on Housing “an overseas Vietnamese specified below and granted residence in Vietnam for at least 3 months is entitled to own a house to meet the her dwelling need and family members in Vietnam, although Mrs. Kim is not eligible for owning the house ownership in Vietnam, the People’s Committee of district 1 still permitted to putting the house ownership in her name based on the gift deed for the property (with house thereon), it was an improper decision. It was necessary for the Court of First Instance and the Court of Appeal, pursuant to Point b Clause 2 Article 121 of the Law on the amendments “…In case of gift or inheritance to entities ineligible for house ownership in Vietnam, they shall only be entitled to receive value of the house associated with the land use right”, to let Mrs. Kim receive the value of the above-mentioned house and land, and propose the People’s Committee of district 1 to revoke the land use right certificate and cancel the title of Mrs. Van Anh Kim. The Court of First Instance decided rejecting the lawsuit petition of Mrs. Muoi for cancellation of the gift deed for land use right (with property thereon) between Mrs. Muoi and Mrs. Kim; the Court of Appeal corrected First Instance Judgment and declared the civil transaction in question null and void. These decisions were wrong and did not ensure the interests of the litigants.

At the cassation court hearing, the representative of the Supreme People’s Procuracy requests the Council of Judges of the Supreme People’s Court to accept the Appeal of the Chief Procurator of the Supreme People’s Court.

CONSIDERING THAT

On May 15, 2008, at the Public Notary Office No. 3 of Ho Chi Minh City, Mrs. Van Anh Muoi made a gift deed for land use right (with property thereon) at No. 04 Le Van Huu, Ben Nghe ward, district 1, Ho Chi Minh City in favor of Mrs. Van Anh Kim and on June 4, 2008, Mrs. Kim was granted land use right certificate (with property thereon) at No. 4 Le Van Huu.

At the time when Mrs. Muoi made the gift deed for gifting land use right (with property thereon) to Mrs. Kim (May 15, 2008) at No. 04 Le Van Huu and at the time when Mrs. Kim was granted the land use right certificate (with property thereon) at No. 04 Le Van Huu (June 4, 2008), Article 126 of the Law on Housing and Article 121 of the Law on Land 2003 has not been amended in the Law No. 34/2009/QH12 dated June 8, 2009 of the Law on the amendments to Article 126 of the Law on Housing and Article 121 of the Law on Land; Decree No. 90/2006/ND-CP dated September 6, 2006 on guidelines for the Law on Housing in force and has not been superseded by Decree No. 71/2010/ND-CP dated June 23, 2010 on guidelines for the Law on Housing.

Article 126 of the Law on Housing 2005 stipulates “1. Overseas Vietnamese returning to Vietnam for long-term investment, being persons with merits of  making  contributions  to  the  country,  cultural  activists,  scientists  wishing  to  conduct  regular activities  in  Vietnam  to  serve  the  cause  of  national  construction,  persons  permitted  to  lead  a stable life in Vietnam and other subjects defined by the National Assembly Standing Committee, may own houses in Vietnam. 2. Overseas Vietnamese other than those defined in Clause 1 of this Article, who have returned to Vietnam for stay for six or more months may each own a single house or an apartment”; Point a Clause 1 Article 126 of the Law on Land 2003 stipulates that overseas Vietnamese returning to Vietnam for long-term investment wishing to have a house during their investment duration in Vietnam are eligible of buying houses associated with residential land use right in Vietnam; Clause 4 Article 65 of Decree No. 90/2006/ND-CP dated September 6, 2006 stipulates: "Overseas Vietnamese mentioned below may purchase, be donated with, exchange or inherit houses like domestic Vietnamese, (a) Overseas Vietnamese who return to Vietnam for long-term investment and directly carry out investment activities under the provisions of the Investment Law and are granted the investment certificates.” and Clause 5 of this Article stipulates that “Overseas Vietnamese other than the subjects defined in Clause 4 of this Article, who have returned to Vietnam and resided for the permitted duration of six months or more, may own a single house or an apartment during their residence in Vietnam.”

Meanwhile, Mrs. Kim is an overseas Vietnamese (Canada) and she is a member of An Cat Co., Ltd according to the business registration certificate of multiple-member limited liability company No. 4102039544 issued by the Department of Planning and Investment of Ho Chi Minh City to An Cat Co., Ltd, with initial registration on May 18, 2006 and the third registration on August 16, 2007. However, the Official Dispatch No. 9057 dated November 8, 2011 of the Department of Planning and Investment of Ho Chi Minh City states: “Business registration certificate issued by Business Registration Department affiliated to the Department of Planning and Investment of Ho Chi Minh City with the type of business entities: limited liability company, joint-stock company, sole proprietorship, etc. and the enterprise registration certificate is not the investment certificate” and in the Official Dispatch No. 8244/BKHDT-PC dated October 23, 2013, the Ministry of Planning and Investment, the Ministry of Planning and Investment replies the People’s Supreme Procuracy that the business registration certificate to An Cat Co., Ltd was issued in accordance with Law on Enterprises 1999 and the Law on Domestic Investment Promotion, amended in 1998, not as prescribed in the Law on Investment (which has not entered into force at that time). Pursuant to Law on Enterprises 1998 and the Law on Domestic Investment Promotion “the business registration certification is not considered as the investment license or investment certificate”. Alternatively, Mrs. Kim fails to present the proof that An Cat Co., Ltd had an investment project as prescribed in the Law on Domestic Investment Promotion (amended in 1998) and An Cat Co., Ltd was not issued with the “certificate of investment incentives” by the competent authority in accordance with the Law on Domestic Investment Promotion.

Moreover, according to the Visa Exemption Certificate issued to Mrs. Kim on May 7, 2008 by the Immigration Administration, Mrs. Kim were granted multiple entries until August 26, 2012, each entry was eligible for temporary residence of not exceeding 90 days.

Thus, at the time when Mrs. Muoi made the gift deed for gifting the land use right (with property thereon) to Mrs. Kim at 04 Le Van Huu and when Mrs. Kim was granted the land use right certificate (with property thereon) at 04 Le Van Huu, Mrs. Kim were both ineligible for owning a house in Vietnam (Mrs. Kim was not issued with an investment license or investment certificate in accordance with investment law, Mrs. Kim was only entitled to reside in Vietnam for up to 90 days, not 6 months or longer).

Therefore, the gift deed for land use right (with property thereon) at 04 Le Van Huu between Mrs. Muoi and Mrs. Kim is null and void. Such voidance has been caused by faults on both parties. When Mrs. Muoi gifted Mrs. Kim the land use right (with property thereon) at 04 Le Van Huu, Mrs. Muoi did not receive any sum of money or other financial interests from Mrs. Kim and Mrs. Kim was not required to perform any financial interest-related obligation for Mrs. Muoi (the said gift deed is of non-compensatory nature but only in favor of the donee, Mrs. Kim). However, Mrs. Kim paid the stamp duty to enable the land use right certificate to be issued and the faults resulting in null and void deed. Such voidance has been caused by faults on both Mrs. Kim and Mrs. Muoi. So, Mrs. Muoi has to compensate Mrs. Kim a half of the stamp duty.

Therefore, the Court of Appeal was grounded when declaring the gift deed for land use right (with property thereon) at 04 Le Van Huu between Mrs. Muoi and Mrs. Kim null and voice and compelling Mrs. Muoi to reimburse Mrs. Kim a half of the stamp duty. Thus, there is no justifiable ground and it is unnecessary to review and retry the case.

According to facts and matters, pursuant to Clause 3 Article 291, Clause 1 Article 297 of the Civil Procedure Code (amended by the Law No. 65/2011/QH12 dated March 29, 2011 of the National Assembly);

HEREBY DECIDES

Do not accept the Appeal No. 27/ỌĐ-KNGDT-V5 dated April 10, 2012 of the Chief Procurator of the People’s Supreme Procuracy; uphold the Appellate Civil Judgment No. 29/2011/DS-PT dated November 9, 2011 of the Court of Appeal of the Supreme People’s Court in Ho Chi Minh City regarding the case “dispute over gift deed for land use right” between the petitioner, Mrs. Van Anh Muoi, and the respondent, Mrs. Van Anh Kim; person with relevant rights and obligations, Mr. Nguyen Thanh Binh.

CONTENTS PROPOSED TO BE RECOGNIZED AS PRECEDENT

The Cassation Decision indicates the question of law which is a valid guide for subsequent similar cases:

In a gift deed for real estate which the donee is not eligible for owning a house in Vietnam, such gift deed shall be declared null and void; the faults resulting in such voidance rest with both parties.

In particular, the Council of Judges of the Supreme People’s Court judged:

“At the time when Mrs. Muoi made the gift deed for gifting the land use right (with property thereon) to Mrs. Kim at 04 Le Van Huu and when Mrs. Kim was granted the land use right certificate (with property thereon) at 04 Le Van Huu, Mrs. Kim were both ineligible for owning a house in Vietnam (Mrs. Kim was not issued with an investment license or investment certificate in accordance with investment law, Mrs. Kim was only entitled to reside in Vietnam for up to 90 days, not 6 months or longer).

Therefore, the gift deed for land use right (with property thereon) at 04 Le Van Huu between Mrs. Muoi and Mrs. Kim is null and void. Such voidance has been caused by faults on both parties. When Mrs. Muoi gifted Mrs. Kim the land use right (with property thereon) at 04 Le Van Huu, Mrs. Muoi did not receive any sum of money or other financial interests from Mrs. Kim and Mrs. Kim was not required to perform any financial interest-related obligation for Mrs. Muoi (the said gift deed is of a non-compensatory nature but only in favor of the donee, Mrs. Kim). However, Mrs. Kim paid the stamp duty to enable the land use right certificate to be issued and the faults resulting in null and void deed. Such voidance has been caused by faults on both Mrs. Kim and Mrs. Muoi. So, Mrs. Muoi has to compensate Mrs. Kim a half of the stamp duty.

Therefore, the Court of Appeal was grounded when declaring the gift deed for land use right (with property thereon) at 04 Le Van Huu between Mrs. Muoi and Mrs. Kim null and voice and compelling Mrs. Muoi to reimburse Mrs. Kim a half of the stamp duty. Thus, there is no justifiable ground and it is unnecessary to review and retry the case.