Judgement no. 153/2017/DS-PT dated july 21, 2017 on dispute over land use right, reclaiming property value and dispute over property loan agreement

SUPERIOR’S PEOPLE COURT OF HO CHI MINH CITY

JUDGEMENT NO. 153/2017/DS-PT DATED JULY 21, 2017 ON DISPUTE OVER LAND USE RIGHT, RECLAIMING PROPERTY VALUE AND DISPUTE OVER PROPERTY LOAN AGREEMENT

On July 21, 2017, at the office of the Superior People’s Court at Ho Chi Minh City, an appellate trial court is conducted to hear the Civil Case No. 138/2016/TLPT-DS dated June 16, 2016 on “Dispute over land use right, reclaiming property value and dispute over property loan agreement”. Based on the appeal against the First Instance Civil Judgment No. 07/2016/DS-ST dated April 20, 2016 of People’s Court of Kien Giang Province. According to the Decision to Bring the Case to Trial No. 448/2016/QD-PT dated September 5, 2016 between litigants:

* Plaintiff: Mrs. Ngo Kim C, born in 1951 (present).

Address: 13728 San Pablo Ave Apt 2003 San Pablo, CA 94806, USA.

- Authorized legal representative of petitioner: Mrs. Ngo Kim P, born in: 1960 (present); Address:86 NTB, VQ Ward, RG City, Kien Giang Province.

The protector of legitimate rights and interests of the petitioner: Mr. Pham Anh V who is a lawyer of Bar Association of Kien Giang Province (present);

* Respondent:

1/. Mrs. Duong Thi Kim X, born in 1957 (present);

2/. Mr. Pham Van K, born in 1953 (absent);

Co-address: P/H Village, MP Commune, HD District, Kien Giang Province.

- The protector of legitimate rights and interests of the respondent: Mr. Thai Van B who is a lawyer of Bar Association of Da Nang City (present);

* Person with relevant rights and obligations: KL Joint-Stock Commercial Bank.

Address: 16-18 PHT, VTV Ward, RG City, Kien Giang.

- Legal representative: Mr. Vo Van C1 - Director General.

- Authorized representative of Mr. Vo Van C1: Mr. Truong Quoc H, born in: 1982, position: Acting Director of Transaction Office ML-KL Joint-Stock Commercial Bank (present);

THE CASE

* Representation of the petitioner Mrs. Ngo Kim C in the lawsuit petition and during the lawsuit settlement:

On April 12, 2012, Mrs. Ngo Kim C received transfer of right to use 22,598m2 located in PT Village, MP Commune, HD District, Kien Giang Province of the married couple Mr. Lu Hong L, Mrs. Nguyen Thi Thu T residing at 138, Group 10, My Hung Village, ML Commune, HD District, Kien Giang Province for VND 750,000,000. Because Mrs. Ngo Kim C is an overseas Vietnamese who is ineligible for having her name included in the certificate of land use right in Vietnam. Therefore, Mrs. Ngo Kim C asked her sister Mrs. Duong Thi Kim X to have her name included in the certificate of land use right on her behalf. After Mrs. Ngo Kim C paid Mr. L and Mrs. L in full, both parties complete paperwork to transfer the land use right in the name of Mrs. Duong Thi Kim X, with the certificate of land use right, housing ownership and property on land  issued by the People’s Committee of HD District No. 260787 dated October 4, 2013. After Mrs. Ngo Kim C transferred money in US Dollar to Mrs. Duong Thi Kim X multiple times, Mrs. Xuong paid Mr. L and Mrs. T for the transfer of land. The current value of land use right based on the certification of value made by Valuation Limited Company TV is VND 813,528,000. Mrs. Ngo Kim C reclaims the value of the transferred land of VND 750,000,000, and agrees to divide the difference of VND 63,528,000 into halves to her and Mrs. X , VND 31,764,000 each, considering as a compensation for Mrs. Duong Thi Kim X’s effort to preserve and improve land.

Mrs. Ngo Kim C lent VND 250,000,000 to the married couple Mr. K and Mrs. X for them to receive mortgage of 12.554 m2 of agricultural land from the married couple Mr. Lu Truong A, Mrs. Nguyen Thi Yen L1 residing in Tan Dien Village, ML Commune, HD District, Kien Giang Province. Mrs. Ngo Kim C and Mr. K and Mrs. X concluded an agreement on March 26, 2011 that upon receiving mortgage of this piece of land, the married couple Mr. K and Mrs. X will cultivate and collect yields and pay her VND 30,000,000 per year. Now, Mrs. Ngo Kim C requires Mrs. X and Mr. K to repay her VND 250,000,000 of principal and VND 30,000,000 per year according to the agreement made on March 26, 2011.

In addition, Mrs. Ngo Kim C determines that on October 8, 2013, she also gave the married couple Mr. K and Mrs. X VND 60,000,000 for 12 months. Mrs. Ngo Kim C gave money to Mrs. X and Mr. K at her house, then both parties made a notarized contract. When the payment was due, the married couple Mr.K and Mrs. X did not repay it. Now, Mrs. Ngo Kim C only requires Mr. K and Mrs. X to repay her VND 60,000,000 of principal without interest.

Particularly for the loan taken out by Mrs. X and Mr. K from KL Joint-Stock Commercial Bank, they must repay it, not relevant to Mrs. Ngo Kim C.

* Representation of co-respondents Mrs. Duong Thi Kim X and Mr. Pham Van K:

Mrs. X and Mr. K agree to repay Mrs. Cham VND 750,000,000, Mrs. C previously received the transfer of land. However, they refuse to repay the difference of VND 63,528,000 according to the certification of value of Valuation Limited Company TV. They are only capable of repaying Mrs. C VND 50,000,000 after each rice crop.

Regarding VND 250,000,000, they confirmed that Mrs. Cham lent them this sum of money for them to receive a pledge of 12,554m2 from Mr. Lu Truong A and Mrs. Nguyen Thi Yen L1, annually, they repaid Mrs. C VND 30,000,000 according to the agreement dated March 26, 2011. They agreed to repay the principal of VND 250,000,000, but they have not repaid VND 30,000,000 since the dispute.

Regarding VND 60,000,000 under the notarized contract, Mrs. C promised to send it to them, but in fact, she did not do that as agreed. Therefore, they reject this request of Mrs. C and request the Court to consider it.

They confirm the loan of VND 250,000,000 granted by the Bank KL, RG Branch - ML Transaction Office for a year until the maturity date April 22, 2016. They will pay the KL Joint-Stock Commercial Bank on time, if they do not repay the loan, the Bank is entitled to request the Civil Enforcement Agency to sell the collateral by order of the court.

Representation of the representative of person with relevant rights and obligations KL Joint-Stock Commercial Bank:

On April 22, 2015, Mrs. Duong Thi Kim X and Mr. Pham Van K entered into a credit contract No. 0184/15/HDTD/l014-3660 with KL Joint-Stock Commercial Bank, RG Branch, ML Transaction Office with the loan of VND 250,000,000 and loan term of 12 months, maturity date April 22, 2016, the interest rate within the term of the loan of 11.43% per year (the interest rate changes every 3 months and equals interest rate of 12-month savings deposit with at-maturity interest payment plus margin of 3.96% per year), and with overdue interest of 150% of loan interest before the overdue debt time.

Property to secure the loan: rice field (area of 22,598m2), located in PT Village, MP Commune, HD District, Kien Giang Province, of the map No. 05, land plot 59+22, according to the certificate of land use right No. BM 260787 issued by the People’s Committee of HD District, Kien Giang Province on October 4, 2013.

Until April 12, 2016, Mrs. Duong Thi Kim X and Mr. Pham Van K still owe KL Joint-Stock Commercial Bank - RG Branch - ML Transaction Office VND 278,004,375 (including principal of VND 250,000,000 and interest within the term of the loan of VND 28,004,375).Now, the Bank requests Mrs. Duong Thi Kim X and Mr. Pham Van K to repay all principal and interest accrued in full according to the credit agreement from April 13, 2016 until the full repayment of the loan.

Request the Court to declare the collateral put up at the KL Bank legal; when the Judgment takes effect, but Mrs. X and Mr. K do not repay the loan or repay the loan in full, the KL Bank is entitled to request Civil Enforcement Agency to take the collateral to put them up for auction to pay the Bank.

* Witnesses:

- Representation of Mr. Lu Hong L, Mrs. Nguyen Thi Thu T:

They transferred the piece of land 22,598m2 located in PT Village, MP Commune, HD District, Kien Giang Province for VND 250,000,000. When negotiating the transfer of land, Mrs. X and Mrs. C were also present. Mr. Lu Hong L and Mrs. Nguyen Thi Thu T determine that: They transferred the above piece of land to Mrs. Ngo Kim C; because before the transfer, they had pledged this piece of land for Mrs. C for 1 year. Upon expiry of mortgage, because they were not capable of redeeming the mortgaged plot of land, they agreed to transfer it to Mrs. C.

- Representation of Mr. Nguyen Van X1:

He did not know the agreement on transfer of land between Mrs. C, Mrs. X, Mrs. T, Mr. L; he only witnessed that Mrs. X made two payments to Mrs. T and Mr. L for the land transfer at his house, when paying money, Mrs. X said that such money was sent by her sister who lives abroad.

In the First Instance Civil Judgment No. 07/2016/DSST dated April 24, 2016, the People’s Court of Kien Giang Province judged:

Pursuant to Article 34, Clause 2 Article 79; Clause 2 Article 80, Article 131, Article 238, Article 245 of the Civil Procedure Code in Viet Nam; Articles 256, 290, 305, 471, 474, 476, 637 of the Civil Code in Viet Nam and Ordinance No. 10/2009/PL-UBTVQH12 in Viet Nam dated February 27, 2009 of Standing Committee of the National Assembly on Court Fees and Charges.

Hereby judges: Accept the lawsuit petition of Mrs. Ngo Kim C and the independent request of KL Joint Stock Commercial Bank.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay Mrs. Ngo Kim C the transfer value of 22,598m2 located in PT Village, MP Commune, HD District, Kien Giang Province of VND 750,000,000 and the difference value of VND 31,764,000.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay Mrs. Ngo Kim C the debt of VND 250,000,000 and VND 30,000,000 according to the Agreement dated March 26, 2011.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay Mrs. Ngo Kim C the debt of VND 60,000,000 borrowed on October 8, 2013.

- In total, Mrs. Duong Thi Kim X and Mr. Pham Van K must repay Mrs. Ngo Kim C VND 1,121,764,000 (One billion one hundred twenty one million seven hundred sixty four thousand dong) after the Judgment takes effect.

From the date on which Mrs. Ngo Kim C applies for judgment enforcement, if Mrs. Duong Thi Kim X and Mr. Pham Van K do not repay the said amount, they are obliged to repay monthly interests according to the basic interest rate prescribed by the State Bank in proportion to the late judgment enforcement time.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay KL Joint Stock Commercial Bank VND 278,004,375 (Two hundred seventy eight million four thousand three hundred seventy five dong). Including the principal of VND 250,000,000; the interest rate within the term of the loan VND 28,004,375 and interest on principal according to the credit agreement from April 13, 2016 until the full repayment of the debt according to the Notice of KL Joint Stock Commercial Bank.

KL Joint Stock Commercial Bank shall release all documentation and title of the collateral put up by Mrs. Duong Thi Kim X and Mr. Pham Van K for the Bank as soon as possible when the parties pay off the mortgage and loans of each credit agreement which was signed.

If Mrs. Duong Thi Kim X and Mr. Pham Van K are not capable of repaying the debt to the Bank, KL Joint Stock Commercial Bank is entitled to request a competent Civil Enforcement Agency to sell the collateral put up at the Bank by order of the court, which is the piece of land 22,598m2 located in PT Village, MP Commune, HD District, Kien Giang Province of the map No. 05, land plot 59+272 in the name of Mrs. Duong Thi Kim X in the certificate of land use right, housing ownership and property on land No. BM 260787 issued by the People’s Committee of HD District, Kien Giang Province on October 4, 2013 for debt collection as per the law.

In addition, the first instance court decided the court fee and expertising fee, and announced the appeal right to litigants as per the law.

After first instance trial on May 4, 2016, the respondent Mrs. Duong Thi Kim X and Mr. Pham Van K both made an appeal against the First Instance Judgment No. 07/2016/DSST dated April 20, 2016 of People’s Court of Kien Giang Province, requesting the Appellate Court to reject the lawsuit petition filed by Mrs. Ngo Kim C, which reclaims Mrs. X and Mr. K  to repay VND 750,000,000 of the land plot and the difference of VND 31,764,000; and refuse to repay VND 60,000,000 that Mrs. C claims that Mrs. X and Mr. K borrowed from her with the mortgage of certificate of land use right on October 4, 2013.

At the appellate court hearing:

- Mrs. Duong Thi Kim X and Mr. Pham Van K still uphold the appeal.

- The litigants in the case do not submit any other item of evidence.

- The procurator, at the court hearing, evaluates that the appeal of Mrs. Duong Thi Kim X and Mr. Pham Van K does not have valid grounds and request to turn down this appeal and uphold the First Instance Judgment.

JUDGEMENT OF THE COURT

After consideration of the case files assessed and the adversarial process at the court hearing, the Trial Panel judges as follows:

[1] Regarding the piece of land 22,598m2 of the land plot No. 59, 272 of the map No. 5 located in PT Village, MP Commune, HD District, Kien Giang Province issued by the People’s Committee of HD District to Mrs. Duong Thi Kim X whose name is included in the certificate of land use right No. BM 260786 dated October 4, 2013.

[2] As stated by the petitioner, this piece of land was purchased by the petitioner from the married couple Mrs. Lu Hong L, Nguyen Thi Thu T in 2012. However, as a foreigner, Mrs. Ngo Kim C is not allowed to purchase land in Vietnam, so, she asked Mrs. Duong Thi Kim X to make the transaction and have her name included in the certificate of land use right on her behalf.

[3] Mrs. Duong Thi Kim X refuses Mrs. Ngo Kim C’s statement, claiming that this piece of land was purchased by them using their money, so she rejects Mrs. Ngo Kim C’s reclaim of VND 750,000,000, the land purchase amount and difference after valuation of VND 31,764,000.

[4] Considering the deposition of Mr. Tu Hong Loc and Mrs. Nguyen Thi Thu T (transferor of 22,598m2) that Mrs. Ngo Kim C was the transferee as Mrs. Ngo Kim C and Mrs. Duong Thi Kim X presented at the transfer date, the Trial Panel declares it accordant with the transfer agreement of agricultural land dated April 12, 2012, which shows signatures of both Mrs. Duong Thi Kim X and Mrs. Ngo Kim C as the transferee (Party A).

Alternatively, the petitioner may prove that Mrs. Duong Thi Kim X had her name included in certificate of land use right No. BM 260787 on behalf of Mrs. Ngo Kim C according to the agreement dated October 7, 2013 stating that 22,598m2 was purchased by Mrs. Ngo Kim C at her expense. As living abroad, Mrs. Ngo Kim C agreed to let Mrs. Duong Thi Kim X have her name included in certificate of land use right No. BM 260787 issued by the People’s Committee of HD District dated October 4, 2013 (the Assessment Result No. 361/KL-KTHS dated October 17, 2015 verifies that the signature in this agreement was made by Mrs. Duong Thi Kim X). Furthermore, the petitioner may prove that she kept USD 58,850 for the respondent from 2010 to 2012.

Therefore, the First Instance Judgment is well-grounded when accepting the petitioner’s request regarding this part.
[5] Considering the loan of VND 60,000,000 claimed by the petitioner; the respondent denies it and the mortgage agreement of land use right No. BM 260787 submitted by the petitioner is not well-grounded to accept. Because this mortgage agreement only indicates that two parties agree the mortgage of land use right No. BM 260787 issued by the People’s Committee of HD District on October 4, 2013 to secure the loan of VND 60,000,000, but the petitioner fails to justify the transfer of VND 60,000,000 in fact to the respondent;

Therefore, the First Instance Judgment’s acceptance to the petitioner’s reclaim for the respondent to repay VND 60,000,000 is not well-grounded, the Appellate Court accepts the appeal filed by the respondent, correct the First Instance Judgment and reject the petitioner’s claim for VND 60,000,000;

[6] Because the appeal is accepted, the respondent does not have to pay appellate court fee.  Because the reclaim for VND 60,000,000 is rejected, the petitioner has to pay the civil court fee involving no monetary value as prescribed.
[7] Other parts of the decision of First Instance Judgment which are not appealed shall not be considered further.

Pursuant to documents and evidence mentioned above:

HEREBY DECIDES

Pursuant to Clause 2 Article 308 of the Civil Procedure Code 2015, accept a part of the appeal of Mrs. Duong Thi Kim X and Mr. Pham Van K and correct a part of the First Instance Judgment No. 07/2016/DS-ST dated April 20, 2016 of People’s Court of Kien Giang Province.

Pursuant to Article 34 , Clause 2 Article 79; Clause 2 Article 80; Article 131; Article 238; Article 245 of the Civil Procedure Code, Articles 256, 290, 305, 471, 474, 476, 637 of the Civil Code and Resolution No. 326/2016/PL-UBTVQH14 in Viet Nam dated December 30, 2016 of Standing Committee of the National Assembly.

Hereby judges: Partially the lawsuit petition of Mrs. Ngo Kim C and the independent request of KL Joint Stock Commercial Bank.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay Mrs. Ngo Kim C the transfer value of 22,598m2 located in PT Village, MP Commune, HD District, Kien Giang Province of VND 750,000,000 and the difference value of VND 31,764,000. Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay Mrs. Ngo Kim C the debt of VND 250,000,000 and VND 30,000,000 according to the Agreement dated March 26, 2011.

- Dismiss the lawsuit petitioner of Mrs. Ngo Kim C reclaiming Mrs. Duong Thi Kim X and Mr. Pham Van K VND 60,000,000 borrowed on October 8, 2013.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to repay KL Joint Stock Commercial Bank VND 278.004.375đ (Two hundred seventy eight million four thousand three hundred seventy five dong). Including the principal of VND 250,000,000; the interest rate within the term of the loan VND 28,004,375 and interest on principal according to the credit agreement from April 13, 2016 until the full repayment of the debt according to the Notice of KL Joint Stock Commercial Bank.

KL Joint Stock Commercial Bank shall release all documentation and title of the collateral put up by Mrs. Duong Thi Kim X and Mr. Pham Van K for the Bank as soon as possible when the parties pay off the mortgage and loans of each credit agreement which was signed.

If Mrs. Duong Thi Kim X and Mr. Pham Van K are not capable of repaying the debt to the Bank, KL Joint Stock Commercial Bank is entitled to request a competent Civil Enforcement Agency to sell the collateral put up at the Bank by order of the court, which is the piece of land 22,598m2 located in PT Village, MP Commune, HD District, Kien Giang Province of the map No. 05, land plot 59+272 in the name of Mrs. Duong Thi Kim X in the certificate of land use right, housing ownership and property on land No. BM 260787 issued by the People’s Committee of HD District, Kien Giang Province on October 4, 2013 for debt collection as per the law.
* With reference to court fee:

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to pay VND 23,996,500 (Twenty six million nine hundred ninety six thousand five hundred dong) of first instance civil fee.

- Compel Mrs. Ngo Kim C to pay VND 3,000,000 (Three hundred dong) of first instance civil fee. This amount shall be deducted from VND 23,700,000 advanced by Mrs. Ngo Kim C. The remaining sum of VND 20,700,000 (Twenty million seven hundred thousand dong) shall be refunded to Mrs. Ngo Kim C according to the receipt No. 05200 dated January 13, 2015 of the Civil Enforcement Agency of Kien Giang Province.

Refund KL Joint Stock Commercial Bank the court fee advance of VND 6,310,000 (Six million three hundred ten thousand dong) according to the receipt No. 0000519 dated June 23, 2015 of the Civil Enforcement Agency of Kien Giang Province (submitted by Mr. Pham Ho Phuong H).

- First instance civil court fee: Mrs. Duong Thi Kim X and Mr. Pham Van K do not have to pay VND 200,000. Refund Mrs. Duong Thi Kim X and Mr. Pham Van K VND 200,000 of appellate court fee which was paid according to the receipt No. 0004923 dated May 6, 2016 at the Civil Enforcement Agency of Kien Giang Province.

- Compel Mrs. Duong Thi Kim X and Mr. Pham Van K to refund the valuation fee and signature verification fee of VND 8,344,000 (Eight million three hundred forty four thousand dong) to Mrs. Ngo Kim C.

In case the judgment or court decision is enforced as per regulations in Article 2 of the Law on enforcements of civil judgments in Viet Nam, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the amended Law on enforcement of civil judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on enforcement of civil judgments.