The "Dispute over property recovery" case was announced according to Decision 220/QD-CA dated April 6, 2016 by the Chief Justice of the Supreme People's Court in Vietnam.
Article table of contents
Precedent No. 02/2016/AL
Approved by the Council of Judges of the Supreme People's Court of Vietnam on April 6, 2016, and published in accordance with Decision No. 220/QD-CA dated April 6, 2016, by the Chief Justice of the Supreme People's Court.
Source of the Precedent:
Supervisory Decision No. 27/2010/DS-GDT dated July 8, 2010, by the Council of Judges of the Supreme People's Court regarding the case "Dispute over property reclamation" in Soc Trang Province between the plaintiff Ms. Nguyen Thi Thanh and the defendant Mr. Nguyen Van Tam; the third party with related rights and obligations is Ms. Nguyen Thi Yem.
Summary of the Precedent Content:
In cases where Vietnamese nationals residing abroad invest money for the transfer of land use rights and entrust someone in-country to hold the land use rights on their behalf, when resolving disputes, the court must consider and account for the effort in maintaining, preserving, and enhancing the land use value by the trustee; if the trustee’s effort cannot be precisely determined, it should be assumed that the actual payer and the trustee have equal efforts to share the additional increased value compared to the initial transfer value.
Relevant Legal Provisions:
Articles 137 and 235 of the 2005 Civil Code.
Precedent Keywords:
“Invalid civil transaction”; “Property reclamation”; “Basis for establishment of ownership”; “Establishment of ownership over profits”; “Vietnamese nationals residing abroad”.
CASE CONTENT
In the complaint dated January 24, 2005, the statement dated February 7, 2005, and during the case resolution, the plaintiff Ms. Nguyen Thi Thanh stated:
Ms. Thanh, a Vietnamese expatriate in the Netherlands, visited relatives in Vietnam and intended to transfer land use rights. On August 10, 1993, she transferred 7,595.7 square meters of rice field land in Ward 7, Soc Trang district-level town from Mr. Heng Tinh and Mrs. Ly Thi Sa Quuenh for 21.99 chi of gold. She directly negotiated and paid for the transfer. Ms. Thanh's purpose was to provide land for her siblings Mr. Nguyen Van Tam and Ms. Nguyen Thi Chinh Em to cultivate and support their parents. Since she was a Vietnamese expatriate, she had Mr. Tam hold the land use rights on her behalf. She presented the “Land Transfer Document” dated August 10, 1993, verified by An Hiep commune authorities. After the transfer, she allowed Mr. Tam’s family to cultivate the land. However, in 2004, Mr. Tam transferred the entire 7,595.7 square meters of land to Minh Chau Limited Liability Company for 1,260,000,000 VND without her consent. Therefore, she demanded Mr. Tam return the proceeds from the land transfer.
Mr. Nguyen Van Tam, the defendant, stated:
The 7,595.7 square meters of land in dispute were acquired by him and his wife. He was the one who paid for the land from Mr. Heng Tinh and was named in the “Land Transfer Document” dated August 10, 1993. This document lacked local government verification. Later, they signed a contract and application for land use right transfer on August 11, 1993, verified by An Hiep commune and My Tu district, allowing the transfer. After the transfer, he registered and was issued a land use right certificate on May 28, 1994. In 2004, he transferred the land to Minh Chau LLC for 1,260,000,000 VND. He claimed the document presented by Ms. Thanh was fake, based on Inspection Conclusion No. 2784/C21 (P7) dated October 25, 2005, by the Criminal Science Institute that the signature in Ms. Thanh's document was not his. Therefore, he did not agree with Ms. Thanh’s lawsuit.
Ms. Nguyen Thi Yem (Mr. Tam's wife), the related third party, stated: In 1993, she and her husband acquired the land from Mr. Heng Tinh. She did not participate in the transfer process but provided the money and gold for Mr. Tam to pay Mr. Heng Tinh. Therefore, she also opposed Ms. Thanh's claim.
Mr. Heng Tinh and Ms. Ly Thi Sa Quuenh (also known as Ly Thi Sa Venh), the sellers, confirmed that Ms. Thanh directly negotiated and paid 21.99 chi of gold and had Mr. Tam hold the title on her behalf in the “Land Transfer Document” dated August 10, 1993. The signatures on this document were theirs.
First Instance Civil Judgment No. 04/2006/DS-ST dated April 28, 2006, of the Provincial People's Court of Soc Trang:
Accepted part of Ms. Nguyen Thi Thanh's request for repayment of the land transfer.
Ordered Mr. Nguyen Van Tam and Ms. Nguyen Thi Yem to return 630,000,000 VND to Ms. Nguyen Thi Thanh.
Additionally, the first-instance court decided on court fees, appraisal costs, and the right to appeal for the parties in accordance with the law.
On May 10, 2006, Mr. Nguyen Van Tam appealed, claiming Ms. Thanh had no right to the land he transferred to Minh Chau LLC but the first-instance court ordered him to pay 630,000,000 VND to Ms. Thanh, which was incorrect.
On May 12, 2006, Mr. Nguyen Huu Phong (representing Ms. Thanh) appealed, requesting the appellate court to order Mr. Tam to return the full 1,260,000,000 VND from the land transfer to Ms. Thanh.
Appellate Civil Judgment No. 334/2006/DS-PT dated August 25, 2006, of the Appellate Court of the Supreme People's Court in Ho Chi Minh City:
Dismissed the appeals of the plaintiff and defendant, amending the First Instance Judgment as follows:
Accepted part of Ms. Nguyen Thi Thanh's request for repayment of land use rights.
Ordered Mr. Nguyen Van Tam and Ms. Nguyen Thi Yem to return 27,047,700 VND equivalent to 21.99 chi of 24k gold to Ms. Nguyen Thi Thanh.
Ordered Mr. Nguyen Van Tam and Ms. Nguyen Thi Yem to pay 1,232,266,860 VND to the State budget.
Additionally, the appellate court decided on court fees.
After the appellate trial, Mr. Nguyen Van Tam appealed against the above appellate civil judgment.
On August 21, 2009, Chief Justice of the Supreme People's Court appealed Appellate Civil Judgment No. 334/2006/DS-PT dated August 25, 2006, of the Appellate Court of the Supreme People's Court in Ho Chi Minh City, requesting the Judges’ Council of the Supreme People's Court to review under supervisory procedures, annul the appellate judgment and the First Instance Civil Judgment No. 04/2006/DS-ST dated April 28, 2006, of the Provincial People's Court of Soc Trang; returning the case file to the Provincial People's Court of Soc Trang for retrial in accordance with the law, with the following reasoning:
“Ms. Nguyen Thi Thanh filed a lawsuit claiming property against Mr. Nguyen Van Tam, stating that she, as a Vietnamese residing abroad, entrusted her brother, Mr. Tam, to receive the land transfer from Mr. Heng Tinh on her behalf, and later Mr. Tam transferred the land to another party.
The first-instance and appellate courts determined that Mr. Tam held the land on behalf of Ms. Thanh based on evidence.
Since Ms. Thanh is a Vietnamese residing abroad, she is not entitled to the land but should be refunded the value of the land transfer investment.
Regarding the increased land value, during the first-instance and appellate trials, when the 2005 Civil Code was in effect, there was no regulation to mandate confiscation to the state budget, so the profit should be shared equally between Ms. Thanh and Mr. Tam. The first-instance court's decision not to confiscate the additional land value was correct, but not ordering Mr. Tam to return the initial investment to Ms. Thanh was incorrect. The appellate court's decision to confiscate the entire additional value to the state budget without any legal grounds was contrary to the law.”
At the supervisory hearing, the representative of the Supreme People’s Procuracy suggested the Judges’ Council of the Supreme People's Court accept the Chief Justice's appeal, annul the appellate and first-instance judgments, and return the case to the Provincial People's Court of Soc Trang for retrial in accordance with the law.
The Judges’ Council of the Supreme People's Court found:
Ms. Nguyen Thi Thanh demanded Mr. Nguyen Van Tam return 1,260,000,000 VND, arguing that she directly negotiated and paid for 7,595.7 square meters of land from Mr. Heng Tinh, with Mr. Tam holding the title on her behalf as she resided abroad. However, Mr. Tam then sold the land to Minh Chau LLC for 1,260,000,000 VND without her consent.
Mr. Tam contended that he was the one who negotiated and paid for the land from Mr. Heng Tinh, hence the title was under his name. After the transfer, he managed, registered, and obtained a land use certificate, and later transferred the land to Minh Chau LLC with government permission, rejecting Ms. Thanh’s claim.
However, during the case, Mr. Tam and his wife gave conflicting statements regarding the amount of money and gold paid to Mr. Heng Tinh and failed to prove the source of the money and gold allegedly paid.
Meanwhile, Mr. Tinh and Ms. Quuenh confirmed that Ms. Thanh negotiated, paid the gold, and had Mr. Tam hold the title on her behalf since she resided abroad.
Statements from Ms. Thai Thi Ba, Mr. Nguyen Phuoc Hoang, and Ms. Nguyen Thi Chinh Em (mother and siblings of Ms. Thanh and Mr. Tam) supported that Ms. Thanh paid for the land, while Mr. Tam held the title on her behalf.
Based on the evidence, the first-instance and appellate courts correctly determined that Ms. Thanh financed the land purchase (21.99 chi of gold) while Mr. Tam held the title. Given Mr. Tam sold the land to Minh Chau LLC and Ms. Thanh only sought the transfer proceeds of 1,260,000,000 VND, the courts correctly handled the case.
Although Ms. Thanh paid for the land (21.99 chi of gold approximating 27,047,700 VND), Mr. Tam held the title, managed the land post-transfer, and sold it. Therefore, Mr. Tam’s efforts in maintaining and enhancing the land's value should be recognized, and the profit post-deducting the initial investment should be jointly owned. The first-instance court’s determination of shared ownership was accurate but failed to refund the gold equivalent to Ms. Thanh.
The appellate court only awarded Ms. Thanh 21.99 chi of gold, while unjustly confiscating the remaining profits, inconsistent with the 2005 Civil Code and fails to ensure parties' rights.
Additionally, Ms. Thanh’s claim against Mr. Tam for 1,260,000,000 VND is about the asset derived from the land transfer, not land usage rights. Thus, the legal relationship should have been identified as "Asset Ownership Dispute."
For the above reasons, based on Articles 297(3) and 299 Civil Procedure Code;
DECISION
1- Annul Appellate Civil Judgment No. 334/2006/DS-PT dated August 25, 2006, of the Appellate Court of the Supreme People's Court in Ho Chi Minh City and First Instance Civil Judgment No. 04/2006/DS-ST dated April 28, 2006, of the Provincial People's Court of Soc Trang regarding the dispute over property reclamation between the plaintiff Ms. Nguyen Thi Thanh and the defendant Mr. Nguyen Van Tam; and the related third party Ms. Nguyen Thi Yem.
2- Return the case file to the Provincial People's Court of Soc Trang for retrial in accordance with the law.
PRECEDENT CONTENT
“Although Ms. Thanh financed the land purchase (21.99 chi of gold approximating 27.047.700 VND), Mr. Tam held the title, managed the land post-transfer, and sold it, thus recognizing Mr. Tam's effort in maintaining and enhancing the land's value is necessary. The profit after deducting the initial investment should be jointly owned, determined, and shared appropriately. If the effort cannot be precisely determined, equal sharing between Ms. Thanh and Mr. Tam must be applied.”
TABLE OF CONTENTS:
- Key word:
- Dispute over property recovery
- Vietnam
- precedent
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