Precedent No. 04/2016/AL on the Dispute over the Contract for the Transfer of Land Use Rights in Vietnam

Precedent No. 04/2016/AL, adopted by the Judicial Council of the Supreme People’s Court on April 6, 2016, and promulgated pursuant to Decision No. 220/QD-CA dated April 6, 2016, issued by the Chief Justice of the Supreme People’s Court.

1. Definition of a Precedent

A precedent refers to the legal reasoning and rulings contained in a legally effective judgment or decision of a court regarding a specific case, selected by the Judicial Council of the Supreme People’s Court and promulgated by the Chief Justice of the Supreme People’s Court as a precedent for courts to study and apply in adjudication. (Article 1, Resolution No. 04/2019/NQ-HDTP)

A precedent must meet the following criteria:

• It clarifies legal provisions subject to differing interpretations, provides analysis and explanation of legal issues and events, and indicates principles, guidelines for adjudication, or applicable legal norms in a specific case, or reflects fairness in matters not specifically regulated by law;
• It is normative;
• It provides guidance for the uniform application of law in adjudication.

2. Precedent No. 04/2016/AL on the Dispute over the Contract for the Transfer of Land Use Rights in Vietnam

2.1. Source of the Precedent

Cassation Decision No. 04/2010/QD-HDTP dated March 3, 2010, issued by the Judicial Council of the Supreme People’s Court regarding the “Dispute over the Contract for the Transfer of Land Use Rights” case in Hanoi City between the plaintiffs, Ms. Kieu Thi Ty and Mr. Chu Van Tien, and the defendant, Mr. Le Van Ngu; with Ms. Le Thi Quy, Ms. Tran Thi Phan, Mr. Le Van Tam, Ms. Le Thi Tuong, Mr. Le Duc Loi, Ms. Le Thi Duong, Mr. Le Manh Hai, and Ms. Le Thi Nham as persons with related rights and obligations.

2.2. Summary of Precedent No. 04/2016/AL

In cases where a house and land are the common property of a married couple, but only one spouse signs a contract to transfer the house and land to another party, and the other spouse does not sign the contract; if there is sufficient evidence to establish that the transferring party received the full agreed amount, the non-signing spouse was aware of and jointly used the proceeds from the transfer, the transferee openly received, managed, and used the house and land, and the non-signing spouse knew but raised no objections, it must be determined that the non-signing spouse consented to the transfer of the house and land.

Relevant legal provisions:

• Clause 2, Article 176 of the Civil Code of Vietnam 1995;
• Article 15 of the Marriage and Family Law of Vietnam 1986.

Keywords of the precedent:

“Dispute over the contract for the transfer of land use rights”; “Disposition of common property of spouses”; “Establishment of ownership by agreement.”

CASE DETAILS

In the lawsuit filed on November 5, 2007, and throughout the case proceedings, the plaintiff, Ms. Kieu Thi Ty, stated:

In 1996, she and her husband purchased two single-story houses on approximately 160 m² of residential land from Mr. Le Van Ngu’s family in Xuan La Commune, Tu Liem District, Hanoi City (now Cluster 2, Quarter 11, Xuan La Ward, Tay Ho District, Hanoi City). The transaction was documented in a contract specifying the assets, houses on the land, and the boundaries of the plot. As Ms. Ty and her husband did not have permanent residency in Hanoi, the local authorities did not certify the transaction between their family and Mr. Ngu’s family. The purchase price was 110 taels of gold, which Ms. Ty fully paid to Mr. Ngu and his wife, and Mr. Ngu’s family handed over the house and land to Ms. Ty for management and use.

After the transaction, Mr. Ngu’s family borrowed the inner house from Ms. Ty and her husband to use and store construction materials while building a new house, while Ms. Ty allowed her relatives to temporarily reside in the house facing Xuan La Road for educational purposes. Once Mr. Ngu’s family completed their construction, they returned the house and land to Ms. Ty. Ms. Ty demolished the old house, raised the foundation, and built a new house for her relatives to use temporarily. In 2001, she rented it out as a carpentry workshop, but later ceased renting and locked it up.

In 2006, after obtaining Hanoi residency, Ms. Ty began procedures to obtain ownership and land use rights certificates, but Mr. Ngu and his wife obstructed her, claiming she owed 3.4 taels of gold and that they had only sold the inner house and land, while the house and land facing Xuan La Road remained theirs. In late 2006, Mr. Ngu forcibly entered and occupied the house, building a wall to separate the veranda of the single-story house facing Xuan La Road (currently rented out as a barbershop). Ms. Ty requested the court to compel Mr. Ngu’s family to honor the contract and return the house and land (the portion facing Xuan La Road).

The defendant, Mr. Le Van Ngu, stated:

In 1996, his family transferred a portion of the house and land to Ms. Ty and Mr. Tien. They agreed that his family would sell the house and land facing Xuan La Road, with a width of 7 meters and extending the full depth of their plot. They excluded 21 m² of land along the road, marked by the State for road expansion, resulting in the sale of a single-story house on 140 m² of land.

The price was 6 taels of gold per m² for 42 m² of roadside land, totaling 25 taels and 2 chis, and 9 taels per m² for 98 m² of inner land, totaling 88.2 taels, for a total of 113.4 taels of gold. Ms. Ty and Mr. Tien paid 110 taels, leaving a debt of 3.4 taels.

His family handed over the house and land to Ms. Ty, but retained management and use of the 21 m² along the road within the road expansion boundary. As the State later revised the planning and did not expand the road, this portion remained under his family’s control, and the land purchased by Ms. Ty and Mr. Tien had no access path.

Mr. Ngu rejected Ms. Ty’s claim for the 21 m² along Xuan La Road. If Ms. Ty and Mr. Tien wished to manage this portion and have access to the inner land, they must cede 2 meters of roadside width extending the full depth to his family and pay an additional 160,000,000 VND.

Persons with related rights and obligations:

Ms. Tran Thi Phan agreed with Mr. Ngu’s statements.

Mr. Le Duc Loi, Mr. Le Van Tam, Mr. Le Manh Hai, Ms. Le Thi Duong, Ms. Le Thi Tuong, and Ms. Le Thi Nham provided statements consistent with Mr. Ngu’s.

At First-Instance Civil Judgment No. 27/2008/DS-ST dated April 25, 2008, the Hanoi City People’s Court decided:

To accept the claim of Ms. Kieu Thi Ty and Mr. Chu Van Tien to recover the house and 23.4 m² of land at No. 39, Xuan La Road, from Mr. Le Van Ngu’s family.

To order Mr. Le Van Ngu, Ms. Tran Thi Phan, Ms. Le Thi Quy (the tenant), and their children to return the entire 23.4 m² of house and land at No. 39, Xuan La Road, Xuan La Ward, Tay Ho District, to Ms. Ty and Mr. Tien (represented by Ms. Ty).

To order Ms. Ty to pay Mr. Ngu’s family 13,759,000 VND for the value of construction and improvements on the 23.4 m², with Ms. Ty retaining ownership of the materials and efforts on this area.

Ms. Ty was permitted to establish access to the inner house and land and to block the rear path to Mr. Ngu and Ms. Phan’s land.

Mr. Ngu, Ms. Phan, and Ms. Ty were responsible for completing the transfer procedures at the competent State authority. If Mr. Ngu’s family obstructed, Ms. Ty could independently declare and complete the procedures for registering ownership and land use rights.

Additionally, the first-instance court ruled on court fees and the parties’ right to appeal.

On May 8, 2008, Mr. Le Van Ngu and Ms. Tran Thi Phan appealed, requesting the appellate court to annul the contract for the transfer of the house and land with Ms. Kieu Thi Ty and Mr. Chu Van Tien, arguing that Mr. Ngu alone signed the contract and received the payment without Ms. Phan’s knowledge.

In Decision No. 02/QD-VKSNDTC-VPT1 dated May 28, 2008, the Chief Procurator of the Supreme People’s Procuracy protested, proposing that the Appellate Court of the Supreme People’s Court in Hanoi order Mr. Ngu to demolish unauthorized constructions on Ms. Ty’s land and restore its original state, exempt Ms. Ty from paying Mr. Ngu 13,759,000 VND, and review the first-instance civil court fees for Mr. Ngu and Ms. Ty.

At Appellate Civil Judgment No. 162/2008/DS-PT dated September 4, 2008, the Appellate Court of the Supreme People’s Court in Hanoi decided to reject the appeal of Mr. Le Van Ngu and Ms. Tran Thi Phan, accept Protest Decision No. 02/QD-VKSNDTC-VPT1 dated May 28, 2008, of the Supreme People’s Procuracy, and partially amend the first-instance judgment as follows:

To accept the claim of Ms. Kieu Thi Ty and Mr. Chu Van Tien to recover the house and 23.4 m² of land at No. 39, Xuan La Road, from Mr. Le Van Ngu and Ms. Tran Thi Phan.

To order Mr. Ngu, Ms. Phan, their children (Mr. Le Duc Loi, Mr. Le Van Tam, Mr. Le Manh Hai, Ms. Le Thi Duong, Ms. Le Thi Tuong, Ms. Le Thi Nham), and Ms. Le Thi Quy (the tenant) to return the entire 23.4 m² of house and land at No. 39, Xuan La Road, Xuan La Ward, Tay Ho District, Hanoi City, to Ms. Ty and Mr. Tien (represented by Ms. Ty).

The value of construction and improvements on the 23.4 m², amounting to 13,759,000 VND, was to be borne by Mr. Le Van Ngu and Ms. Tran Thi Phan, who were ordered to demolish these constructions and restore the original state for Ms. Ty and Mr. Tien, with demolition costs borne by Mr. Ngu and Ms. Phan.

Ms. Ty was permitted to establish access to the inner house and land and to block the rear path to Mr. Ngu and Ms. Phan’s land.

Mr. Ngu, Ms. Phan, and Ms. Ty were responsible for completing the transfer procedures at the competent State authority. If Mr. Ngu’s family obstructed, Ms. Ty could independently declare and complete the procedures for registering land use rights and house ownership.

Additionally, the appellate court ruled on court fees.

Following the appellate trial, in complaints dated October 21, 2008, and October 22, 2008, Mr. Ngu and Ms. Phan argued that the house and land at No. 39, Xuan La Road, were their family’s common property, and Mr. Ngu’s unilateral sale to Ms. Ty and Mr. Tien without Ms. Phan’s consent was invalid, requesting the contract be declared void.

In Protest Decision No. 63/QD-KNGDT-V5 dated May 14, 2009, the Chief Procurator of the Supreme People’s Procuracy protested the appellate judgment, proposing that the Judicial Council of the Supreme People’s Court conduct a cassation review to annul Appellate Civil Judgment No. 162/2008/DS-PT dated September 4, 2008, and First-Instance Civil Judgment No. 27/2008/DS-ST dated April 25, 2008, of the Hanoi City People’s Court; and to transfer the case file to the Hanoi City People’s Court for re-adjudication at first instance. The findings were:

In 1996, Mr. Chu Van Tien and Ms. Kieu Thi Ty purchased two single-story houses on residential land facing Xuan La Road, with a width of 7 meters extending the full depth of Mr. Le Van Ngu’s family plot in Xuan La Commune, Tu Liem District (now Xuan La Ward, Tay Ho District). The parties executed a handwritten contract for the transfer, but did not comply with legal procedures. After the purchase, Ms. Ty demolished both houses, rebuilt the foundation and walls, and roofed it as it currently stands. In late 2005, when Ms. Ty sought to obtain ownership and land use rights certificates, Mr. Ngu’s family disputed, claiming Ms. Ty owed 3.4 taels of gold and had only purchased the inner land, while the land facing Xuan La Road remained theirs.

In late 2006, a physical altercation occurred over the disputed 21 m² of land facing Xuan La Road, Tay Ho District, Hanoi City.

On October 29, 2007, Ms. Kieu Thi Ty and Mr. Chu Van Tien filed a lawsuit to claim ownership of the house and land based on the contract dated April 26, 1996, between Mr. Le Van Ngu, Ms. Tran Thi Phan, and Ms. Ty, Mr. Tien. The contract did not comply with legal requirements for form and content; Mr. Ngu’s family claimed Ms. Ty and Mr. Tien owed 3.4 taels of gold and did not purchase the land facing Xuan La Road, refusing to allow Ms. Ty and Mr. Tien to complete ownership and land use rights registration. The entire land under the contract remained registered in Mr. Ngu and Ms. Phan’s names.

The first-instance and appellate courts determined the legal relationship as a “Dispute over house and land ownership” and applied Articles 255 and 256 of the Civil Code of Vietnam 1995 to accept Ms. Kieu Thi Ty and Mr. Chu Van Tien’s claim against Mr. Le Van Ngu and Ms. Tran Thi Phan, which was incorrect, as it implicitly recognized Ms. Ty and Mr. Tien’s ownership and land use rights over the entire transferred land, despite the ongoing dispute preventing registration. Thus, both judgments should be annulled, and the case remanded for re-adjudication at first instance to correctly identify the disputed legal relationship, ensuring the parties’ rights and the State’s interests.

At the cassation hearing, the representative of the Supreme People’s Procuracy proposed that the Judicial Council of the Supreme People’s Court accept the Chief Procurator’s protest.

The Judicial Council of the Supreme People’s Court determined:

Based on the lawsuit filed on November 5, 2007, and Ms. Ty and Mr. Tien’s statements during the proceedings, they demanded that Mr. Ngu and Ms. Phan return the entire house and land they had transferred, which Mr. Ngu’s family was occupying, and remove unauthorized constructions on the land. Thus, the plaintiffs sought ownership of the house and land transferred under the contract dated April 26, 1996. Meanwhile, Mr. Ngu and Ms. Phan claimed the disputed land remained theirs, as they had not transferred it to Ms. Ty and Mr. Tien. Therefore, there is basis to determine that the parties disputed both property ownership and the contract for the transfer of the house and land. However, the first-instance and appellate courts only identified the legal relationship as a dispute over house and land ownership, which was incomplete. Nonetheless, both courts effectively addressed both disputes. Thus, Protest No. 63/QD-KNGDT-V5 dated May 14, 2009, by the Chief Procurator, asserting that the courts misidentified the disputed legal relationship and requiring annulment of both judgments for re-adjudication at first instance, was inaccurate and unnecessary.

Regarding the house and land sale contract dated April 26, 1996: The transfer occurred in 1996. After purchasing, Mr. Tien and Ms. Ty paid the full amount, received the house and land, raised the foundation, renovated the house, and allowed relatives to reside there. Meanwhile, Mr. Ngu and Ms. Phan’s family continued living on the adjacent remaining land. According to their children’s statements, after selling the house and land to Ms. Ty and Mr. Tien, Mr. Ngu and Ms. Phan distributed gold to their children. Furthermore, after transferring and handing over the house and land, on April 26, 1996, Mr. Ngu wrote a “commitment letter” stating he would borrow back the transferred house and land for use during the construction of a new house on their remaining land, and in practice, Mr. Ngu and Ms. Phan used Ms. Ty and Mr. Tien’s house and land during construction. Thus, there is basis to determine that Ms. Phan was aware of the transfer between Mr. Ngu and Ms. Ty and Mr. Tien, consented to it, and participated, so her complaint that she was unaware of Mr. Ngu’s transfer lacks basis.

During the proceedings, Mr. Ngu and Ms. Phan claimed the sale price was 113.4 taels of gold. However, they provided no evidence to support this. According to the contract dated April 26, 1996, the agreed amount was 110 taels of gold, and in a payment receipt dated May 9, 2000, Mr. Ngu confirmed, “I have received the remaining amount from the sale of the house and land to Mr. Tien and Ms. Ty…,” with a note stating the total gold received was 110 taels. Thus, there is sufficient evidence to confirm the sale price was 110 taels of gold, fully paid by Mr. Ngu and Ms. Phan.

Although the contract did not specify the transferred land area, the parties clearly agreed on the boundaries: “the plot width is 7 meters from the edge of the wall separating Mr. Tay’s house; Northeast facing Xuan La – Xuan Dinh Road; Southeast adjacent to Mr. Le Van Tay’s land; Southwest adjacent to Ms. Le Thi Soat and Mr. Vinh’s land; Northwest adjacent to Mr. Ngu’s remaining land. The length extends from Xuan La – Xuan Dinh Road to the full depth…”

Additionally, the parties agreed that if the State used the front land for road purposes, Mr. Tien would receive all State compensation. Thus, the agreed transferred land extended from Xuan La – Xuan Dinh Road to the full depth, including the disputed area.

Therefore, the courts correctly determined that the 23.4 m² facing Xuan La – Xuan Dinh Road was part of the land Mr. Ngu agreed to transfer to Ms. Ty and Mr. Tien, that Ms. Ty and Mr. Tien paid the full 110 taels of gold, and received the house and land. Consequently, ordering Mr. Ngu’s family to return the entire 23.4 m² of house and land at No. 39, Xuan La Road, Xuan La Ward, Tay Ho District, Hanoi City, to Ms. Kieu Thi Ty and Mr. Chu Van Tien was well-founded.

For the foregoing reasons, pursuant to Clause 3, Article 291, and Clause 1, Article 297 of the Civil Procedure Code of Vietnam 2004,

DECISION

To reject Protest No. 63/QD-KNGDT-V5 dated May 14, 2009, of the Chief Procurator of the Supreme People’s Procuracy; to uphold Appellate Civil Judgment No. 162/2008/DS-PT dated September 4, 2008, of the Appellate Court of the Supreme People’s Court in Hanoi.

CONTENT OF THE PRECEDENT

Regarding the house and land sale contract dated April 26, 1996: The transfer occurred in 1996. After purchasing, Mr. Tien and Ms. Ty paid the full amount, received the house and land, raised the foundation, renovated the house, and allowed relatives to reside there. Meanwhile, Mr. Ngu and Ms. Phan’s family continued living on the adjacent remaining land. According to their children’s statements, after selling the house and land to Ms. Ty and Mr. Tien, Mr. Ngu and Ms. Phan distributed gold to their children. Furthermore, after transferring and handing over the house and land, on April 26, 1996, Mr. Ngu wrote a “commitment letter” stating he would borrow back the transferred house and land for use during the construction of a new house on their remaining land, and in practice, Mr. Ngu and Ms. Phan used Ms. Ty and Mr. Tien’s house and land during construction. Thus, there is basis to determine that Ms. Phan was aware of the transfer between Mr. Ngu and Ms. Ty and Mr. Tien, consented to it, and participated, so her complaint that she was unaware of Mr. Ngu’s transfer lacks basis.