Precedent No. 05/2016/AL on the Dispute over Inheritance Property in Vietnam

Precedent No. 05/2016/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. 05/2016/AL on the Dispute over Inheritance Property in Vietnam

2.1. Source of the Precedent

Cassation Decision No. 39/2014/DS-GDT dated October 9, 2014, issued by the Judicial Council of the Supreme People’s Court regarding the “Dispute over Inheritance Property” case in Ho Chi Minh City between the plaintiffs, Ms. Nguyen Thi Thuong and Ms. Nguyen Thi Xuan, and the defendants, Mr. Nguyen Chi Trai (Cesar Trai Nguyen), Ms. Nguyen Thi Thuy Phuong, and Ms. Nguyen Thi Bich Dao; with Ms. Nguyen Thi Xe, Mr. Nguyen Chi Dat (Danforth Chi Nguyen), Mr. Nguyen Thuan Ly, Ms. Nguyen Thi Trinh, Mr. Nguyen Chi Duc, Ms. Nguyen Thi Thuy Loan, Ms. Pham Thi Lien, Ms. Pham Thi Vui, Mr. Tran Duc Thuan, and Mr. Tran Thanh Khang as persons with related rights and obligations.

2.2. Summary of Precedent No. 05/2016/AL

In an inheritance property dispute, where a party is entitled to a portion of the inheritance and has contributed to managing and improving the inherited property but opposes the division of the inheritance (claiming the statute of limitations for inheritance claims has expired) and does not specifically request consideration of their contributions to managing and improving the property, if the court decides to divide the inheritance among the heirs, it must consider the contributions of that party, as their request to not divide the inheritance is broader than a request to consider their contributions.

Relevant legal provisions:

• Clause 1, Article 5 and Article 218 of the Civil Procedure Code of Vietnam 2004.

Keywords of the precedent:

“Claim”; “Counterclaim”; “Contributions to managing and improving inherited property.”

CASE DETAILS

In the lawsuit filed on July 18, 2008, and throughout the case proceedings, Ms. Nguyen Thi Thuong and Ms. Nguyen Thi Xuan stated: Their parents, Mr. Nguyen Van Hung (deceased in 1978) and Ms. Le Thi Ngu (deceased in 1992), had six children: Ms. Nguyen Thi Xe, Mr. Nguyen Chi Trai, Ms. Nguyen Thi Xuan, Ms. Nguyen Thi Thuong, Ms. Nguyen Thi Trinh, and Mr. Nguyen Chi Trai. Mr. Trai was married to Ms. Ong Thi Manh and had five children: Mr. Nguyen Thuan Ly, Mr. Nguyen Thuan Huy, Ms. Nguyen Thi Quoi Duong, Mr. Nguyen Chi Dat (born 1966), and Mr. Nguyen Chi Dat (born 1968). By Decision No. 413/2008 dated March 31, 2008, the Ho Chi Minh City People’s Court declared Mr. Trai, Ms. Manh, Mr. Thuan Huy, Ms. Quoi Duong, and Mr. Nguyen Chi Dat (born 1968) deceased.

The house at No. 263, Tran Binh Trong Street, Ward 4, District 5, Ho Chi Minh City, was acquired by Mr. Hung and Ms. Ngu through a land transfer from Mr. Dao Thanh Phung in 1953, and they built the current house in 1966. The house and land have not been issued an ownership or land use rights certificate, only registered in 1999. Mr. Hung and Ms. Ngu died without leaving a will, and the house is currently managed by Ms. Nguyen Thi Thuy Phuong, a daughter of Mr. Nguyen Chi Trai. During her management, Ms. Phuong leased part of the house to Ms. Nguyen Thi Bich Dao for a bakery. Ms. Phuong made minor repairs to the house. Mr. Trai and his wife made no contributions to the construction or repairs, as Mr. Trai was in re-education, and his wife, Ms. Tu, had no occupation, with young children and no income to contribute. If Ms. Phuong provides evidence of repair costs and makes a claim, the plaintiffs would reimburse her.

The plaintiffs requested the division of the house as inheritance property in accordance with the law, seeking to receive the house and pay the other heirs in cash. As Ms. Phuong is not an heir, she must return the house, and the plaintiffs did not agree to support her relocation.

The defendant, Ms. Nguyen Thi Thuy Phuong, stated: She agreed on the family relationships. Her father was Mr. Nguyen Chi Trai, and her mother was Ms. Nguyen Thi Tu, with three children: herself, Mr. Nguyen Chi Duc, and Ms. Nguyen Thi Thuy Loan (Mr. Duc and Ms. Loan reside in Canada). The house at No. 263, Tran Binh Trong Street, was purchased by her grandparents in 1953, then a tiled house with wooden walls. In 1955, her parents married and lived in the house. In 1978, her father emigrated to the United States, and her mother died in 1980. Ms. Phuong has lived in the house since childhood, making repairs such as installing aluminum doors, building walls for the mezzanine, tiling the terrace, and constructing a rear wall. She claimed her father’s inheritance share, as in 2006, he executed a document bequeathing his inheritance in Vietnam to her, entitling her to his share of Mr. Hung and Ms. Ngu’s estate. She opposed the plaintiffs’ claim, arguing the statute of limitations for inheritance had expired, and she and her two children currently reside in the house. She leased part of the house to Ms. Nguyen Thi Bich Dao for a bakery and would resolve the lease with Ms. Dao independently.

The defendant, Mr. Nguyen Chi Trai, stated: In a document dated October 14, 2009, he requested to cancel a document dated April 25, 2006, in which he bequeathed his inheritance to Ms. Phuong, and authorized Ms. Thuong and Ms. Xuan to represent him in court, stating that his inheritance share be given to his son, Mr. Nguyen Chi Duc, residing in Canada.

After the first-instance trial, on April 22, 2010, Mr. Trai submitted a statement opposing the division of the house at No. 263, Tran Binh Trong Street, and assigning Ms. Phuong to continue managing and residing in it, claiming he and his wife contributed to the house. However, on July 14, 2010, he issued another document bequeathing his inheritance share to his son, Mr. Nguyen Chi Duc. On March 11, 2011, he stated he agreed with the first-instance judgment and would not appeal.

Persons with related rights and obligations:

• Ms. Nguyen Thi Trinh (daughter of Mr. Hung and Ms. Ngu) stated: She agreed with the plaintiffs on family relationships and the property’s origin. In 1966, the house was damaged, and her parents repaired it with contributions from their children, including herself, but she did not claim her contributions. She denied Ms. Phuong’s claim that her parents and she contributed to repairs. She requested her inheritance share be managed by Ms. Xuan and Ms. Thuong and that Ms. Dao and Ms. Phuong return the house.
• Mr. Nguyen Chi Dat (born 1966) and Mr. Nguyen Thuan Ly stated: Their parents, Mr. Nguyen Chi Trai and Ms. Ong Thi Manh, and three siblings died at sea during an escape in 1982. They agreed with the plaintiffs’ request to divide the inheritance, sought their share of Mr. Hung and Ms. Ngu’s estate, and entrusted management to Ms. Thuong and Ms. Xuan.
• Ms. Nguyen Thi Xe (daughter of Mr. Hung and Ms. Ngu) agreed with the plaintiffs’ statements on family relationships and claims, bequeathing her inheritance share to her two children, Ms. Pham Thi Vui and Ms. Pham Thi Lien.
• Statements by Ms. Nguyen Thi Thuy Loan and Mr. Nguyen Chi Duc, per a power of attorney dated May 21, 2007 (legalized by consular authorities), authorized Ms. Phuong to handle all matters related to disputes or division of property and land in Vietnam (presented by Ms. Phuong on March 25, 2011, after the first-instance trial).

Ms. Loan submitted a request (with the power of attorney) to be absent from the hearing on August 13, 2009, stating her parents contributed to the disputed property, while other relatives did not, and after 1975, only Ms. Phuong remained with their grandparents, requesting the court allow Ms. Phuong to stay in the house and land.

At First-Instance Civil Judgment No. 3363/2009/DS-ST dated November 18, 2009, the Ho Chi Minh City People’s Court decided:

• To recognize the house and land at No. 263, Tran Binh Trong Street, as the inheritance property of Mr. Nguyen Van Hung and Ms. Le Thi Ngu; each inheritance share was valued at 10,655,687,000 VND ÷ 6 = 1,775,947,800 VND.
• To order Ms. Phuong and her children, along with Ms. Dao, to return the disputed house and land to Ms. Thuong and Ms. Xuan. Ms. Thuong and Ms. Xuan were responsible for paying the other heirs their respective shares in cash.
• To acknowledge Mr. Nguyen Chi Trai’s bequest of his inheritance share to his son, Mr. Nguyen Chi Duc.

On November 30, 2009, Ms. Nguyen Thi Thuy Phuong appealed, arguing that Mr. Hung and Ms. Ngu died over 10 years ago, so the statute of limitations for inheritance claims had expired.

On March 15, 2011, Ms. Phuong supplemented her appeal, stating:

• Her father, Mr. Trai, opposed the division and agreed to let her manage the house. The co-heirs had no document confirming the disputed house as undivided common property. She, her parents, and siblings had lived stably in the house for over 50 years, preserving it, but being forced to leave was unjust.

At Appellate Civil Judgment No. 116/2011/DS-PT dated May 10, 2011, the Appellate Court of the Supreme People’s Court in Ho Chi Minh City decided: To uphold the first-instance judgment.

On June 16, 2011, Ms. Nguyen Thi Thuy Phuong requested a cassation review of the appellate judgment.

In Protest Decision No. 158/2014/KN-DS dated May 6, 2014, the Chief Justice of the Supreme People’s Court 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. 116/2011/DS-PT dated May 10, 2011, and First-Instance Civil Judgment No. 3363/2009/DS-ST dated November 18, 2009, of the Ho Chi Minh City People’s Court; and to transfer the case file to the Ho Chi Minh City People’s Court for re-adjudication at first instance in accordance with the law.

At the cassation hearing, the representative of the Supreme People’s Procuracy agreed with the Chief Justice’s protest.

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

Mr. Nguyen Van Hung (deceased in 1978) and Ms. Le Thi Ngu (deceased in 1992) had six children: Ms. Nguyen Thi Xe, Mr. Nguyen Chi Trai, Ms. Nguyen Thi Xuan, Ms. Nguyen Thi Thuong, Ms. Nguyen Thi Trinh, and Mr. Nguyen Chi Trai. Mr. Nguyen Chi Trai and Ms. Ong Thi Manh had five children: Mr. Nguyen Thuan Ly, Mr. Nguyen Thuan Huy, Ms. Nguyen Thi Quoi Duong, Mr. Nguyen Chi Dat (born 1966), and Mr. Nguyen Chi Dat (born 1968). Mr. Trai, Ms. Manh, Mr. Huy, Ms. Duong, and Mr. Nguyen Chi Dat (born 1968) were declared deceased on March 31, 2008, per Decision No. 413/2008 of the Ho Chi Minh City People’s Court.

Mr. Hung and Ms. Ngu died without leaving a will. Their children and Ms. Phuong (Mr. Trai’s daughter) acknowledged that the house at No. 263, Tran Binh Trong Street, Ward 4, District 5, Ho Chi Minh City, acquired from Mr. Dao Thanh Phung in 1953, was created by the couple and is currently managed and used by Ms. Phuong.

In 2008, Ms. Xuan and Ms. Thuong filed a lawsuit to divide the inheritance property left by Mr. Hung and Ms. Ngu.

The parties confirmed that Mr. Trai settled in the United States before July 1, 1991. The first-instance and appellate courts, based on Resolution No. 1037/2006/NQ-UBTVQH11 dated July 27, 2006, of the National Assembly Standing Committee, correctly determined that the statute of limitations for inheritance claims regarding Mr. Hung’s estate was still valid. For Ms. Ngu’s estate, the statute of limitations had expired, but Mr. Trai and the co-heirs acknowledged her estate as undivided common property and agreed to divide it equally. Thus, the first-instance and appellate courts, pursuant to Subpoint a, Point 2.4, Part I of Resolution No. 02/2004/NQ-HDTP dated August 10, 2004, of the Judicial Council of the Supreme People’s Court guiding the application of law in civil and family cases, had basis to divide Ms. Ngu’s estate among the heirs.

Mr. Hung died in 1978, and under the Marriage and Family Law of Vietnam 1959, Mr. Trai was entitled to one-seventh of Mr. Hung’s estate. The property Mr. Trai inherited from Mr. Hung was the common property of Mr. Trai and his wife, Ms. Tu. Ms. Tu died in 1980, with her heirs including Mr. Trai and their three children, including Ms. Phuong. Thus, Ms. Phuong was entitled to a portion of her mother Ms. Tu’s estate, but Mr. Trai’s disposition of his entire inheritance share from Mr. Hung to Mr. Duc was incorrect.

Ms. Phuong, born in 1953, and the parties confirmed she has lived in the house since childhood. Since 1982, Ms. Phuong has been the registered head of the household at the property, while Ms. Ngu lived elsewhere during her lifetime, and Ms. Thuong registered her residence there in 1979 but did not reside there. Ms. Phuong has directly managed and used the disputed property since Ms. Ngu’s death. The other parties have stable residences elsewhere. When dividing the inheritance and common property, the first-instance and appellate courts failed to consider providing Ms. Phuong a place to live and ordered her to return the house to the plaintiffs, including her inheritance share from her mother, Ms. Tu, which was inappropriate.

Although Ms. Phuong is not a first-line heir of Mr. Hung and Ms. Ngu, she is their granddaughter and has significantly contributed to managing and funding house repairs. During the proceedings, Ms. Phuong did not request consideration of her contributions, believing the case was time-barred and opposing the return of the property to the heirs. Thus, her request to establish her rights was broader than a request to consider her contributions, but the first-instance and appellate courts’ failure to address her contributions did not fully resolve her claims.

For the foregoing reasons, pursuant to Clause 3, Article 297, and Clauses 1 and 2, Article 299 of the Civil Procedure Code of Vietnam 2004, as amended and supplemented in 2011;

DECISION

To annul in its entirety Appellate Civil Judgment No. 116/2011/DS-PT dated May 10, 2011, of the Appellate Court of the Supreme People’s Court in Ho Chi Minh City, and First-Instance Civil Judgment No. 3363/2009/DS-ST dated November 18, 2009, of the Ho Chi Minh City People’s Court, regarding the inheritance property dispute between the plaintiffs, Ms. Nguyen Thi Thuong and Ms. Nguyen Thi Xuan, the defendant, Ms. Nguyen Thi Thuy Phuong, and other persons with related rights and obligations.

To transfer the case file to the Ho Chi Minh City People’s Court for re-adjudication at first instance in accordance with the law.

CONTENT OF THE PRECEDENT

Mr. Hung died in 1978, and under the Marriage and Family Law of Vietnam 1959, Mr. Trai was entitled to one-seventh of Mr. Hung’s estate. The property Mr. Trai inherited from Mr. Hung was the common property of Mr. Trai and his wife, Ms. Tu. Ms. Tu died in 1980, with her heirs including Mr. Trai and their three children, including Ms. Phuong.

Although Ms. Phuong is not a first-line heir of Mr. Hung and Ms. Ngu, she is their granddaughter and has significantly contributed to managing and funding house repairs. During the proceedings, Ms. Phuong did not request consideration of her contributions, believing the case was time-barred and opposing the return of the property to the heirs. Thus, her request to establish her rights was broader than a request to consider her contributions, but the first-instance and appellate courts’ failure to address her contributions did not fully resolve her claims.