Precedent No. 55/2022/AL was adopted by the Council of Justices of the Supreme People’s Court on September 7, 2022, and published under Decision No. 323/QD-CA dated October 14, 2022, by the Chief Justice of the Supreme People’s Court.
1. What is a precedent?
Precedents are arguments and rulings in legally effective judgments and decisions of the Courts regarding specific cases, selected by the Council of Justices of the Supreme People’s Court and published by the Chief Justice of the Supreme People’s Court as precedents for Courts to study and apply in adjudication. (Article 1 of Resolution 04/2019/NQ-HDTP)
A selected precedent must meet the following criteria:
– It has the value of clarifying legal provisions that have different interpretations; analyzing and explaining legal issues and events, and pointing out principles, handling methods, and legal norms to be applied in a specific case, or demonstrating equity for issues not yet specifically regulated by law;
– It is of a standard nature;
– It has the value of guiding the uniform application of law in adjudication.
2. Precedent No. 55/2022/AL on recognizing the validity of a contract violating formal requirements
2.1. Source of the precedent
Civil First Instance Judgment No. 16/2019/DS-PT dated March 19, 2019, of the People’s Court of Quang Ngai Province regarding the case “Dispute over land use rights transfer contract” between the plaintiff Mr. Vo Si M and the defendant Mr. Doan C; with 05 persons having related interests and obligations.
Location of the precedent’s content:
Paragraph 6 of the “Court’s Assessment” section.
2.2. Overview of the precedent’s content
– Case situation:
A land use rights transfer contract established before January 1, 2017, has not been notarized/authenticated, but the transferee has performed 2/3 of their obligations.
– Legal solution:
In this case, the Court recognizes the validity of the contract.
Legal provisions related to the precedent:
– Article 129, Clause 1 Article 502, and Point b Clause 1 Article 688 of the Civil Code of Vietnam 2015;
– Point a Clause 3 Article 167, Clause 1 Article 188 of the Land Law of Vietnam 2013.
Keywords of the precedent:
“Land use rights transfer”; “Not notarized/authenticated”; “Performed 2/3 of obligations”; “Recognition of contract validity”.
CASE CONTENT
In the lawsuit petition dated April 18, 2017, amended and supplemented on June 6, 2017, the self-declaration, and at the first-instance trial, the plaintiffs Mr. Vo Si M and Mrs. Phung Thi N stated:
There is a kinship relationship between the plaintiffs and the defendants Mr. Doan C and Mrs. Tran Thi L. In 2009, the defendants needed money to build a house for their son, Mr. Doan Tan L1, so they agreed and established a contract to transfer land use rights to the plaintiffs. The transferred land area was Lot B in the defendants’ land portion when granted resettlement land by the State (the State recovered the defendants’ land and notified that resettlement land would be granted in Area L Village H) for 90,000,000 VND. The plaintiffs paid the full 90,000,000 VND to the defendants.
By 2011, the State had designated the boundary markers of the land position granted to the defendants as 03 adjacent front-facing lots. The defendants and Mr. Doan Tan L1 requested the plaintiffs to pay an additional 30,000,000 VND because the front-facing land price was higher. The plaintiffs agreed to provide another 20,000,000 VND, with the remaining 10,000,000 VND to be paid upon completion of the transfer procedures. At this time, the defendants pointed out the location as well as the boundaries of the transferred land plot to the plaintiffs.
While waiting for the land use rights transfer procedures, on June 5, 2014, the plaintiffs leased this land area to Mrs. Nguyen Thi M1, address: Village V, Commune P, District D, Quang Ngai Province, as business premises, and no one raised any objections.
It was not until October 2016 that the State issued the land use right certificate to the defendants. However, the defendants and Mr. Doan Tan L1 only handed over the land use right certificate for plot No. 877, map sheet No. 24, Commune P (hereinafter referred to as Plot 877) to the plaintiffs but did not complete the transfer procedures. Currently, the plaintiffs have built a split-stone foundation on Plot 877. Now, the plaintiffs request the defendants to complete the transfer procedures for Plot 877, map sheet No. 24, Commune P, District D, Quang Ngai Province, to the plaintiffs.
During the case resolution process, the defendants Mr. Doan C, Mrs. Tran Thi L, and their authorized representative, Mr. Truong Quang T, stated:
The defendants admitted the agreement and establishment of the land use rights transfer contract as stated by the plaintiffs (at the time of the contract, the State had not yet granted the land). The defendants received the full 90,000,000 VND and subsequently received an additional 20,000,000 VND, which the plaintiffs said was for the land use rights transfer procedures. After the State recovered the defendants’ household land, they heard that the State would grant the household 03 lots, including 02 Lot Bs and 01 Lot A; the land use rights transfer contract specified a self-chosen Lot B. When the contract was made, the State had not yet granted the land, so there was no land to hand over to the plaintiffs. On the other hand, a land use rights transfer contract must be in writing with notarization or authentication; the land belonged to the defendants’ household consisting of many members, but only the defendants agreed to the transfer, which was against the law. Therefore, the defendants request the court to declare the land use rights transfer contract void and resolve the consequences by having the parties return what they received to each other.
The person with related interests and obligations, Mr. Doan Tan L1, stated:
He is the son of the defendants and agrees with the statement of the defendants’ authorized representative. He added that he stood out to sell the land with his parents because they were in a very difficult situation at that time, and the handover of the land use right certificate to the plaintiffs was due to threats. He admitted dumping split stones on the disputed land plot to build a shop for his parents, but since it was not used, he sold it to the plaintiffs for 6,450,000 VND. Regarding the plaintiffs’ unauthorized construction of the split-stone foundation, Mr. M did come to talk about it, but Mr. L1 did not agree and prevented the construction.
The persons with related interests and obligations, Mr. Doan Tan N1, Ms. Doan Thi Thu V, and Ms. Doan Thi My N2, stated:
They have shared the same household registration with their parents since the State recovered the land until now, and they have rights in the family’s common property. The fact that their parents and Mr. L1 voluntarily transferred the land use rights, which is common property of the household, without consulting them, violated their interests, so they do not agree. They request to declare the residential land transfer document dated August 10, 2009, void.
The person with related interests and obligations, Mrs. Nguyen Thi M1, stated:
In 2014, she went to the defendants’ house to ask about renting Plot 877 to open a beverage shop, but the defendants said they had already sold the land to the plaintiffs, so she should ask the plaintiffs. She agreed with the plaintiffs to rent the land to open a shop, paying annual rent; she even hired the defendant, Mr. C, to build the shop for her. After the mediation at the commune level, she saw Mr. L1 dumping split stones on the plot. When the plaintiffs had been building the house foundation for two days, Mr. L1 came and stopped the construction. She has no opinion on the plaintiffs’ lawsuit request, but whoever the land is handed over to, she will dismantle the shop herself and has no requests.
Civil First Instance Judgment No. 22/2017/DS-ST dated September 21, 2017, of the People’s Court of Duc Pho District ruled:
Accept the plaintiffs’ lawsuit request. Recognize the land use rights transfer contract dated August 10, 2009. Compel the defendants to complete the transfer procedures for Plot 877 to the plaintiffs.
Do not accept the defendants’ counterclaim regarding the cancellation of the land use rights transfer contract dated August 10, 2009.
Additionally, the first-instance judgment resolved litigation costs, court fees, and announced the parties’ right to appeal.
On October 2, 2017, the defendants and the persons with related interests and obligations, Doan Tan L1, Doan Tan N1, Doan Thi Thu V, and Doan Thi My N2, filed an appeal: Requesting the appellate court to annul the first-instance judgment for a re-trial. At the appellate trial, the appellants changed the content of the appeal, requesting the Trial Panel to amend the first-instance judgment, declare the land use rights transfer contract dated August 10, 2009, void, and resolve the consequences of the void contract.
On October 5, 2017, the Procurator-General of the People’s Procuracy of Duc Pho District issued Protest Decision No. 1317/QDKNPT-VKS-DS: Requesting the appellate court to amend the first-instance judgment, reject the plaintiffs’ lawsuit petition, accept the defendants’ counterclaim, declare the land use rights transfer contract between the plaintiffs and defendants void, and require the parties to return what they received. At the appellate trial, the Procuracy representative withdrew the entire protest.
Civil Appellate Judgment No. 24/2018/DS-PT dated February 1, 2018, of the People’s Court of Quang Ngai Province ruled: Amend Civil First Instance Judgment No. 22/2017/DS-ST dated September 21, 2017, of the People’s Court of Duc Pho District; reject the plaintiffs’ lawsuit request, accept the defendants’ counterclaim.
On September 19, 2018, the Chief Justice of the High People’s Court in Da Nang issued Cassation Protest Decision No. 68/2018/KN-DS: Proposing to annul Civil Appellate Judgment No. 24/2018/DS-PT dated February 1, 2018, of the People’s Court of Quang Ngai Province, and transfer the case file to the People’s Court of Quang Ngai Province for a re-appellate trial.
Cassation Decision No. 93/2018/DS-GDT dated November 29, 2018, of the Judges’ Committee of the High People’s Court in Da Nang ruled: Accept Cassation Protest Decision No. 68/2018/KN-DS dated September 19, 2018, of the Chief Justice of the High People’s Court in Da Nang; annul the entire Civil Appellate Judgment No. 24/2018/DSPT dated February 1, 2018, of the People’s Court of Quang Ngai Province, and transfer the case file to the People’s Court of Quang Ngai Province for a re-trial according to appellate procedures.
Opinion of the representative of the People’s Procuracy of Quang Ngai Province at the appellate trial:
The Judge, Trial Panel, Clerk, and the involved parties have strictly complied with the provisions of the Civil Procedure Code.
The appeal petitions of the defendants and the persons with related interests and obligations were filed within the statutory time limit and are valid.
Regarding the content: The content of the land transfer contract is the Residential Land Transfer Document dated August 10, 2009, which was performed by the plaintiffs handing over 90,000,000 VND to the defendants. Subsequently, because the defendants were not granted Lot B as resettlement land, the parties changed the agreement to transfer Lot A for 120,000,000 VND; the plaintiffs paid another 20,000,000 VND, and the remaining 10,000,000 VND would be paid upon completion of the transfer procedures.
Based on the statements of Mr. Pham Van H (Record 190) and Mrs. Nguyen Thi M1 (Record 118), there is a basis to determine that the defendants handed over the land and the land use right certificate to the plaintiffs; the plaintiffs built a house foundation and leased it to Mrs. M1 for a shop. The land use right certificate is in the defendants’ name, so the defendants have the right to transfer it without the consent of other members of the household.
The contract violated the form but is being performed, so the Civil Code 2015 is applied for resolution. According to Clause 2, Article 129 of the Civil Code 2015, this contract is recognized as valid. However, the first-instance court’s failure to compel the plaintiffs to pay the remaining 10,000,000 VND to the defendants is an omission.
It is proposed that the Trial Panel base on Article 289, Clause 2 Article 308, and Article 309 of the Civil Procedure Code; terminate the appellate trial for the part where the People’s Procuracy of Quang Ngai Province withdrew the protest of the Procurator-General of the People’s Procuracy of Duc Pho District; reject the appeal of the defendants and the persons with related interests and obligations; amend the first-instance judgment, recognize the validity of the transfer contract for Plot 877; the plaintiffs have the obligation to pay the defendants 10,000,000 VND; the plaintiffs have the right to contact competent State agencies to be granted the land use right certificate for Plot 877.
COURT’S ASSESSMENT:
[1] At the appellate trial, the representative of the People’s Procuracy of Quang Ngai Province withdrew the entire Protest Decision No. 1317/QDKNPT-VKS-DS dated October 5, 2017, of the Procurator-General of the People’s Procuracy of Duc Pho District. Therefore, terminating part of the appellate trial for the protest withdrawn by the Procuracy is consistent with Article 284 of the Civil Procedure Code.
[2] Before the first-instance court issued the judgment, none of the parties requested the application of the statute of limitations, so the application of the statute of limitations for filing a lawsuit is not considered as per Clause 2 Article 184 of the Civil Procedure Code.
[3] The defendants Mr. C, Mrs. L, and the person with related interests and obligations Mr. L1 admitted that, knowing the defendants’ family land was being recovered and they would be granted three resettlement lots (including one Lot A and two Lot Bs), on August 10, 2009, the plaintiffs Mr. M, Mrs. N, and the defendants Mr. C, Mrs. L, and Mr. Doan Tan L1 agreed and established a “Residential Land Transfer Document” (Record 27). The content of the agreement was that the defendants and Mr. L1 would transfer to the plaintiffs a land plot belonging to Lot B, measuring 5m x 20m (self-chosen when the State grants the land) within the defendants’ family land to be granted for resettlement at a price of 90,000,000 VND. Mr. L1 was responsible for processing the land use right certificate and handing over the land on-site to the plaintiffs. All parties involved in the transaction agreed and signed; the plaintiffs paid the full 90,000,000 VND to the defendants. These are facts that do not need proof according to Clause 2 Article 92 of the Civil Procedure Code.
[4] The defendants do not admit the change of transfer agreement from Lot B to Lot A for 120,000,000 VND as stated by the plaintiffs, because they were only granted the land use right certificate in 2016; the additional 20,000,000 VND received was only for processing the land use right certificate. However, at the appellate trial, Mr. L1 admitted that in 2011, the defendants already knew the map positions of the three resettlement lots the family would be granted, and there was no Lot B as agreed with the plaintiffs; among these 03 lots was Plot 877. Furthermore, in the Statement Record of the involved parties (Record 192), Mr. C stated that he had built a house on 01 resettlement lot since 2013. Thus, although the land use right certificate had not been issued, the defendants already knew the positions of the resettlement lots granted by the State.
[5] Based on the actual use of Plot 877, the statements of the lessee Mrs. Nguyen Thi M1, the “Land Lease Agreement” (Record 27), and the statement record of Mr. Doan C dated July 25, 2017 (Record 192), it is proven that the defendants handed over Plot 877 and its land use right certificate to the plaintiffs. The plaintiffs leased the land to Mrs. M1 to build a shop, and Mr. C also worked as a builder for Mrs. M1’s shop without any dispute. Mr. L1 himself dumped split stones on Plot 877 and sold them to the plaintiffs for them to build the house foundation.
[6] Regarding the time limit for performing the transaction, it was identified by both parties as from the establishment of the transaction until the defendants finished the obligation of transferring the name on the land use right certificate to the plaintiffs. Therefore, this is an ongoing transaction, and its content and form are consistent with the provisions of the Civil Code 2015. Thus, applying the Civil Code 2015 is correct according to Point b, Clause 1, Article 688 of the Civil Code 2015. Although at the time the parties agreed on the transfer, the defendants had not yet been granted the land and only made a hand-written paper, once the land was granted, the parties changed the agreement verbally to transfer Plot 877 and continued to perform the contract by paying more money, handing over the land, and handing over the land use right certificate. At the time of handing over the certificate, which was in the defendants’ name, the conditions for transfer were met. According to Article 116 and Clause 2, Article 129 of the Civil Code 2015, although the land use rights transfer transaction did not comply with the formal requirements specified in Clause 1, Article 502 of the Civil Code 2015, the plaintiffs paid the defendants 110,000,000 VND, and the defendants handed over the land use rights to the plaintiffs, which means more than 2/3 of the obligations in the transaction were performed; thus, the transaction is recognized as valid. The first-instance court’s recognition of the transaction’s validity is lawful, but compelling the defendants to perform transfer procedures for Plot 877 is unnecessary; once the Court recognizes the validity of the transaction, the plaintiffs shall contact the competent State agencies to have their land use rights recognized according to the legally effective judgment.
[7] The persons with related interests and obligations, namely Mr. Doan Tan L1, Mr. Doan Tan N1, Ms. Doan Thi Thu V, and Ms. Doan Thi My N2, who are members of the defendants’ family, appealed claiming that their parents’ land transfer without their consent affected their legal rights and interests. However, according to the land use right certificate, Plot 877 is resettlement land granted to the defendants, not to the household, so the defendants have the right to transfer it. The defendants’ transfer of Plot 877 does not violate any legal prohibitions as claimed by the defendants and related persons. Even if Plot 877 were the common property of the household, the defendants only transferred one of the three resettlement plots, which still falls within the scope of the defendants’ property rights within the household’s common property.
[8] From the above assessments, the appeals of the defendants Mr. C, Mrs. L, and the related persons Mr. L1, Mr. N1, Ms. V, and Ms. N2 are not accepted.
[9] However, according to the transfer agreement, the plaintiffs still have to pay the defendants 10,000,000 VND. The first-instance court recognized the contract but failed to compel the plaintiffs to pay the remaining amount, which is an omission that needs to be corrected in the first-instance judgment.
[10] At the appellate trial, the plaintiffs voluntarily allowed the temporary beverage shop measuring 25m2 built of eucalyptus wood, iron sheet roofing, and cement floor belonging to Mrs. Nguyen Thi M1 to continue to exist on the land if the Court accepted the plaintiffs’ lawsuit request. As assessed above, the plaintiffs are the lawful land users, so the plaintiffs’ voluntariness is recorded.
[11] Regarding the stone foundation the plaintiffs built on Plot 877, map sheet No. 24, Commune P, valued at 9,400,000 VND, since the plaintiffs purchased the materials and built it themselves, it belongs to the plaintiffs’ ownership and use.
[12] Other parts of the first-instance judgment that are consistent with legal regulations are upheld.
[13] The opinion of the Representative of the People’s Procuracy of Quang Ngai Province is grounded and lawful, and is therefore accepted.
[14] The defendants are elderly and have applied for a court fee exemption; therefore, exempting them from appellate civil court fees is consistent with Point d, Clause 1, Article 12 of Resolution 326/2016/UBTVQH14 dated December 30, 2016, of the National Assembly Standing Committee. The persons with related interests and obligations, Mr. L1, Mr. N1, Ms. V, and Ms. N2, do not have to bear appellate civil court fees as per Clause 2 Article 148 of the Civil Procedure Code.
For these reasons;
DECISION:
Applying Clause 1 Article 147, Clause 2 Article 148, Article 289, Clause 2 Article 308, Article 309 of the Civil Procedure Code; Article 116, Clause 2 Article 129 of the Civil Code 2015; Article 106 of the Land Law 2003; Point d, Clause 1, Article 12 of Resolution No. 326/2016/UBTVQH14 dated December 30, 2016, of the National Assembly Standing Committee.
Terminate part of the appellate trial for Protest Decision No. 1317/QDKNPT-VKS-DS dated October 5, 2017, of the Procurator-General of the People’s Procuracy of Duc Pho District.
Do not accept the appeal of the defendants Mr. Doan C, Mrs. Tran Thi L and the persons with related interests and obligations, namely Mr. Doan Tan L1, Mr. Doan Tan N1, Ms. Doan Thi Thu V, and Ms. Doan Thi My N2.
Ruling: Amend part of the Civil First Instance Judgment No. 22/2017/DS-ST dated September 21, 2017, of the People’s Court of Duc Pho District.
1. Accept the lawsuit request of the plaintiffs Mr. Vo Si M and Mrs. Phung Thi N;
Recognize the validity of the land use rights transfer contract for Plot 877, map sheet No. 24, Commune P between Mr. Vo Si M, Mrs. Phung Thi N and Mr. Doan C, Mrs. Tran Thi L. Mr. M and Mrs. N have the right to use Plot 877, map sheet No. 24, Commune P. Mr. M and Mrs. N have the obligation to contact competent state agencies to be granted the land use right certificate for Plot 877, map sheet No. 24, Commune P, District D, Quang Ngai Province.
Mr. Vo Si M and Mrs. Phung Thi N have the obligation to pay an additional 10,000,000 VND (Ten million VND) to Mr. Doan C and Mrs. Tran Thi L.
2. Do not accept the entire counterclaim of Mr. Doan C, Mrs. Tran Thi L and the persons with related interests and obligations Mr. Doan Tan L1, Mr. Doan Tan N1, Ms. Doan Thi Thu V, and Ms. Doan Thi My N2 regarding declaring the land use rights transfer contract dated August 10, 2009, void and resolving the consequences of the void contract.
3. Record the voluntariness of Mr. Vo Si M and Mrs. Phung Thi N regarding allowing the temporary beverage shop measuring 25m2 built of eucalyptus wood, iron sheet roofing, and cement floor belonging to Mrs. Nguyen Thi M1 to continue to exist on Plot 877, map sheet No. 24, Commune P.
4. Record the voluntariness of Mr. Vo Si M and Mrs. Phung Thi N regarding bearing the costs of on-site inspection and appraisal themselves.
5. Regarding court fees:
5.1. Mr. Vo Si M and Mrs. Phung Thi N do not have to bear first-instance civil court fees; refund 300,000 VND (Three hundred thousand VND) of the court fee advance paid by Mr. M and Mrs. N according to receipt No. AA/2014/003 747 dated June 7, 2017, at the Civil Judgment Enforcement Bureau of Duc Pho District, Quang Ngai Province.
5.2. Mr. Doan C and Mrs. Tran Thi L are exempt from first-instance and appellate civil court fees.
5.3. Mr. Doan Tan L1, Mr. Doan Tan N1, Ms. Doan Thi Thu V, and Ms. Doan Thi My N2 do not have to bear appellate civil court fees. Refund each person 300,000 VND (Three hundred thousand VND) of the appellate court fee advance paid according to receipts No. AA/2014/0003856, AA/2014/0003859, AA/2014/0003857, AA/2014/0003858 all dated October 19, 2017, at the Civil Judgment Enforcement Bureau of Duc Pho District, Quang Ngai Province.
6. From the date the person entitled to judgment enforcement files an application for enforcement, if the judgment debtor is late in performing the obligation, they must pay interest on the late payment amount corresponding to the period of delay at the interest rate agreed upon by the parties; if there is no agreement, it shall be implemented according to Clause 2, Article 357 of the Civil Code 2015.
7. In case the judgment is enforced according to Article 2 of the Law on Civil Judgment Enforcement, the judgment creditor and judgment debtor have the right to agree on enforcement, the right to request enforcement, voluntary enforcement, or be subject to coerced enforcement as stipulated in Articles 6, 7, 7a, 7b, and 9 of the Law on Civil Judgment Enforcement. The statute of limitations for judgment enforcement is implemented according to Article 30 of the Law on Civil Judgment Enforcement.
8. The appellate judgment takes legal effect from the date of pronouncement.
PRECEDENT CONTENT:
“[6] Regarding the time limit for performing the transaction, it was identified by both parties as from the establishment of the transaction until the defendants finished the obligation of transferring the name on the land use right certificate to the plaintiffs. Therefore, this is an ongoing transaction, and its content and form are consistent with the provisions of the Civil Code 2015. Thus, applying the Civil Code 2015 is correct according to Point b, Clause 1, Article 688 of the Civil Code 2015. Although at the time the parties agreed on the transfer, the defendants had not yet been granted the land and only made a hand-written paper, once the land was granted, the parties changed the agreement verbally to transfer Plot 877 and continued to perform the contract by paying more money, handing over the land, and handing over the land use right certificate. At the time of handing over the certificate, which was in the defendants’ name, the conditions for transfer were met. According to Article 116 and Clause 2, Article 129 of the Civil Code 2015, although the land use rights transfer transaction did not comply with the formal requirements specified in Clause 1, Article 502 of the Civil Code 2015, the plaintiffs paid the defendants 110,000,000 VND, and the defendants handed over the land use rights to the plaintiffs, which means more than 2/3 of the obligations in the transaction were performed; thus, the transaction is recognized as valid…”
