Right to ownership or common property acquired during cohabitation
28.09.2022
Explaining the problem
Case No.Rev.2 No.589/2021 deals with recognizing the right to ownership or common property acquired during cohabitation that is eventually transformed into marriage, and which after several years ceases to exist due to divorce. The procedure for determining ownership itself lasted 9 years during which time all legal remedies stipulated in our legislation were used.
The plaintiff B.K. for a longer time was cohabitating with her partner out of wedlock and at some point they bought an apartment that was written in the name of her partner and later her husband. After the divorce, her husband disputed her ownership over the apartment, so she filed a lawsuit to formally protect and record the property in her own name in the Real Estate Register, considering that the apartment was purchased by the two partners (later spouses) and she is legally entitled to 1/2 of the property.
The apartment was purchased with the money from a loan taken in the name of her partner (later her husband) and with the cash given by the parents of the two partners. They both wanted to buy the apartment in order to start a family, as it happened later on. Although as buyer of the apartment we only have the one partner, the financial contribution of the Plaintiff was never disputed, considering that she was completely dedicated to refurbishing the apartment and she even abandoned her work in order the construction works in the apartment to be finished as soon as possible. She used her own money to pay for these renovations. They continue to live together in the apartment, after which they enter into marriage and establish a family in which she gives birth to two children. During all this time she disposes freely with the apartment until it became disputed by her ex-spouse.
Court proceedings for protection of ownership right
The first instance decision of the Basic Court Skopje 2 Skopje 4.PZ-47/11 of 15.07.2014 upheld the claim of the Plaintiff the apartment to be treated as property acquired by both partners, because the decision to take the loan and the efforts put by her in the renovations showed the will of both of them to share the ownership over the apartment. The money given by the parents of both parties were considered by the Court as assistance for solving their residence issue. When deciding in this way, the Court invoked Article 67 from the Law on Ownership and Other Real Rights which stipulates that property acquired during marriage shall be considered as joint property, and Article 69 from the same Law, which stipulates that even if the property is registered under the name of only one partner, it shall be considered as it was registered under the name of both partners.
The Appellate Court Skopje with the Decision GZ No.3354/15 of 29.09.2016 revoked this decision and returned the case for retrial at the first instance in order the first instance court to determine when the apartment was bought and whether besides the loan other funds have been used for this purpose. Further the first instance court was to determine what was the intent of the parents of the parties when giving the money and generally how extensive were the investments by the parties to satisfy their daily needs before the marriage and during the marriage up to the divorce. The court did not take into consideration the will of the parties to buy the apartment nor requested any evidence in this regard, although the Plaintiff was requesting for her formally to be also registered as an owner of the apartment, while the Defendant never submitted a claim for him to be determined as the only owner of the apartment.
In the retrial the Basic Court Skopje 2 with the judgement 4s.P.No.59/16 of 11.07.2018 determined that the cohabitation between the parties started in 1993 and although they intended to turn this common-law relationship into marriage, the court accepted that the Defendant expressed a will to buy his own apartment although at that moment his only partner was the Plaintiff. The court did not elaborate on the issue of the joint will to buy the apartment, although it evidence were presented that could sustain the joint will and possession over the apartment in question, which dateed back to the cohabitation as well as later to marriage. The court found that the apartment in question was purchased and handed over to the Defendant before he married the Plaintiff, although in fact she also received and had possession of the apartment from the beginning, considering that they had moved in together and began to renovate and refurbish it as they wanted. The court did not take into account the fact that the cohabitation is legally equated with the marital community, and they both wanted jointly to purchase the apartment, which was helped by its parents.
The Appellate Court Skopje with the judgement GZ No. 5525/18 of 11.03.2020 reversed the decision and upheld the request of the Plaintiff determining that the apartment was bought for both of them and it is not owned only by the Defendant, considering the evidence proposed by both parties and applying the above mentioned law.
The Supreme Court of the Republic of North Macedonia, with its decision Rev.2 No.419/2020 of 23.03.2021 quashed this judgement and returned the case for retrial at the Appellate Court due to lack of clarity with regard to to the intention and will for purchasing the apartment.
The Appellate Court with its Judgement GZ.No.1532/21 of 23.09.2021 after holding a public hearing and presentation and assessment of all evidence proposed by the parties once again reversed the first instance judgment and upheld the claim of the Plaintiff finding that there was will and intent of both parties to buy the apartment. The Court determined that the apartment which was bought during cohabitation, immediately before concluding the marriage, with joint will and intent is a common property, regardless who took the loan and who paid for it. The financial support from the parents is considered as assistance for building future marital and family life. The Court considers the registration in the Real Estate Register of only one partner insignificant, considering the provision in Article 69 paragraph 2 of the Law on Ownership and Other Real Rights which stipulates that such a registration should be interpreted as registration in the name of both partners. From the evidence, the Court accepted that the Defendant did not take any action to show that he was buying the apartment only for himself during the cohabitation, which gradually converted into marriage, immediately before the purchase of the apartment, which according to Article 81 of the said Law, means that the apartment is a joint property of the partners who cohabitate. In deciding, the Court also took into account the provisions of Article 13 of the Law on Family according to which cohabitation is equal to marriage in terms of support and ownership of property acquired.
The Supreme Court of the Republic of North Macedonia, with judgement Rev.2 no. 589/2021 of 22.02.2022, upheld the revision and changed the final judgement of the Skopje Court of Appeal, and confirmed the judgement of the Basic Court Skopje 2 Skopje P3 no. 59/16 of 11.07.2018, which does not contain an analysis and assessment of the decisive evidence. The Supreme Court accepted that the apartment in question was bought by the Defendant with the help of his parents before marrying the Plaintiff, with the intention of representing his exclusive property for which there is no concrete evidence. The Court considers only his will to acquire individual property, as well as the will of his parents, who together with him made a financial plan, although there is no material evidence for this and they provided him with funds for down payment, after which he took the loan. When considering the evidence the Court did not considered the evidence submitted by the Plaintiff showing that she has contributed with her own funds, as well as with the funds provided by her parents. Not taking into account her evidence, the Supreme Court arbitrarily rendered incorrect conclusions, stating that the apartment in question is an individual property of the Defendant, while the evidence of the Plaintiff were not considered by the Supreme Court altough they show that the apartment is owned by both parties. This means that the Supreme Court acted arbitrarily violating the principle of fair procedure.
By receiving the judgment of the Supreme Court of the Republic of North Macedonia Rev. 2 No.589/2021 of 22.02.2022, which changed the judgment of the Court of Appeal Skopje GZ No.1532/21 of 23.09 2021 and confirmed the judgment of the Basic Court PZ No.59/16 of 11.07.2018, all domestic legal remedies were exhausted which could change the final outcome of the national proceedings which lead to interventions in the ownership rights of the Plaintiff.
The Supreme Court did not respect the right to a fair trial, stipulated in Article 6 paragraph 1 of the European Convention on Human Rights, because it did not consider the evidence in a way that guarantees fair proceedings. Although proper consideration of the evidence is key and presents an integral part of a reasoned decision, the Supreme Court omitted to consider and evaluate them, something that neither the Basic Court did, which is why the guarantees for a fair trial for the Plaintiff were violated. These are contrary to the Judgement of the Court of Appeal and its final decision. Namely, the upheld judgment was not based on the assessment that the decisive evidence were examined by the Basic Court, in an adversarial procedure, accepting that there was no joint will of the parties in the dispute for the purchase of the apartment, only on the basis of the statement of the Defendant and his mother, without contradicting that evidence with the statement of the Plaintiff and her mother. The Court decided to disregard the evidence proposed and presented by the Plaintiff, without analysis and without stating why they were not accepted, unlike the evidence presented by the other party, which comprise unsubstantiated statements. This violates the principle of equality of arms of the parties. The material evidence (the bank remittances from the parents of the Defendant and the loan taken by him because only he was creditworthy at that moment) does not reflect the decisive fact, which is the joint will of the two partners to buy a joint apartment. Examination of issues of factual nature under Article 8 of the Law on Civil Procedure requires individual examination of each evidence separately and all together, and based on the results of the overall procedure the decision should be made.
The unilateral and arbitrary approach of the Supreme Court in this case caused a violation of the principle of adversity in the proceedings as well as a violation of the principle of equality of arms, without applying and achieving the necessary balance between the parties.
There is apparent incoherence and inconsistency in the reasoning that is not based on contradicting arguments, leading to arbitrariness in the making of the judgement. It is the obligation of the Court to apply consistent national case law, which derives from such cases, and to give value to the will of both parties. The judgement of the Supreme Court disregards this. The non-application of consistent case law, regardless of the reason for this, presents a violation of Article 6 of the Convention – the right to a fair proceedings (Atanasovski v. Macedonia, appeal No.36815/03).
According to Article 81, paragraph 1 of the Law on Ownership and Other Real Rights, property acquired in civil partnership or cohabitation is considered common property, just like according to Article 67 of the same law the property acquired in marriage is their common property. Article 69, paragraph 2 of the said law stipulates that if only one spouse is entered in the public register as the owner, it will be considered that the entry was made in the name of the two spouses. According to Article 13 of the Law on Family, the cohabitation (civil partnership) and marriage that lasted at least one year are equal to marriage in terms of the right to mutual support and the property acquired. In order to preserve the legal standing of these persons, the case law supports the opinion that their common will for acquisition of common property is important, which is a decisive factor in the resolution of such disputes.
By deciding in this way, the Court deprived the Plaintiff of her right to ownership over the property, which according to the Law on Ownership and Other Real Rights and the established case law, was her legitimate right and she had the expectation that she was the owner of a part of the apartment. She disposed with their common apartment since the beginning until the end of the marriage at what point her husband took away the apartment key from her. The intervention and the decision of the Supreme Court, violates Article 1 of Protocol 1 to the European Convention on Human Rights.
Conclusion
The court arbitrarily applied the Law on Ownership and Other Real Rights or rather did not apply it at all, not taking into account the will of the parties at the time of purchase of the apartment. As stated above, considering that there is a law, the Plaintiff had been legitimately expecting a right of ownership, which right she has been exercising for a long time (more than 6 years), during which period no one disputed it. The law is clear and the Supreme Court does not apply it appropriately disregarding her behavior throughout that period, especially her contribution and her will which throughout that period has never been disputed by the Defendant, nor the Defendant has taken any actions to limit the ownership over the apartment only to him, and by the force of law the recording of the property on his name is not sufficient. The law stipulates that if the property is written as property of only one person, this property shall be considered to be joint property of the other cohabitant or spouse. Therefore, the Supreme Court's actions are unlawful and deprive the Plaintiff of her acquired property. Such a finding is also the result of the already explained inequality of arms, lack of reasoning and the lack of adversarity in the procedure and the lack of application of not only the law but also the obligation to apply consistent case law with regard to the will when acquiring ownership.
Јelena Kadric
Case No.Rev.2 No.589/2021 deals with recognizing the right to ownership or common property acquired during cohabitation that is eventually transformed into marriage, and which after several years ceases to exist due to divorce. The procedure for determining ownership itself lasted 9 years during which time all legal remedies stipulated in our legislation were used.
The plaintiff B.K. for a longer time was cohabitating with her partner out of wedlock and at some point they bought an apartment that was written in the name of her partner and later her husband. After the divorce, her husband disputed her ownership over the apartment, so she filed a lawsuit to formally protect and record the property in her own name in the Real Estate Register, considering that the apartment was purchased by the two partners (later spouses) and she is legally entitled to 1/2 of the property.
The apartment was purchased with the money from a loan taken in the name of her partner (later her husband) and with the cash given by the parents of the two partners. They both wanted to buy the apartment in order to start a family, as it happened later on. Although as buyer of the apartment we only have the one partner, the financial contribution of the Plaintiff was never disputed, considering that she was completely dedicated to refurbishing the apartment and she even abandoned her work in order the construction works in the apartment to be finished as soon as possible. She used her own money to pay for these renovations. They continue to live together in the apartment, after which they enter into marriage and establish a family in which she gives birth to two children. During all this time she disposes freely with the apartment until it became disputed by her ex-spouse.
Court proceedings for protection of ownership right
The first instance decision of the Basic Court Skopje 2 Skopje 4.PZ-47/11 of 15.07.2014 upheld the claim of the Plaintiff the apartment to be treated as property acquired by both partners, because the decision to take the loan and the efforts put by her in the renovations showed the will of both of them to share the ownership over the apartment. The money given by the parents of both parties were considered by the Court as assistance for solving their residence issue. When deciding in this way, the Court invoked Article 67 from the Law on Ownership and Other Real Rights which stipulates that property acquired during marriage shall be considered as joint property, and Article 69 from the same Law, which stipulates that even if the property is registered under the name of only one partner, it shall be considered as it was registered under the name of both partners.
The Appellate Court Skopje with the Decision GZ No.3354/15 of 29.09.2016 revoked this decision and returned the case for retrial at the first instance in order the first instance court to determine when the apartment was bought and whether besides the loan other funds have been used for this purpose. Further the first instance court was to determine what was the intent of the parents of the parties when giving the money and generally how extensive were the investments by the parties to satisfy their daily needs before the marriage and during the marriage up to the divorce. The court did not take into consideration the will of the parties to buy the apartment nor requested any evidence in this regard, although the Plaintiff was requesting for her formally to be also registered as an owner of the apartment, while the Defendant never submitted a claim for him to be determined as the only owner of the apartment.
In the retrial the Basic Court Skopje 2 with the judgement 4s.P.No.59/16 of 11.07.2018 determined that the cohabitation between the parties started in 1993 and although they intended to turn this common-law relationship into marriage, the court accepted that the Defendant expressed a will to buy his own apartment although at that moment his only partner was the Plaintiff. The court did not elaborate on the issue of the joint will to buy the apartment, although it evidence were presented that could sustain the joint will and possession over the apartment in question, which dateed back to the cohabitation as well as later to marriage. The court found that the apartment in question was purchased and handed over to the Defendant before he married the Plaintiff, although in fact she also received and had possession of the apartment from the beginning, considering that they had moved in together and began to renovate and refurbish it as they wanted. The court did not take into account the fact that the cohabitation is legally equated with the marital community, and they both wanted jointly to purchase the apartment, which was helped by its parents.
The Appellate Court Skopje with the judgement GZ No. 5525/18 of 11.03.2020 reversed the decision and upheld the request of the Plaintiff determining that the apartment was bought for both of them and it is not owned only by the Defendant, considering the evidence proposed by both parties and applying the above mentioned law.
The Supreme Court of the Republic of North Macedonia, with its decision Rev.2 No.419/2020 of 23.03.2021 quashed this judgement and returned the case for retrial at the Appellate Court due to lack of clarity with regard to to the intention and will for purchasing the apartment.
The Appellate Court with its Judgement GZ.No.1532/21 of 23.09.2021 after holding a public hearing and presentation and assessment of all evidence proposed by the parties once again reversed the first instance judgment and upheld the claim of the Plaintiff finding that there was will and intent of both parties to buy the apartment. The Court determined that the apartment which was bought during cohabitation, immediately before concluding the marriage, with joint will and intent is a common property, regardless who took the loan and who paid for it. The financial support from the parents is considered as assistance for building future marital and family life. The Court considers the registration in the Real Estate Register of only one partner insignificant, considering the provision in Article 69 paragraph 2 of the Law on Ownership and Other Real Rights which stipulates that such a registration should be interpreted as registration in the name of both partners. From the evidence, the Court accepted that the Defendant did not take any action to show that he was buying the apartment only for himself during the cohabitation, which gradually converted into marriage, immediately before the purchase of the apartment, which according to Article 81 of the said Law, means that the apartment is a joint property of the partners who cohabitate. In deciding, the Court also took into account the provisions of Article 13 of the Law on Family according to which cohabitation is equal to marriage in terms of support and ownership of property acquired.
The Supreme Court of the Republic of North Macedonia, with judgement Rev.2 no. 589/2021 of 22.02.2022, upheld the revision and changed the final judgement of the Skopje Court of Appeal, and confirmed the judgement of the Basic Court Skopje 2 Skopje P3 no. 59/16 of 11.07.2018, which does not contain an analysis and assessment of the decisive evidence. The Supreme Court accepted that the apartment in question was bought by the Defendant with the help of his parents before marrying the Plaintiff, with the intention of representing his exclusive property for which there is no concrete evidence. The Court considers only his will to acquire individual property, as well as the will of his parents, who together with him made a financial plan, although there is no material evidence for this and they provided him with funds for down payment, after which he took the loan. When considering the evidence the Court did not considered the evidence submitted by the Plaintiff showing that she has contributed with her own funds, as well as with the funds provided by her parents. Not taking into account her evidence, the Supreme Court arbitrarily rendered incorrect conclusions, stating that the apartment in question is an individual property of the Defendant, while the evidence of the Plaintiff were not considered by the Supreme Court altough they show that the apartment is owned by both parties. This means that the Supreme Court acted arbitrarily violating the principle of fair procedure.
By receiving the judgment of the Supreme Court of the Republic of North Macedonia Rev. 2 No.589/2021 of 22.02.2022, which changed the judgment of the Court of Appeal Skopje GZ No.1532/21 of 23.09 2021 and confirmed the judgment of the Basic Court PZ No.59/16 of 11.07.2018, all domestic legal remedies were exhausted which could change the final outcome of the national proceedings which lead to interventions in the ownership rights of the Plaintiff.
The Supreme Court did not respect the right to a fair trial, stipulated in Article 6 paragraph 1 of the European Convention on Human Rights, because it did not consider the evidence in a way that guarantees fair proceedings. Although proper consideration of the evidence is key and presents an integral part of a reasoned decision, the Supreme Court omitted to consider and evaluate them, something that neither the Basic Court did, which is why the guarantees for a fair trial for the Plaintiff were violated. These are contrary to the Judgement of the Court of Appeal and its final decision. Namely, the upheld judgment was not based on the assessment that the decisive evidence were examined by the Basic Court, in an adversarial procedure, accepting that there was no joint will of the parties in the dispute for the purchase of the apartment, only on the basis of the statement of the Defendant and his mother, without contradicting that evidence with the statement of the Plaintiff and her mother. The Court decided to disregard the evidence proposed and presented by the Plaintiff, without analysis and without stating why they were not accepted, unlike the evidence presented by the other party, which comprise unsubstantiated statements. This violates the principle of equality of arms of the parties. The material evidence (the bank remittances from the parents of the Defendant and the loan taken by him because only he was creditworthy at that moment) does not reflect the decisive fact, which is the joint will of the two partners to buy a joint apartment. Examination of issues of factual nature under Article 8 of the Law on Civil Procedure requires individual examination of each evidence separately and all together, and based on the results of the overall procedure the decision should be made.
The unilateral and arbitrary approach of the Supreme Court in this case caused a violation of the principle of adversity in the proceedings as well as a violation of the principle of equality of arms, without applying and achieving the necessary balance between the parties.
There is apparent incoherence and inconsistency in the reasoning that is not based on contradicting arguments, leading to arbitrariness in the making of the judgement. It is the obligation of the Court to apply consistent national case law, which derives from such cases, and to give value to the will of both parties. The judgement of the Supreme Court disregards this. The non-application of consistent case law, regardless of the reason for this, presents a violation of Article 6 of the Convention – the right to a fair proceedings (Atanasovski v. Macedonia, appeal No.36815/03).
According to Article 81, paragraph 1 of the Law on Ownership and Other Real Rights, property acquired in civil partnership or cohabitation is considered common property, just like according to Article 67 of the same law the property acquired in marriage is their common property. Article 69, paragraph 2 of the said law stipulates that if only one spouse is entered in the public register as the owner, it will be considered that the entry was made in the name of the two spouses. According to Article 13 of the Law on Family, the cohabitation (civil partnership) and marriage that lasted at least one year are equal to marriage in terms of the right to mutual support and the property acquired. In order to preserve the legal standing of these persons, the case law supports the opinion that their common will for acquisition of common property is important, which is a decisive factor in the resolution of such disputes.
By deciding in this way, the Court deprived the Plaintiff of her right to ownership over the property, which according to the Law on Ownership and Other Real Rights and the established case law, was her legitimate right and she had the expectation that she was the owner of a part of the apartment. She disposed with their common apartment since the beginning until the end of the marriage at what point her husband took away the apartment key from her. The intervention and the decision of the Supreme Court, violates Article 1 of Protocol 1 to the European Convention on Human Rights.
Conclusion
The court arbitrarily applied the Law on Ownership and Other Real Rights or rather did not apply it at all, not taking into account the will of the parties at the time of purchase of the apartment. As stated above, considering that there is a law, the Plaintiff had been legitimately expecting a right of ownership, which right she has been exercising for a long time (more than 6 years), during which period no one disputed it. The law is clear and the Supreme Court does not apply it appropriately disregarding her behavior throughout that period, especially her contribution and her will which throughout that period has never been disputed by the Defendant, nor the Defendant has taken any actions to limit the ownership over the apartment only to him, and by the force of law the recording of the property on his name is not sufficient. The law stipulates that if the property is written as property of only one person, this property shall be considered to be joint property of the other cohabitant or spouse. Therefore, the Supreme Court's actions are unlawful and deprive the Plaintiff of her acquired property. Such a finding is also the result of the already explained inequality of arms, lack of reasoning and the lack of adversarity in the procedure and the lack of application of not only the law but also the obligation to apply consistent case law with regard to the will when acquiring ownership.
Јelena Kadric