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Recent clarification by the Appeal Court regarding the matrimonial property of a deceased person

topic

The Family Court in Cyprus recently examined an interesting yet significant decision which affected the current practice as to the right of a surviving spouse to claim posthumously his/her contribution to the increase in his/her spouse’s property, regardless of his/her rights under the Regulation of Matrimonial Property Relations Act 1991 Law 232/1991 (hereafter ‘the Act’).

The Act was enacted to regulate the division of matrimonial property in the event of the marriage breakdown and the obligations of alimony between spouses. It is a condition that at least one of the spouses has been permanently residing in Cyprus at least 3 months prior to the filing of the divorce application and that the property in dispute, which can be both movable and immovable, is situated in Cyprus (Article 2).

The main provision regulating matrimonial property disputes is Article 14. This principle reads that ‘where a marriage is dissolved or annulled or where the spouses are separated, and the property of one spouse has increased, the other spouse, if he/she has contributed in any way to that increase, shall bring an action and claim the return of the increase which is derived from his/her contribution’. The law introduces a presumption whereby each spouse's contribution to the increase in the other's property is equal to one third of the increase, even when the applicant is a housewife who has not contributed financially, unless proven otherwise, unlike other jurisdictions where each spouse is eligible to half of the increase.

Additionally, Article 15 referring to the claims’ limitation period states that ‘the claim provided for in the abovementioned Article (a) shall lapse three years after the dissolution or annulment of the marriage (b) shall not, in the case of death, arise in heirs of the deceased spouse (c) shall not be assigned or inherited unless it has been contractually recognised or a claim has been served’.

For the purpose of dividing the parties’ community property, the financial contribution of each spouse separately shall be considered. Every property a spouse had before cohabitation or acquired through a gift from third parties, such as one’s parents, remains his/her own, thus it will not be distributed. However, any property acquired by them during their first cohabitation with the prospect of marriage and during their marriage, jointly own it. Such property could be money, shares, bonds, buildings or other movable property.

Background

The landmark case of Prokopiou v Giagkou and Pilidou as Administrators of the property of the deceased Karalouka Appeal no. 22/2020 gave the impetus to the court to clarify the law.

In this case, just three days before the completion of the three years from the marriage dissolution, the appellant filed a petition raising the primary issue of whether the Family Court as such has jurisdiction to hear a claim under Article 14 against the administrators of her ex-husband's property, against whom the claim would have been made if he had been alive.

Tribunal of First Instance

The Trial Court, ex officio, held that the Appellant had no actionable right as pursuant to Article 15(b) a claim on the basis of Article 14 against the deceased spouse’s heirs cannot be brought and the petition did not involve a property dispute between spouses. In such a situation, the administrators would have been required to distribute the deceased's property in accordance with the law of succession without prejudice to any rights the Appellant might have had in the property under Article 14 since there could be no claim. Consequently, the petition was dismissed.

Arguably, the court was influenced by the case of Gregoriou v Gregoriou (2001) 1(B) A.A.D. 1461 which highlighted that ‘since one of the spouses is deceased, a property dispute cannot exist therefore the Family Court no longer has jurisdiction which is the competent court under Article 11 of the Family Courts Act 1990 (23/1990)’.

Appeal Court

Unanimously, the appeal succeeded.

The interpretation given at First Instance was characterised as incorrect. Article 15(b) does not refer to a surviving spouse's right to the deceased's property, which is a vested and subsisting right, only because of the spouse’s death the claim must be against the administrators of his property, as in any other claim against a deceased (Article 34(1) and (7) of the Administration of Properties of Deceased Persons Act, Cap.189). In other words, what the decedent could claim under Article 14 if he was alive cannot be claimed by his heirs. Similarly, the restriction in Article 15(c) is of the same form and would assist in interpretating Article 15(b).

In Papaioannou v Papaioannou (2000) 1 (A) A.A.D.656 it was explained that Articles 14 and 15 reproduce Articles 1400 and 1401 of the Greek Civil Code and an illuminating extract from the text of Georgiadis and Stathopoulos is adopted. The authors discussed that ‘only the beneficiary spouse is protected by having the right to claim the return of his/her personal contribution, neither his/her heirs nor any transferees. The contribution and support between spouses are considered to be personal matters which third parties, even heirs, are not entitled to invoke and derive benefits from. Thereupon, if the marriage is dissolved by death, the surviving spouse will still have the right, against his/her spouse's heirs, to participate to any increase in the deceased’s property. Contrary, the deceased spouse’s right which would have arisen on his/her death never arises, as it cannot arise to his/her heirs. Nor a right arises in a joint survivorship.’

It is irrelevant whether the marriage was dissolved on the spouse’s death or the marriage was dissolved, annulled or there was a separation and then the other died. Nor it would matter that the petition was registered and/or served before his death and the consequence of his death requires a title modification so that the petition can proceed against the administrators of his property (H'Kypri v Hadjikypri) (2007) I(B) A.A.D.1239). The reference to service of process in Article 15(c) relates to the right of the deceased and should not be ambiguous.

Takeover

The interpretation of Article 15(b) given by the Trial Court was erroneous and no application of the provision was made to the circumstances of the application before it. The Trial Court had plenary jurisdiction to hear the petition before it.

In conclusion, the competent court, as interpreted in Article 2, is the Family Court. No other court has jurisdiction as such to hear a claim under Article 14. Following the majority decision in Philippou v Philippou (2003) 1 (C) A.A.D. 1343 it is clear that the legislature’s intention was to bring all property disputes between spouses in respect of property acquired before marriage, with a view to marriage or after marriage by either spouse under the provisions of the act within the exclusive jurisdiction of the Family Court irrespective of the base of the action.

The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Stavriani Sofroni, Legal Consultant, Limassol at +357 25363685 or by email at Stavriani.sofroni@kyprianou.com

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