Property Division on Divorce in Thailamd

 Property Division on Divorce in Thailan

 By Joe Lynch, Accredited Australian Family Law Specialist, Lanna Lawyers, Chiang Mai, Thailand.

Applicable Law

Where there is a breakdown of a marriage between a Thai citizen and a foreigner it is possible that Courts in both parties' countries may have jurisdiction to determine the division of property. The question of choice of forum and the law to be applied becomes crucial in those cases. The Thai Conflict of Laws Act in Section 22 provides “As regards property of husband and wife, if there is no antenuptial agreement, the law of nationality shall govern. If the husband and the wife are of different nationalities, the law of nationality of the husband shall govern. However, in respect of immovable property, the law of the place where it is situated shall govern.”

It is a frightening to think about a Thai court applying the property division law regime of another country. In such cases it is crucial that specialist legal advice be sought as to the relevant law in each jurisdiction and to make an early choice of forum. In a number of foreign countries binding prenuptial agreements can be entered into specifying the agreed forum.

Property Division

Division of property on the breakdown of a marriage in Thailand is governed by what is known as a community property regime. This regime is used in many jurisdictions in the United States and in a number of other countries.

There are two types of matrimonial assets in Thailand. Firstly, there is Sin SuanTua (Personal Property) and Sin Somoros (Common Property). The nature of each type of property is set out in the Code.

Personal Property - Sin Suan Tua

Sin Suan Tua (Personal property) under Sections 1470 and 1471 is

1.  Property belonging to either spouse before marriage;

2.  Property for personal use such as clothing or tools of trade;

3.  Property acquired during marriage by way of inheritance or gifts;

4.  Khongman, otherwise known as an engagement gifts.

Common Property - Sin Somoros

Sin Somoros (Common property) under section 1474 is

1.  Property acquired during marriage;

2.  Property acquired by either spouse during marriage through a will or gift declared by
          such will or document of gift to be Sin Somros;

3.  Property that is the fruit of Sin Suan Tua.

For example, if a wife has inherited shares in accompany they would be seen as Sin Suan Tau but the dividends from the company would be Sin Somoros. Property that is Sin Somoros is under joint control. The permission is needed of both spouses in dealing with Sin Someros.

Division of Property on Divorce

After a divorce is granted, the property is required to be liquidated. Section 1532 however creates two different time frames for the liquidation of the property.

On a divorce in Thailand by mutual consent, the liquidation of the property will apply to the property as it was on the date of the registration of the divorce.

On a divorce in Thailand by court order, the liquidation of the property will apply to the property as it was on the date of the application for divorce.

Upon the granting of the divorce the Common property - Sim Somros is divided into equal shares between the parties. `

Each party is entitled to retain their respective Personal property - Sin Suan Tua. Apart from each of the spouses' personal property; Sin Suan Tua, a Thai marriage is likely to result in the creation of common property owned jointly or severally by the husband and wife (Sin Somros). All such property acquired throughout the course of the marriage is common property regardless of in whose name the title is held. Unless the parties can agree on how to divide the common property the Court will divide these assets subject to section 1472 of the Civil and Commercial Code. The general principle applies that 'benefit and income' and the fruit of each spouse's personal property (e.g. rent received from personal property) acquired during the course of the marriage will be divided equally as joint property between husband and wife. Often property of husband and wife during marriage will consist of a mix of personal and common property.

Property acquired by inheritance, legacy or gift by one of the spouses during the course of the marriage will, in principle, become personal property of that spouse.

Transactions Which May Defeat Claims

If one of the parties has disposed, dissipated of or destroyed property that required the permission of both spouses, that spouse is liable for the disposal, dissipation or destruction of the property may be notionally credited with that property and its value is taken into account during the division of the Sin Somros

In Supreme Court Case 960/2552 the husband and the wife bought the disputed land and town house. While the property was subject to a mortgage both parties registered their divorce. After that the husband sold his interest in the disputed property to his elder sister. The divorce agreement provided hat during the continuance of the mortgage the ownership of the property would remain jointly with the husband and wife but after the mortgage was discharged ownership of property would be transferred to the wife. The divorce agreement was attached to the back of the Divorce Certificate. Article 2 of the agreement stated that “The 21 square wahs (84 square meters) land and the house number 161/899 locate on Jarunsanitwongse Rd., Bangkunsri Sub-District, Bangkoknoi District, Bangkok, are under mortgage installment with K. company. Once installment is completed, the husband will transfer the ownership of the property to the wife.” The agreement did not contemplate

that the husband would transfer his share in the disputed property to his sister, the Joint Plaintiff to the proceedings it only stated that he would transfer his ownership in the disputed property to the wife There was no settlement on marital property partition. The Civil and Commercial Code, Section 1533, provides that “On divorce, the Sin Somros shall be divided equally between man and woman.” The Court held that the transferee could only acquire ownership of the same one-half interest that the husband possessed by law. The sister had no right to ownership of the disputed property even though the she was acting in good faith in acquiring the property. The Civil and Commercial Code, section 1361 provides in the1st paragraph “Each co-owner may sell, mortgage or create a charge on his share.” The 2nd paragraph provides that “The property itself may be sold, pledged, mortgaged or made a charge only with the consent of all the co-owner.” Therefore, when the husband sold the disputed property without the consent of the wife, the sale contract between the husband and his sister was binding only to the extent of the ownership that the husband possessed. The effect of the law was that both the husband and the wife each possessed equally ownership of the disputed property. The sister had no right to evict the wife from the disputed property and the wife was entitled to file a complaint seeking to revoke the sale contract made between the husband and his sister in so far as it related to her ownership of the property.

Management of Property

During marriage each spouse retains the right of management of his or her own personal property. Management of common property - Sin Somros (as provided in section 1476 of the Code) lies with both spouses jointly, or in case of prenuptial agreement sole management can be given to one of the spouses.

“Section 1476. In managing the Sin Somros in the following cases, the husband and wife have to be joint manager, or one spouse has to obtain consent from the other:

(1)                Selling, exchanging, sale with the right of redemption, leasing property on hire-purchase,          mortgaging, releasing mortgages to mortgagor or transferring the right of mortgage on immovable property or on mortgageable movable property.

(2)                      Creating or distinguishing the whole or a part of the servitude, right of habitation, right of superficies, usufruct or charge on immovable property.

(3)                      Letting immovable property for more than three years.

(4)                      Lending money

(5)                      Making a gift unless it is a gift for charitable, social or moral purposes and is auitable to the family condition.

(6)                      Making a compromise.

(7)                      Submitting a dispute to arbitration.

(8)                      Putting up the property as guarantee or security with a competent official or the Court.

The management of the Sin Somros in any case other than those provided in paragraph one can be made only by one spouse without having to obtain consent from the other.

Section 1476/1. The husband and wife can manage the Sin Somros, differently, in whole or in part, from provisions of Section 1476, provided that the ante-nuptial agreement under Section 1465 and Section 1466 has been made. In such case, the management of the Sin Somros shall be made in accordance with the ante-nuptial agreement.


In case the specifications of the management of the Sin Somros in the ante-nuptial agreement are only part in difference to the provisions of Section 1476, the management of the Sin Somros other than those specified in the ante-nuptial contract shall be made in accordance with Section 1476.”

Procedure

On the filing of an application for property settlement the applicant is required to pay an amount equal to 2 per cent of the value of the property sought. Part or all of this may be refunded or borne in such shares by the parties as ordered or agreed. Cases are usually mediated initially and if not settled are determined by the Court following a defended hearing. Hearings are usually short and evidence is limited. A defended hearing is often expensive and should, if possible, be avoided.

Legal Advice

A divorce in Thailand is not always straightforward. When contemplating a divorce in Thailand it is always best to consult a reputable attorney first. As can be seen even a simple division of community property is not always on a 50/50 bases and as such your divorce in Thailand could set you back financially. Any divorce in Thailand, whether a divorce by mutual consent or not, always needs expert legal advice as all proceedings and documents are in Thai and the laws for divorce in Thailand may be alien to you.

In case of a marriage between a Thai and foreign national the couple can in principle choose which law will apply on their marital property regime. It is possible to choose the law of the foreigner's home country, Thailand or a combination subject to the principles of conflict of laws and having made a valid choice of law. Each country has its own rules on which law will be applied and it is recommended that expert legal advice be sought in each country.

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