Dispute over Divorce

 Lei v. Song for Dispute over Divorce
(Issued on September 19, 2016, as deliberated and adopted by the Judicial Committee of the Supreme People's Court)
Keywords
civil; divorce; at the time of divorce; unauthorized disposition of community property

Key Points of Judgment
Where, during, or before the filing of, an action for divorce, one party conceals, transfers, sells, or destroys any community property, or fabricates any debt in an effort to encroach on the property of the other party, in the partition of community property upon divorce, the party may have a smaller or even no share of the community property in accordance with Article 47 of the Marriage Law of the People's Republic of China.

Legal Provisions
Article 47 of the Marriage Law of the People's Republic of China

Basic Facts
Plaintiff Lei (female, given name withheld) and defendant Song (given name withheld) registered their marriage on May 19, 2003. It was a remarriage for both of them, and they had no child after marriage. Trifles during marriage caused tensions between them, and a fight occurring in the first half of 2013 led to their separation in February 2014. In March 2014, Lei once filed a lawsuit to demand divorce with Song. After the lawsuit was rejected by the court, their relationship did not take a turn for the better. In January 2015, Lei sued again for divorce and legal partition of community property. Arguing that there was no rupture of affection between them, Song refused divorce.
Lei alleged that the deposit of 370,000 yuan in Song's accounts with Postal Savings Bank of China (PSBC) was community property, and submitted deposit and withdrawal vouchers and bank transfer vouchers as evidence. Song contended that the deposit came from house demolition compensation before their marriage and his pension and the balance was then over 200,000 yuan (including pension of 14,322.48 yuan). He also submitted account statements, a , receipt of payment involved in the case, and other evidence.
Song claimed that the deposit of 250,000 yuan in Lei's bank account was community property, and demanded legal partition of it. Lei denied it. The transaction details of Lei's account with last digits of 4179 at Industrial and Commercial Bank of China (ICBC) from January 26, 2014, submitted in the original trial showed that the balance of this account was 262.37 yuan on December 21, 2014. In the trial upon appeal, at the request of Song, the court subpoenaed detailed bank statements of the aforesaid ICBC account of Lei since the opening date of the account on November 26, 2012, showing that on April 30, 2013, Lei transferred 195,000 yuan from the account to Lei Qi (middle name withheld, not a party to this case) by wire transfer and ATM withdrawal. Song considered that because the deposit was rental income from his house owned before marriage, it should be community property of them but Lei transferred it before divorce. Lei claimed that the deposit was income from a restaurant run by her. She first stated that the deposit had been used in their common expenses, but later stated that the deposit was used for repaying a loan borrowed from her niece. However, Lei failed to provide evidence for her claims. In court, Lei once agreed that the deposits under their respective names were owned by them respectively and she would additionally pay Song 100,000 yuan, but Lei later regretted and refused to pay.

Judgment
On April 16, 2015, the People's Court of Chaoyang District, Beijing Municipality entered a civil  (No. 04854 [2015], First, Civil Division, Chaoyang) that: divorce was granted between Lei and Song; and the deposit in Lei's ICBC account with last digits of 4179 should be owned by Lei, while the deposit in Song's PSBC accounts with last digits of 7101, 9389, and 1156 should be owned by Song. The  also dealt with other property and debt issues. After the  was pronounced, Song appealed, requesting partition of the deposit in the bank account of Lei as community property, among others. On October 19, 2015, the No. 3 Intermediate People's Court of Beijing Municipality entered a civil  (No. 08205 [2015], Final, Civil Division, No. 3 IPC, Chaoyang) that: all items of the award part of the original  should be affirmed but item (3), which should be revoked; instead, the deposit in Lei's ICBC account with last digits of 4179 should be owned by Lei, the deposit in Song's PSBC accounts with last digits of 7101, 9389, and 1156 should be owned by Song, and Lei should pay Song 120,000 yuan within seven days after the  took effect.

Judgment's Reasoning
In the effective , the court held that: The martial relation was based on husband-wife affection. When living together, tensions between Song and Lei arose from trifles. After the court did not grant divorce between them, the affection between them still failed to improve. After mediation by the court failed, for the actual rupture of their husband-wife relationship, the court should enter a  to grant divorce of them.
In the trial upon appeal, the dispute between both parties focused on whether Lei transferred community property and how to partition the deposits under their respective names. Paragraph 2 of Article 17 of the Marriage Law of the People's Republic of China provided that: “Husband and wife shall have equal rights to disposal of community property.” Article 47 thereof provided that: “If, at the time of divorce, one party conceals, transfers, sells, or destroys any community property, or fabricates any debt in an effort to encroach on the property of the other party, the party who conceals, transfers, sells, or destroys the community property or fabricates the debt may, in the partition of community property, have a smaller or even no share of it. If one party discovers any of the aforesaid acts after divorce, he or she may file a lawsuit with the people's court to apply for repartitioning community property.” In other words, where, during, or before the filing of, a divorce action, one party concealed, transferred, sold, or destroyed any community property or fabricated any debt in an effort to encroach on the property of the other party, the party infringed upon the equal rights of husband and wife to disposal of their community property. At the time of partitioning community property upon divorce, the party may have a smaller or even no share of community property in accordance with Article 47 of the Marriage Law of the People's Republic of China.
With regard to the partition of deposits under their respective names, based on the relevant evidence, Song's deposit derived from house demolition compensation before their marriage should be owned by Song, but his pension obtained after their marriage should be community property. The deposit in Lei's ICBC account with last digits of 4179 was income obtained in the duration of their marital relation, and should be partitioned as community property. On April 30, 2013, by wire transfer and ATM withdrawal, Lei transferred 195,000 yuan from the bank account with last digits of 4179 to a non-party to this case. At first, Lei stated that the deposit was used for domestic expenses but later stated that it was used for repaying a loan. The two statements were obviously contradictory. Lei failed to provide any evidence to support her claims, and could not provide a reasonable explanation of the whereabouts of the deposit. Based on the case facts and relevant evidence, the court determined that Lei transferred and concealed community property. In accordance with the aforesaid legal provisions, Lei may have a smaller share of the deposit in her ICBC account with last digits of 4179. Song's claim for the partition of the deposit in Lei's bank account was well-founded according to the law, and should be upheld. Therefore, the court entered a  that Song's pension of 14,322.48 yuan obtained after their marriage should be owned by Song and out of the deposit of 195,000 yuan transferred by Lei, Lei should pay 120,000 yuan to Song.
(Judges rendering the effective : Li Chunxiang, Zhao Xia, and Yan Hui)