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Abolition of Common Property Regime in Poland

Abolition of Common Property Regime in Poland

As a rule, from the moment of marriage the common property regime arises between the spouses. However, sometimes on the initiative of one of the spouses or both of them the need to abolish common property regime appears. This may be caused, for example, by the misunderstandings of the spouses regarding the disposal of joint property. Such abolition may take place by way of an agreement (intercourse)   between the spouses or by establishing property separation in court on the claim of one of the spouses.

Abolition of common property regime  in Poland – by the court

From legal point of view, the issue of the judicial abolition of common property regime is more challenging and puzzling. Pursuant to Article 52 of the Family and Guardianship Code of Poland, each of the spouses may submit a claim for property separation. Article 52 § 1 clarifies that the establishment of separate regime of the property may be demanded only basing on  “important reasons”. In this respect a couple of questions arise: what does the notion “important reasons” mean? What are the conditions for the abolition of joint property?

Abolition of common property regime  in Poland – conditions and reasons

Generally speaking, there are two types of conditions for the abolition of joint property of the spouses: property-based (everything that is directly related to joint property) and non-property-based (for example, actual separation). Judicial practice shows that, in principle, actual separation alone can be an important reason for the abolition of marital property regime (I CKN 98/99). However, the Supreme Court of Poland repeated several times that “an important reason” within the meaning of Art. 52 § 1 KRO is not every form of actual separation of the spouses, but only one that at the same time prevents or significantly hinders cooperation in the management of their joint property (II CKN 1070/98). This happens in situations where each of the spouses has his or her own property and they simply do not contact in matters of joint property, because they are not able to agree on the  disposal of  common property that would suit both the wife and the husband. Despite this, the Supreme Court of Poland, basing on legal doctrine and jurisprudence, mentions as a basis for the abolition of joint property “an infringement or serious threat to the property interest of one of the spouses and, as a rule, also the best  interests of the family” (for example, the case III RC 245/15).
Among the most important factors that influence the courts’ decision on the establishment of separate property regime are the following: the fact that one of the spouses has  debts, the amount of the debts, the circumstances in which the debt has arisen and the ways in which he or she fulfills his or her obligations, as well as issues related to the upbringing and care of the minor children of the parties of the conflict (situations when, for example , only one of the spouses actually takes care of the child), squandering  of common property, gross mismanagement, reluctance to increase  and maintain common marital property, drug and alcohol abuse by one of the spouses. 

Abolition of joint property regime in Poland –  with a retrospective date 

It follows from Article 52 § 2 that property separation arises on the date indicated in the judgment which establishes it. However, claiming on the same paragraph, it is possible to establish a separation of property with a retrospective date. However, It is worth noting,  that the court establishes property separation with the date earlier than the date the court is seised only in exceptional cases. For example, when the spouses had already been living apart at the time the claim was made. Nevertheless, it should be borne in mind that the court always decides to abolish common property regime taking into account the specific circumstances of the case, trying to take consideration of as many factors as it is possible.

Abolition of common property regime  in Poland – enforcement of Polish judgements abroad

Since Council Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes does not cover Poland, the issue of recognition and enforcement of Polish judgments on the abolition of common matrimonial property is particular difficult. This means that the spouse who demands the separation of joint property and its enforceability abroad is to take into account Polish international agreements on legal assistance in this respect (for example, an agreement with the Czech Republic on legal assistance and legal relations in civil, family, employee matters and criminal from 1987). The same applies to enforcement of judgments outside the EU. In any case, the success in the abolition of common property regime fully depends on the circumstances of each situation. Hence, a court attitude may vary from case to case. Taking into account these facts, it should be admitted that the assistance of an experienced legal advisor is absolutely indispensible in this type of situations.

Divorce with cross-border assets in the EU

Divorce with cross-border assets is without any doubts of the utmost importance for many international coupes having their property in different countries of the EU. The principal questions to be settled in this respect are the following:

  • the court of which country has jurisdiction in the particular case,
  • which law is to be applicable.

Sixteen EU states  including Germany, Spain, Czech Republic, Italy, the Netherlands wishing to establish an enhanced cooperation in these matters initiated the creation of COUNCIL REGULATION (EU) 2016/1103 implementing enhanced cooperation in the area of jurisdiction, applicable law and recognition and enforcement of decisions in matters of matrimonial property regimes.

Divorce with cross-border assets – which country has its jurisdiction under Regulation 2016/1103?

The general rule reflected in Article 5 of the Regulation envisages that the court of a Member State, which is seized to rule on an application for divorce, legal separation or marriage annulment, has also jurisdiction in cases related to matrimonial property division. However, it might be so that no court has been seized to rule on a divorce matter. Then the jurisdiction will consequently lie (according to article 6) with the courts of those member states:

  • in whose territory the spouses are habitually resident at the time the court is seized, if no
  • in whose territory the spouses were last habitually resident, in case one of the spouses still lives there, if no
  • in whose territory the respondent is habitually resident at the time the court is seized, if no
  • of the spouses’ common nationality at the time the court is seised.

It should be admitted that pursuant to article 7 the parties may agree that jurisdiction lies within the court of a MS where the marriage has been concluded or of a MS which law is applicable under the described Regulation. Moreover, article 9 of the Regulation gives a chance to decline jurisdiction, if the marriage in question is not recognised in a MS for the purposes of matrimonial property regime proceedings. In that case according to Article 9(2), the parties might choose a court in another MS.

However, even if no state has its jurisdiction under the provisions mentioned above, the factor of immoveable property location comes on the scene. Article 10 gives jurisdiction to courts of that  MS where immoveable property of one or both spouses is located.

Divorce with cross-border assets  – which law should be applicable under Regulation 2016/1103?

As for the law applicable in such proceedings, two major options are available. Firstly, according to article 22, the spouses are entitled to choose the law applicable for matrimonial property matters. That law might be the law of the country where they (or at least one of them) are habitually resident or of the country of their nationality (or nationality of at least one of them). In absence of the choice, the following option arises. The applicable law in such situation is the law of the State (1) of the spouses’ first common habitual residence after the conclusion of their marriage; or, failing that, (2) of the spouses’ common nationality at the time of the conclusion of their marriage; or, failing that, 3) of the State with which the spouses jointly had the closest connections at the time of the conclusion of their marriage.

Divorce with cross-border assets  –  what in case of countries countries, such as Poland, which are not parties to the Regulation?

It should be taken into account that 12 EU states including Poland, UK, Denmark, Estonia, Lithuania, Latvia, Hungary, Ireland, Romania and Slovakia are not parties to the Regulation and, hence, its provisions are not applicable in the mentioned countries. In case of Polish citizens facing divorce and having common property in different countries, the key point in matters of applicable law and jurisdiction is in which particular country the property is.  The matrimonial property regime after divorce might vary depending on the fact, whether Poland has agreements with the state on the matter. Anyway, the provisions of Polish international private law should be taken into account.

Divorce with cross-border assets – Article 1103 of the Polish code of civil procedure

Article 1103 of the Polish code of civil procedure mentions the cases where jurisdiction in matters of matrimonial property is vested in Polish courts. It covers situations in which both spouses have Polish citizenship, or both of them lived in Poland and one of the spouses still remains there, or the claimant habitually resident in Poland (and has been living in Poland at least for a year before the start of  proceedings) or has Polish citizenship (and lives in Poland at least for half a year before the start of  proceedings). Article 1106 adds to this provision that the jurisdiction should be given to Polish courts in case if a significant part of the matrimonial property is located in Poland.

As for applicable law on the matter, the Polish Act on International Private Law (Article 51) states that the applicable law is the law of the country where the spouses are residing or (if they are residing in different states) of the country with which both spouses have the closest ties.

In any case, the issues related to divorce with cross-border assets, i.e.  matrimonial property division in situations where the property is in different states,  are quite intricate for the countries, which are not parties to the Regulation, and require expert advice.