BÀN VỀ VIỆC ĐỊNH GIÁ LẠI TÀI SẢN TRONG TỐ TỤNG DÂN SỰ / REASSESSMENT OF ASSETS IN CIVIL PROCEDURE

1. Definition of assets pricing and valuation 

Pricing and valuation under Article 4 of the Law on Prices 2023 are defined as follows: “Pricing means the process of determining the prices of goods and services performed by competent state agencies or suppliers of goods and services”; “Valuation means advisory operations of evaluating assets at a certain location and period for specific purposes performed by valuation enterprises or valuation councils under the Valuation Standards of Vietnam.”

The current Civil Procedure Code does not provide specific definitions for these two activities. Yet, based on the provisions of point d, clause 2, Article 97, and Article 104 of the Civil Procedure Code 2015, asset pricing and valuation in procedure can be understood as the determination of the value of disputed assets, serving as a basis for resolving the case.

The regulations on asset pricing are primarily stipulated in the Civil Procedure Code 2015, Civil Procedure Code 2004, and Joint Circular No. 02/2014/TTLT-TANDTC-VKSNDTC-BTP-BTC dated February 28th on guidelines for Article 92 of the amended Civil Procedure Code on Asset Pricing and Asset Valuation (Joint Circular No. 02/2014). However, until now, the Civil Procedure Code 2004 has no longer been effective, resulting in the effect of the Joint Circular No. 02/2014 also being ineffective. Yet, in practice, the use of these regulations is not unified. 

2. Reality and challenges in applying regulations on asset pricing in civil procedure 

According to clause 5 of Article 104 of the Civil Procedure Code 2015 stipulates the property price appraisal, the reassessment of property prices shall be conducted when there are grounds for presuming that the results of the first assessment are inexact or unconformable with market prices of places where the properties are located at the time of processing lawsuits. So what grounds can be used to determine whether the results of the first assessment are inexact or unconformable with market prices at the time of processing lawsuits? If the assessment is different each time, what prices would be chosen to serve as a basis for processing lawsuits? The law remains silent on this issue in the present; judicial practice shows that in many cases, the initial assessment is either inaccurate or inappropriate; however, the reasons for approving a reassessment or determining which price is accepted often depend on the subjective discretion of the Jury in each case. Despite the positive and necessary nature of this regulation, the lack of clear and detailed guidance has led to numerous difficulties in its practical implementation. In fact, there have been instances where parties in a case have deliberately exploited this legal loophole to prolong proceedings, causing disadvantages to the other parties. 

The author will interpret some of the practice instances regarding the assessment in processing civil lawsuits as follows: 

First, regarding the grounds for approving a reassessment, in Judgement No. 16/2022/HNGD-PT dated March 25th, 2022, of the Bac Ninh People’s Court regarding the division of common property after the divorce between plaintiff Nguyen Thi Lien H and defendant Nguyen Huy D, the Court has opinions as follows: 

“First, regarding the request for a reassessment: Pursuant to Circular No. 02/2014/TTLN-TANDTC-VKSNDTC-BTP-BTC dated March 28th, 2014, on guidelines for articles of the Civil Procedure Code (hereinafter referred to as CPC) of the assessment and clause 5 Article 104 of CPC: “The re-assessment shall be conducted when there are grounds for presuming that the results of the first assessment … are unconformable with market prices of places where the properties are located at the time of processing civil lawsuits.” Under this provision, at the time of the first assessment, the value of land use rights is calculated based on the land price in TS town; however, by the time of the appellate hearing, TS town has been upgraded to TS City, resulting in a change in land value. Therefore, Mr. D’s request for a reassessment is accepted.” 

This judgment determined that the place where the property is located had been upgraded from town to city, increasing in land price; therefore, the request for a reassessment is accepted. 

It can be seen that the court’s acceptance of the reassessment request is reasonable and appropriate. However, this raises the question of the significance of the initial assessment. There should be specific regulations on the timing of asset pricing to serve as a basis for processing a case without clear provisions on when asset pricing must be conducted, situations like the above may arise, rendering the first assessment meaningless. This not only leads to unnecessary expenses for the parties involved and wastes the efforts of all sides, since organizing an assessment is not a simple matter. Besides, this also creates opportunities for parties to deliberately prolong the proceedings, “waiting” for asset value to increase and then requesting a reassessment for personal gain. 

Second, regarding the determination of the rate of asset value to serve as a basis for proceeding with the case, judgment No. 27/2021/HNGD-PT dated December 22nd, 2021, of the Dong Thap People’s Court regarding the divorce dispute between plaintiff Pham Van T and defendant Nguyen Thanh T1, the court has the following opinions: 

“The Court requested Mr. T and Ms. T1 to agree upon a unified price so that the Court  could use it as the asset price. In the event that the parties proposed different prices, the Court would take the average of the prices provided by the parties; yet, up to this point, Mr. T and Ms. T1 have not agreed upon a common price and have instead proposed different price as stated above. Therefore, the Trial Court’s decision to use the assessment of 75,000 VND/square determined by the Cao Lanh City Asset Valuation Council was inappropriate; the average of the values proposed by Mr. T and Ms. T1 which was 216,874,000 VND (400,000,000 VND + 33,748,500 VND = 433,748,500 VND / 2 = 216,874,000 VND), should be used as the basis for the disputed asset price. Mr. T’s appeal requesting the asset price to be determined as 400,000,000 VND based on the price in a land transfer agreement between Mr. T and another party and to have it split equally is groundless and was not accepted by the Appellate Jury. Meanwhile, Ms. T1’s agreement with the asset price as determined by the Dong Thap Provincial Asset Valuation Council was also deemed inconsistent with the market value and was therefore not accepted.” 

In this opinion, the appellate court applied clause 1 of Article 17 of Joint Circular No. 02/2014/TTLT-TANDTC-VKSNDTC-BTP-BTC dated March 28th, 2014, and used the average of the asset price proposed by both parties as the value of the disputed asset. However, this Circular No. 02/2014 on guiding the CPC 2004 expired on July 1st, 2016, while the judgment was decided on December 22nd, 2021. The continued application of this provision is questionable, especially in light of point b, clause 3, Article 104 of the CPC 2015, which clearly states that if the involved parties failed to reach agreement about selection of price assessment organizations or offered prices were different or agreement about prices has not been reached, the Court shall make decisions on property price assessment and set up Price Assessment Councils. 

Third, the Appellate Judgment No. 88/2022/DS-PT dated April 1st, 2022, of Da Nang Supreme People’s Court regarding the dispute over the recovery of a house and land lent for temporary use between the plaintiff Tran Viet T and the defendant Pham Thi S, contains the following content: 

On August 28th, 2021, the plaintiff, Tran Viet T, represented by Mr. Nguyen Hoai N under a power of attorney, filed an appeal with the following content: the Trial Court did not objectively and comprehensively assess the documents and evidence and overestimated the defendant’s contribution in preserving the property; the defendant is capable of creating a new place of residence, thus the plaintiff requested the return of the house land; the trial judgment required the defendant to compensate for the house land at a value that was too low, so the plaintiff requested the appellate court to reassess the property. 

The Appellate court considered, “However, after the trial, the plaintiff requested a reassessment of the property. According to the assessment report dated January 18th, 2022, the land value based on market price was 25,000,000 VND/square x 87.5 m² = 2,187,500,000 VND. The value of the house and property in use was 2.430.000 VND/square x 87.5 m² = 212.625.000 VND x 30% (remaining quality rate) = 63.787.500 VND. The total value of the land, house, and assets was 2,187,500,000 VND + 63,787,500 VND = 2,251,287,500 VND. The amount attributed to Ms. Pham Thi S for her contribution was calculated as follows: 2,251,287,500 VND – 60,000,000 VND (initial purchase price by Mr. T and Ms. T) x 30% = 657,386,250 VND. Therefore, the amount Ms. S must pay to Mr. T and Ms. T is 2,251,287,500 VND - 657,386,250 VND = 1,593,901,250 VND. As a result, a portion of the appeal by the plaintiff, Mr. Tran Viet T, represented by Mr. Nguyen Hoai N under a power of attorney, is accepted, and the trial judgment is amended based on the above reassessment.” 

Meanwhile, in Appellate Judgment No. 150/2024/DS-PT dated May 22nd, 2024, of Da Nang Supreme People’s Court, in the case between the plaintiff Dinh Xuan Q. and the defendant Le Thi C, regarding a dispute over the recovery of property rights to land use, a request to declare a notarized document void, cancel amendments to Land use right certificates, and divide jointly owned property, during the appellate proceedings, the defendant requested a reassessment of the property, arguing that the asset value had changed. However, the court denied the request, reasoning that “The application of the assessment conducted at the trial stage (in 2020) is in accordance with the regulations; thus, there is no basis for a reassessment”. It can be seen that the time between the assessment (October 2020) and the appellate jury (2024) spanned nearly four years; the value of the asset, especially real estate had changed during this period, yet the Jury held that the value of the land had not changed and that applying the assessment from the trial stage was legally accurate, thus providing no grounds for a reassessment. This raises the question of whether such a conclusion aligns with practical realities. 

It can be seen that, in practice, for similar situations where there is a significant time gap between the date of assessment and the date of trial, some Jury accept a request for reassessment, while others do not. In the absence of specific legal provisions regarding the timing for asset valuation, an early valuation may not serve as a proper basis for processing the case; it also may lead to unnecessary costs in terms of time, effort, and financial resources for parties involved. 

3. Conclusion 

The provisions on asset valuation are stipulated in Article 104 of CPC 2015, primarily revolving around matters of evidence and proof. According to this provision, during the settlement of certain civil cases, asset valuation and price appraisal are necessary to determine the value of relevant assets, thereby assisting the court in clarifying disputed issues. The results of asset valuation and appraisal are recognized as one of the key sources of evidence that plays a particularly important role in ensuring the objectivity and accuracy of judicial decisions. However, as demonstrated in the aforementioned judgments, there remains a lack of consistency in determining the grounds for requesting a reassessment of property, as well as in identifying which valuation should serve as the basis for resolving disputes when parties disagree or when multiple assessments exist. Some courts apply the average of the values proposed by the parties, while others adopt the value determined in the latest appraisal. This raises the question of what significance the initial valuation holds and whether relying solely on the final appraisal results in reasonable and objective results. The author recommends that a detailed guiding document be issued, similar to Joint Circular No. 02/2014/TTLT-TANDTC-VKSNDTC-BTP-BTC dated March 28th, 2014, to ensure the consistent and objective application of legal provisions on asset valuation. Such guidance should clearly key aspects including the grounds for requesting a reassessment, the validity period of a valuation report, the procedures for selecting a valuation organization, and the criteria for determining which valuation to adopt as the basis for adjudication in cases where the parties do not agree or where each valuation yields a different result. 

Thao Nguyen - Lawyer of FDVN