In this article, we will focus on the basics of the legal regime of joint property of spouses, as regulated by the Family Code, with an emphasis on relevant and current case law in this regard.
Article 67 of the Family Code states that joint property shall be all property rights acquired by work or against payment during the marriage or life union of the spouses. Joint property of spouses is also property acquired on the basis of and with the help of the joint property or from the property deriving from it. The object of joint property are property rights (obligatory and real), which the spouses can form for the needs of the joint household and personal needs. The joint property of the spouses thus includes: salaries, annual leave allowance, royalties, money that the spouses have in their accounts, securities, compensation arising from the joint property (e.g. for damage to the house that is joint), compensation for lost profits, daily allowances, severance pays, bonuses arising from employment, natural fruits (livestock with offspring, orchard with fruit) and civil fruits (interest on foreign currency savings), property gains from copyright and property acquired by the spouses through purchase using a loan during the marriage (e.g. apartment). Joint property is acquired during the marriage. When a life union of the spouses ends due to the breakdown of the relationship and they live separate lives, the legal basis for acquiring joint property also ends. However, joint property may also be formed before marriage, if there was an extramarital community between them, which, according to Article 4 of the Family Code, is equal to marriage upon fulfilment of specific conditions. Case law also clearly and uniformly states that the property created by spouses through work during their economic community is their joint property (e.g. judgement of the Ljubljana High Court ref. no. I Cp 4733/2008 of 4 March 2009, judgement of the Ljubljana High Court ref. no. I Cp 1393/1999 of 20 October 1999). Furthermore, the judgement and decision of the Supreme Court of the Republic of Slovenia, ref. no. II Ips 696/2007 of 11 June 2009 states that the relevant joint property of the spouses (or extramarital partners) means the community of all property, i.e. value-assessable rights, which belong to both spouses (partners) together in undefined shares. Usually, the object of joint property is the right of ownership over a certain thing and shall in such cases represent the joint property of the spouses (partners). However, the object of the joint property is not in all cases necessarily only the property right to a thing, but can also be some other property right or entitlement. Judgement of the Supreme Court of the Republic of Slovenia ref. no. II Ips 179/2019 of 6 June 2019 states that two preconditions must be met simultaneously for the disputed real estate to be included in the joint property of the litigants, specifically that they were acquired through work (the first precondition) and that they were acquired during marriage or legally recognised extramarital community (the second precondition).
Furthermore, Article 68 of the Family Code states that joint property of spouses shall belong jointly to both spouses, that on the joint property of the spouses the shares of each of them are not determined, that a spouse may not dispose of his/her unspecified share of joint property by legal transactions inter vivos, specifically, he/she may not expropriate or encumber joint property, and the spouses shall have joint ownership of things from the commom property. Such provision is based on the principle of equality. When the division of joint property occurs, a legal presumption of equality of shares is established. A spouse who does not agree with this presumption must prove that he/she contributed a different share to the joint property. In this regard, the court does not base its judgement on strict arithmetic operations, but carefully examines all the relevant circumstances that may affect the definition of spouses’ contributions to the joint property. A slight difference in the spouses’ contributions to the joint property is not taken into account, as it is difficult to expect the spouses’ shares to be equal. Case law in this field is also clear and uniform. The judgement of the Koper High Court ref. no. Cp 92/1999 of 26 October 1999 states that the equality of the spouses’ shares in the joint property is presumed; therefore, the burden of proof for a larger share is borne by the party making such a claim. Judgement of the Supreme Court of the Republic of Slovenia ref. no. II Ips 100/99 of 11 November 1999 states that the following conditions must be met in order to increase the co-ownership share of one of the (former) spouses: a) the spouse must prove a significantly higher income, b) a higher income must be reflected in a larger scope of joint property, c) the spouse must prove that the larger scope of joint property is primarily due to his/her higher income, and d) other burdens of the spouses (in their community or family) must also be taken into account. Judgement of the Supreme Court of the Republic of Slovenia ref. no. II Ips 730/2006 of 19 February 2009 states that the determination of shares of joint property is not purely an arithmetic operation concerning earnings, values of labour, pensions and the like (factors that can be counted and measured), but also determines immeasurable, but nevertheless important, factors (assistance of one spouse given to the other spouse, performance of domestic work, care for the maintenance of property, effort and care in raising children). Due to the above, the contributions of spouses cannot be determined mathematically with completely accurate criteria.
Article 69 of the Family Code also states that the joint property of spouses shall be managed and disposed of jointly and by agreement. If one of the spouses uses movable property of small value or if such spouse manages the joint property it shall be deemed that he/she have the consent of the other spouse. Management of joint property includes for example, payment of bills related to the apartment, schooling of children, payment of tax, collection of fruits, repair of damaged items, visit to the veterinarian due to regular vaccination of a pet, car registration, etc.. Judgement of the Supreme Court of the Republic of Slovenia ref. no. II Ips 200/2015 of 8 December 2016 states that a spouse who carries out transactions related to the management of joint property must have the consent of the other spouse, which may also be given implicitly. As a rule, the spouse being silent or tolerating such actions is also considered an implicit consent, but only if the spouse is aware of the intended management activity. The significance of the spouse’s explicit consent also depends on the significance of the transaction entered into by the other spouse. The implicitness of consent is presumed in transactions of management. In transactions that go beyond management (e.g. disposal of the entire joint property, real property, etc.), the interests of the spouse who does not manage the joint property are sufficiently protected only if they co-decide on these transactions. Furthermore, we point out judgement of the Ljubljana High Court ref. no. II Cp 100/2019 of 27 March 2019, which states that in cases where one of the spouses manages or uses the property without the consent of the other spouse, the deprived spouse may, if he/she do not agree with the use of the joint assets, demand payment of a monetary amount corresponding to the amount of deprivation of the joint property due to the other spouse’s unauthorised use of the joint property.
Article 70 of the Family Code states that the spouses may agree on the management and use of joint property which differs from the provisions of Article 69 of the Family Code. If they agree that the joint property will be managed and disposed of by only one spouse, this spouse shall consider the interests of the other spouse. Either spouse may withdraw from such an agreement, but he/she must not do this at an inappropriate time. The agreement on management and disposal shall not be in conflict with paragraphs two and three of Article 59 of the Family Code. The spouses can therefore agree on how and in what way they will manage and dispose of their joint property. Thus, they can agree that only one of them shall manage and dispose of the entire joint property or only one part of the joint property. They can also agree that each of them will manage and dispose of only a certain part of the property (e.g. the wife will manage the household-related transactions and the husband will manage transactions related to field cultivation, renting of joint real property). A spouse may withdraw from the agreement on management and disposal of the joint property if the other spouse manages the property negligently or to the detriment of the other spouse.
In the next article, we will focus in more detail on the division of joint property of spouses.