The Many Forms of Legal Proceedings-The intersection of contentious and non-contentious proceedings-

Kimimasa Hata
Professor, Faculty of Law, Chuo University
Areas of Specialization: Civil Procedure Law, ADR (Alternative Dispute Resolution),
Proceedings for Partitioning of Property in Co-Ownership

1. Survey of German citizens' attitudes regarding civil dispute resolution

A recent German report[1] surveyed the attitudes of German citizens in regards to dispute resolution methods. According to the report, the following interesting results were received in response to the question: "For the following types of disputes, which type of proceedings makes it possible to achieve better results: court proceedings or mediation proceedings (dispute resolution through discussions between related parties)?"
What would the results be if we conducted a similar survey of attitudes in Japan? It seems likely that some parts of Japanese results would overlap with German results; however, I also feel that some of the results would be very different. (The aforementioned survey does not limit the content of disputes; therefore, responses are likely to differ depending on the details of the dispute imagined by the respondent.) In any case, as shown in the table above, there are various types of legal disputes in society. The important question is what kinds of means and methods are desirable for resolving legal disputes. (A detailed explanation of various dispute resolution methods--particularly ADR--was given by Professor Shinichiro Toyama in a recently published article entitled Research: Introduction to Dispute Resolution Studies-Recommendations for Alternative Dispute Resolution (ADR)-.) Based on the survey results, at the very least, it can be said that citizens consider some disputes to be unsuitable for court proceedings.

2. Classification of legal dispute resolution by courts

From this point forward, I will limit our discussion to legal dispute proceedings conducted by the court. The national government has set up a litigation system to resolve disputes that arise in society. In order to promptly and efficiently handle a large number of disputes, the proceedings are set uniformly; at the same time, they are expensive procedures that emphasize appropriateness and fairness. However, when considering that there are a wide variety of disputes in society as mentioned above, it may be inappropriate to handle all disputes through the same procedures. For example, in civil procedure proceedings, as the result of adopting principles such as jus disponendi and adversary systems as a manifestation of private autonomy in civil society, courts may be bound by the claims and allegations of parties to the case at hand. Also, it can be seen as a problem in terms of substantive resolution and flexibility of procedures. Additionally, as the result of emphasizing appropriateness and fairness as described above, a large amount of time and money is required to complete the procedures. Therefore, for example, divorce disputes emphasize the act of finding the substantive truth, and are said to be based on the procedures of the Personal Status Litigation Act, which is a special law, rather than ordinary civil procedures. In cases involving bills or notes and checks, and small claims, emphasis is placed on simplicity and speed, and special proceedings (summary proceedings) are provided in the Code of Civil Procedure.

However, cases handled in court are not limited to the above. Adult guardianship (for instance, who manages the property of elderly people with severe dementia), which has increased significantly in the last 20 years, child custody disputes, and visitation exchange cases are conceivable examples. Although these cases are also handled by the court, procedures are not carried out in the form of "litigation = judgment." Instead, the court is involved in the guardianship, and simpler and more flexible procedures are being adopted. It is a group of cases other than legal proceedings, and is therefore referred to as non-contentious cases. The concept of non-contentious cases is very broad and includes the aforementioned domestic relations cases, land lease non-contentious cases, and various types of ADR (civil conciliation, etc.).

Non-contentious cases are very different from civil proceedings. For example, non-contentious procedures are conducted privately (Article 30 of the Non-Contentious Case Procedures Act, Article 33 of the Domestic Relations Case Procedure Act). In some cases, it may be possible for a person other than the parties to the dispute to file a procedure, and the principle of "Fact finding and examination of evidence by the court's own authority" is adopted (Article 49 of the Non-Contentious Case Procedures Act, Article 56 of the Domestic Relations Case Procedure Act). Moreover, the orders and judgments made by the court can also be canceled or changed due to changes in the circumstances of the case (Article 59 of the Non-Contentious Case Procedures Act, Article 78 of the Domestic Relations Case Procedure Act).

3. The Many Forms of Legal Proceedings
-The intersection of contentious and non-contentious proceedings-

Given the clear differences between contentious proceedings and non-contentious proceedings, it is an extremely important issue for the parties to decide which type of proceedings will be applied to a certain case. Consequently, the method of defining criteria for the allocation of the different proceedings became a major issue, as did the extent to which it is permissible to use non-contentious proceedings (in the judicial precedents, criteria for deciding whether or not the purpose is to determine the existence of rights and obligations are argued[3]). This issue still remains important even today. Nevertheless, in reality, there are times when non-contentious proceedings are adopted even when a case is tried through contentious proceedings; conversely, there are times when contentious proceedings are adopted even when a case is tried through non-contentious proceedings. For example, damage compensation cases are typically dealt with via contentious legal proceedings; yet the amount of compensation is required to be dealt with at the discretion of the court. Furthermore, contentious legal proceedings are used for cases on partitioning of property in co-ownership (which is the area of my researching); yet, according to judicial precedents and common wisdom, the court is not bound by the petition of the parties and cannot decide to dismiss the claim (a substantive non-contentious case). Therefore, such cases are called formative proceedings. In particular, the latter problem is made even more difficult by the existence of cases for partitioning an estate, which also involves the division of property. Cases for partitioning an estate were once dealt with in contentious legal proceedings. However, after World War Two, such cases began to be dealt with through non-contentious proceedings (judgments) due to the enactment and enforcement of the Domestic Causes Inquiries Act (currently the Domestic Relations Case Procedure Act). This phenomenon is referred to as jurisdicción voluntaria of legal proceedings. Thus, in Japan, different procedures were formally adopted in which the partitioning of property in co-ownership became a contentious legal proceeding and the partitioning of an estate became a non-contentious legal proceeding. Even so, the contentious proceedings for the partitioning of property in co-ownership also adopt the special procedures as described above, and the contents are also similar to the partitioning of an estate in that the property in co-ownership is partitioned.

4. Procedures for partitioning property in co-ownership and partitioning an estate

Compared to this rather complicated situation in Japan, Germany's idea of partitioning of property in co-ownership and partitioning an estate is consistent in that it eliminates the discretion of the court to the greatest possible extent. In relation to this, the following two points can be raised as major characteristics of the German law. First of all, in Germany, cases involving partitioning of property in co-ownership and partitioning an estate are dealt with via contentious proceedings, and the court is bound by the partitioning proposals and allegations filed by the parties. However, as a result of the contentious proceedings, the parties must prove the specific requirements for the partitioning; in reality, this requirement is considered to be quite difficult. Secondly, regarding the specific details of partitioning, the basic stance is to convert the property in co-ownership into money as much as possible by auctioning and to partition the property. However, when partitioning the land in co-ownership for two people, it may be allowed as an exception to partition the land itself (the method of partitioning the actual property in co-ownership is called partitioning in kind) and the partitioned portions are assigned to the co-owners. In such cases, the portion of the partitioned land which will be acquired by each co-owner is determined by drawing lots (Article 752, Paragraph 2 of the German Civil Code). In this way, if Germany's stance is to emphasize formal fairness, Japan's partitioning of property in co-ownership has a different orientation. In other words, Japan originally used the principle of partitioning in kind (see Article 258 of the Civil Code). Then, a decisive turning point occurred when the Supreme Court decision of 1996[4] recognized the so-called "partitioning via full-price compensation"[5] which was not clearly stated in the articles. This strengthened the concept of substantive fairness and departed from formal fairness. Specifically, while assuming the guarantee of substantive fairness among the co-owners, Japan pursued the partitioning of contents while considering factors such as the past usage status of the property in co-ownership. The following table shows a brief summary of the differences between Japan and Germany.

5. Future prospects

Two major movements are underway that will have a major impact on the future of partitioning of property in co-ownership and partitioning an estate. In April 2020, a portion of law to revise the inheritance field of the Civil Code was enforced, and the "spousal residence right"[6] was granted for the purpose of protecting the residence interests of the spouse in the partitioning of an estate (Article 1028 and the following articles of the Civil Code). This amendment can be recognized as protecting the portion of interests of the co-owners by emphasizing the use of the residential building of the decedent's spouse. Now, as a result of the enforcement of this amended law, in what cases will the judgment of the court recognize the spousal residence right (see Article 1029 of the Civil Code)? Furthermore, during the partitioning of property in co-ownership, will there be a strengthened movement towards protection for profits obtained from use of the property in co-ownership?

The other movement is the consequence of the problem of land of unknown ownership, which is currently under debate by the Legislative Council. It is said that land and buildings of unknown ownership are caused when real estate that is part of inheritance becomes property in co-ownership due to inheritance, after which events such as the successive death of heirs/heiresses results in a large number of co-owners. In order to prevent this problem, it is necessary to eliminate the state of co-ownership. In that respect, it becomes very important that the form of partitioning of property in co-ownership and partitioning an estate is capable of forcibly eliminating co-ownership. The important points of the interim [7] released in December 2019 are not only to specify the partitioning via full-price compensation, which is admitted in response to the judicial precedents, and the prioritization of partitioning methods more clearly than articles, but also to further align the contents of partitioning of property in co-ownership and partitioning of an estate; for example, adopting the rules for determining the room for discretion by the court as recognized in case of partitioning of an estate for partitioning of property in co-ownership (Article 196 of the Domestic Relations Case Procedure Act)[8]. The draft also has the possibility of significantly advancing the connection and fusion of both types of partitioning; for example, if partitioning of an estate has not been performed for a long period of time, the draft recognizes room for processing individual partitioning of property in co-ownership for assets that are part of an inheritance which would normally be subject to integrated processing (partitioning of property in semi-co-ownership). This is expected to stimulate meaningful discussions in the field.

[1]Allensbach, Rolandrechtsreport 2014, S.33
[2]The idea that the court can take into account facts which are not claimed by parties to the case and examine the evidence per authority of the court
[3]Judgment by all justices of the Supreme Court, June 30, 1965; Supreme Court Decisions for Civil Actions (Minshu), Volume No. 19, Issue No. 4, p. 1,089
[4]Judgment by the Supreme Court, October 31, 1996; Supreme Court Decisions for Civil Actions (Minshu), Volume No. 50, Issue No. 9, p. 2,563
[5]For example, when assuming the division of land shared by two people, A and B, each of whom owns half of the land, the method in which A is assigned the ownership of the land independently, and A is required to pay B the amount equivalent to the purparty of B. (In other words, all purparties are compensated by the amount according to the value = full-price compensation.)
[6]The right of a spouse who is an heir/heiress to use the building and earn money free of charge when he/she lives in a building that is an estate of the decedent
[7]Ministry of Justice homepage "Interim Draft Regarding Amendment to the Civil Code & Real Property Registration Act (related to land of unknown ownership)" "Supplementary Explanation for the Interim Draft"
[8]"In a ruling of the partitioning of an estate, the family court may order a party to pay money, deliver an object, perform an obligation to register or perform any other act." (Article 196 of the Domestic Relations Case Procedure Act)
Kimimasa Hata
Professor, Faculty of Law, Chuo University
Areas of Specialization: Civil Procedure Law, ADR (Alternative Dispute Resolution), Proceedings for Partitioning of Property in Co-Ownership
Kimimasa Hata was born in Yokohama City, Kanagawa Prefecture in 1975.
In 1997, he graduated from the Faculty of Law, Aoyama Gakuin University.
In 1999, he completed the Master’s Program in the Graduate School of Law, Waseda University.
In 2002, he completed the Doctoral Program of the same graduate school.
He served as Assistant Professor in the Faculty of Law, Heisei International University, Associate Professor in the Faculty of Law, Chuo University and other positions before assuming his current position in 2014.

His current research themes include a comparative study of Japan and Germany as regards the partitioning of property in co-ownership and partitioning of an estate, the recent developments in ADR (Alternative Dispute Resolution) in Germany and more.