Three reported rulings of the First Civil Chamber of the Cour de cassation (the French supreme court for civil matters), in 2016, settle accounts between spouses. In the ruling of 19 October, a husband had paid for a community asset with his separate funds (fonds propres), costs included, and the court of appeal, on top of a compensation between spouses (récompense) equal to the value of the property, had awarded a further compensation for the costs; the Court quashes: “the value borrowed that served to acquire an asset includes the costs connected with that acquisition”. On 25 May, the Court holds that the community owes compensation for separate funds it received without investment or reinvestment (emploi ou remploi), and that “that fact may be proved by any means”; on 5 October, under the participation in acquisitions regime (participation aux acquêts), it holds that “the financing, by a spouse, of a rental investment intended to build up savings does not fall within the contribution to the expenses of the marriage”. For the valuer, three clarifications: what the contribution includes, who must prove the origin of the funds, and what falls outside marriage expenses.
The facts
In the first case, spouses married on 2 September 2006 under the community of property regime (communauté) divorce by a judgment of 18 March 2009. The husband had paid with his separate funds for the acquisition of a community property, costs and agency fee included. The Montpellier court of appeal, on 8 April 2015, grants him a compensation equal to the value of the property at the date of dissolution, 319 000 €, plus 37 000 € of further compensation for the costs and the fee, under the second paragraph of article 1469. It also orders the wife to return 12 500 € of cheques received before the marriage, the husband being morally unable to prove the loan.
In the second, spouses married on 30 December 1980 without a marriage contract go through three sets of divorce proceedings, each with its non-conciliation order (ordonnance de non-conciliation): on 30 November 1999, proceedings the husband withdrew; on 24 May 2005, proceedings whose divorce summons was declared inadmissible; on 9 April 2010, those that led to the divorce, pronounced on 2 April 2013. The husband asks for the effects of the divorce as to property to go back to 30 November 1999. The Paris court of appeal, on 5 February 2015, sets them at 24 May 2005, as he did not prove that cohabitation had ended earlier, and rejects his claim for compensation for separate funds invested in a Paris building, for want of a reinvestment clause in the deed.
In the third, spouses married under the participation in acquisitions regime divorce by a ruling of 11 May 1999. The husband alone had financed a jointly owned flat intended for letting. The Bordeaux court of appeal, on 29 September 2015, raising of its own motion the contribution to marriage expenses, sees in it not a revocable indirect gift, as the husband argued, but a remunerative and compensatory act in favour of the wife, a stay-at-home mother. It also holds that the action to settle the joint ownership’s accounts is not time-barred, the wife having claimed her share of the flat’s income by a letter to the notary on 6 October 2001.
The decision
First ruling (Cass. 1re civ., 19 October 2016, no. 15-27.387, reported): partly quashed under article 1469, third paragraph, of the Civil Code, “the value borrowed that served to acquire an asset includes the costs connected with that acquisition” and “that provision does not distinguish according to whether the value borrowed financed that acquisition in whole or in part”; the compensation owed for the whole contribution, “including the costs connected with the acquisition and the estate agent’s fee, could not exceed the subsisting profit valued at 319 000 euros”. On the cheques, under former articles 1315 and 1348, the moral impossibility of obtaining a written document does not relieve the claimant of the duty “to prove by any means the obligation whose performance he claims”; the court of appeal reversed the burden of proof. Remitted to the Nîmes court of appeal.
Second ruling (Cass. 1re civ., 25 May 2016, no. 15-18.573, reported): dismissed on the date of effect, “while the non-conciliation order referred to in article 262-1 of the Civil Code is the one made in the proceedings that led to the divorce judgment, the judge may, at the request of either spouse, move the effects of the judgment back to the date on which they ceased to cohabit and to collaborate”; as no earlier end of cohabitation had been proved, the trial judges retained 24 May 2005 in their sovereign assessment. Partly quashed on the compensation, under article 1433: “the community owes compensation to the owning spouse whenever it has drawn a benefit from separate property”, in particular where it has received separate funds without investment or reinvestment (emploi ou remploi), and “that fact may be proved by any means”. Remitted to the Versailles court of appeal.
Third ruling (Cass. 1re civ., 5 October 2016, no. 15-25.944, reported): partly quashed under article 16 of the Code of Civil Procedure, then under article 214 of the Civil Code: “the financing, by a spouse, of a rental investment intended to build up savings does not fall within the contribution to the expenses of the marriage”. The Court also quashes, under article 815-10 of the Civil Code and article 2244 as worded before the Law of 17 June 2008, the holding that the action to settle the accounts was not time-barred: “a mere letter sent by a co-owner to the notary in charge of the partition of a joint ownership is not such as to interrupt the limitation period laid down in article 815-10 of the Civil Code”. Remitted to the Toulouse court of appeal.
What this changes for valuation
Acquisition costs enter the value borrowed. Where a spouse pays for a community asset with separate funds, the compensation owed by the community may not be less than the subsisting profit (profit subsistant): the proportion in which those funds contributed to the acquisition, applied to the value of the property at the date of liquidation. The ruling of 19 October 2016 places in the numerator the whole contribution, deed costs and agency fee included, with no separate compensation under the second paragraph. Where the spouse paid for everything, the compensation is the value of the property, here the subsisting profit valued at 319 000 € by the court of appeal at the date of dissolution, with nothing added. For an acquisition, the subsisting profit is therefore also a ceiling: the compensation cannot exceed it, even if the expense incurred, costs included, was higher. It follows, consistently with article 1436, which for investment and reinvestment refers to the price and costs of the acquisition, that for partial financing the report divides the contribution, costs included, by the total cost, price plus costs, and applies that fraction to the value at the date of liquidation, in the condition of the property at acquisition: for instance 120 000 € contributed, of which 20 000 € of costs, on a cost of 270 000 €, that is 44.4 % of the current value, instead of 40 % (100 000 / 250 000) plus a separate compensation of 20 000 € under the method that was quashed. The articles on separate property partly sold and on the formula for compensation for works apply the same proportion, and the one on the equalising payment paid by the community and partial reinvestment the same base, price and costs, to reinvestment.
Separate funds may be proved by any means, but the burden rests on the claimant. Without a reinvestment declaration, the property is community property, but the spouse may prove by any means that separate funds financed the acquisition, and the community owes compensation. On a separate issue, the ruling of 19 October holds, about a loan alleged between future spouses, that the moral impossibility of obtaining a written document does not reverse the burden of proof: the claimant must prove the loan. The article on personal benefit and funds presumed common shows what followed: proof by any means remains open, but money from a personal account is presumed common until its separate origin is established.
The date on which the divorce takes effect. The non-conciliation order that fixes the effects of the divorce as to property is the one in the proceedings that led to the judgment, unless, at a spouse’s request, those effects are moved back to the end of cohabitation and collaboration. That date closes the community and opens the post-community joint ownership (indivision); the value of the assets is set, for its part, at the date closest to partition. Since 2021, article 262-1 refers to the date of the divorce petition, with the same option to move the date back. The guide Matrimonial property liquidation in France: which valuation date? details those dates, and the article on occupation indemnity between co-owners in 2016 shows from which date the indemnity owed by the spouse occupying the home runs.
A rental investment is not a marriage expense. The financing by one spouse alone of a jointly owned flat intended for letting, to build up savings, is not set against that spouse’s contribution to the expenses of the marriage. The Court held likewise, from 2019 to 2022, for a capital contribution to the jointly owned home of spouses under separation of property. The remittal court will have to decide whether the financing is a revocable indirect gift, as the husband argued. The ruling says no more; failing donative intent, the spouse who financed the other’s share may assert a claim, which is valued in that case as subsisting profit. Under participation in acquisitions, assets are then valued in the original and final estates under the rules described in the article on added value from work.
What the valuer takes from it
- The value borrowed that served to acquire an asset includes acquisition costs and the agency fee; they enter the subsisting profit proportion, with no separate compensation, and the spouse who paid for everything receives the value of the property, with nothing added.
- Separate funds received by the community may be proved by any means; the burden rests on the claimant.
- The date on which the divorce takes effect closes the community; the valuation date remains the one closest to partition.
- The financing by a spouse of a rental investment intended to build up savings is not a contribution to marriage expenses; it still has to be characterised, gift or claim, and if a claim is found, it is valued as subsisting profit.
- The report presents the proportion with costs included and, where proof of separate funds is disputed, the computation under each hypothesis.
Further reading
The Market value page describes the assignment, its timescale and its fee. The guide Matrimonial property liquidation in France: which valuation date? and the glossary entries récompense, date de valeur and indivision complement this article. On the same theme: Compensation: equalising payment by the community, reinvestment and Compensation: separate property partly sold, the profit is shared. The decisions are available on Légifrance: no. 15-27.387, no. 15-18.573 and no. 15-25.944.
What next
A community asset paid for with separate funds, deed costs and agency fee included, and a compensation to compute?
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