Settlement of Spouses - Reimbursement of Expenses and Investments

Usually, after a divorce, and sometimes even during the course of marriage, the issue of settlement between former spouses arises, regarding expenses and investments. The principles governing the settlements made by spouses for expenses and investments from common property to the personal property of each, as well as those made from personal property to common property, are regulated by the Family and Guardianship Code. However, it is important to note that in the proceedings for the division of common property, the court comprehensively decides both on claims for the duration of statutory community and for the period from the cessation of statutory community until the moment of dividing the common property.

 On the other hand, settlements for expenses and investments incurred from the personal property of one spouse to the personal property of the other can only be made based on the provisions of the Civil Code and through civil proceedings. Exceptionally, according to the decision of the Supreme Court of 24.7.2020 (I CSK 106/20), in proceedings for the division of common property, settlements may also apply to investments from separate (personal) property of spouses to separate (personal) property of one of them. This occurs when there is a need to settle the sum of investments made from both common property and personal property of each spouse on a complete object, and conducting these settlements in two separate proceedings would be impractical. This may happen, for example, when a complete object is created at the expense of both common property and personal property of each spouse on real estate that constitutes the personal property of one of the spouses. There is a need for a comprehensive settlement of all investments in one proceeding.

 Settlements of expenses and investments are carried out in the context of contractual or judicial division of common property. The court decides on the reimbursement of expenses and investments made from common property to its personal property, even in the absence of a request from the interested spouse. However, the court rules on the request for reimbursement of expenses and investments that one spouse made from their personal property to common property only upon the request of the interested party.

 Claims for the reimbursement of expenses and investments, if pursued in proceedings for the division of common property, can be settled in this proceeding regardless of the time of their occurrence. This means that they must be settled no later than at the division of common property. According to jurisprudence, in proceedings for the division of common property after the termination of marital property community between spouses, the court determines the value of investments made from common property to the personal property of one spouse, regardless of the evidentiary initiative of the participants in the proceedings (resolution of the Supreme Court of 21.2.2008, III CZP 148/07).

 If the well-being of the family requires it, the court may order the earlier reimbursement of expenses and investments, as an exception to the principle that settlements in this regard are made during the division of common property. In practice, this applies to situations where, after incurring expenses or investments, the marital life in a functioning family has broken down.

 The value of expenses and investments, as in determining the value of components of common property subject to division, is determined according to prices prevailing at the time of the judgment on the division of common property or at the time of an earlier judgment on reimbursement. In practice, settlements for investments made from both common property and personal property are crucial, for example, in the construction of a jointly built house on real estate that constitutes the personal property of one of the spouses. The Supreme Court expressed its opinion on this matter in a resolution of 16.12.1980, III CZP 46/80, explaining that preventing harm to either of the spouses involves determining the value of investments by first establishing a fractional share of the spouses' investments in the value of the house based on market prices at the time of its construction, and then calculating the same fractional share in the value of the house based on market prices at the time of the division of common property.