The person has fled, the money is gone—don't be fooled by a fake divorce.

Compiled from: Liubei Court, Legal Home, Beijing Legal Affairs
 
The Family and Juvenile Trial Division of Liubei District People's Court of Liuzhou City (hereinafter referred to as the "Liubei District Court Family and Juvenile Division") recently adjudicated a case in which a husband and wife obtained a “sham divorce” under the pretext of purchasing a house, after which the husband refused to perform the Supplementary Provisions to the Divorce Agreement. The court of first instance ruled that the Supplementary Provisions to the Divorce Agreement signed by both parties was lawful and valid, and the husband should pay the wife over 1.6 million yuan as agreed. Upon appeal, the second-instance judgment upheld the original ruling, and the judgment has now taken legal effect.

 
 

Case review
Tang Wei (pseudonym) and Miao Dongmin (pseudonym) registered their marriage in 2007, and their child born within the marriage was born in 2009. In order to improve their housing situation and take advantage of policy benefits, the couple planned to first enter into a “sham divorce,” after which they would each purchase property in their own names, and then remarry immediately after the purchases were completed. Accordingly, they divorced in February 2018 and signed a Divorce Agreement, which mainly stated that the child born within the marriage would be raised by the husband, the wife would pay 500 yuan per month in child support, and there was no marital community property or debts between the parties.

 
 

From April to July 2018, the two parties separately took out loans in their own names to purchase properties in a residential community in Liuzhou City. The property in Building 12 of the community was registered under the man’s name, while the property in Building 16 was registered under the woman’s name. During this period, the man also took out a loan in his own name to purchase a car worth 150,000 yuan.
 
At the end of July 2018, the woman proposed remarriage, but the man refused and informed her that he had already married another woman. The woman felt that the man had married someone new just five months after the divorce, which suggested he had likely been unfaithful during the marriage, yet he had deliberately concealed the truth and failed to honor their prior agreement to remarry. She therefore demanded that the man sign a Supplementary Provisions to the Divorce Agreement. In August 2018, both parties voluntarily signed the Supplementary Provisions to the Divorce Agreement. The supplementary provisions mainly stated: 1. The woman owned a property located in Building 16 of a certain residential community, and the man would pay the mortgage of 5,000 yuan per month on her behalf from August 2018 to July 2046; 2. For the car worth 150,000 yuan purchased by the man with a loan, the woman would repay the remaining car loan of 90,000 yuan on his behalf, and the car would belong to the woman. After the supplementary agreement was signed, the man paid the mortgage for five months and then refused to continue paying. Left with no choice, the woman paid the mortgage for all of 2019 herself. During this period, she sought negotiations with the man on multiple occasions, but all ended without result. In July 2019, the woman filed a lawsuit against the man in court, requesting that the court order the man to fulfill the obligations stipulated in the Supplementary Provisions to the Divorce Agreement in accordance with the law.
 
 
Focus of dispute: What is the validity of the "Supplementary Clause to the Divorce Agreement"?
In January 2020, the Family and Juvenile Division of Liubei District Court heard the case, where both parties held sharply conflicting views and engaged in fierce debate over whether the Supplementary Provisions to the Divorce Agreement they had signed possessed legal effect.

 
 

The wife contends that the parties had a prior gentlemen's agreement to “divorce fictitiously” for the purpose of purchasing property and then remarry afterward. Accordingly, when signing the Divorce Agreement, the parties only negotiated matters concerning child custody and left all other matters unaddressed. After discovering that the husband failed to honor the “remarriage” agreement and had engaged in deceptive conduct, the wife requested that the husband sign a Supplementary Clause to the Divorce Agreement to address matters left unresolved from the previous marriage. The husband agreed and voluntarily signed it. The supplementary agreement is lawful and compliant in content, and the husband should bear liability in accordance with the agreement.
 
The husband believes that divorce is simply divorce, and there is no such thing as a "remarriage" agreement. Moreover, the parties had already signed a Divorce Agreement at the time of divorce, which fully addressed all matters during the marriage. After the divorce, the wife has no right to interfere with whom he marries or when he marries, and his subsequent marriage will not have any impact on the wife. The husband contends that the Supplementary Provisions to the Divorce Agreement subsequently signed at the wife's request were executed under duress, and the terms are manifestly unfair, and therefore the provisions are legally invalid. For example, regarding the provision that the husband shall repay the mortgage on the wife's behalf, the property located in Building 16 of a certain residential community in Liuzhou City was purchased by the wife in her individual name and constitutes her personal act. After the divorce, the husband should no longer have any obligation to repay it on her behalf.
 
 
[1] Court Opinion
1. Regarding the fake divorce
The court held that although the woman claimed the divorce was a "sham divorce" conducted with the man for the purpose of purchasing property, the law does not recognize any distinction between genuine and sham marital relationships. As adults, both parties should have foreseen the legal consequences of registering their divorce. The court hereby issues a reprimand and criticism to both parties.
 
2. Regarding the Supplementary Clause to the Divorce Agreement
Concerning the disputed cause of action in the lawsuit, since the property and car distribution stipulated in the Supplementary Clause to the Divorce Agreement involved assets purchased in each party's name after the divorce, which are not marital property, it is more appropriate to change the cause of action from a post-divorce property dispute to a contract dispute.
 
Regarding the legal validity of the Supplementary Provisions to the Divorce Agreement disputed by both parties, the supplementary agreement was voluntarily signed by both parties, and its contents do not violate the mandatory provisions of laws and administrative regulations. Therefore, the supplementary agreement is lawful and valid. Although the phrase “to be paid by the husband on behalf” appears in the supplementary provisions, considering the contents of the supplementary agreement, the husband’s statements, and the actual circumstances of the case, it can be determined that the parties agreed that the mortgage payments for the property located in Building 16 and registered under the wife’s name shall be borne by the husband. In addition, the husband failed to provide evidence proving that the supplementary agreement was signed under coercion by the wife. Therefore, the husband’s claims are not accepted by the court. Regarding the vehicle under the husband’s name, the wife has already advanced 90,000 yuan to cover the remaining car loan on the husband’s behalf, and the vehicle has now been transferred to the wife’s name. The husband shall pay the wife the corresponding advanced amount in accordance with the supplementary agreement.
 
In summary, the court of first instance ruled in accordance with the law as follows: 1. Miao Dongmin shall pay Tang Wei RMB 60,000 for the full year of 2019 in housing mortgage payments; 2. Miao Dongmin shall pay Tang Wei RMB 5,000 per month for housing mortgage payments from January 2020 to July 2046; 3. Miao Dongmin shall pay Tang Wei RMB 90,000 for the vehicle loan.
 
After the first-instance judgment was rendered, Miao Dongmin, dissatisfied with the ruling, filed an appeal. The court of second instance, upon trial, held that the facts found by the first-instance court were clear, the applicable law was correct, and the judgment should be upheld. It ruled according to law to dismiss the appeal and affirm the original judgment.
 
 
[1] The author's perspective
I. Regarding Whether the Marital Relationship Is Dissolved in a “Sham Divorce”
The newly promulgated "Marriage and Family" section of the Civil Code introduces a new provision in Article 1080 regarding the effective time for the dissolution of marriage: "Upon completion of divorce registration, or upon the effectiveness of a divorce judgment or mediation agreement, the marriage relationship is dissolved." This clarifies the equal effect of registered divorce and litigation divorce, and once the divorce registration is completed, the marriage relationship is declared dissolved.
 
This provision aligns with the special nature of divorce. Divorce, as a significant civil legal act affecting the vital interests of the parties involved, is a status-based legal act that leads to major changes in marital and family relations. It encompasses factors such as the civil affairs authority's formal review, the public notice and trust effect of registration, and the principle of good faith, and has binding force; once divorced, the identity relationship is irreversible.
 
According to the relevant provisions of the “Marriage and Family” section of the Civil Code, consensual divorce shall satisfy three conditions: first, the parties have civil capacity; second, both spouses have a clear expression of intent to agree to divorce; and third, both spouses have reached an agreement on child custody, division of property, and handling of debts, and have formed a written divorce agreement. The third point is a newly adjusted content in the Civil Code regarding the content and requirements of a divorce agreement, emphasizing the need for a clear written agreement and specifying the main contents that the written divorce agreement must contain, so as to further standardize the divorce registration procedures and the review standards for consensual divorce. Therefore, in a legal sense, as long as the parties had full civil capacity at the time of divorce, voluntarily signed the divorce agreement, and completed the divorce registration procedures, regardless of their true purpose, it has the legal effect of dissolving the marriage relationship, and the parties do not enjoy the right to request revocation.
 
II. Issues Concerning the Performance of the Property Division Provisions in a Divorce Agreement Executed Under a “Sham Divorce”
The important form and vehicle for registering a divorce is the divorce agreement. In essence, a divorce agreement is a composite agreement derived from divorce that encompasses multiple identity and property elements. Although the substance of a marital relationship is an identity relationship, this specific identity relationship is accompanied by a statutory property relationship, and such statutory property relationship permits the parties to modify it through agreement. Such an agreement is a contract concerning the ownership of property. Therefore, the portion of a divorce agreement addressing property division is not only governed by the "Marriage and Family" Part of the Civil Code, but, absent any conflict, the principles of the "Contract" Part should also serve as the basis for applicable law. In cases of "sham divorce," one spouse may argue in litigation that the "sham divorce" was not intended to restore the original marital relationship, but rather because during the implementation of the "sham divorce," the property division was not the result of careful consideration, or was made to circumvent regulatory policies, did not reflect that party's true intent, or even increased that party's own burden, and therefore requests the court to redistribute the property.
 
When adjudicating such cases, courts generally distinguish between identity and property relationships. While affirming the validity of the parties' agreed divorce in handling identity relationships, the court must still examine the true intent behind the property disposition in the divorce agreement. The validity of property division clauses in a divorce agreement must satisfy the condition of genuine expression of intent. If no circumstances such as fraud or coercion in the formation of the property division agreement are found, the party's claim should be dismissed in accordance with the law. If evidence can indeed prove that the property division provisions in the divorce agreement do not reflect the true intent of both parties and violate the principle of consistency of rights and obligations, the court should redistribute the marital property in accordance with the law.
 
In summary, in cases of "sham divorce" between spouses, the marital status relationship and property relationship should be treated separately. The marital status relationship between spouses is terminated once the divorce registration is completed or the divorce judgment (mediation agreement) takes effect, based on considerations of the public credibility of registration and the principle of good faith. However, regarding the property relationship during the marriage, it is necessary to determine whether the agreement between the parties concerning property reflects their true intent. According to Article 146 of the Civil Code of the People's Republic of China, "A civil juristic act performed by an actor and the counterparty based on a false expression of intent is void." In this case, the supplementary agreement between the man and the woman regarding marital property after divorce does not fall under the circumstances stipulated in Article 146 of the Civil Code. It only needs to satisfy the conditions for validity under the Contract Law and be free from grounds for invalidity or rescission to be considered valid.