Regulation of Proprietary Relations between Spouses in the New Family Law Act: Toward Better Regulation by Means of Private Autonomy?

Author:Liis Hallik
Position:Magister iuris, Adviser to the Civil Chamber Supreme Court of Estonia

1. General considerations - 2. Recent developments in Estonia - 3. The intention of the spouses as a basic principle for matrimonial property law? - 4. The obligation of spouses to determine the proprietary relations between themselves - 5. Conclusions

1. General considerations

In history as well as today, the marriage can be viewed either as a contractual relationship between individuals that is arranged by the family members or as a specific status or position of spouses that is granted to the spouses by the competent authority-i.e., the state or the Church2. Accordingly, the traditional marriage can be seen on one hand as a matter for the family members-the matter of a man and a woman or a larger family-or on the other hand a matter of the state or the Church. Therefore, the consequences of the marriage could also either be regulated within the circle of the family members themselves or fall under the competence of the state or of religious authorities. Where proprietary relations between spouses are concerned, also these rights and duties can be determined by the concerned individuals-i.e., the spouses-according to their own will or set forth as mandatory rules by the competent authority.

In continental Europe, it is common today that after the conclusion of the marriage the proprietary consequences will ex lege automatically apply for the spouses3. The state has regulated the proprietary relationship between spouses by enacting the laws that stipulate the matrimonial property regime. The legal order is aimed at guaranteeing an appropriate and safe proprietary relationship for the married couple even if the spouses are unaware of the legal consequences.

At the same time, almost all of the European legal orders recognise also, at least to some extent, the right of spouses to regulate their proprietary relations according to their own will and preferences4. In modern times, it has been pointed out that the essence of the marriage has changed in the course of the last century. A fundamental change in values and conceptions has led to a gradual shift of focus from status to contract. The law concerning the consequences of marriage and divorce is characterised by a general withdrawal of the state, and the primary focus is on the private autonomy of the spouses. Therefore, the marriage today is conceptualised less as a status and more like a contractual relationship between spouses5.

In the light of these developments, which have led us to the shift of paradigm in marriage concept and, further, also in matrimonial property law, the question arises of whether the status of a spouse conferred by a competent authority could (at least as regards the matters of proprietary rights and duties) be totally replaced by the mutual agreement between spouses or the spouses should be at least promoted to regulating their proprietary relations themselves according to their own will.

2. Recent developments in Estonia

In Estonia, radical legal changes have taken place in the last 15 years concerning the right of the spouses to regulate the proprietary relationship by means of a contract. According to the Marriage and Family Code of the Estonian SSR 6 (hereinafter 'MFC'), spouses were not allowed to conclude a contract in order to regulate the proprietary relations between them and the mandatory rules of the matrimonial property regime applied for all in a spousal relationship in Soviet times. The freedom of contract of spouses was not recognised in relation to these matters. When one bears in mind that in a totalitarian society there is always very little space for private autonomy, it is clear that the proprietary consequences of a marriage were at that time the business of the state and not of the spouses.

After the regaining of independence, as Estonia recognised again the ideas of the liberal state and grounded her legal system with three pillars-freedom, justice, and law-which were laid down as such in the Constitution of the Republic of Estonia 7 , the civil law of the Republic of Estonia was drafted on the basis of the principles of the 1940 draft of the Civil Code 8 , which led to the recognition of the principle of private autonomy as a basis of civil law. Although the conceptual bases of the Family Law Act from 1994 9 (FLA 1994), which entered into force in 1995, remained to a great extent the same as in the Marriage and Family Code of the Estonian SSR, the new Family Law Act of 1994 recognised the freedom of contract between spouses in matrimonial property relations10. As before 1995 the spouses were not allowed to conclude a contract in order to regulate their proprietary relations differently from what is provided for in law-i.e., there was recognised only one matrimonial property regime-the Family Law Act of 1994 recognised, besides the legal matrimonial property regime, also the contractual regime. Although there were formal requirements stipulated for matrimonial property contracts and these set some limits as to substance, the freedom of contract of spouses remained rather free of limits.

In the mid-1990s, the essential reform of family law was postponed. It was held that any change in the family law affects the whole of the society emotionally and that radical reforms in that sphere should be undertaken with greater than ordinary prudence11.

The same argument was brought forward as the Parliament of the Estonian Republic read the draft law. Also, social scientists were involved in the process of lawmaking. Being against change in the legal matrimonial property regime, the social scientists came up with the idea to let the spouses themselves decide which matrimonial property regime would be the most suitable for them12. This occasionally expressed idea was picked up by the legislator, who began to develop and expand it. As a result of that, in spring 2009 the legislator made a proposal to eliminate the then-current matrimonial property system, which consisted of the legal and contractual matrimonial property regimes. The intention was to replace the existing system with the obligation of all spouses to choose the matrimonial property regime on their own when getting married13. The intention of the legislator was to create a totally new matrimonial property system, according to which there would be no legal matrimonial property regime but several matrimonial property regimes from among which the spouses have to choose before concluding the marriage14. The same idea was written into the Draft of Acts Related to Civic Status Act15. These developments point indirectly to the fact that, from the point of view of the legislator, regulation of proprietary rights and duties between spouses should be primarily the concern of the future spouses and not so much of the state. This also refers to the idea that marriage should be mostly understood as a contractual relationship between spouses and not really as a status given by the legal order.

For now, the Estonian Parliament has adopted the new Family Law Act 16 (hereinafter 'FLA 2009') and the Acts Related to Civic Status Act 17 (hereinafter 'ARCSA'). These new legal acts entered into force on 1 July 2010. Notwithstanding the previously mentioned ideas about abolishing the legal matrimonial regime in Estonia fully and introducing the obligation of all spouses to choose a matrimonial property regime, the interpretation of the paragraphs of the new Family Law Act and of the Acts Related to Civic Status Act leads to the conclusion that the system of matrimonial property remains still fundamentally the same-there will be both the legal and the contractual matrimonial property regime available for spouses18. As regards the contractual property regime, the general idea of the new Family Law Act is to restrict the freedom of contract between spouses and to set clear rules concerning the substance of matrimonial property contracts. It is held that the Family Law Act, from 1994, allows the spouses too wide a freedom of contract. Therefore, the quite unlimited freedom of contract of spouses was to be replaced by the right (but not the obligation) of spouses to choose from among three matrimonial property regimes stipulated by law19.

As a conclusion, Estonian family law has undergone a radical change in the last 20 years-legally ignored freedom of contract between spouses in relation to matrimonial property matters in Soviet times has been replaced with relatively unlimited possibilities for spouses to regulate their proprietary relations differently from what is provided for by law, with this change coming about after the restoration of the Republic of Estonia. Now the new Family Law Act seeks to find the balance between...

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