Macao Legal Landscape | Introduction to Macao's Legal System (Part Two) - Structure and Practice of Macao's Civil Code

In 1999, the Macao Civil Code was officially promulgated and implemented, marking a new stage of development for Macao's civil law. This code retains the characteristics of the continental legal system and has been improved in conjunction with Macao's actual situation, becoming the core norm of Macao's civil law.

The Macao Civil Code adopts a five-part structure, similar to the traditional civil code of the continental legal system, including general provisions, debt law, property law, kinship law, and inheritance law. The General Provisions establish the basic principles, legal sources, legal interpretation and application rules of civil law, as well as the relevant systems of civil subjects, laying the foundation for the entire civil law system; the Debt Law stipulates the general rules of debt, various contracts, and the transfer of creditor's rights and debts, and adjusts the relationship of property transfer; the Property Law regulates the possession, ownership, and other property rights systems of goods, clarifying the rules for the ownership and utilization of goods; the Family Law regulates personal relationships arising from blood ties and marriage, and regulates aspects such as marriage, parent-child relationships, adoption, and support; the Inheritance Law regulates the legal relationships related to inheritance, such as the scope of inheritance, the order of heirs , and testamentary inheritance. This structural system is rigorous, with each section cooperating with each other, comprehensively covering various fields of civil law.

In 1999, the Macao Civil Code was officially promulgated and implemented, marking a new stage of development for Macao's civil law. This code retains the characteristics of the continental legal system and has been improved in conjunction with Macao's actual situation, becoming the core norm of Macao's civil law.

The Macao Civil Code adopts a five part structure, similar to the traditional civil code of the mainland legal system, including general provisions, debt law, property law, kinship law, and inheritance law. The General Provisions establish the basic principles, legal sources, legal interpretation and application rules of civil law, as well as the relevant systems of civil subjects, laying the foundation for the entire civil law system; The Debt Law stipulates the general rules of debt, various contracts, and the transfer of creditor's rights and debts, and adjusts the relationship of property transfer; The Property Law regulates the possession, ownership, and other property rights systems of goods, clarifying the rules for the ownership and utilization of goods; The Family Law regulates personal relationships arising from blood ties and marriage, and regulates aspects such as marriage, parent-child relationships, adoption, and support; The Inheritance Law regulates the legal relationships related to inheritance, such as the scope of inheritance, the order of heirs, and testamentary inheritance. This structural system is rigorous, with each section cooperating with each other, comprehensively covering various fields of civil law.

Legal capacity and behavioral capacity: According to the Macao Civil Code, the legal capacity of a natural person begins at full birth and life, and ends at death. In terms of behavioral capacity, the Macao Civil Code divides natural persons into individuals with full legal capacity, minors, prohibited persons, and quasi-prohibited persons . Natural persons who have reached the age of eighteen have full legal capacity and are able to independently carry out civil legal acts; minors usually lack legal capacity, but in certain specific circumstances, such as when minors over the age of sixteen manage or dispose of property acquired through their work, they have a certain level of legal capacity. Individuals who are prohibited from undergoing medical treatment due to mental disorders, deafness, or blindness are declared as such, and their ability to act is restricted, which is equivalent to the relevant provisions for minors; quasi-prohibited persons are those with long-term mental disorders but not to the extent of being prohibited, assisted by a guardian, and their disposal of property during their lifetime requires permission from the guardian.

In addition, Macao civil law provides comprehensive protection for personality rights, covering various rights such as the right to life, physical and mental integrity, freedom, reputation, etc.

Legal capacity and behavioral capacity: According to the Macao Civil Code, the legal capacity of a natural person begins at full birth and life, and ends at death. In terms of legal capacity, the Macao Civil Code divides natural persons into individuals with full legal capacity, minors, prohibited persons, and quasi prohibited persons. Natural persons who have reached the age of eighteen have full legal capacity and are able to independently carry out civil legal acts; Minors usually lack legal capacity, but in certain specific circumstances, such as when minors over the age of sixteen manage or dispose of property acquired through their work, they have a certain level of legal capacity. Individuals who are prohibited from undergoing medical treatment due to mental disorders, deafness, or blindness are declared as such, and their ability to act is restricted, which is equivalent to the relevant provisions for minors; A person who is subject to a ban on childbirth is a person who has long-term mental disorders or other conditions but has not reached the level of a ban on childbirth. They are assisted by a guardian, and their disposal of property during their lifetime requires permission from the guardian.

In addition, the Macao Civil Code provides comprehensive protection for personality rights, covering various rights such as the right to life, physical and mental integrity, freedom, reputation, etc.

The types of legal persons stipulated in Macao civil law include associations, foundations and joint ventures. An association is a legal person based on people and not for the economic interests of its members. Its establishment requires a statutory form, with written establishment documents clearly stating the assets or services provided by the members, the name of the legal person, its purpose and address, etc., and it takes effect against third parties after being published in the Macao Government Gazette. A foundation is a legal person based on property and for the purpose of social benefit, acquiring legal personality through recognition, which requires the competent administrative authority, and the act of establishing a foundation must meet the statutory conditions. Joint ventures refer to organizations in which two or more natural persons or legal persons jointly invest and operate for a specific purpose, and their establishment and operation must comply with the provisions of the Macao Civil Code and relevant laws.

The legal person types stipulated in Macao Civil Law include associations, foundations, and joint venture organizations. A club is a legal entity based on human beings and not aimed at the economic interests of its members. Its establishment must have a legal form, and a written establishment document must specify the assets or services provided by its members, the name, purpose, and residence of the legal entity. After being published in the Macao Government Gazette, it shall have effect on third parties. A foundation is a legal entity based on property and aimed at social interests. It obtains legal personality through recognition, which must be carried out by an authorized administrative authority. The act of establishing a foundation must comply with legal conditions. A joint venture organization refers to an organization in which two or more natural or legal persons jointly invest and operate for a specific purpose, and its establishment and operation must comply with the provisions of the Macao Civil Code and relevant laws.

Ownership is the core of property rights, and the Macao Civil Code provides detailed regulations on the acquisition, modification, and termination of ownership. The acquisition methods of ownership include original acquisition and derivative acquisition. Original acquisition refers to the direct acquisition of ownership through production, prior occupation, accession, acquisitive prescription, and other means; Derivative acquisition is the acquisition of ownership from the original owner through means such as sale, gift, inheritance, etc. For example, in the case of “A and B Real Estate Time Limited Acquisition” (Court of Final Appeal Case No. 87/2021), A and their children occupied the unit in question for more than 38 years and used the unit as the true and sole owner, ultimately obtaining ownership through acquisitive prescription. According to Article 1221 of the Macao Civil Code, ownership of immovable property can be acquired through acquisitive prescription after 15 years of possession.

Ownership is the core of property rights, and the Macao Civil Code provides detailed regulations on the acquisition, modification, and termination of ownership. The acquisition methods of ownership include original acquisition and derivative acquisition. Original acquisition refers to the direct acquisition of ownership through production, prior occupation, accession, acquisitive prescription, and other means; Derivative acquisition is the acquisition of ownership from the original owner through means such as sale, gift, inheritance, etc. For example, in the case of “A and B Real Estate Time Limited Acquisition” (Court of Final Appeal Case No. 87/2021), A and their children occupied the unit in question for more than 38 years and used the unit as the true and sole owner, ultimately obtaining ownership through acquisitive prescription. According to Article 1221 of the Macao Civil Code, ownership of immovable property can be acquired through acquisitive prescription after 15 years of possession.

Usufructuary right refers to the right to use and benefit from the property owned by others, including land rights, servitude rights, perpetual tenancy rights, etc. Ground rights refer to the right to construct buildings or other works on someone else’s land; Easement refers to the right to use someone else’s land for the convenience of one’s own land; Permanent tenancy right refers to the right to permanently use someone else’s land by paying rent.

Usufructuary right refers to the right to use and benefit from the property owned by others, including land rights, servitude rights, perpetual tenancy rights, etc. Ground rights refer to the right to construct buildings or other works on someone else’s land; Easement refers to the right to use someone else’s land for the convenience of one’s own land; Permanent tenancy right refers to the right to permanently use someone else’s land by paying rent.

Security interest refers to the property rights established to ensure the realization of creditor’s rights, including mortgage, pledge, and lien. Mortgage right refers to the debtor or a third party not transferring possession of property and using the property as collateral for the creditor’s rights; Pledge refers to the transfer of movable property or rights by a debtor or third party to the possession of a creditor, using the movable property or rights as collateral for the creditor’s rights; The right of retention refers to the creditor’s possession of the debtor’s movable property in accordance with the contract. If the debtor fails to fulfill the debt within the agreed period in the contract, the creditor has the right to retain the movable property and receive priority compensation with the proceeds of the sale or auction of the movable property.

Security interest refers to the property rights established to ensure the realization of creditor’s rights, including mortgage, pledge, and lien. Mortgage right refers to the debtor or a third party not transferring possession of property and using the property as collateral for the creditor’s rights; Pledge refers to the transfer of movable property or rights by a debtor or third party to the possession of a creditor, using the movable property or rights as collateral for the creditor’s rights; The right of retention refers to the creditor’s possession of the debtor’s movable property in accordance with the contract. If the debtor fails to fulfill the debt within the agreed period in the contract, the creditor has the right to retain the movable property and receive priority compensation with the proceeds of the sale or auction of the movable property.

The causes of debt include contracts, infringement, management without cause, and unjust enrichment. Contract is the main cause of debt, and the parties agree on each other’s rights and obligations through the formation of a contract. Infringement refers to the act of infringing upon the legitimate rights and interests of others, and the perpetrator shall bear the responsibility for compensation for damages. Non causal management refers to the act of managing or providing services without legal or contractual obligations, in order to avoid losses to the interests of others. The manager has the right to demand that the beneficiary repay necessary expenses. Unreasonable enrichment refers to the act of obtaining undue benefits without legal basis, causing losses to others, and the obtained undue benefits should be returned to the person who suffered the loss.

The causes of debt include contracts, infringement, management without cause, and unjust enrichment. Contract is the main cause of debt, and the parties agree on each other’s rights and obligations through the formation of a contract. Infringement refers to the act of infringing upon the legitimate rights and interests of others, and the perpetrator shall bear the responsibility for compensation for damages. Non causal management refers to the act of managing or providing services without legal or contractual obligations, in order to avoid losses to the interests of others. The manager has the right to demand that the beneficiary repay necessary expenses. Unreasonable enrichment refers to the act of obtaining undue benefits without legal basis, causing losses to others, and the obtained undue benefits should be returned to the person who suffered the loss.

Contract is one of the most important legal acts in Macao Civil Law, and the Macao Civil Code provides comprehensive regulations on the establishment, validity, performance, modification, and termination of contracts. The establishment of a contract requires two stages: offer and acceptance. An offer is an expression of intention to enter into a contract with another person, and acceptance is an expression of intention by the offeree to agree to the offer. The validity of a contract depends on whether it meets the requirements for effectiveness as stipulated by law, including the parties having the corresponding capacity, the expression of intention being genuine, and the content of the contract being legal.

Contracts are among the most significant legal instruments within Macao's civil law framework. The Macao Civil Code provides comprehensive regulation covering the formation, validity, performance, modification, and termination of contracts. Contract formation involves two key stages: offer and acceptance. An offer constitutes an expression of intent to engage in a contractual agreement with another party, while acceptance signifies the offeree's expression of intent to concur with the offer. A contract's enforceability hinges on its compliance with legal prerequisites for validity, including the parties possessing the requisite capacity to act, the veracity of their expressed intentions, and the legality of the contract's subject matter.

Tort liability refers to the civil responsibility incurred by an individual for infringing upon the legitimate rights and interests of another. The Macao Civil Code outlines the constituent elements, forms of liability, and scope of compensation for tort liability. These elements include the harmful act, the resulting damage, causality, and fault. Forms of liability encompass actions such as ceasing the infringement, removing obstacles, eliminating danger, returning property, restoring the original state, and providing compensation for losses. Compensation may cover both property damage and mental distress.

Tort liability refers to the civil liability that the perpetrator should bear for infringing on the legitimate rights and interests of others. The Macao Civil Code stipulates the constituent elements, forms of liability, and scope of compensation for tort liability. The constituent elements of tort liability include the tortious act, the consequences of the damage, causality, and fault. The forms of responsibility include stopping infringement, removing obstacles, eliminating danger, returning property, restoring the original state, compensating for losses, etc. The scope of compensation includes property damage and mental damage compensation.

The kinship system encompasses legal norms governing personal relationships stemming from blood ties and marriage. This includes aspects such as marriage, divorce, parent-child relationships, adoption, and support. The Macao Civil Code details the conditions, procedures, and legal effects of marriage, as well as the grounds and consequences of divorce. For instance, marriage necessitates the voluntary consent of both parties and fulfillment of legal age and other requirements; divorce requires legally valid reasons, such as irreconcilable differences. Regarding parent-child relationships, parents bear the responsibility for their children's upbringing and education, while children have a duty to support their parents. Adoption involves a legal process of formally adopting another's child, establishing a legally recognized parent-child relationship. Support refers to the mutual obligation of support among certain relatives.

The kinship system is a legal norm that regulates personal relationships arising from blood ties and marriage, including marriage, divorce, parent-child relationships, adoption, and support. The Macao Civil Code stipulates the conditions, procedures, effects of marriage, as well as the conditions and consequences of divorce. For example, marriage requires both parties to be voluntary and meet the legal age and other conditions; Divorce must meet legal reasons, such as emotional breakdown. In terms of parent-child relationships, parents have the obligation to raise and educate their children, and children have the obligation to support and assist their parents. Adoption refers to the legal process of taking someone else's child as one's own and establishing a simulated parent-child relationship. Support refers to the obligation of mutual support among certain relatives.

The inheritance system regulates the transfer of property upon the death of a natural person. This includes statutory inheritance, testamentary inheritance, and bequests. Statutory inheritance follows legal guidelines for heir succession and shares in the absence of a will. Testamentary inheritance involves the testator designating heirs through a will. A bequest is a testamentary provision leaving property to individuals outside the legal heirs or to the state or collective entities.

The inheritance system is a legal norm that regulates property transfer relationships that occur due to the death of a natural person, including statutory inheritance, testamentary inheritance, and bequest. Statutory inheritance refers to the process of inheriting without a will, in accordance with the order and share of heirs as stipulated by law. Testamentary inheritance refers to the act of the testator designating an heir to inherit their estate through the creation of a will. Legacy refers to the act of the deceased making a will to give their property to a person other than the state, collective, or legal heirs.

On November 30, 2000, a dispute arose between suspect A and grocery store owner B concerning the parking of a motorcycle. Following B kicking the motorcycle, A retaliated by striking B's head and face with a helmet, resulting in injuries. A, a first-time offender, admitted to the facts and cited family responsibilities. B sought compensation for medical expenses and mental distress, although claims of permanent facial scarring and income loss lacked substantiation.

The Macao Primary Court found A guilty of simple assault, sentencing him to nine months' imprisonment, suspended for two years, and ordering compensation of MOP 8317.4 for property damage and MOP 15,000 for mental distress. The Macao Intermediate Court of Appeal upheld the other aspects of the original verdict but increased the mental distress compensation to MOP 80,000. This adjustment, based on Article 489 (1) and (3) of the Civil Code, considered B's facial scarring, A's intentional actions, and the parties' financial circumstances, applying principles of equity.

Original Court Document:

https://www.court.gov.mo/sentence/zh-53590d38b8265.pdf

On November 30, 2000, suspect A had a dispute with grocery store owner B over the parking of his electric bike. After B kicked the bike, suspect A attacked B's head and face with a helmet, causing injuries. First time offender of type A, admitted to the facts, needs to take care of family members; B claims compensation for medical expenses and mental damages, but the facts of permanent facial disfigurement and income loss have not been confirmed.

The Macau Basic Court found that A committed the crime of simple injury and sentenced A to 9 months' imprisonment with a 2-year reprieve. B was compensated with property losses of MOP 8317.4 and mental damages of MOP 15000.

The Intermediate Court of Macau (appellate trial) upheld the other parts of the original judgment and revised the compensation for mental damages to MOP 80000, on the grounds that it should be adjusted in accordance with Article 489 (1) and (3) of the Civil Code, taking into account the facial scars of Party B, intentional behavior of Party A, and the economic situation of both parties, based on the principle of equity.

In 1998, defendant B and his former husband C actually invested in purchasing the property in question. To take advantage of policy benefits, they registered the nominal purchaser as C's daughter D (D did not invest or reside there). B and C have continuously occupied the house since July 1998, paying all expenses (mortgage, utilities, etc.), and are recognized by relatives, friends, and property management as the actual rights holders. In 2015, D sold the house to plaintiffs F and G, who demanded B's removal and compensation. B counter-sued, claiming ownership through prescription. Bank A, as F and G's mortgagee, participated in the lawsuit, claiming protection of its mortgage rights.

The court found B and C's possession to be in good faith. Although there was false registration, as actual investors, they subjectively were unaware of infringing on others' rights, aligning with the "good faith possession" definition in Article 1184 of the Civil Code. B and C's continuous, open possession for over 15 years met the conditions for acquisitive prescription (Article 1221 of the Civil Code), legally granting them ownership retroactive to July 1998. Plaintiffs F and G's ownership was extinguished due to conflict with B and C's prescriptive rights, and Bank A's mortgage right became invalid. The plaintiffs knowingly purchased from D and filed suit, constituting malicious litigation under Article 385 of the Civil Procedure Code, resulting in a fine.

Original Verdict:

https://www.court.gov.mo/sentence/zh-95268207ff179927.pdf

In 1998, defendant B and his ex husband C actually invested in purchasing the property in question. In order to enjoy policy benefits, they registered the nominal purchaser as C's daughter D (D did not invest or move in). B and C have been continuously occupying the house since July 1998, paying all fees (mortgage, utilities, etc.), and are recognized by their relatives, friends, and property management as the actual rights holders. In 2015, D sold the house to plaintiffs F and G, who demanded that B move out and claim compensation. B counterclaimed and claimed ownership through statute of limitations. Bank A, as the mortgagee of F and G, participated in the lawsuit and claimed that the mortgage rights should be protected.

The court held that the possession of B and C was in good faith. Although there was false registration behavior during the purchase, the two individuals, as actual investors, subjectively did not know that possession infringed upon the rights of others, which is in line with the recognition of "good faith possession" in Article 1184 of the Civil Code. B and C have been publicly occupying the house for more than 15 years, meeting the conditions for obtaining good faith possession (Article 1221 of the Civil Code), and legally obtaining ownership of the house, with retroactive effect until July 1998. The ownership of Plaintiffs F and G is extinguished due to a conflict with the time limited acquisition rights of B and C, and the mortgage right of Bank A becomes invalid with the extinction of Plaintiff's ownership. The plaintiff knowingly purchased and sued D, which constitutes malicious litigation under Article 385 of the Civil Procedure Code, and was fined.

The plaintiff was originally the registered owner of a commercial unit in Macau. On February 8, 2016, they authorized Party A to handle the sale. Party A, acting as the plaintiff's agent, signed a sales agreement and notarized documents with defendants 1-4. The defendants paid, the unit was registered in their name and mortgaged. The plaintiff sued, claiming the authorization was invalid due to formal defects, the notarization was ineffective, and sought confirmation of rights, return of the unit, or payment and compensation.

The court found that while the authorization had formal defects, the plaintiff's intention to authorize the sale was genuine, and the defendants acted in good faith based on the apparent agency.

According to Articles 644 of the Commercial Code and 261(2) of the Civil Code, protecting good-faith third parties and prohibiting abuse of rights, the legal acts were valid against the plaintiff. The plaintiff's initial authorization followed by denial due to formal defects constituted a breach of good faith and abuse of rights. The appeal was dismissed, with costs awarded against the plaintiff.

Original Verdict:

https://www.court.gov.mo/sentence/zh-3afed14218ca3446.pdf

The plaintiff was originally the registered owner of a commercial unit in Macau. On February 8, 2016, they signed an authorization letter with Party A, entrusting them to handle the sale of the unit. Subsequently, Party A, as the plaintiff's agent, signed an appointment sales contract and sales notarization with the first to fourth defendants. The defendant paid the price, and the unit was registered under the defendant's name and mortgaged. The plaintiff claims that the authorization letter is invalid due to formal defects, and the notarized certificate has no effect on it. They have filed a lawsuit to confirm their rights, return the unit, or pay the price and compensation.

The court held that although there were formal flaws in the authorization letter, the plaintiff's expression of intention to sell authorization made through the authorization letter was genuine, and the defendant acted in good faith based on the appearance of agency generated by the authorization letter. According to Article 644 of the Commercial Code and Article 261 (2) of the Civil Code, the protection of third parties in good faith and the prohibition of abuse of rights are effective for the plaintiff. In addition, the plaintiff first authorized the sale and then denied the agency's behavior due to formal defects, which constitutes a reversal of words and an abuse of rights. The final court rejected the plaintiff's appeal and the litigation costs were borne by the plaintiff.

Appellants A and B (deceased, represented by heirs) appealed a dispute over the inheritance of the deceased F, arguing for the application of the Inheritance Law of the People's Republic of China. Their reasons included: 1. A previous judgment determined the deceased's habitual residence was mainland China, thus mainland law should apply; 2. Applying Macau law would deprive parents of their legal inheritance rights, harming mainland public interest; 3. Heirs' status is an "identity status," and according to Article 17 of Macau's Civil Code, renvoi should be excluded, prioritizing mainland law. Appellee E (administrator of the estate) opposed this.

The court found that the previous judgment did not definitively establish the deceased's habitual residence as mainland China, nor did it address the applicable inheritance law or heir qualifications; therefore, it lacked res judicata, invalidating the appellants' claim. Inheritance is a private matter, unrelated to public interest. Even if Macau law conflicts with mainland regulations, under "One Country, Two Systems," Macau has the right to apply its own laws, unconstrained by mainland public interest clauses (Article 5 of the Law of the People's Republic of China on the Application of Law to Foreign-Related Civil Relations does not apply to Macau). Heir status is not an "identity status." Identity status affects capacity and legal standing and is irrevocable, while heir status only concerns inheritance rights, which can be lost by renouncing the inheritance; thus, Article 17 of Macau's Civil Code on renvoi exclusion for identity status does not apply. The appeal was dismissed, upholding the original court's application of Macau law.

Original Verdict:

https://www.court.gov.mo/sentence/zh-1061c5ad72d45f6a.pdf

Appellants A and B (deceased, represented by the heir) filed an appeal regarding the inheritance dispute of the deceased F's estate, claiming that the Inheritance Law of the People's Republic of China should be applied. The reasons include: 1 The previous effective judgment has determined that the habitual residence of the deceased is in mainland, and mainland laws should be applied; 2. Applying Macau law would deprive parents of their statutory inheritance rights and harm the public interests of mainland society; 3. The identity of the heir belongs to the "status of identity", and according to Article 17 of the Macau Civil Code, reciprocity should be excluded, and mainland laws should be given priority. The appellant E (the property manager to be divided) holds a dissenting opinion.

The court held that the previous judgment did not determine that the deceased's habitual residence was in mainland, nor did it review the application of inheritance laws and the eligibility of heirs, and therefore did not have res judicata. The appellant's claim is unfounded. Inheritance belongs to private interests and has nothing to do with the public interest. Even if the application of Macau laws may conflict with mainland regulations, based on the principle of "one country, two systems", Macau has the right to apply local laws and is not bound by the provisions of the mainland's public interest (Article 5 of the Law of the People's Republic of China on the Application of Law in Foreign related Civil Relations does not apply to Macau). The identity of the heir does not belong to the "status of identity". The identity status needs to affect the ability to act and legal status, and cannot be relinquished. However, the identity of an heir only involves property inheritance rights, which can be lost by renouncing the estate. Therefore, Article 17 of the Macau Civil Code regarding the exclusion of renvoi based on identity status does not apply. In summary, the appeal is rejected and the decision to apply Macau law in the original trial is upheld.