How Do Parents with Joint Custody Manage Their Child's Property Under Japanese Law, and What Happens in Case of Disagreement?

Japanese Attorney at Law - Bengoshi L.L.

• 10 min read

In Japan, when parents are married, they jointly exercise parental authority (kyōdō shinken - 共同親権) over their minor children. This fundamental principle, enshrined in Article 818, Paragraph 3 of the Japanese Civil Code, extends not only to the child's upbringing and care but also crucially to the management of the child's property and their legal representation in property-related matters, as stipulated by Article 824. While the ideal is one of harmonious, joint decision-making, the practicalities of managing a child's assets and the legal ramifications when one parent acts unilaterally or when parents disagree present a complex area of Japanese family law. This is compounded by Japan's notable lack of a formal judicial mechanism to resolve specific disagreements between jointly custodial parents during the marriage concerning the exercise of their parental authority.

The Scope of Parental Property Management and Representation

Under Article 824 of the Civil Code, parents vested with parental authority have the right to "manage the child's property and represent the child in legal acts concerning the child's property." This encompasses two distinct but often intertwined functions:

  1. Property Management (Zaisan Kanri - 財産管理): This includes all factual and legal acts necessary for the maintenance and administration of the child's assets. It clearly covers acts of preservation (e.g., repairing a child's inherited property), utilization (e.g., renting out such property for the child's benefit), and improvement. A more debated area is whether this power extends to the disposition of a child's property beyond what is strictly necessary for routine management. Historically, the drafters of the Meiji Civil Code interpreted this parental management power broadly to include all acts of disposition. This broad interpretation has largely carried over into the understanding of the current Article 824, meaning that parents are generally considered to have the authority to sell or encumber their child's property, though specific rules like those concerning conflicts of interest (Article 826) apply.
  2. Legal Representation (Hōtei Dairi - 法定代理): Parents act as the legal representatives of their minor child in most property-related legal transactions. This means they can enter into contracts on behalf of the child, acquire rights, or incur obligations that bind the child's estate. This excludes acts of a purely personal nature and certain contracts, like labor contracts for the child, where parental consent rather than full representation is the norm (Article 824 proviso, referring to the Labor Standards Act).

In practice, these two functions are deeply interconnected. Managing property often necessitates entering into legal agreements, and legal representation is frequently exercised in the course of property administration. Japanese case law has tended to interpret these parental powers broadly, affirming the parents' extensive authority over their child's financial and proprietary affairs.

The Principle of Joint Exercise: Intent and Action

The core principle of Article 818(3) is that parents "shall jointly exercise parental authority." Ideally, this translates to decisions being made with joint intent (ishi no kyōdōsei - 意思の共同性) and actions being taken in the joint names of both parents (meigi no kyōdōsei - 名義の共同性). However, the legal system and judicial practice have had to address situations where these ideals are not met.

The rationale for requiring joint exercise is viewed differently by scholars. Some argue its primary purpose is to protect the child: if parents cannot agree, no action can be taken concerning the child, thus preventing potentially harmful unilateral decisions. Others, looking at the historical context of its introduction (post-WWII reforms emphasizing equality of the sexes), see it more as a mechanism to ensure equal participation and cooperation of both parents in child-rearing and management, rather than primarily as a child-protection measure through mutual veto. The way Japanese law has developed, particularly in relaxing the formal requirements for joint action in property transactions, tends to align more with this latter interpretation.

When it comes to legal acts concerning a child's property—such as entering into contracts (agency) or giving consent for the child to do so—the application of the joint exercise principle has seen considerable flexibility.

Relaxation of Formalities: The Primacy of Joint Intent

Japanese courts and legal scholarship have generally held that if both parents share a common intent regarding a transaction for their child, the act can be valid even if only one parent formally executes it in their sole name, provided the other parent has given express or, more commonly, implied consent. Implied consent has been interpreted relatively broadly. For instance, if one parent is negotiating the sale of a child's property and the other parent is present and raises no objection, courts have been willing to find that implied consent existed, thereby validating the transaction as a joint act. This pragmatic approach, which developed early after the introduction of joint parental authority, likely reflected the social realities and practicalities of the time, where expecting both parents, particularly mothers in an earlier era, to formally co-sign every transaction might have been unrealistic.

One Parent Acting in Joint Names: The Apparent Agency of Article 825

A specific statutory provision, Article 825 of the Civil Code, addresses the situation where one parent performs a legal act concerning the child's property in the joint names of both parents, even if the other parent did not actually consent internally. This article states:

"If one of the parents who jointly exercise parental authority performs a legal act on behalf of the child in the names of both parents, or gives consent to a legal act to be performed by the child in the names of both parents, such act shall be effective even if it is contrary to the will of the other parent; provided, however, that this shall not apply if the other party was in bad faith."

This provision functions as a special rule of apparent agency, designed to protect third parties who transact in good faith relying on the representation that both parents are acting jointly. If the third party is unaware of the internal disagreement or lack of consent from the other parent, the transaction binds the child and the non-consenting parent. The primary aim here is the security of transactions involving minors.

However, this rule has been critiqued for potentially subordinating the child's property protection to the interests of third-party transaction security. It means that one parent, by acting in joint names, can effectively bind the child's property even against the explicit wishes of the other parent, as long as the third party is not aware of the dissent. This applies regardless of the transaction's significance or risk level (e.g., creating a mortgage on the child's property or entering into a guarantee for a third party's debt). The non-consenting parent's recourse is often limited to internal claims against the acting parent, while the transaction itself remains valid concerning the third party. This provision also serves as a de facto way of overcoming parental disagreement, essentially allowing the acting parent's decision to prevail in the external relationship.

If one parent acts concerning the child's property in their own sole name, without the consent (express or implied) of the other parent, the act is generally treated as unauthorized agency (muken dairi). As such, it is ineffective and does not bind the child or the other parent unless the other parent subsequently ratifies it. If the child themselves entered into a contract with only one parent's consent (where joint consent was required), that contract would be voidable by the child or their legal representatives.

In these sole-name scenarios, Article 825 does not apply. However, the general principles of apparent agency under the Civil Code (e.g., Article 110, where a person has given a third party reason to believe that another person has authority to act as their agent) could potentially be invoked if the circumstances warrant it. For example, if the acting parent had some basic authority (e.g., managing a specific fund for the child) and the third party had reasonable grounds to believe their authority extended to the transaction in question, an argument for apparent agency might be made, though this is a more general and often harder-to-establish doctrine than the specific protection of Article 825.

Joint Exercise in Other Contexts

The principle of joint exercise also applies to other aspects of managing a child's property and legal interests.

Litigation on Behalf of the Child

When legal action is taken on behalf of a child concerning their property rights:

  • For highly significant procedural acts, such as initiating a lawsuit or filing an appeal, the dominant view among legal scholars and practitioners is that both parents must act jointly and explicitly state their joint representation. This is based on the importance of such decisions and the need for careful consideration by both parents.
  • For less critical procedural acts during litigation, if one parent acts alone, their action might be considered valid if the other parent does not object, effectively ratifying the act.
  • Importantly, the Supreme Court of Japan, in a decision on November 26, 1982, held that Article 825 (the apparent agency rule for acts in joint names) does not apply to litigation acts. The rationale given was the paramount need for clarity and certainty regarding legal representation in court proceedings, and the existence of other procedural rules designed to ensure proper representation of minors. If one parent initiated a lawsuit in joint names without the other's true consent, it would be treated as a defect in representation.
  • Regarding the receipt of procedural notices (e.g., court documents served on the child's representatives), service on one parent is generally considered sufficient. However, for summonses to hearings where both parents' participation is expected or required for joint decision-making, it is considered preferable for both parents to be formally notified to ensure they have the opportunity to act jointly.

For acts of property management that are not formal legal transactions (e.g., factual administration, collection of due income, simple repairs not involving contracts):

  • Article 825, being specific to "legal acts," does not directly apply. The general principle of joint intent under Article 818(3) remains the guiding rule.
  • However, case law has shown some flexibility. For instance, one parent has been permitted to unilaterally receive payment of a debt owed to the child (such as compensation from an accident settlement) provided there are no "special circumstances" suggesting an abuse of authority or detriment to the child. This is often justified by viewing such an act as merely settling an existing legal relationship with little inherent risk, analogous to the passive receipt of performance by one of several joint obligees.
  • Acts of preservation concerning the child's property (e.g., demanding the removal of an illegal occupant from the child's land, undertaking urgent repairs to prevent further damage) are generally considered actions that one parent can undertake unilaterally. The reasoning is either that the other parent's consent can be implied for such clearly beneficial acts, or that the nature of preservation acts inherently justifies prompt, individual action to protect the child's interests.

The Absence of a Formal Dispute Resolution Mechanism

A distinctive feature of Japanese family law is the lack of a specific statutory mechanism for Family Courts to intervene and resolve disagreements between married parents who jointly exercise parental authority regarding specific decisions about their child's welfare or property. This was a conscious decision made during the post-WWII Civil Code reforms, with the expectation that parents would resolve such matters through discussion and mutual agreement.

This absence can lead to several consequences:

  • Deadlock: Parents may reach an impasse, preventing necessary decisions from being made.
  • Unilateral Action: One parent might proceed unilaterally, leading to the legal complexities discussed above regarding validity and third-party rights.
  • De Facto Resolution by Other Rules: As noted, provisions like Article 825 (for property transactions in joint names) and judicial interpretations around implied consent or apparent agency can, in effect, resolve certain disputes by validating one parent's actions. However, this often prioritizes transactional expediency or third-party protection over ensuring genuine joint parental decision-making and potentially the child's best interests in that specific decision.

Exceptional Sole Exercise of Parental Authority

The proviso to Article 818(3) of the Civil Code allows one parent to exercise parental authority solely if the other parent "is unable to exercise parental authority." This typically covers situations like the other parent's long-term physical absence (e.g., whereabouts unknown), serious illness rendering them incapable, imprisonment, or if their parental authority has been formally lost or suspended by court order.

Courts have, on occasion, cautiously extended the interpretation of "unable to exercise" to situations of de facto divorce where parents are living separately and communication and cooperation have completely broken down. This has been particularly relevant in cases where one parent needs to initiate legal action for the child's direct benefit, and the other parent is uncooperative or their interests conflict with the child's (e.g., one parent suing the other parent's new partner for damages related to the breakup's impact on the child, or seeking child support from an uncooperative non-custodial parent). In such limited, highly conflictual scenarios, allowing sole exercise by the de facto custodial parent can be seen as a practical, albeit imperfect, way to ensure the child's legal interests can be pursued. However, merely living separately without complete inability to cooperate is generally not sufficient to trigger this proviso for all matters of parental authority.

Critique and Avenues for Reform

The current Japanese system for joint parental management of a child's property, while offering some flexibility, has drawn criticism for not sufficiently prioritizing the child's property protection through robust mutual parental supervision. The ease with which implied consent can be found, or the broad protection offered to third parties under Article 825, can mean that significant decisions about a child's assets are effectively made unilaterally.

To address this, some legal commentators advocate for:

  • Strengthening Mutual Supervision: For significant property transactions, requiring stricter adherence to both joint intent and joint names, thereby reinforcing the mutual supervisory role of parents.
  • Court Approval for Major Dispositions: Introducing a requirement for Family Court approval for certain major or risky transactions involving a child's property, similar to how a formally appointed guardian's powers might be subject to court oversight, regardless of whether the parents are in agreement. This would add an external check to protect the child's interests.
  • Formal Dispute Resolution Mechanism: The most frequently cited area for reform is the establishment of a formal judicial mechanism for parents to resolve specific disagreements regarding the exercise of parental authority during their marriage, including those related to property management. Such a system could provide a structured way to break deadlocks based on the child's best interests, rather than relying on one parent's unilateral action or the default operation of rules like Article 825.

Conclusion: Balancing Ideals and Realities

Japanese law mandates that married parents jointly manage their child's property and represent the child in related legal acts. This reflects an ideal of cooperative, shared parenting. However, the practical application of this principle, through statutory provisions like Article 825 and evolving judicial interpretations concerning implied consent and apparent agency, often results in a system where one parent's actions can effectively bind the child, frequently prioritizing the security of transactions and pragmatic solutions over strict adherence to joint decision-making.

The notable absence of a formal statutory mechanism for resolving parental disagreements during marriage over the exercise of their joint authority remains a significant characteristic of the Japanese system. This gap means that conflicts are often resolved indirectly, through the validation of one parent's actions or, in exceptional circumstances, through a finding that one parent is "unable" to exercise their authority. The ongoing legal and societal discussion in Japan continues to grapple with how to better balance the protection of a child's property, the principle of parental equality and cooperation, and the practical need for clear and effective decision-making in the child's life. The system reflects a persistent tension between the legal ideal of shared parental responsibility and the complex realities of parental relationships and unilateral actions.