Экзамен зачет учебный год 2023 / Ramaekers, EU Property Law

Chapter 1

law.116 Just as in civil law systems, where the right of ownership can be regarded as the most extensive property right one can have under a legal system, these two property rights can be seen as the ‘most extensive’ property rights one can have in English law, in relation to land and personal property respectively. Both the holder in fee simple as well as the holder of title to a chattel are entitled to exclusive possession of the object forever.117 Other rights to possession exist both in land law and in personal property law, but these property rights are less strong. One exception might be the demesne title to land held by the Crown, under which the Crown owns all land.118 What is essential for the System-Cube is that English property law, just like other systems of property law in Europe, distinguishes between a most extensive property right and less extensive property rights.

Apart from the division between land law and personal property law, English property law also classifies the objects of property rights differently from civil law systems.119 Tangibles can be subdivided into immovables – which would be subject to land law – and choses in possession – which would be subject to personal property law. Choses in possession and choses in action, the latter being intangibles, can together be classified as chattels, both being subject to personal property law. Taking all of the above into account, the system of property rights in England could then be visualized with the System-Cube in the following manner:

Figure 8. The system of property rights in English law.

Taking Figure 8, representing the system of property rights in English law, as a starting point, the following figure shows what a fee simple estate in land looks like and what title to a chattel looks like:

116Akkermans 2008, p. 417.

117Akkermans 2008, p. 418; Lawson & Rudden 2002, p. 65 and 80.

118Lawson & Rudden 2002, p. 78 and 101.

119For more information on the classification of objects of property rights in English law, see Akkermans 2008, p. 332-334; Clarke & Kohler 2005, p. 18; Lawson & Rudden 2002, p. 19 et seq.

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Figure 9. Fee simple estate in land and title to a chose in possession respectively.

2.2.4.1. Common Law and Equity

As a result of historical developments, English law consists of two sub-systems: common law and equity.120 A consequence of this division is the existence of legal as well as of equitable property rights.121 This division into sub-systems does not prevent the application of the System-Cube. The depth of the Cube represents the range of property rights. The content of the right determines just how deep that dimension is. There is no reason why this range of property rights cannot contain both the legal and the equitable rights. Whether a person holds a property right at law or in equity does not change the content of the right as such, although it may mean that different operating rules apply to the property right. For instance: one kind of operating rules are rules concerning the third party effect of property rights.122 These rules on third party effect may apply differently depending on whether a person holds a property right at law or in equity. Equitable property rights, for instance, cannot be invoked against a bona fide purchaser for value without notice, whereas legal property rights can.123 However, a change in the operating rules does not change the parameters of the System-Cube. English property rights, regardless of whether they are legal or equitable property rights, can therefore be visualized through the System-Cube like any other property right.

There is one exception, however, and that is restrictive covenants. Restrictive covenants are English property rights that only exist in equity. A restrictive covenant was first created by the Lord Chancellor’s Court in Tulk v Moxhay in 1848,124 and was subsequently refined in Haywood v Brunswick Permanent Building

120Lawson & Rudden 2002, p. 10-11.

121Akkermans 2008, p. 336; Clarke & Kohler 2005, p. 403 et seq. See, for instance, restrictive covenants, which can only exist in equity.

122Supra, section 2.2.1. Defining property law: introducing the System-Cube.

123Akkermans 2008, p. 336-337.

124Tulk v Moxhay (1848) 2 Ph 774; Akkermans 2008, p. 363 et seq.

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Society125 and London County Council v Allen.126 A restrictive covenant is an agreement between parties that restricts the holder of an estate in land in his use of the land.127 It requires the existence of a servient and a dominant tenement and the dominant tenement must benefit from the covenant.128 It must be the intention of the parties that the covenant runs with the land which it burdens.129 Finally, and this is perhaps the most important aspect and a distinguishing feature from (positive) easements,130 restrictive covenants must be negative in the sense that they can only entail an obligation for the holder of the servient tenement not to use his property in a certain way.131 It cannot contain a positive obligation for the holder of the servient tenement to do something with or on the property,132 nor can it contain a right for the holder of the dominant tenement to do something with or on the servient tenement.

This makes it somewhat difficult to visualize a restrictive covenant through the System-Cube, because it has no content for the ‘active side’, i.e. the rightholder of the dominant tenement, in the sense that the latter can do something with or on the servient tenement as a result of the restrictive covenant. A restrictive covenant does not give the party benefiting from it any right to do something with the property on which the covenant rests, as would be the case with other limited property rights, most notably positive easements and profits a prèndre. Positive easements grant the party benefiting from them a right to use the servient tenement in a particular way, for instance, to walk over it or run drains underneath it.133 Profits grant the party benefiting from them a right to take something from the servient land, such as fish (piscary), turf (turbary), or timber (estovers).134 Restrictive covenants (and negative easements for that matter)135 do not grant such a right to the owner of the dominant tenement to use or take something from the servient tenement and therefore have a ‘negative’ content for the owner of the dominant tenement. What it does do, however, is make an addition to the right of ownership of the dominant tenement.136 For instance, if a restrictive covenant is created to prevent the owner of the servient tenement from developing the land, then that essentially adds the development value of the servient tenement to the dominant

125(1881) 8 QBD 403.

126[1914] 3 KB 642.

127Tulk v Moxhay.

128London County Council v Allen.

129S 79 Law of Property Act 1925.

130Negative easements are similar to restrictive covenants in that they only entail an obligation for the owner of the servient tenement to refrain from using his land in a certain way, but they seem to be limited to four categories: the right to light, the right to a free flow of air, the right to support of buildings, and the right to a continued flow of water. Lawson & Rudden 2002, p. 154. See also Sara 2011, p. 205, who would however consider the rights to a free flow of air and water to have positive elements in case of a vent or artificial stream, because there is then a defined channel which could be blocked by the servient owner (p. 220).

131Rhone v Stephens [1994] 2 AC 310, HL. See also McFarlane, Hopkins & Nield 2009, p. 928-932.

132Unless it is made as part of a lease: Akkermans 2008, p. 364.

133Van Erp & Akkermans 2012, Chapter 3 at II.A.6.; Lawson & Rudden 2002, p. 154.

134Van Erp & Akkermans 2012, Chapter 3 at II.A.7.

135Sara 2011, p. 205.

136Cf McFarlane, Hopkins & Nield 2009, p. 923 and 926.

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tenement.137 Therefore, while the System-Cube cannot visualize the content of a restrictive covenant as such – since it has only a negative content – it can visualize the fact that a restrictive covenant forms an addition to the right of ownership of the dominant tenement. The result would be this:

Figure 10. A restrictive covenant on land.

The minor cube in the front, marked with horizontal stripes, represents the dominant tenement, which is an immovable object. The two minor cubes behind it marked with an represent the right of ownership in relation to the dominant tenement. Neither the object nor the right of ownership are limited in time, which is why no time-cubes have been removed. The column of minor cubes in the back represents the restrictive covenant which is attached to the right of ownership of the dominant tenement. It is also unlimited in time.

2.2.4.2. Trusts

The trust is an institution unique to English law and to certain systems based on the English system.138 Legal scholars have tried to classify it as several different things, among others as a limited property right or as a legal person.139 The creation of a trust in any event entails a fragmentation of ownership:140 the powers contained in the ownership right originally held by the settlor are divided amongst the trustees and beneficiaries upon the creation of the trust. The trustees will have the power to

137Lawson & Rudden 2002, p. 156-157.

138The author assumes that the reader is familiar with the concept of a trust. For a basic explanation of what this concept entails, see, however, Lawson & Rudden 2002, p. 86-88.

139Cf Lawson & Rudden 2002, p. 171.

140Clarke & Kohler 2005, p. 333.

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manage and dispose of the property, whereas the beneficiaries will have the right to benefit from the property. Gardner defines the trust as:

‘[A] situation in which property is vested in someone (a trustee), who is under legally recognized obligations, at least some of which are of a proprietary kind, to handle it in a certain way, and to the exclusion of any personal interest. These obligations may arise either by conscious creation by the previous owner of the property (the settlor), or because some other legally significant circumstances are present.’141

The difficulty for this chapter lies not so much in the question, what a trustee’s or beneficiary’s interest looks like – if there is a beneficiary; not all trusts have beneficiaries142 – but rather in the question whether or not the trustee’s interest and whether or not the beneficiary’s interest is of a proprietary nature. If it is the case that these interests are seen as proprietary, then they can be visualized through the System-Cube just like any other property right.

The trustee has the legal title to the property and can thus be said to be the owner.143 Of course, being a trustee means being a fiduciary owner, meaning the ownership does not benefit the trustee himself. In that sense, the content of fiduciary ownership clearly differs from outright ownership.144 Nevertheless, the interest held by the trustee over the trust property is a property right. Whether the right held by the beneficiary (i.e. equitable interest) is a property right is less straightforward. As was seen above in section 2.2.1., the defining characteristics of a property right are that it is a right as against a thing, which can be invoked erga omnes. Much depends on the nature of a specific trust, and since there exists a myriad of trusts, it is difficult to give straightforward statements on the nature of a beneficiary’s interest. Nevertheless, some general observations can be made. A beneficiary can be said to have an interest against the trust property, if he can dissolve the trust and demand that possession of the trust property is transferred to him under the rule in Saunders v Vautier.145 This will be the case where the trust is fixed, held for a sole adult beneficiary of unimpaired capacity, upon whose entitlement there are no conditions.146 This will also be the case in an exhaustive discretionary trust if all beneficiaries act together as a single beneficiary.147

It is clear that a beneficiary can invoke his interest, under certain circumstances, against the trustee. But can a beneficiary invoke his interest erga omnes? If not, then it may be doubtful whether a beneficiary’s interest is a property right after all. This is a discussion that is far from crystallized. McFarlane and Stevens describe the beneficiary’s interest as a right against the trustee’s right of ownership.148 This means that the beneficiary can only invoke his interest under the trust against those third parties who have acquired a right ‘that derives from the right which [the

141Gardner 2011, p. 2.

142Gardner 2011, p. 6.

143Clarke & Kohler 2005, p. 334.

144Gardner 2011, p. 224; Lawson & Rudden 2002, p. 171-173.

145(1841) 4 Beav 115, Cr & Ph 240. Gardner 2011, p. 223.

146Gardner 2011, p. 218-219.

147See e.g. Re Smith [1928] Ch 915; Sainsbury v IRC [1970] Ch 712.

148McFarlane & Stevens 2010.

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trustee] holds on trust for [the beneficiary]’.149 As a result, the beneficiary can invoke his interest against C if C is given the trust property by the trustee, but the beneficiary cannot invoke his interest against D if D carelessly damages the trust property, for D in that case does not acquire a right in the trust property from the trustee. In accordance with this interpretation, a beneficiary’s interest is almost like a semiproperty right, in that it can be relied upon against some third parties but not against all third parties. Maitland provided an overview of the different classes of third parties against whom a beneficiary can and cannot invoke his interest.150 He argued that equitable interests – such as that of a beneficiary under a trust – are not to be seen as property rights, that they are rights in personam having only a ‘misleading resemblance’ to rights in rem because a trust will be enforced against persons acquiring legal rights through the trustee, if they knew of or ought to have known of the existence of the trust.151 On the other hand, a recent Court of Appeal’s judgment in Shell v Total152 would suggest that a beneficiary’s interest is a property right after all, since in that case the applicant was allowed to rely on his beneficial interest directly against the defendant, who negligently damaged the trust property. This judgment has been criticized, however, because it is not clear-cut and may rest on fallacious reasoning.153

If it is accepted that a beneficiary’s interest under a trust is a property right, then it can be visualized through the System-Cube. The beneficiary’s interest is not as extensive as a full right of ownership: the beneficiary may have the right to use and benefit from the object held on trust, but he does not have the right to manage the property and dispose of it. Take as an example a car – i.e. a chattel – held on trust for a sole beneficiary for the duration of his life, that beneficiary’s interest in the car could be visualized in the following manner:

Figure 11. A beneficiary’s interest in a car held on trust.

149McFarlane & Stevens 2010 at C Equitable property rights and rights against a right.

150Maitland 1936, Lecture IX ‘The nature of equitable estates and interests(I)’, p. 112 et seq.

151Maitland 1936, Lecture IX ‘The nature of equitable estates and interests(I)’, p. 115, and Lecture X ‘The nature of equitable estates and interests (II), p. 117.

152[2010] EWCA Civ 180.

153Rushworth & Scott 2010.

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The minor cubes representing time have been reduced by one above the rights-cube (marked with a dotted ), to indicate that the beneficiary’s interest is limited to his lifetime.

2.2.5. Summary

The model presented above indicates the general characteristics of any property law system, but it can also account for the variables of specific property rights in specific national property law systems. One could debate whether the System-Cube is the preferred way of visualizing the building blocks of property rights; that remains a matter of preference. The underlying model, however, remains the same: a system of property law consists of a core representing the property rights and an operating system around it regulating those rights. The core in turn has three dimensions (width – objects; depth – content of the right; height – time) and in each system the shape of these dimensions shifts depending on the idiosyncrasies of a particular property right.

The model is primarily created to solve the particular methodological problems of this research project. It is not intended for universal application, even though others may be able to use it for different purposes. With this model, I can answer the question how to make a selection of the acquis communautaire and on the basis of what criteria. As I said before, every Treaty Article, secondary legislative measure, judgment and policy document that has an impact on property law will be part of the selection. This criterion can now be refined to: every Treaty Article, secondary legislative measure, judgment and policy document that deals with or affects either one of the three dimensions of property rights or any of the operating rules will be part of the selection.

3.Linguistic Problems: the Method of the Court of Justice of the European Union

The first major methodological issue of this project has been outlined above: to find out what constitutes property law, before the acquis communautaire can be analysed and described in order to establish what constitutes EU property law. Once this hurdle is cleared and the analysis of the acquis can start, a second problem will undoubtedly be encountered. This is the problem of the multilingual nature of the European Union. There are currently 27 Member States with a total of 23 official languages in the EU. The method developed by the CJEU when dealing with multilingual texts prescribes that all the different language versions must be taken into account on the basis of the principle of equality of languages. However, this method was tailored to an EU with maximum 15 Member States. The official languages spoken in those Member States were relatively understandable for judges who would normally be able to understand a combination of French, English and German. It is uncertain whether this method still fits an EU with 27 Member States and 23 official languages, some of which have much less in common with each other and with the languages of the EU-15. Not all of these languages will be easily

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understood by all of the judges, nor by academics for that matter. This section is dedicated to explaining the method developed by the CJEU to deal with the multilingual nature of EU law. In the next chapters, especially Chapter 3 dealing with Article 345, this method will be applied and, on occasion, adapted for the idiosyncrasies of this project.

3.1.The Semantic Approach and the Contextual Approach

The judgments rendered by the Court in cases dealing with interpretation problems show that a hierarchy of interpretative rules exists. The role that languages play in the EU legal order is described in the CILFIT case:154

‘18 To begin with, it must be borne in mind that Community legislation is drafted in several languages and that the different language versions are all equally authentic. An interpretation of a provision of Community law thus involves a comparison of the different language versions.

19 It must also be borne in mind, even where the different language versions are entirely in accord with one another, that Community law uses terminology which is peculiar to it. Furthermore, it must be emphasized that legal concepts do not necessarily have the same meaning in Community law and in the law of the various Member States.

20 Finally, every provision of Community law must be placed in its context and interpreted in the light of the provisions of Community law as a whole, regard being had to the objectives thereof and to its state of evolution at the date on which the provision in question is to be applied.’

As can be seen from this section of the judgment, the Court takes two steps when interpreting the text of a provision: it starts with a purely textual – or ‘semantic’ – approach, according to which it compares the different language versions. The Court will thereafter examine the provision in its context, both the immediately surrounding provisions and the other parts of the Treaty, as well as secondary legislation if that legislation touches upon the same subject.155 If the language versions are unequivocal, the contextual interpretation is intended to confirm this conclusion. If the semantic approach is inconclusive, the contextual interpretation is intended to remedy this divergence between the different language versions.156 The Court’s case law provides a number of examples where the semantic method is applied. See, for instance, Isabelle Lancray where the Court in paragraph 16 says: ‘The wording of the different language versions of the provision in question

154Case 283/81 [1982] ECR 3415.

155See also case 30/77, Bouchereau [1977] ECR 1999, para. 14: ‘The different language versions of a Community text must be given a uniform interpretation and hence in the case of divergence between the versions the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms a part.’ The two-step method of interpretation here described applies both to Treaty provisions and to secondary legislation; Cf Van Calster 1997, p. 375.

156See, for instance, case 6/60, Humblet [1960] ECR 559, 575, 6th paragraph; case 90/83, Paterson v Weddel [1984] ECR 1567, para. 12; see also Vismara 2006, p. 67.

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suggests…’.157 The Court starts with the use of the semantic approach because of the need for uniformity in interpretation. The result of the fact that all language versions of the Treaty are equally authentic is that the content of the Treaty is not laid down in any of those versions separately but that the content is contained in all those versions together.

The Court is thorough in its analysis. A decision will not be made based on a majority of texts only. First of all, this would go against the rule that all language versions are equally authentic. Secondly, if a decision is based on a common denominator found in a majority of texts but not in all of them, an interesting solution featuring in the minority of texts might be overlooked. This is especially important as it is not always the common denominator that the Court is looking for.158 Thirdly, basing a decision on the maximum common content could set a poor example for the Member States. A Member State that is unhappy with the way in which legislation develops in a particular area of European law could start looking for differences in wording in the different language versions of the legislative instrument concerned and stick only to the minimum common content. This would be an undesirable hindrance to the unification of that particular area of law.159 It would equally go against the principle of equality to discount diverging language versions simply because they represent only a small percentage of the Union’s population. The CJEU has discarded this suggested approach in case EMU Tabac.160

It is only when the semantic approach fails to provide a clear answer that the Court turns to the second step: contextual interpretation. An important part of this step in the interpretation process is the intention of the drafters of the – primary or secondary – legislation. However, it was not until 1994 that the documents drawn up during the Intergovernmental Conference of 1957, where the text of the E(E)C Treaty was decided, were released.161 Before that time, those documents were unavailable to the Court, let alone to the general public and ascertaining the intention of the drafters of the Treaty was therefore usually impossible.162 The Court therefore examines a provision in its context. It takes into account the ‘general

157Case C-305/88 [1990] ECR I-2725. For an overview of cases in which the CJEU applies the semantic approach see Van Calster 1997, p. 370.

158Cf Lenaerts 2003, p. 879.

159Van Calster 1997, p. 378.

160Case C-296/95, The Queen v Commissioners of Customs and Excise, ex parte EMU Tabac and others

[1998] ECR I-1605, para. 36: ‘Furthermore, to discount two language versions, as the applicants in the main proceedings suggest, would run counter to the Court’s settled caselaw to the effect that the need for a uniform interpretation of Community regulations makes it impossible for the text of a provisions to be considered in isolation but requires, on the contrary, that it should be interpreted and applied in the light of the versions existing in the other official languages […]. Lastly, all the language versions must, in principle, be recognized as having the same weight and this cannot vary according to the size of the population of the Member States using the language in question.’ See also Ioriatti Ferrari 2008, p. 108.

161Decision No. 359/83 of the ECSC, 5 February 1983 and Regulation No. 354/83 of the EEC and Euratom, concerning the opening to the public of the historical archives of the European Coal and Steel Community, the European Economic Community and Euratom.

162These documents are now available in the Historical Archives of the European Union at the European University Institute, Firenze, Italy. They can also be consulted in Neri & Sperl 1960, p. 410.

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scheme and the purpose of the regulatory system of which the provisions in question form part’.163 This purposive approach goes hand in hand with the doctrine of effet utile: once the purpose of a provision has been established, it will be interpreted further in a way that will ‘ensure that the provision retains its effectiveness’.164

CONCLUSION

This chapter has outlined the two goals of this study: to map out the landscape of EU property law and to propose a framework for further conceptualization of this field of law. The reasons for investigating whether and how the EU should get involved in property law are twofold. First of all, the divergences between the national systems of property law and their closed and mandatory nature, which cannot be avoided through a choice of law, may cause – and do cause – hindrances to free movement within the internal market. The discovery of potential hindrances to free movement functions as a signal that harmonization may be needed. Whether that is indeed the case deserves further research which will be conducted in this study. Secondly, the European Union has been involved in the development of European contract law for several decades, but other areas of private law adjacent to contract law – most notably property law – are left behind in these developments. However, there are too many areas where property law and contract law intertwine, so that moving forward in contract law without also moving forward, at least to a certain extent, in property law could lead to disruptions within the national legal orders that have to implement the European rules on contract law. Having said this, before a discussion about whether and how property law should be developed by the EU can take place, it is important to have an overview of the extent to which the EU has already created property law. This study purports to provide such an overview, focussing on European legislation and case law in the field of property law.

In this chapter, the method has been developed with which the acquis communautaire will be analysed for existing property law. To analyse the acquis in the field of property law, a selection of measures from the acquis will have to be made that deal with property law. Therefore, before it can be established what constitutes EU property law, it has to be established what constitutes property law and where the line is to be drawn between property law and contract law. The distinguishing features of property rights are that they are rights against a thing, which can be relied upon erga omnes, as opposed to contractual rights which are rights against a specific person or group of persons only. The principle of numerus clausus determines that the list of property rights available within a given system is closed and mandatory. Only rights that are in the numerus clausus are property rights and only rights that have the two characteristics just mentioned will be in the numerus

163Joined cases C-267/95 and C-268/95 [1996] ECR I-6285, paras. 21-22. The wording of this formula has changed somewhat over the years, but the essence has stayed the same; see Fennelly 1996-1997, p. 664-665.

164Case 187/87 [1988] ECR 5013, para. 19: ‘It is to an interpretation to that effect, which is such as to ensure that the provision retains its effectiveness [effet utile], that preference must be given, in accordance with a line of decided cases [reference omitted].’

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