Экзамен зачет учебный год 2023 / Ramaekers, EU Property Law

Chapter 1

clausus. The numerus clausus thus acts as a filter to draw the line between property rights and contractual rights. Once it has been established that a right is a property right, rules of property law determine how such a right can be created or transferred, whether it must be registered, etc. I have developed a model that shows what a system of property law looks like. It consists of a core, representing the property rights, which is surrounded by an operating system, i.e. the system of rules that governs property rights. The core illustrates the three dimensions of property rights: the first dimension consists of the content of the property right, the second dimension consists of the objects in relation to which a property right can be held and the third dimension represents time, since both a property right and the object on which it rests can be limited or unlimited in time. I have named this core the System-Cube: it illustrates the dimensions of property rights through cubes that represent the building blocks of a property right. The System-Cube was applied to several examples of national property rights to show how its building blocks can visualize any property right from any legal system. At the end of this study, the System-Cube will be revisited and filled in with the data gathered on the status quo of EU property law. The model of property law, including the System-Cube, was developed specifically for the kind of research that I am conducting, where the field of law is largely unexplored and where one therefore has to work with an abstract concept containing the general characteristics of that field of law. The model does not presume to be universally applicable, even though others may be able to use it for different purposes.

While the primary focus of this study is therefore on the acquis communautaire, comparative research also plays a role. It is first of all used as a basis to outline the field of property law. Information drawn from comparative research has been used to feed the model that I have developed in this chapter, including the System-Cube. Comparative research will moreover be used at a later point in this study, when the status quo of EU property law is described and when the framework for the future conceptualization of this field of law is developed. Any gaps in EU property law will be able to be filled using examples gathered through comparative research.

Once the status quo of EU property law is clear, this study will provide a framework for the future development of EU property law in a consistent and coherent way. It will deal with both form and content. There are different options for the form which EU property law could take. These possible forms will be explored in depth in Chapter 5, but I will already introduce them briefly here. One possibility would be to lay down a coherent set of property law rules in one regulation or directive, which would be mandatory for the Member States. Drafting a set of regulations or directives, each dealing with a specific issue area of property law might also be possible; they would again be mandatory measures. Whether the EU is allowed to promulgate such measures depends of course on whether the necessary legal basis is available. This is an issue that will be discussed both in

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Purpose and Method of the Study

Chapter 3 and in Chapter 5. Another option would be for the European Institutions to adopt an inter-institutional agreement. It remains to be seen, however, what could be achieved with this option, as an inter-institutional agreement is only binding on the EU institutions and not on the Member States. A final possibility would be for the EU to adopt an optional instrument on property law that would provide an alternative for parties next to the national systems of property law. Such an optional system is often referred to as the ‘28th system’ to indicate that it exists next to the 27 national systems. However, a 28th system implies that one could choose between one’s own system, the 26 other systems of the Member States, and the European system, but in property law there is no such choice of law because the applicable property law will always be the lex rei sitae, i.e. the law of the place where an object is situated. If a European alternative was offered, it would therefore not constitute a 28th system but simply a 2nd system.

As far as the content of future EU property law is concerned, there are several examples that can provide inspiration. In this regard one could think of Article 9 of the Uniform Commercial Code or the Cape Town Convention on International Interests in Mobile Equipment, both of which provide for a property security right that can be used in cross-border situations. The developments around a Euromortgage and the DCFR are also relevant for this study. All these examples will be explored in the final chapter of this study, which will contain a proposal for the future development of EU property law.

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Chapter 2

PROPERTY LAW AND THE INTERNAL MARKET

INTRODUCTION

The first chapter of this study identified one of the main reasons for researching the development of EU property law as being that the divergences between national systems of property law may cause obstacles to the freedom of movement within the internal market.1 The effect that the rules of the internal market have on national law is called negative integration. Through negative integration, European law creates the internal market by imposing obligations upon Member States not to do something, not to apply certain national legislation. If national law is found to hinder free movement within the internal market, it can no longer be applied, unless the Member State can justify the continuing existence of its law and can show that its law is proportional to the aim it pursues. Negative integration is the opposite of positive integration, by which the EU develops the internal market through European legislation in the form of regulations and directives. These legislative measures impose obligations upon the Member States to do something, to change and interpret their national legislation in line with the European rules. Positive integration will be dealt with in Chapter 4. The topic of this chapter is negative integration which, in the European Union, is achieved through the rules on

1There may, of course, be other reasons why businesses or consumers are deterred from entering into cross-border trade than merely a difference in laws. An interesting study in this regard is LOW’s European Contract Law between the Single Market and the Law Market – A Behavioural Perspective. Some of these deterrents may be practical (e.g. IKEA Belgium will not deliver furniture to people living in the Netherlands for insurance reasons; foreign plugs will not fit into the sockets in your home country; you do not speak the language). Others may be behavioural (Status quo bias indicates that as long as there is a default position, people will tend to follow that default position.) Such considerations may lead businesses or consumers to decide not to engage in cross-border proprietary transactions, even if they could be fully informed about foreign law and would therefore not need to worry about, for instance, the costs of acquiring the information. See in particular Low 2011, p. 89-91, 146-150, 256-262, and 268 et seq. These considerations, while extremely insightful, fall outside the scope of this study, which focuses only on the effects that differences in national property laws have on people’s and companies’ decisions to enter into cross-border proprietary transactions.

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Property Law and the Internal Market

the free movement of goods, persons, services and capital.2 In Chapter 1, a brief introduction was given concerning the possible influence of the four freedoms on national property law. The current chapter investigates whether the rules of national property law indeed fall within the scope of application of the four freedoms and, if so, what the effects of such an application would be. It is meant to explore where the boundaries of the four freedoms lie when it comes to their application to property law.

The possibility that the four freedoms also apply to property law is not often considered. Even though the idea that the four freedoms might also be applicable to private law is not a completely new one,3 not much is written about the possible influence of the rules on free movement on national property law.4 National lawyers and courts do not seem to consider that there could be an influence, which is for a large part due to Article 345 TFEU stating that nothing in the Treaties shall affect the Member States’ system of property ownership. This will be addressed further Chapter 3. Much more focus is placed on active measures, positive harmonization, undertaken by the EU, which affects property law. This is understandable because these measures are more visible and their effect is perhaps more easily quantifiable. The effect of the rules on free movement is less visible and possibly more indirect, hence the risk of unawareness. But rules of private law are just as capable of creating obstacles to the internal market as rules of public law are.5 And the effect of the four freedoms on private law could be much more extensive than the effect of the more visible, positive harmonization measures. Precisely for that reason it is important to figure out just how extensive this effect could be.

Apart from unawareness, discomfort also seems to play a part in the limited amount of research done in this area6 and in the hesitance of the CJEU to test the compatibility of national property law with the internal market rules, as will be shown below in the discussion of the Krantz judgment.7 People seem to be convinced that the application of the four freedoms to private law automatically has drastic consequences, that it will open the flood-gates and that it will disrupt the national system. This is certainly not necessarily the case, however.8 The application of the internal market rules always occurs in several steps: step 1 – is there an obstacle to the internal market? If the answer is yes, step 2 follows: is there a possible ground for justification of the national measure? If the answer to that is no, the national measure infringes the internal market rules and will have to be changed or removed; but if the answer to that is yes, step 3 follows: is the national measure proportionate to the aim pursued? If the answer to that is also yes, then the national measure, even though it forms an obstacle to the internal market, is justified and can

2Apart from the four freedoms, negative integration also includes the rules on competition law. They will however not be dealt with here, as that would go beyond the scope of this project.

3Klauer 1998, p. 17 with further references in footnote 4.

4Klauer 1998, p. 22.

5Klauer 1998, p. 62.

6The application of the four freedoms to private law has even been called a ‘horror-image’: Steindorff 1994, p. 98.

7C-69/88, Krantz v Ontvanger der Directe Belastingen [1990] ECR I-583.

8Klauer 1998, p. 71.

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Chapter 2

remain in existence. It will be shown in section 7 that there are quite a large number of possible grounds for justification that have been or may be accepted by the Court. That means that, even though a national measure of private law may initially be caught under one of the free movement articles, in the end nothing much may need to be changed at all, because the measure is justified.

The case law of the CJEU, which interprets the four freedoms in general and which deals with the application of these freedoms to cases relating to property law specifically, will be closely looked at in this chapter. Given the interface between internal market law – especially the free movement of goods and capital – and national property law, which forms one of the two pillars of this research,9 an important element of this chapter will be an analysis of how the CJEU defines the concept of ‘goods’ and how it develops this definition. Such an analysis can give an indication as to whether the term ‘goods’ is given a definition only for the purposes of the internal market or whether it is interpreted in such a way that it can also be used in the context of EU property law.

Another thread running through this chapter is the trend of the CJEU to shift to a market access test, as opposed to a discrimination test, when determining whether a national measure forms an obstacle to the internal market. A discrimination test is applied to catch measures that are of a directly or indirectly discriminatory nature against foreign persons or goods. However, non-discriminatory measures cannot be caught with such a test. Given that even such measures can nevertheless hinder cross-border trade, a test was developed by the CJEU to determine whether they prevent or limit access to the market of a host Member State.10 It is important to find out for each of the four freedoms which test the CJEU applies because property law is generally applied to anyone and anything within a particular Member State, regardless of whether or not that person or object ‘originated’ from that Member State. Cases of property law (in)directly discriminating between foreign and domestic persons or between foreign and domestic goods are therefore unlikely.11 Rules of property law may nevertheless restrict access to the market of a Member State. A market access test is therefore needed to determine whether a rule of national property law constitutes a hindrance to free movement. According to the case law of the Court, a market access test (or ‘hindrance-test’) is by now applied to the free movement of services and persons. For the free movement of capital the Court’s case law is less clear-cut. In the free movement of goods, the Court seemed to be going in the direction of a market access test, but the Keck and Mithouard judgment caused a lot of uncertainty on this point. That uncertainty has to some extent been relieved by the Trailers judgment. Both these cases will be discussed in detail in this chapter. Which test is applied is also relevant to determine what kind of justifications a Member State could rely on to maintain its national measure. In

9Chapter 1, at 1.1. The relationship between free movement law and property law.

10‘Host’ Member State means the receiving Member State or Member State of destination in a cross-border situation.

11Klauer 1998, p.64. The agreements that have been made with new Member States upon their accession to the EU, on the acquisition of land in their territories by nationals of the other Member States, are an exception to this. See e.g. Treaty of Accession of Croatia, Annex V

Transitional measures, [2012] OJ L 112/70; Documents concerning the accession of […] the Republic of Malta […], Protocol No 6 on the acquisition of secondary residences in Malta, [2003] OJ 947.

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Property Law and the Internal Market

the case of direct or indirect discrimination, only the justifications enumerated in the Treaty are available. This is always a closed list containing justification grounds such as public policy, public security and public health. In the case of nondiscriminatory measures which nevertheless pose an obstacle to the internal market, the ‘rule of reason’ originating from the Cassis de Dijon case applies, which provides an open-ended list of possible justifications which are necessary to protect mandatory requirements in the public interest.12

A third central theme of this chapter is whether a de minimis test is applied when determining if there is an obstacle to the internal market. A de minimis test means that there has to be a minimum impact on the internal market before the application of the free movement rules is triggered. A de minimis test was unexpectedly applied in one of the cases that will be discussed in depth in this chapter, namely the Krantz case.13 While such a test was generally discarded,14 it has possibly resurfaced in the development of the market access test.

Finally, it will be shown for each of the four freedoms how they might affect national property law and which part of national property law they could or do affect.

1.Cross-border or Purely Internal Situation?

Cases concerning ‘purely internal situations’ are important for the question whether or not national property law provisions fall within the scope of application of the free movement rules. It could be argued that property relationships are not of a cross-border nature and therefore do not fall under the free movement rules, either due to the nature of the goods (i.e. immovable objects are not transported crossborder) or because of the fact that the lex rei sitae rule always designates one (national) system of property law as the applicable law to a proprietary relationship.15 However, CJEU cases such as Pistre, Guimont, Reisch and Salzmann indicate that the chance of a situation being purely internal is becoming more and more remote. Reisch16 and Salzmann17 both concerned the free movement of capital, which is contained in Article 63 TFEU.18 They have a close connection to property law because they concern the acquisition of immovable property. Guimont19 and Pistre20

12Cf for free movement of services case C-384/93, Alpine Investments [1995] ECR I-1141, para. 45, and for free movement of persons case C-55/94, Gebhard [1995] ECR I-4165, para. 37. See also Klauer 1998, p. 68. ‘Mandatory requirements’ is the original wording from the Cassis judgment (para. 8 of that judgment). An alternative that is often seen is ‘imperative reasons’ or ‘imperative requirements’ (e.g. case C-76/90, Säger, para. 15).

13Case C-69/88, H. Krantz GmbH & Co. v Ontvanger der Directe Belastingen and Netherlands State

[1990] ECR I-583; see infra, section 3.4.

14Cf Barnard 2010, p. 78.

15Cf Akkermans 2012a, p. 206.

16Joined cases C-519/99 to C-524/99 and C-526/99 to C-540/99, Reisch and others v

Bürgermeister der Landeshauptstadt Salzburg and Grundverkehrsbeauftragter des Landes Salzburg

[2002] ECR I-2157.

17Case 300/01, Doris Salzmann [2003] ECR I-04899.

18Ex Art. 56 EC.

19Case C-448/98, Criminal proceedings against Jean-Pierre Guimont [2000] ECR I-10663.

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Chapter 2

do not have this connection to property law; they were cases regarding a national rule for the production of cheese and a national rule regulating labelling respectively, ‘standard’ free movement of goods cases therefore.21 Nevertheless, the Court’s interpretation of when there is a purely internal situation is of general application to any free movement of goods case, regardless of the type of national rule. Therefore, the Court’s ruling in Guimont and Pistre would also apply to a free movement of goods case concerning property law.

In Pistre, the Court starts with the famous Dassonville-formula.22 According to the Dassonville-formula, ‘[a]ll trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions’.23 Those measures violate Article 34 TFEU on the free movement of goods. Building on that formula, the Court in Pistre then went on to state the following:

‘44 Accordingly, whilst the application of a national measure having no actual link to the importation of goods does not fall within the ambit of Article [34] of the Treaty [reference omitted], Article [34] cannot be considered inapplicable simply because all the facts of the specific case before the national court are confined to a single Member State.

45 In such a situation, the application of the national measure may also have effects on the free movement of goods between Member States, in particular when the measure in question facilitates the marketing of goods of domestic origin to the detriment of imported goods. In such circumstances, the application of the measure, even if restricted to domestic producers, in itself creates and maintains a difference of treatment between those two categories of goods, hindering, at least potentially, intraCommunity trade.’

The Court continues this reasoning in Guimont:

’17 … The mere fact that a rule is not applied to imported products in practice does not exclude the possibility of it having effects which indirectly or potentially hinder intraCommunity trade […]

19 Article [34] cannot be considered inapplicable simply because all the facts of the specific case before the national court are confined to a single Member State.’

So far, these two cases only concerned the free movement of goods. AdvocateGeneral Geelhoed discusses the matter of purely internal situations at length in his Opinion in the Reisch case, about which more below. In his opinion, the Court had been applying a different line of reasoning depending on which of the four freedoms was at stake. He refers to Pistre and Guimont and proposes to extend the ruling in those cases to the other three freedoms.

20Joined cases C-321/94, C-322/94, C-323/94 and C-324/94, Criminal proceedings against Pistre and others [1997] ECR I-2343.

21The right to free movement of goods is contained in Art. 34 TFEU (ex Art. 28 EC).

22Case 8/74, Procureur du Roi v Benoît and Gustave Dassonville [1974] ECR 837.

23Para. 5.

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Property Law and the Internal Market

In the context of the free movement of goods, the Court has indicated that it will not refuse to give an answer to a preliminary question in cases where all the elements are confined to a single Member State. Article 34 could still apply to such cases – for example in the event of a national measure prohibiting reverse discrimination – even though strictly speaking there is no cross-border element. An interpretation by the Court is therefore needed and the Court will provide it.24 As Advocate-General Geelhoed puts it: ‘[I]t is the nature and substance of the national measure that determine whether the Court answers questions referred to it for a preliminary ruling, not the facts in the main proceedings.’25 In other words, if the nature and substance of a national measure are such that they potentially hinder the free movement of goods, the Court will examine it under Article 34, regardless of whether the facts of this specific case are all connected to one Member State only.

In the context of the free movement of workers, the freedom of establishment and the freedom to provide services, the Court’s interpretation of purely internal situations has been different than in the context of the free movement of goods. Even though it is quick to recognize that there is a cross-border element, it will ultimately refuse to answer the preliminary question if all the facts of the case are linked to a single Member State. With regard to these freedoms, it therefore focuses more on the facts of the case and not on the nature and substance of the national measure.26

Advocate-General Geelhoed proposes in Reisch that the Court no longer follow this separate line of reasoning for the free movement of persons and services but rather that it should also apply Guimont to these freedoms.27 He offers several grounds for this proposition, the most striking of which is the following:

‘100. It is my view […] that the internal nature of cases such as the present is not very significant. It is mere coincidence that all of the parties in the cases referred to the Court are resident in the Member State of Austria.’ [emphasis added]

In his view, the nature and substance of a national measure such as the Salzburger Land Transfer Law – which was the national measure in dispute in Reisch – may have an external effect, thereby actually or potentially obstructing free movement. In the case of Reisch the parties happened to all be Austrian but, argued the Advocate-General, next time they could be German or Italian nationals. It is therefore insufficient to deny the existence of a cross-border element solely based on the fact that all parties involved happen to have the nationality of the Member State imposing the measure.

In the context of the free movement of capital, the Court had not needed to consider purely internal situations any time before the Reisch case. According to Advocate-General Geelhoed there is always a cross-border situation as far as the free movement of capital is concerned, since the introduction of the Economic and

24A.-G. Geelhoed in Reisch, paras. 83-88.

25A.-G. Geelhoed, para. 88.

26A.-G. Geelhoed, paras. 89-95.

27The facts in Reisch will be discussed later in this Chapter because it is an essential case explaining how national property law rules can infringe the free movement of capital: section 4.3. Obstacles to the free movement of capital.

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Chapter 2

Monetary Union. Both the investment in immovable property and the financing of that investment are considered to be capital movements.28 Geelhoed suggests that, since it is not the duty of the Court to investigate whether parties have taken out a mortgage loan and how the institutions lending those mortgage loans operate on the national or European capital market, the Court should leave it up to the national court to raise preliminary questions or not, thereby following the Guimont line of reasoning.29

The CJEU followed the Advocate-General to a certain extent. It did not explicitly deal with Geelhoed’s proposal to extend the Guimont judgment to also include the free movement of persons and services. It did, however, take over Geelhoed’s suggestion to apply Guimont to the free movement of capital. It agreed with the submission by one of the parties that all the facts of the case were restricted to one Member State but held that that was insufficient to conclude that there was no need to answer the preliminary questions referred by the national court. Only if such questions clearly have no connection to the actual case will the Court refuse to reply to them.30 The Court concluded with a reference to Guimont:

’26. In this case, it is not obvious that the interpretation of Community law requested is not necessary for the referring court. Such a reply might be useful to it if its national law were to require that an Austrian national must be allowed to enjoy the same rights as those which a national of another Member State would derive from Community law in the same situation [reference to Guimont].’

This line of case law was confirmed in Salzmann. Both Advocate-General Léger and the Court stated – relying on Pistre, Guimont and Reisch – that the mere fact that all elements of a case are confined to a single Member State does not exclude a possible effect on free movement:

’26. Ms Salzmann observes [that the national measure] grants Community nationals equal treatment with regard to the acquisition of real property. The lack of prior authorization […] could, therefore, also be used to refuse to give effect to the acquisition by nationals of other Member States of building plots […] Consequently, the fact that the material circumstances in the main proceedings are confined to a single Member State is purely accidental.’31 [emphasis added]

The conclusion to be drawn from this line of cases is that – at least for the free movement of goods and capital – the CJEU looks at the nature of the national measure and not to the facts of the case. If the national measure is applied equally to a Member State’s own nationals and to the nationals of the other Member States, then the possibility exists that that measure will create a hindrance to free movement. The fact that in a particular case all elements are linked to a single Member State is therefore not decisive.

28Infra, at section 4.1.

29A.-G. Geelhoed, paras. 102-111.

30Joined cases C-515/99, C-519/99 to C-524/99 and C-526/99 to C-540/99, Reisch and others [2002] ECR I-2157, paras. 24-26.

31Case C-300/01, Doris Salzmann [2003] ECR I-4899. See also Advocate-General Léger’s Opinion of 30 January 2003, paras. 19-32.

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2.Horizontal or Vertical Relationships

It could be argued that the national rules, which are at stake in some of the CJEU cases as discussed in the following sections, are not property law or even private law at all but public law. As a result, those CJEU judgments would not constitute ‘European property law’. However, because rules of property law are nearly always mandatory law, it is difficult to draw a strict line between what is private law and what is public law. Property law concerns the vertical relationship between the State and private persons, whereby the State determines, through mandatory legislation, what rights a person can have with regard to an object and how these rights can be created, used and transferred.32 Of course, property law also governs the relationships between individuals, but they cannot deviate from the mandatory property law provisions, as is allowed in contract law. In that sense, it could be argued that property law is always of a public law nature, in that it is always generated by the State and not by individuals themselves.

In a preliminary procedure before the CJEU concerning a proprietary relationship, a private person – relying on free movement rules – will argue that a national rule of property law infringes his free movement rights; he will not contest the individual actions of another private party with whom he has a proprietary relationship.33 The internal market rules are applied in such a way that national (property) law that infringes them can no longer remain in existence. Because this is negative harmonization, the application of the rules of free movement will never actually create new law governing the (proprietary) relationship between individuals. Rather, the free movement rules influence rules of national law, which have an effect within property law. As a result, the free movement rules themselves indirectly have an effect within national property law. That does not necessarily mean that the national rule has to be a property law rule under the national classification.34 It is the proprietary effect that is important; from an EU perspective it is irrelevant whether a national rule is classified as belonging to one or the other area of law.35 In other words, it does not matter, from the perspective of EU law, whether national law classifies a legal rule or relationship as proprietary, contractual, or anything else. Therefore, CJEU case law on the four freedoms that deals with a national rule, which has an effect in national property law, is included in this chapter as part of EU property law, regardless of whether that rule is – at the national level – classified as public or private law.

32See e.g. Goode 1998, p. 455.

33Cf Klauer 1998, p. 102-103: ‘Da jeder Privatrechtsstreit, der vor den Gerichtshof gelangt, zuvor vor einem nationalen Gericht ausgetragen wird, besteht so gut wie immer ein Ansatzpunkt für ein staatsgerichtetes Verständnis der Warenverkehrsfreiheit. Formaljuristisch ist es nicht das Verhalten der Privatrechtssubjekte, das überprüft wird, sondern die Ausgestaltung des staatlichen (Privat-) Rechts und seine Anwendung durch ein staatliches Gericht.’

34Cf Verhagen 2007a, p. 28.

35Case 82/71, SAIL [1972] ECR 119, para. 5; Case C-20/92, Hubbard [1993] ECR I-3777, para. 19.

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