IUS COMMUNE CASEBOOKS FOR THE COMMON LAW OF EUROPE

Series General Editor Walter van Gerven

Cases, Materials and Text on National, Supranational and International

Property Law Editors

Sjef (JHM) van Erp (Maastricht University) Bram Akkermans (Maastricht University)

Series Managing Editor Dimitri Droshout (University of Leuven and Maastricht University)

Chapter Authors

Bram Akkermans (Maastricht University) Michael (University of Utrecht) Alexandra Braun (University of Oxford) Vincent Sagaert (Universities of

Sjef (JHM) van Erp (Maastricht Leuven and Antwerp, member of the University) Brussels Bar)

Monika Hinteregger (University of Graz) William Swadling (University of Oxford) Caroline Lebon (University of Leuven, Lars van (Maastricht University)

member of the Brussels Bar)

PUBLISHING

OXFORD AND OREGON 2012

CONTENTS

Acknowledgements vi Preface vii Country codes xxix Table of cases xxxi Table of legislation

INTRODUCTION ESSENTIAL DIRECTIONS ON USING THE CASEBOOK 1

I. The content and structure of the casebook 2 II. Legal systems in general 3

II.A Sources of law 4 II.A.1 Civil law 4

II.A. La Source: different forms of legislation 4 II.A.l.b Source: court decisions 7

Source: customary law 8 Source: doctrine 8 Hierarchy of sources of law 8

II.A.2 Common law 9 II.A.2.a Common law and equity 9 II.A.2.b Source: case law and the rule of precedent 9 II.A.2.C Source: legislation 10 II.A.2.d Source: academic commentary 10 II.A.2.e Hierarchy of sources 10

II.B Types of case law 10 II.B.1 French law 11 II.B.2 German law 17 II.B.3 Dutch law 29 II.B.4 The law of England and Wales 29 II.B.5 The of international courts 30

Property law 31 France 32

II.C.2 Germany 34 II.C.3 The Netherlands 35 II.C.4 England and Wales 36

CHAPTER ONE GENERAL ISSUES: SETTING THE SCENE 37

I. Introductory remarks 37 LA What is 'property' law? 39

I.A.I Classic approaches 39 I.A.2 Modem approaches 43

LB Terminology and the use of English 46

CONTENTS

I.C The nature of property rights 51 II. Importance of understanding the history of property law 53

II.A The French Revolution 58 II.B Abolishing the feudal system does not always mean abolishing

feudal concepts 59 II.C A fragmented or a unified system of property law? 64

III. Numerus clausus 65 III.A Numerus clausus in theory 65 III.B Limitations on party autonomy 67

III.B. 1 Typen2wang 68 III.B.2 Typenfixierung 69

III.C Legal provisions on numerus clausus 72 Is the of property rights really closed? 73

IV. Transparency: specificity and publicity 75 V Ground rules 92 Concise bibliography 94

CHAPTER TWO THE PROTECTION OF PROPERTY RIGHTS 97

I. Civil law 99 LA Possession and possessory claims 99

I.A.I Possession 99 France 99

Germany 101 l.c Austria 105

I.A.2 Protection of possession I.A.2.a France 107 I.A.2.b Germany 115

(i) Self-help (ii) Possessory actions (iii) Claim for restoration of possession 125 (iv) Protection in tort and unjust enrichment 126

I.A.2.C Austria 128 (i) Possessory protection 128 (ii) Actio Publiciana 129

LB Protection of ownership I.B.I France 131

Immovable objects 132 (i) Right to removal 132 (ii) Proof of ownership 134 (iii) Troubles de voisinage (neighbour law) 139 Movable objects 142

I.B.2 Germany 143 I.B.2.a Assertion of ownership (rei vindicatio) 143

CONTENTS

I.B.2.b Injunction (actio negatoria) and right to removal 148

(i) Definition of interference 149 (ii) Definition of interferer 155

I.B.3 Austria 160 II. Common law 161

II.A Land 162 II.A.1 Dispossession 162 II.A.2 Other interference 168

II.A.2.a Trespass to land 168 Nuisance

II.B Goods 193 II.B.l Trespass 198 II.B.2 Conversion 199

III. Comparative overview 206 III.A Civil law and common law: the fundamental difference 206 III.B Protection of property rights in civil law 206

1 Possession 206 III.B.2 Ownership 207

III.C The protection of property rights in English law 208 Concise bibliography 209

CHAPTER THREE TYPES OF PROPERTY AND MOVABLES (GOODS) 211

I. Civil law 212 LA Ownership 213

I.A.1 Legislation on ownership I.A.2 'Most comprehensive' nature of the right of ownership 219 I.A.3 Unitary nature 224 I.A.4 Limitations on the rights of the owner 226

LAAa Limitations by law 227 Limitations by contract 230

I.A.4.C Limitations in neighbour law 233 I.A.5 239 I.A.6 Security ownership 243

LB Real servitudes 243 Rules common to French, German and Dutch law 244

I.B.2 French legal servitudes 249 I.C Personal servitudes 253

I.C.I Usufruct 253 I.C.2 Quasi-usufruct 261 I.C.3 Use and habitation 262 I.C.4 Germany: limited personal servitudes 264

CONTENTS

(i) Regular servitudes 264 (ii) Security servitudes 267

I.C.5 German real burdens 270 Emphyteusis 273

I.D.I General rules common to French and Dutch law. 273 I.D.2 Ownership of constructions made by the holder of an

Emphyteusis 275 I.D.3 Payment of a sum of money for an Emphyteusis and

the right in practice 277 I.D.4 French law: the construction lease 278

Superficies 280 I.E.I Rules common to French, German and Dutch law 280 I.E.2 Content of the right of superficies 282

I.F Apartment rights 285 I.F.1 French law 285 I.F.2 German law 287 I.F.3 Dutch law 289 I.F.4 A comparison of German, Dutch and French law 291

German law: options to purchase 292 French law in reform: special property right to use 293

I.I Security rights: hypothec 294 I.J Borderline cases 294

I.J.1 Dutch law: 'qualitative duties' 294 I.J.2 Lease of assets 298

I.J.2.a French and German law 298 I.A.2.b Dutch law 299

I.J.3 German law: acquisition rights 299 II. Common law 302

II.A Land 302 II.A.1 A numerus clausus of property rights in land at

common law 302 II.A.2 Estates in not 'ownership' 306 II.A.3 Possession as a root of title 307 II.A.4 Estates in land 309 II.A.5 Leases of land 315 H.A.6 Easements 319 II.A.7 Profits a prendre 329 II.A.8 Rentcharges 331 II.A.9 Restrictive covenants 331 II.A. 10 Estate contracts 338 II.A. 11 Options to purchase 342 II.A. 12 Equities of redemption 345 II.A. 13 Legal and equitable charges 345

14 Licences over land: a borderline case 345 II.B Goods 346

CONTENTS

II.B.l Introduction 346 No doctrine of estates for chattels 346 No concept of 'ownership' of chattels 347

II.B.2 Title 348 II.B.3 Limited doctrine of life estates in testamentary

dispositions 348 II.B.4 Power to rescind contract of sale and revest title 351 II.B.5 Servitudes over goods 355

Leases of goods 357 II.B.7 Security rights over goods 361

III. Comparative overview 361 III.A Legacy of feudalism 362 III.B No concept of ownership in English law 362 III.C Debt to Roman law 362 III.D The numerus clausus principle 363

A dislike of positive burdens 363 III.F No servitudes in gross 363

Status of lease in different systems 363 Concise bibliography 364

CHAPTER FOUR PROPERTY RIGHTS IN RESPECT OF CLAIMS 365

I. General introduction 365 LA The notion of 'claim' 367 LB Claims as objects of property law? 369 I.C Further delimitation of the content of this chapter: 'incorporeal

claims' 375 I.D Claims as an object of property law? Different approaches 377

II. 'Ownership' of claims 378 II.A Ownership of incorporeal objects? 379

II.A.1 French 379 II.A.2 German law 379 II.A.3 Austrian law 380 II.A.4 Dutch law 382 II.A.5 English law 382 II.A.6 Comparative remarks 384

II.B Acquisition of (the ownership of) claims 385 II.B.l Transposition of the principles on the aoquision of

ownership of corporeal objects? 385 II.B.2 Assignment of claims 387

II.B.2.a General principles 387 (i) German law 388 (ii) French law 389 (iii) Belgian law 391

CONTENTS

(iv) Dutch law 392 (v) English law 394 (vi) Comparative remarks 396

II.B.2.b Priority in case of one or more subsequent assignments 396

II.B.2.C Contractual prohibition of assignment of claims (pactum de non 403

(i) German law 403 (ii) French law 405 (iii) Belgian law 408 (iv) Dutch law 410 (v) English law (vi) Comparative remarks 414

HI. Right of in respect to claims III.A General statutory provisions on usufruct of claims 416 III.B Right to collect the claim: French and Belgian law 417 III.C Right to collect the claim: German law 420 III.D Right to collect the claim: Dutch law 421

IV. Security interests in claims 422 V. Comparative overview 422

V.A Property law and claims 422 V.B A special type of object 423 V.C A special type of property right in respect to it 423

Concise bibliography 423

CHAPTER FIVE SECURITY 425

I. Types of security rights 426 II. Common features of security rights

II.A Accessory nature of the security interests II.B Specificity of the secured claim 434 II.C Prohibition of unjustified enrichment 436

Publicity of property security rights/reputed ownership in decline 439 Disproportionate security rights 440

Right of pledge 444 III.A Right of pledge of corporeal movable assets 444

LTI.A.1 Nature of the right of pledge 444 III.A.2 Dispossession of the pledgor 446 III.A.3 Realisation of the pledge 450 III.A.4 Fixed charge-floating charge 454

n.A.4.a French law 454 III.AAb Belgian law 457 HI.A.4.C Dutch law 458 III.AAd German law 460

CONTENTS

III.AAe English law 462 III.B Right of pledge in respect of claims 465

IV The right of ownership as security instmment 472 IV.A Retention of title 472

Basic legislation on reservation of ownership 472 IV.A.2 Reservation of title as an accessory right? 477 IV.A.3 Claims which can be secured by a retention of title 480 IV.A.4 Position of the purchaser under title retention 484

Resale of the Assets under Retention of title 484 IV.A.5.a Power of the buyer to resell the goods 485 IV.A.5.b Rights of the original seller to the proceeds

of the resale 488 IV.A.6 Manufacturing of the assets under retention of title 499

IV.B Transfer of ownership for security purposes 505 French law 505

IV.B.2 Belgian law 509 IVB.3 German law IV.B.4 Dutch law 513 IV.B.5 English law: the mortgage 516 IV.B.6 Comparative remarks 518

V. Right of retention/lien V.A German law 523 V.B Dutch law 524 V.C Common law lien 526 VD Comparative notes

VI. Security rights in immovable assets 532 VI.A Definition of a right of with the (English)

mortgage 532 VLB Main features of a hypothec 535

Immovable nature of a hypothec 535 VI.B.2 Formal nature of a hypothec 536 VI.B.3 Accessory nature of a hypothec 538

VLB.3.a Semi-exception: rechargeable hypothec (hypotheque rechargeable) in French law 539

VI.B.3.b Full exception: security land charge in German law 541

Priority ranking of rights of hypothec 543 Realisation of a right of hypothec 545

French law 545 VI.D.2 German law 547 VI.D.3 Dutch law 547 VI.D.4 English law 548

Concise bibliography

XIX

CONTENTS

CHAPTER SIX MANAGEMENT: TRUST, TREUHAND AND FIDUCIE 553

I. General overview 554 LA The common law trust 554 LB The fiduziarische Treuhand 561

Nature and scope of the fiduziarische Treuhand 563 I.B.2 Parties to the Treuhand 566 I.B.3 The subject-matter of the Treuhand (the Treugut) 566 I.B.4 Formality requirements and registration of the Treuhand 568

I.C The fiducie 571 I.C. 1 Nature, scope and validity of the fiducie 572 I.C.2 Parties to the fiducie 575 I.C.3 Form and content of the fiducie 577 I.C.4 Registration 578 I.C.5 Modification, revocation and termination of the fiducie 579

II. Misappropriation of assets by the manager 580 II.A English law 580 II.B German law 583 II.C French law 588

HI. The death of the manager 589 III.A English law 589 III.B German law 590 III.C French law 591

IV. Insolvency of the manager (including cases where personal creditors of the manager try to seize the fund he is managing) 592 IV.A English law 592 IV.B German law 596

French law 600 V. Insolvency of the settlor, Treugeber and constituant, including cases

where his personal creditors try to seize the fund 601 V.A English law 601 V.B German law 605 V.C French law 610

VI. Comparative overview VI.A Communalities and differences in relation to the proprietary

aspects investigated 612 1 Misappropriation of assets by the manager 613

VI.A.2 Death of the manager, settlor, Treugeber or constituant 613 VI.A.3 Insolvency of the manager or attacks by personal

creditors 614 VI.A.4 Insolvency of the transferor or attacks by his personal

creditors Concise bibliography

XX

IS

CHAPTER SEVEN CREATION 617

I. Accession 618 LA Accession of movables to land

I.A.I Dutch law 620 I.A.2 German law 626 I.A.3 English law 638 I.A.4 French law 651

5 Comparative overview 659 LB Right of removal 660 I.C Accession of movables to movables 664

II. Commingling 671 II.A Dutch law 671 II.B German law 673 II.C English law 675

French law 678 III. Specificatio 679

III.A Dutch law 680 III.B German law 682 III.C English law 688 III.D French law 690

The borderline between specificatio and 697 IV. Acquisitive prescription 702

IV.A Acquisition of ownership by prescription 702 French law 703

The general provision on prescription 703 IVA.l.b The prescription periods 706

The requirement of possession 706 Special requirements for the ten-year

prescription period 709 (i) Requirement of good faith 709 (ii) Requirement of a legal ground (iii) Additional requirements for acquisitive

prescription 713 (iv) Peaceful possession 713 (v) Publicly visible possession (vi) Unequivocal possession (vii) Permission (viii) Succession of the predecessor's possession 723

Dutch law 725 Prescription periods 725 Possession 725

IVA.2.C Good faith 726 IV.A.2.d Unequivocal possession 730

CONTENTS

IV.A.2.e Permission 731 IV.A.3 German law 732 IV.A.4 English law 734

IV.B Acquisition of a servitude by prescription 745 French law 745

Possession 745 IV.B.l.b Visibility and permanence 746

Unequivocal possession 749 IV.B.l.d No prescription beyond your possession 750 IV.B.l.e No possession in the case of permission or

tolerance 750 IV.B.l.f Compulsory right of way (enclave) 752

IV.B.2 Dutch law 753 IV.B.2.a The ten-year period and the difficult

requirement of good faith 753 rV.B.2.b The twenty-year period of Article 3:105 BW 754 IV.B.2.C Possession of a servitude 754

(i) Recognisability 754 (ii) Visibility and permanence 755

IYB.2.d Unequivocal possession 759 IV.B.2.e No possession in the case of permission or

tolerance 759 IV.B.2.f The consequence of permission (other than

toleration) 761 IVB.2.g Compulsory right of way 762

German law 763 IV.B.4 English law 763

rVBAa Continuous use 770 IV.BAb praescriptum quantum possessum 774 IV.BAc Easement of necessity and other implied

easements 774 Concise bibliography 782

CHAPTER EIGHT TRANSFER 783

General introduction 783 I. Transfer Systems 784

LA Payment of money: transfer? 784 LB The first dividing line: the tradition system and the consensual

system 787 I.B.I Introduction 787 I.B.2 French law 788 I.B.3 English law 789 I.B.4 Dutch law 795

CONTENTS

I.B.5 German law 797 I.B.6 Austrian law 798

I.C Exceptions to the consensual transfer system 799 I.C.I Generic goods 799 I.C.2 Sale ex bulk under the Sale of Goods Act 803 I.C.3 Goods that have yet to be manufactured 808 I.C.4 Rejection of defective goods

I.D Transfer of possession: traditio vera and traditio ficta I.D.I Traditio symbolica 814 I.D.2 Traditio brevi I.D.3 possessorium (attornment of transferor to

transferee) 818 I.D.4 Attornment by a third party in possession 821

The second dividing line: abstract and causal transfer systems 823 I.E.I French law 823 I.E.2 English law 825

I.F.2.a Illegal contracts 829 I.E.3 The abstract German and the causal Dutch and Austrian

transfer system 830 I.E.4 Practical differences between causal and abstract transfer

systems 835 I.E.5 Mitigation of the abstract system in German law 837

6 English law: transfers outside Sale of Goods Act 843 Comparative overview 844

II. Transfer of property rights in land and land register 844 II.A Germany and Austria 845

II.A.1 The transfer of property rights in land 845 II.A. Germany 845 II.A. Austria 853

II.A.2 The land register 855 II.A.2.a Organisation and structure of the land

register 855 II.A.2.b Competent authority and legal review 859 II.A.2.C Registration procedure 860 II.A.2.d Publicity of the land register 863 II.A.2.e Registrable rights and interests 866 II.A.2.f Effects of registration 868

(i) Effect between the parties 868 (ii) Third party effect 868

II.A.2.g The priority notice (Vormerkung) 870 II.B English law 871

II.B.l The transfer of property rights in land 871 II.B.2 The land register 872

II.B.2.a Organisation and structure of the land register 873

CONTENTS

II.B.2.b Competent authority and legal review 874 II.B.2.C Registration procedure 876

(i) First registration and registered dispositions 876 (ii) Registration procedure 877

II.B.3 Publicity of the land register 877 II.B.3.a Registrable rights and interests 878

Effect of registration 881 II.B.3.C Effect of land 883

(i) Conclusiveness of the register 883 (ii) Priority 887 (iii) Alteration 889 (iv) Indemnification 890

II.C French law 891 Transfer of property rights in land 891

II.C.2 The land register 892 II.C.2.a Organisation and structure of the land

register 892 II.C.2.b Registration procedure, competent authority

and legal review 893 H.C.2.C Publicity of the land register 898 II.C.2.d Registrable rights and interests 898 II.C.2.e Effect of registration 900

HI. Creation of limited property rights 902 III.A Content of limited property rights 902 III.B Creation of limited property rights 904

1 French law 904 III.B.2 Dutch law 904 III.B.3 German law 905 III.B.4 Austrian law 905

TV. Comparative overview 906 IV.A Transfer of property rights in land 906 IV.B The land register 907

IV.B.1 Organisation and structure of the land register 907 IV.B.2 Competent authority, legal review and registration

procedure 908 IV.B.3 Publicity of the land register 908 IV.B.4 Effects of registration 908

Concise bibliography 909

CHAPTER NINE DESTRUCTION 911

I. Introduction n. Civil law 912

II.A Destruction of the subject-matter of the right 912

CONTENTS

II.A.1 French law 912 II.A.2 German law II.A.3 Dutch law 914

II.B. Destruction of the right 916 II.B.l Creation of property rights (original acquisition) 916 II.B.2 Third party protection (good faith purchase/acquisition)

II.B.2.a French law 917 (i) No requirement of valuable consideration in

French law 918 (ii) Good faith (iii) Stolen or lost goods 921 (iv) Actual possession 923

II.B.2.b German law 931 (i) Good faith 932 (ii) Stolen and lost goods 934 (iii) Actual possession 937

II.B.2.C Dutch law 942 (i) Good faith 943 (ii) Stolen property 945 (iii) Actual possession 946

II.B.3 Abandonment 948 II.B.3 French law 948

(i) Abandonment of ownership 949 (ii) Effects of abandonment 950 (iii) Special rules on abandonment 952

II.B.3.b German law 953 (i) Abandonment of ownership of movable object 953 (ii) Abandonment of ownership of immovable objects 953 (iii) Abandonment of property rights 955

II.B.3.C Dutch law 955 (i) Abandonment of ownership of movable objects 956 (ii) Abandonment of ownership of immovable objects 956 (iii) Abandonment of property rights other than

ownership 958 n.B.4 Merger of rights 958

French 959 (i) Merger of rights in French law 959 (ii) Exceptions to destruction of property rights

through merger 959 German law 962

(i) Merger of rights in German law 962 (ii) Exceptions to destruction of property rights through merger 963

II.B.4.C Dutch law 963 II.B.5 Termination of rights 965

xxv

CONTENTS

II.B.5.a French law 965 German law 966 Dutch law 966

II.B.6 Extinctive prescription 967 II.B.6.a French law 968

(i) General rules on prescription 968 (ii) Start of the prescription period 969 (iii) Special rules 969

II.B.6.b German law 971 (i) General rules on prescription 972 (ii) Start of the prescription period 972 (iii) Prescription of property rights on immovable

objects 973 (iv) Specific rules on prescription 974

II.B.6.C Dutch law 975 (i) General rules on prescription 975 (ii) Start of the prescription period 975 (iii) Specific rules on prescription 977

II.B.7 Realisation of a property right 978 II.B. 8 Destruction specific to certain rights 978

II.B.8.a French law 979 II.B.8.b German law 979 II.B.8.C Dutch law 979

III. Common law 979 III.A Destruction of subject-matter of right 979

1 Accession 980 III.B Destruction of right 983

Limitation 983 III.B. Land 983 III.B. Goods 986

III.B.2 Satisfaction of judgment in conversion 987 III.B.3 Good faith purchase 987

III.B.3.a Titles to money 987 Title to goods other than money 989

(i) Sale by seller in possession 989 (ii) Sale by buyer in possession before title passes 993 (iii) Purchase in good faith and for value of a

voidable title (iv) A special regime for cars on credit 1003

III.B.4 Estoppel 1005 III.B.5 Abandonment 1006

IV. Comparative remarks 1007 IV.A Approach 1007 IV.B Terminology 1008

Destruction of subject-matter 1008

CONTENTS

Destruction of right 1008 Techniques of destruction Prescription and limitation 1009 Third party protection and bona fide purchasers 1009 Abandonment 1009

Concise bibliography

CHAPTER TEN UNIFORM OR HARMONISED PROPERTY LAW

I. Harmonisation of property law 1012 LA Introduction 1012 LB Methods of harmonisation 1012 I.C Harmonising property law 1013 I.D Content of the chapter 1016

II. Private international law and property law III. Harmonisation at the level of the European Union 1024

A Introduction 1024 III.B by enactment of EU legislation 1025

III.B.l Legislative instruments: regulations and directives 1025 IILB.2 Legal basis of unification or harmonisation 1026 III.B.3 Exclusion of property 345 TFEU 1032

III.C Existing EU property law 1036 1 Cultural objects 1036

III.C.2 Late payments 1036 III.C.3 Insolvency proceedings 1038 III.C.4 Financial collateral arrangements 1042 III.C.5 Emission rights 1044

III.D Future EU property law 1046 III.D.1 Euromortgage 1047 HI.D.2 Succession and wills 1053 III.D.3 Matrimonial property 1056 III.D.4 (Draft) common of reference

Towards a common frame of reference 1057 III.D.4.b General provisions of the DCFR

Transfer of ownership of movables in the DCFR 1064

III.DAd Personal property security rights in the DCFR 1067

Trusts in the DCFR 1070 III.DAf The next step: feasibility study of the expert

group on EU contract law: towards and optional instrument? 1072

Harmonisation by internal market law or by case law of the J 1074

CONTENTS

III.E.l Free movement of goods and property law 1075

Article 34 TFEU 1075 III.E. Article 36 TFEU 1078 III.E. l.c Proportionality 1081

Case study: free movement of goods and property law 1082

III.E.2 Free movement of capital and property law 1089 III.E.2.a Freedom of movement of capital 1090 III.E.2.b Case study: Austrian land law regulations 1091

IV. Harmonisation at the level of the Council of Europe: Article 1 First Protocol of the European Convention on Human Rights 1096 IV.A Article 1 First Protocol ECHR 1097 IV.B The approach of the European Court of Human Rights 1097 IV.C Case study: Pye v UK 1105 IV.D Effects of Article 1 First Protocol ECHR on national property

law 1109 V. Harmonisation on an international level: UNIDROIT, and

EBRD 1109 V.A Unidroit: Cape Town Convention 2001 on interests in mobile

equipment V.B UNCITRAL Legislative Guides 1117 V.C Model Law on Secured Transactions of the European Bank for

Reconstruction and Development VI. Multi-level harmonisation? A case study of cultural objects VII. The role of academics and practitioners in the harmonisation of property

law 1129 VILA The Joined Network on European Private Law

The Study Group on a European Civil Code Land Information Service 1135 Electronic Conveyancing of Land 1135

The Trento Common Core project Concluding Remarks 1141

More activity then appears at first sight Lex rei sitae in demise? Towards uniform systems of property security rights 1142

VIII.D Free movement of goods or persons? 1142 Movables and immovables 1142

VHI.F European Union property law in the making?

Index 1145