The Impact of EU Law on Dutch Property Law

CHAPTER 1
Introduction / 1
1.1. The core of European private law: consumer contract law / 1
1.1.1. The development of the consumer acquis / 1
1.1.2. Insights gained from the consumer acquis / 6
1.2. European property law / 11
1.2.1. What is property law / 11
1.2.2. Fragments of European property law / 12
1.2.3. Article 345 TFEU / 13
1.2.4. Future EU property law / 15
1.3. The problem of implementing directives and the effect on national property law / 16
1.3.1. Different strategies of implementation / 16
1.3.1.1. Implementation outside the Civil Code / 16
1.3.1.2. Implementation within the civil code / 18
1.3.1.3. A separate Book for European Private law / 19
1.3.2. Formulating the research question / 19
1.3.2.1. The difficulties of incorporating directives on matters of property in the Dutch Civil Code / 20
1.3.2.2. The loss of autonomy / 21
1.3.2.3. The research question / 21
1.3.3. The normative framework / 22
1.3.3.1. The unity of law / 22
1.3.3.2. The law as a system / 23
1.3.3.3. Elements of a good system / 25
1.3.4. Considering the problem on the basis of the Collateral Directive / 27
1.3.4.1. The Collateral Directive in a nutshell / 28
1.3.4.2. The approach / 28
1.4. The organisation of this book / 29

CHAPTER 2
The Framework of European influence on property law / 33
Introduction / 33
2.2. The effect of primary EU Law on national property law / 34
2.2.1. The internal market: free movement of goods / 34
2.2.2. Relation between EU law and national law / 34
2.2.2.1. The lex rei sitae and the free movement of goods / 35
2.2.2.2. Article 34 of TFEU: quantitative restrictions and measures having equivalent effect / 35
2.2.3. The argument made by Akkermans and Ramaekers / 39
2.2.4. The refutation of the argument / 41
2.2.4.1. Preliminary remarks / 41
2.2.4.2. Why the non-recognition of foreign property rights does not fall within the scope of Article 34 TFEU / 43
2.2.4.3. The measure can in any case be justifi ed under EU law / 46
2.2.5. Harmonisation of confl ict of law rules concerning matters of property law / 49
2.2.5.1. The CJEU’s decision in Kubicka / 50
2.2.5.2. The impact of ESR on national property law / 53
2.2.5.3. The ESR and the development of future European property law / 54
2.3. Secondary EU law / 56
2.3.1. The competence to adopt directives / 56
2.3.1.1. Article 114 TFEU and Tobacco advertising / 56
2.3.1.2. Tobacco advertising / 57
2.3.2. Harmonisation of substantive property law / 58
2.3.2.1. Article 345 TFEU: a possible impediment? / 58
2.3.2. The implementation of directives / 59
2.3.2.1. General requirements / 59
2.3.2.2. The degree of harmonisation achieved by directives / 60
2.3.3. Ensuring proper implementation / 61
2.3.4. The interpretation of directives / 62

CHAPTER 3
The Financial Collateral Directive / 67
Introduction / 67
3.2. Background and purpose of the Directive / 67
3.3. Financial collateral / 69
3.3.1. Cash, financial instruments and credit claims / 69
3.3.2. The dual function of fi nancial collateral / 70
3.4. Parties to a financial collateral arrangement / 71
3.5. The security financial collateral arrangement / 72
3.5.1. Providing financial collateral under a security fca and formalities / 72
3.5.2. Enforcement of the security fi nancial collateral arrangement / 73
3.5.2.1. Article 4 Directive: different methods of enforcement / 73
3.5.2.2. Aviabaltika case / 74
3.6. The right of use / 80
3.7. The title transfer financial collateral arrangement / 81
3.8. Conflict of laws / 81
3.9. The financial collateral arrangement and insolvency / 81
3.9.1. Close-out netting and insolvency / 82
3.9.2. Non-applicability of certain insolvency provisions / 82
3.9.3. The impact of Aviabaltika on Dutch insolvency law / 84
3.9.4. Aviabaltika and the title transfer fca / 88

PART ONE
The title transfer financial collateral arrangement and Article 3:84 par. 3 DCC / 97

CHAPTER 4
Article 3:84 par. 3 DCC: the prohibition of fiduciary transfers / 99
Introduction / 99
4.2. The fiduciary transfer for security purposes / 100
4.2.1. The historical background of the fi duciary transfer for security purposes / 100
4.2.2. The Bierbrouwerij case / 101
4.2.3. Restrictions with regard to the transfer for security purposes / 103
4.2.3.1. The applicability of the rules of pledge / 103
4.2.3.2. Security ownership ineffective against certain third parties / 104
4.2.4. The construction of the transfer for security purposes / 105
4.2.4.1. No multiple encumbrances / 105
4.2.4.2. Lack of accessoriness / 106
4.3. Article 3:84 par. 3 DCC: the prohibition of transfer for security purposes / 107
4.3.1. Meijers’ objection to the fiduciary transfer for security purposes / 107
4.3.2. The classification of subjective patrimonial rights / 107
4.3.3. The lack of publicity due to the delivery constitutum possessorium / 109
4.3.4. The legislator’s reasons for introducing Article 3:84 par. 3 DCC / 109
4.3.4.1. The non-possessory pledge as an alternative to the transfer by way of security / 109
4.3.4.2. More rights than the creditor’s interest can justify / 110
4.3.4.3. A division of rights not recognised by law / 111
4.3.4.4. A difference of treatment between the first part and the second part of Article 3:84 par. 3 DCC / 112
4.4. The Supreme Court’s Interpretation of Article 3:84 par. 3 DCC / 112
4.4.1. The Sogelease case / 113
4.4.1.1. The transfer for recourse purposes / 114
4.4.1.2. The agreement to a real transfer of ownership / 115
4.4.2. Decision in the BTL Lease case / 116
4.4.2.1. Discrepancy between the purchase price and the value / 117
4.4.2.2. Additional circumstances / 118
4.4.2.3. A duty to account for the surplus value / 119

CHAPTER 5
The title transfer collateral arrangements and the prohibition of the transfer for security purposes / 123
Introduction / 123
5.2. The transfer of financial collateral and Article 3:84 par. 1 DCC / 124
5.2.1. Cash collateral / 124
5.2.2. Securities and the GSTA / 125
5.2.3. Credit claims / 127
5.3. The compatibility of the title transfer fca with Article 3:84 par. 3 DCC / 127
5.3.1. The legislator’s point of view / 127
5.3.1.1. A fiduciary transfer by way of security does not fall within the scope of the title transfer fca / 127
5.3.1.2. Security in the sense of Article 3:84 par. 3 DCC versus security in the sense of its economic effect / 128
5.3.1.3. A quasi-authentic interpretation / 129
5.3.2. Why the title transfer fca does confl ict with Article 3:84 par. 3 DCC / 130
5.3.2.1. The scope of Article 2 par. 1 (b) of the Collateral Directive / 130
5.3.2.2. A wrong interpration of the Sogelease criterion / 131
5.3.2.3. An incomplete account of the Sogelease case / 133
5.4. Options to ensure that a title transfer fca can have full effect / 133
5.4.1. Reinterpreting Article 7:55 DCC / 133
5.4.1.1. Article 3:84 par. 3 DCC not applicable to the title transfer fca / 134
5.4.1.2. Reinterpretation does not allow for the standard type of fiduciary transfer by way of security / 135
5.4.2. Removing Article 3:84 par. 3 DCC / 136
5.4.2.1. Narrow interpretation of Article 3:84 par. 3 DCC may gain authority / 136
5.4.2.2. New legislation: the agreement to pawn / 137
5.4.2.3. Removal of Article 3:84 par. 3 DCC and legal uncertainty / 138

CHAPTER 6
The transfer for security purposes in other European legal systems / 141
Introduction / 141
6.2. French Law / 142
6.2.1. The legal regime for the garantie fi nancière / 143
6.2.2. The Cession Dailly / 144
6.2.2.1. The scope of the cession Dailly / 144
6.2.2.2. The assignment of claims by way of a bordereau / 144
6.2.2.3. The cession Dailly à titre de garantie versus à titre d’escompte / 145
6.2.2.4. Claims assigned on the basis of a cession Dailly for security purposes return by way of law / 145
6.2.2.5. The assigned claim cannot exceed the amount of the secured claim / 146
6.2.3. The fiducie in general / 148
6.2.3.1. The parties to the fiducie / 148
6.2.3.2. The formalities of the fiducie / 149
6.2.3.3. The creation of a separate patrimony / 150
6.2.4. The fiducie-sûreté / 150
6.2.4.1. Different modalities and the possibility of a recharge / 151
6.2.4.2. The fiducie-sûreté and publicity / 151
6.2.4.3. The ending of the fiducie-sûreté / 152
6.2.4.4. The enforcement of the fiducie-sûreté / 153
6.2.4.5. The fi ducie-sûreté and the French insolvency procedures / 154
6.2.4.6. The fi duciary’s insolvency / 155
6.3. German law / 157
6.3.1. The transfer of movable objects for security purposes / 157
6.3.1.1. Transfer of ownership by a constructive delivery / 157
6.3.1.2. Mutual rights and duties arising out of the agreement and the contractual accessoriness / 158
6.3.1.3. No presumption of a conditional transfer / 159
6.3.2. Breach of public morals / 159
6.3.2.1. Economically restraining the security provider / 159
6.3.2.2. Taking too much security: Übersicherung / 160
6.3.3. Enforcement of security ownership / 162
6.3.3.1. Realisation of the transferred object / 162
6.3.3.2. Enforcement in case of insolvency / 162
6.3.3.3. Security ownership and the security taker’s insolvency / 163
6.4. English law / 164
6.4.1. The mortgage / 165
6.4.1.1. The legal mortgage and the equitable mortgage / 165
6.4.1.2. The equitable right of redemption / 166
6.4.2. Perfection of the mortgage / 166
6.4.2.1. Perfection by registration: Bills of Sale Act / 167
6.4.2.2. Registration and the Companies Act 2006 / 168
6.4.3. Enforcement of the mortgage / 168
6.4.3.1. The remedy of foreclosure / 168
6.4.3.2. Taking possession followed by sale / 169
6.4.4. Mortgage and insolvency / 170
6.4.4.1. The administration procedure / 170
6.4.4.2. Winding-up procedure / 171
6.4.4.3. Mortgee’s insolvency / 172
6.5. The DCFR / 173
6.5.1. Security over movable assets / 173
6.5.1.1. Movable assets / 173
6.5.1.2. Security rights / 173
6.5.2. The establishment of a security right / 174
6.5.2.1. The creation of a security right / 174
6.5.2.2. Effectiveness against third parties / 175
6.5.3. Termination of the proprietary security right / 175
6.5.4. The enforcement of a security right / 176
6.5.5. The security trust / 177

CHAPTER 7
Removing Article 3:84 par. 3 from the Dutch Civil Code / 183
Introduction / 183
7.2. The nature of the transfer for security purposes / 184
7.2.1. Different techniques with respect to the transfer for security purposes / 184
7.2.2. A conditional transfer, unless parties have determined otherwise / 184
7.2.3. No accessory right and no consecutive encumbrance / 185
7.3. Formalities / 187
7.3.1. A written agreement / 187
7.3.2. Registration of a transfer of movable objects delivered constitutum possessorium / 188
7.4. Enforcement of property transferred for security purposes / 188
7.4.1. Power to sell the transferred property / 189
7.4.2. Appropriation followed by a set-off / 189
7.5. The transfer for security purposes and third parties / 190
7.5.1. Ineffective against certain other creditors? / 190
7.5.2. Taking too much security / 190
7.5.2.1. Erba case: creating a false appearance of creditworthiness / 191
7.5.2.2. Limiting the amount security that a creditor may take / 192
7.6. Insolvency of the security provider / 193
7.6.1. Application of the rules of pledge with appropriate adaptation / 193
7.6.2. Insolvency and the assignment for security purposes / 194
7.6.2.1. Payment of the assigned claim before bankruptcy / 195
7.6.2.2. Receiving payment after bankruptcy / 195
7.6.2.3. Actively collecting payment by the bankruptcy trustee / 196
7.6.3. Insolvency of the security taker / 198
Conclusion of part one: the title transfer financial collateral arrangement and Article 3:84 par. 3 DCC / 201

PART TWO
The provision of financial collateral and the principle of publicity / 205

CHAPTER 8
The provision of financial collateral on the basis of a security fca / 207
Introduction / 207
8.2. The prohibition of formalities / 208
8.2.1. Formal acts and other legal requirements / 208
8.2.2. Formal acts and the provision of the different types of collateral / 209
8.3. Dispossession as a condition for the applicability of the Directive / 211
8.3.1. Grammatical interpretation / 211
8.3.2. The purpose of dispossession: publicity / 212
8.3.2.1. The Commission proposal / 213
8.3.2.2. The opinion of the Economic Social Committee / 215
8.3.2.3. The amendments proposed by the European Parliament / 216
8.3.2.4. The common position / 218
8.3.2.5. Dispossession and the risk of fraud / 220
8.3.2.6. The CJEU’s decision in Swedbank / 221
8.4. The relevant test to determine control and possession / 221
8.4.1. Control: the ability to prevent the collateral provider from dealing with the collateral / 222
8.4.2. Control and possession under Article 9 UCC / 224
8.4.2.1 Attachment and Perfection / 225
8.4.2.2. Perfection by control and possession / 226
8.4.3. The relevant test / 227
8.4.4. The concept of control according to the CJEU in Swedbank / 229
8.4.5. Control over credit claims / 231
8.5. Other aspects of providing financial collateral / 234

CHAPTER 9
Provision of financial collateral under Dutch law / 239
Introduction / 239
9.2. The system of providing financial collateral under Title 7.2 DCC / 240
9.3. The creation of a pledge over financial instruments / 240
9.3.1. A pledge over corporeal financial instruments / 241
9.3.2. A pledge over securities subject to the Giro Securities Act / 242
9.3.2.1. Organisation of the Giro Securities Transaction Act in brief / 242
9.3.2.2. The creation of a pledge over a share in the pool of securities / 243
9.4. The creation of a pledge over cash / 246
9.4.1. An undisclosed pledge over cash / 247
9.4.2. A disclosed pledge / 248
9.5. The creation of a pledge over credit claims / 257
9.5.1. Control / 258
9.5.2. The undisclosed pledge and the prohibition of formalities / 258
9.5.3. Consequences for Dutch law / 262
9.6. The scope of Title 7.2 DCC / 263
9.6.1. The interpretation of Article 7:51 under (c) DCC / 264
9.6.2. The residual power to regulate / 266

CHAPTER 10
Towards a stronger principle of publicity / 271
Introduction / 271
10.2. The prohibition of formalities and the interest of market effi ciency / 272
10.2.1. The starting point in Dutch patrimonial law: absence of a prescribed form / 272
10.2.2. Why property law is necessarily formal / 273
10.2.3. Recent developments: the Supreme Court’s recognition of the collective deed of pledge / 276
10.2.4. Assessment of Dix q.q. v ING and deformalisation / 279
10.2.5. Article 3 of the Directive and Dutch Property Law / 283
10.3. Dispossession and the principle of publicity / 287
10.3.1. The principle of publicity with regard to security rights / 287
10.3.1.1. Meaning of publicity / 287
10.3.1.2. Publicity and establishing a mortgage over registered property / 289
10.3.1.3. Publicity and establishing a pledge over movable objects / 290
10.3.1.4. Publicity and establishing a pledge over claims / 292
10.3.1.5. Conclusion / 294
10.4. The idea of dispossession and the system of Dutch property law / 294
10.5. Whether more publicity is necessary with regard to security rights / 297
10.5.1. The problem with lack of publicity / 297
10.5.2. Arguments against more publicity, in particular against the introduction of a registration system / 300
10.5.3. The merit of these counter arguments / 302
10.5.4. Registration and other means of publicity / 307
10.6. A registration system and Dutch property law / 314
Conclusion of Part Two: The provision of fi nancial collateral and the principle of publicity / 321

PART THREE
The right of use and the principle of numerus clausus / 325

CHAPTER 11
The Right of Use / 327
Introduction / 327
11.2. Article 5 of the Directive: the right of use / 329
11.2.1. The background of the right of use / 329
11.2.2. The conditions of the right of use: Regulation (EU) 2015/2365 / 330
11.2.3. The scope of the right of use / 335
11.3. The legal consequences of exercising a right of use / 338
11.4. The implementation of the right of use / 341
11.4.1. Article 7:53 DCC: the right of use / 341
11.4.2. The right of use and the prohibition to appropriate / 348

CHAPTER 12
The Principle of Numerus Clausus / 351
12.2. A closed system of property rights / 352
12.3. The historical background of the numerus clausus / 352
12.3.1. Article 584 of the Old Dutch Civil Code / 353
12.3.2. First intermezzo: French law / 354
12.3.2.1. The case of Caquelard v Lemoine / 354
12.3.2.2. Demolombe’s opposing view / 356
12.3.2.3. La Maison de Poésie / 357
12.3.2.4. A semi-open system of property rights / 358
12.3.3. The commentaries on the old Dutch Civil Code / 359
12.3.4. Second intermezzo: Von Savigny and the German law of things / 361
12.3.4.1. The methods of the Historical school / 361
12.3.4.2. Von Savigny’s system / 363
12.3.4.3. The numerus clausus of real rights and the German BGB / 365
12.3.5. Concluding remarks / 367
12.4. The case of Blaauboer v. Berlips: a turning point / 369
12.5. The closed system of property rights under the new Dutch Civil Code / 371
12.5.1. Meijers’ view on the principle of numerus clausus / 371
12.5.2. A semi-closed system of property rights / 372
12.6. Alternative views on the numerus clausus / 373
12.6.1. A more open system of property rights / 373
12.6.2. Akkermans’ proposal for a European numerus clausus / 374
12.6.3. Struycken on the purpose and meaning of the numerus clausus / 376

CHAPTER 13
How to deal with the dogmatic issues surrounding the right of use / 381
Introduction / 381
13.2. A brief reiteration of Struycken’s ideas on the numerus clausus / 383
13.3. The right of use and the Dutch Civil Code: the power to repledge / 384
13.3.1. The power to repledge: disposing of goods belonging to someone else / 385
13.3.2. Change in priority / 387
13.3.3. The enforcement of the second pledge and the position of the original pledgor / 390
13.3.4. A brief summary of the power to repledge / 392
13.4. The right of use and the Dutch Civil Code: the power of disposal with respect to the right of usufruct / 392
13.4.1. The reasons for introducing a power of disposal / 393
13.4.2. The power of disposal / 394
13.4.3. The nature of the power of disposal / 395
13.4.4. The workings and legal consequences of the power of disposal / 398
13.5. Systemic elements / 404
13.6. The right of use and the system of property law / 406
13.6.1. The nature of the right of use / 407
13.6.2. The right of use and proprietary substitution / 410

CHAPTER 14
Whether the introduction of a right of use is sensible / 419
Introduction / 419
14.2. Why Akkermans’ approach to the principle of numerus clausus offers little assistance / 420
14.3. The impact of implementing a right of use / 421
14.3.1. An outward pressure within the national legal system / 422
14.3.2. The normal type of pledge and other issues / 423
14.4. Hybrid security rights in other legal systems / 424
14.4.1. French law / 424
14.4.1.1. Antichresis in the French Civil Code / 424
14.4.1.2. Pledge over fungible goods / 431
14.4.2. German law / 432
14.5. Whether the Dutch legal system should adopt the right of use on a larger scale / 433
14.5.1. The need for a right of use / 433
14.5.2. The organisation of the right of use / 434
14.5.3. Possible application and negative side effects / 435
14.5.4. Cauda: applying the right of usufruct for security purposes / 437
Conclusion part three: the right of use and the principle of numerus clausus / 441

Conclusion / 447
Summary / 465
Samenvatting / 477
Bibliography / 491
Table of cases / 533
About the author / 539