GLOBALISATION OR ISOLATION IN NEW DUTCH PROPERTY LA W? The New Civil code of the netherlands and the new civil codes of the netherlands antilles and Aruba Comp Sjef van Erp Readers are reminded that this work is protected by copyright. While they are free to use the ideas expressed in it, they may not copy, distribute or publish the work or part of it, in any source. Readers are permitted to make copies, electronically orprinted, for persona ie form, printed, electronic or otherwise, except for reasonable quoting, clearly indicating cla ssroom use The new civil Codes of the Netherlands the Netherlands antilles and aruba In this annual address, I would like to make a comparative property law analysis focusing on the relations within the Kingdom of the Netherlands. The Kingdom of the Netherlands is comprised of: the so-called Kingdom in Europe'( the Netherlands), the Netherlands antilles and aruba. The overall constitutional structure can be found in the statuut voor hel Koninkrijk der Nederlanden( Charter for the Kingdom of the Netherlands). 2 In Article 42 of the Charter it is stated that the rules of constitutional law of the parts of the Kingdom are laid down in the Constitution(Grondwer)of the Netherlands and the Constitution Staatsregeling) of the Netherlands Antilles and Aruba. 3 Article 39 of the Charter contains the principle that within the Kingdom, among other legal areas, civil and commercial law should, as far as consult one another during the legislative process if far-reaching changes in the law ae te to alated in the governments of the three constituent parts ar proposed. 4 This is the so-called principle of concordance. It is explicitly not required that Nether, his is a revised and elaborated version of the presidential address held at the annualmeeting ofthe ds Comparative Law Association in Maastricht on 15 Decem ber 2002. The address was also presented as a paper at a meeting held under the auspices of the lus Commune Research School(workshop Property Law) at Edinburgh law school on 19 and 20 June 2003 The Statuut voor het Koninkrijk der Nederlanden can be found at 3 The Grondwet van het Koninkrijk der Nederlanden can be found at http:/www.minbzk.nlcontents/pages/00007999/grondwetNl6-02pdfForanEnglishtranslationofthe ConstitutionoftheKingdomoftheNetherlandsinEurope,seehttp:/www.oefre.unibe.ch/law/icl/nl00000html Article 39 read 1. Het burgerlijk en handelsrecht, de burgerlijke rechtsvordering, het strafrecht, de strafvordering, het auteursrecht, de industriale eigendom, het notarisambt, zomede bepa lingen omtrent maten en gewichten worden in Nederland, de Nederlandse Antillen en Aruba zoveel mogelijk op overeenkomstige wijze geregeld 2. Een voorstel tot ingrijpende wijziging van de bestaande wetgeving op dit stuk wordt niet bi] het vertegenwoordigende lichaam ingediend -dan wel door het vertegenwoordigende lichaam in behandeling genomen-alvorens de regeringen in de andere landen in de gelegenheid zijn gesteld van
1 GLOBALISATION OR ISOLATION IN NEW DUTCH PROPERTY LAW? The New Civil Code of the Netherlands and the New Civil Codes of the Netherlands Antilles and Aruba Compared1 Sjef van Erp Readers are reminded that this work is protected by copyright. While they are free to use the ideas expressed in it, they may not copy, distribute or publish the work or part of it, in any form, printed, electronic or otherwise, except for reasonable quoting, clearly indicating the source. Readers are permitted to make copies, electronically or printed, for personal and classroom use. 1. The new Civil Codes of the Netherlands, the Netherlands Antilles and Aruba In this annual address, I would like to make a comparative property law analysis focusing on the relations within the Kingdom of the Netherlands. The Kingdom of the Netherlands is comprised of: the so-called ‘Kingdom in Europe’ (the Netherlands), the Netherlands Antilles and Aruba. The overall constitutional structure can be found in the Statuut voor het Koninkrijk der Nederlanden (Charter for the Kingdom of the Netherlands).2 In Article 42 of the Charter it is stated that the rules of constitutional law of the parts of the Kingdom are laid down in the Constitution (Grondwet) of the Netherlands and the Constitution (Staatsregeling) of the Netherlands Antilles and Aruba.3 Article 39 of the Charter contains the principle that within the Kingdom, among other legal areas, civil and commercial law should, as far as possible, be regulated in the same way. The governments of the three constituent parts are to consult one another during the legislative process if far-reaching changes in the law are proposed.4 This is the so-called ‘principle of concordance’. It is explicitly not required that 1 This is a revised and elaborated version of the presidential address held at the annual meeting of the Netherlands Comparative Law Association in Maastricht on 15 December 2002. The address was also presented as a paper at a meeting held under the auspices of the Ius Commune Research School (workshop Property Law) at Edinburgh Law School on 19 and 20 June 2003. 2 The Statuut voor het Koninkrijk der Nederlanden can be found at: http://www.minbzk.nl/contents/pages/00008175/statuut_koninkrijk_nederlanden_7 -01.pdf. 3 The Grondwet van het Koninkrijk der Nederlanden can be found at: http://www.minbzk.nl/contents/pages/00007999/grondwet_NL_6-02.pdf. For an English translation of the Constitution of the Kingdom of the Netherlands in Europe, see http://www.oefre.unibe.ch/law/icl/nl00000_.html. 4 Article 39 reads: 1. Het burgerlijk en handelsrecht, de burgerlijke rechtsvordering, het strafrecht, de strafvordering, het auteursrecht, de industriële eigendom, het notarisambt, zomede bepalingen omtrent maten en gewichten worden in Nederland, de Nederlandse Antillen en Aruba zoveel mogelijk op overeenkomstige wijze geregeld. 2. Een voorstel tot ingrijpende wijziging van de bestaande wetgeving op dit stuk wordt niet bij het vertegenwoordigende lichaam ingediend - dan wel door het vertegenwoordigende lichaam in behandeling genomen - alvorens de regeringen in de andere landen in de gelegenheid zijn gesteld van
the law within the Kingdom be uniform, as differences between the parts may be necessary because of differing local conditions. Because of this constitutional principle of concordance it became imperative that after the enactment of the new Dutch Civil Code a new Civil Code for the Netherlands Antilles and aruba be drafted as well, taking the Dutch Civil Code as the model law. 5 The new Dutch Civil Code has now been in force for more than ten years, and it is becoming clear in which areas the Code meets the expectations that existed when it was enacted and in which areas it does not function very well. It is, therefore, quite interesting not to say intriguing-to see to what extent the dutch model was followed in the area of property law. My approach will be to analyse the Dutch model from the perspective of policy choices and compare the choices made in the Netherlands and in the Netherlands antilles and Aruba. I will take the concept of unitary ownership and personal property security interests as examples 2. Policy choices underlying the concept of unitary ownership It is a well-known characteristic of civil law systems that ownership is considered not to be fragmented. "Ownership, as the old Dutch Civil Code states in Book 5, Article 1(1)(NCC Article 1(1), is the most comprehensive right which a person can have in a thing. also dismembered rights(limited real rights)exist, which are rights'derived from a more comprehensive right, the latter being encumbered with the dismembered right(Book 3, Article 8 NCC). The law in mandatory form fixes the number and content of real rights this is the so-called numerus clausus of absolute rights. 7 Of course, also in a civil law system several people can be the owners of one object at the same time. This is not, however, a case of fragmentation but a sharing of ownership: co-ownership This means that all the owners have the same rights and are burdened by the same duties, but according to their share Furthermore, no distinction between major (common law )and minor(equitable)interests is mad The civil law principle of unitary ownership has not only been reaffirmed as the basis of new Dutch property law, it was even decided that this principle should be maintained more strictly than under the old Civil Code. As a consequence, the introduction of the English and American concept of trust into Dutch law was explicitly not made possible and the transfer of ownership for security purposes, accepted by Dutch case law under the influence of German haarzienswijze hieromtrent te doen blijken Hereina fter the Netherlands Civil Code will be a bbreviated as ncc. the civil code of the Netherlands Antilles as nacc and the civil Code of aruba as acc An English translation of the NCC, patrimonial law, can be found in: P P.C. Haanappeland e Mackaay, Nieuw Nederlands Burgerlijk Wetboek. Het Vermogensrecht/New Netherlands Civil Code Patrimonial Law(deventer and Boston: Kluwer Law and Taxation Publishers, 1990) CfJH M. van Erp, A Numerus Quasi-Clausus of Property Rights as a Constitutive Element of a Future European Property Law,, in: K. Boele-Woelki C.H. Brants and G.J. W. Steenhoff(eds ) Het pleziervan de rechtsvergelijking Opstellen overunificatie en harmonisatie van het recht in Europa aangeboden aan prof. mr. E.H. Hondius(Deventer: Kluwer, 2003), also published electronically in vol. 7.2 ELECTRONIC JouRnalOfCompaRativELaw,juNe2003),<http:www.eiclorg/72/art72-2.htmp
2 the law within the Kingdom be uniform, as differences between the parts may be necessary because of differing local conditions. Because of this constitutional principle of concordance, it became imperative that after the enactment of the new Dutch Civil Code a new Civil Code for the Netherlands Antilles and Aruba be drafted as well, taking the Dutch Civil Code as the model law.5 The ‘new’ Dutch Civil Code has now been in force for more than ten years, and it is becoming clear in which areas the Code meets the expectations that existed when it was enacted and in which areas it does not function very well. It is, therefore, quite interesting - not to say intriguing - to see to what extent the Dutch model was followed in the area of property law. My approach will be to analyse the Dutch model from the perspective of policy choices and compare the choices made in the Netherlands and in the Netherlands Antilles and Aruba. I will take the concept of unitary ownership and personal property security interests as examples. 2. Policy choices underlying the concept of unitary ownership It is a well-known characteristic of civil law systems that ownership is considered not to be fragmented. ‘Ownership’, as the old Dutch Civil Code states in Book 5, Article 1(1) (NCC Article 1(1)), ‘is the most comprehensive right which a person can have in a thing’.6 Also ‘dismembered rights’ (limited real rights) exist, which are rights ‘derived from a more comprehensive right, the latter being encumbered with the dismembered right’ (Book 3, Article 8 NCC). The law in mandatory form fixes the number and content of real rights; this is the so-called numerus clausus of absolute rights.7 Of course, also in a civil law system several people can be the owners of one object at the same time. This is not, however, a case of fragmentation but a sharing of ownership: co-ownership. This means that all the owners have the same rights and are burdened by the same duties, but according to their share. Furthermore, no distinction between major (‘common law’) and minor (‘equitable’) interests is made. The civil law principle of unitary ownership has not only been reaffirmed as the basis of new Dutch property law, it was even decided that this principle should be maintained more strictly than under the old Civil Code. As a consequence, the introduction of the English and American concept of trust into Dutch law was explicitly not made possible and the transfer of ownership for security purposes, accepted by Dutch case law under the influence of German haar zienswijze hieromtrent te doen blijken. 5 Hereinafter, the Netherlands Civil Code will be abbreviated as NCC, the Civil Code of the Netherlands Antilles as NACC and the Civil Code of Aruba as ACC. 6 An English translation of the NCC, patrimonial law, can be found in: P.P.C. Haanappel and E. Mackaay, Nieuw Nederlands Burgerlijk Wetboek. Het Vermogensrecht/New Netherlands Civil Code. Patrimonial Law (Deventer and Boston: Kluwer Law and Taxation Publishers, 1990). 7 Cf. J.H.M. van Erp, A Numerus Quasi-Clausus of Property Rights as a Constitutive Element of a Future European Property Law?, in: K. Boele-Woelki, C.H. Brants and G.J.W. Steenhoff (eds.), Het plezier van de rechtsvergelijking. Opstellen over unificatie en harmonisatie van het recht in Europa aangeboden aan prof. mr. E.H. Hondius (Deventer: Kluwer, 2003), also published electronically in vol. 7.2 ELECTRONIC JOURNAL OF COMPARATIVE LAW, (June 2003), < http://www.ejcl.org/72/art72-2.html>
case law, became no longer allowed. The pivotal provision is Book 3, Article 84(3)NCC, the so-called fiducia ban, not permitting any transfer of ownership that is not real pledge, which under the old Civil Code could only be created in a possessory form. 6 s on (complete). Transfer of ownership for security purposes was used to evade the provision replace this type of transfer, the non-possessory pledge was introduced. Originally, this was to be a publicly registered pledge, but after an intense debate the new non-possessory pledge was to be created secretly. Although such a pledge must still be registered, this has to be done in a non-public tax register merely to certify the date. 9 Remarkably enough, the new Civil Codes of the Netherlands Antilles and Aruba do not contain this fiducia ban. The Netherlands antilles and Aruba still accept a transfer of ownership for security purposes. It is even discussed whether it should be made possible to create a trust under the law of the Netherlands Antilles. It is also quite interest ing to note that the Dutch non-possessory pledge has been adopted, though without the limited registration at the tax office Several reasons are given for this deviation from the dutch model. In the following sections, I will first examine briefly the background of the dutch debate on unitary ownership followed by the continuing criticism made about this choice and the reasons why the gislatures of the Netherlands antilles and aruba refused to follow the dutch example Finally, I will consider the developments in the light of globalisation. My conclusion will be that the fiducia ban in the Dutch Civil Code will prove to be a futile attempt to maintain the purity of a civil property law system in a world characterised by regional and global integration of markets and the world wide legal integration which results from this economic process 3. Policy choices underlying the law of personal property security interests Under the old Dutch Civil Code, it was accepted through case law that a transfer of ownership for security purposes as such was valid. Although such a juridical act was a transfer from the perspective of form, from the perspective of substance, however, it was the creation of a non-possessory security interest. If the property transferred were goods, the debtor/transferor did not lose control and if they were claims, the debtor of the claim was not informed. As a pledge, this was an invalid transaction given the publicity requirements that pply here. Pledging of goods could (and canonly be done by bringing the goods under the control of the creditorpled gee or a third person agreed upon by the parties(article 1198(1) of the old NCC, Book 3, Article 236(1)of the new NCC). In the case of claims, a deed had (and has ) to be drawn up and notice of this deed must be given to the debtor of the claim (Article 1198 of the old NCC and Book 3, Article 236(2)in conjunction with Book 3, Article 94(1)of the new NCC). As a transfer or an assignment, however, the transaction was valid C.J. van Zeben, J.w. du Pon and M.M. Olthof, Parlementaire geschiedenis van het nieu Burgerlijk Wetboek. Boek 3, Vermogensrecht in het algemeen(Deventer, Kluwer, 1981), pp. 316 ff., pp. 466ff (Prof E M.M. Meijers during parliamentary discussions). See also pp 699 ff, esp. pp. 703 and 704, where Meijers states that it is a general principle of law that no creditor can create a preferential status by merely concluding contract with his debtor. The only exception, Meijers continues, is the transfer of ownership for securit Cf Van Zeben, Du Pon and Olthof, Parlementaire geschiedenis, pp 730 ff
3 case law, became no longer allowed.8 The pivotal provision is Book 3, Article 84(3) NCC, the so-called fiducia ban, not permitting any transfer of ownership that is not ‘real’ (complete). Transfer of ownership for security purposes was used to evade the provisions on pledge, which under the old Civil Code could only be created in a possessory form. To replace this type of transfer, the non-possessory pledge was introduced. Originally, this was to be a publicly registered pledge, but after an intense debate the new non-possessory pledge was to be created secretly. Although such a pledge must still be registered, this has to be done in a non-public tax register merely to certify the date.9 Remarkably enough, the new Civil Codes of the Netherlands Antilles and Aruba do not contain this fiducia ban. The Netherlands Antilles and Aruba still accept a transfer of ownership for security purposes. It is even discussed whether it should be made possible to create a trust under the law of the Netherlands Antilles. It is also quite interesting to note that the Dutch non-possessory pledge has been adopted, though without the limited registration at the tax office. Several reasons are given for this deviation from the Dutch model. In the following sections, I will first examine briefly the background of the Dutch debate on unitary ownership, followed by the continuing criticism made about this choice and the reasons why the legislatures of the Netherlands Antilles and Aruba refused to follow the Dutch example. Finally, I will consider the developments in the light of globalisation. My conclusion will be that the fiducia ban in the Dutch Civil Code will prove to be a futile attempt to maintain the purity of a civil property law system in a world characterised by regional and global integration of markets and the worldwide legal integration which results from this economic process. 3. Policy choices underlying the law of personal property security interests Under the old Dutch Civil Code, it was accepted through case law that a transfer of ownership for security purposes as such was valid. Although such a juridical act was a transfer from the perspective of form, from the perspective of substance, however, it was the creation of a non-possessory security interest. If the property transferred were goods, the debtor/transferor did not lose control and if they were claims, the debtor of the claim was not informed. As a pledge, this was an invalid transaction given the publicity requirements that apply here. Pledging of goods could (and can) only be done by bringing the goods under the control of the creditor/pledgee or a third person agreed upon by the parties (Article 1198(1) of the old NCC, Book 3, Article 236(1) of the new NCC). In the case of claims, a deed had (and has) to be drawn up and notice of this deed must be given to the debtor of the claim (Article 1198 of the old NCC and Book 3, Article 236(2) in conjunction with Book 3, Article 94(1) of the new NCC). As a transfer or an assignment, however, the transaction was valid. 8 C.J. van Zeben, J.W. du Pon and M.M. Olthof, Parlementaire geschiedenis van het nieuw Burgerlijk Wetboek. Boek 3, Vermogensrecht in het algemeen (Deventer, Kluwer, 1981), pp. 316 ff. , pp. 466 ff. (Prof. E.M.M. Meijers during parliamentary discussions). See also pp. 699 ff., esp. pp. 703 and 704, where Meijers states that it is a general principle of law that no creditor can create a preferential status by merely concluding a contract with his debtor. The only exception, Meijers continues, is the transfer of ownership for security purposes. 9 Cf. Van Zeben, Du Pon and Olthof, Parlementaire geschiedenis, pp. 730 ff
Goods can be delivered constitute posessorio: the transferor is still in control of the goods though no longer as possessor, merely as holder(detenteur). Under the old Civil Code giving notice to the debtor of the assigned claim was not a conditio sine qua non for assignment.0 Not informing the debtor, however, resulted in the protection of the debtor paying bona fide to the assignor and not the assignee The ownership of the creditor/transferor for security purposes was not, however, complete. If the debtor did not pay his debts, the rules on pledge applied as far as possible to any forced sale of the goods or claims. The transferor was not able to invoke his ownership rights against certain privileged creditors. 2 Parallel to this use of ownership for security purposes, old Dutch property law allowed the broad retention of title clauses. 3 Clearly, the underlying policy was that ownership, whether transferred or retained, could be used for security purposes. This created an atmosphere in which a limited form of ownership fragmentation became accepted The debtor/transferee for security purposes could be seen as economic owner the cred itor/transferor was the formal owner. In the case of retention of title, the seller/owner was the formal owner, the buyer/holder'of the goods sold and delivered was the economic owner,, especially if he was allowed to dispose of the goods in the ord inary course of business. 4 This all changed when the new Civil Code entered into force, resulting in a fundamental policy change. 5 In Book 3, Article 84(3)of the new NCC it is stated A juridical act which is intended to transfer property for purposes of security or which does not have the purpose of bringing the property into the patrimony of the acquirer, aftertransfer, does not constitute valid title for transfer of that property With regard to the assignment of claims, Book 3, Article 94 now provides In cases other than those provided for in the preceding article [ viz. rights payable to bearer or to order the instrument of which is under the control of the transferee, JvE, rights to be exercised against one or more specifically determ ined persons are delivered by means of a deed intended for that purpose and This is different under the new NcC. See the text a bove Hoge Raad, 3 January 1941, Nederlandse Jurisprudentie 1941, 470(Boerenleenbank Hazerswoude v Los). This decision was reaffirmed in Hoge Raad, 19 May 1995, Nederlandse Jurisprudentie 1996, 119 (Keereweer q q v Sogelease). Cf. Asser-Mijnssen, Zakenrecht 3-//(Zwolle: W.EJ. Tjeenk Willink, 1986),nos 185 ff. see also Asser-Mijnssen-De Haan, Goederenrecht 3-1(Deventer. W.E.J. Tjeenk Willink, 2001),nos 468 ff. Older editions of the Asser series(a series of leading manua ls concerning Dutch patrimonial law)are still important for their analysis of old Dutch civil law See Asser-Mijnssen, Zakenrecht 3-l, nos. 179f Cf. Asser-Mijnssen-De Haan, Goederenrecht 3-1, no 222 especau see Asser-Miynssen-De Haan, Zakenrecht 3-1(Zwolle: W.E. J. Tjeenk Willink, 1992), nos 538 ff. lly no 544, Asser-Minssen-De Haan, Goederenrecht 3-1, nos. 483 ff For a brief overview of Dutch law, see J H M. van Erp and L P.w. van Vliet, Realand Personal Security, in: E. Hondius and C Joustra(eds ) Netherlands Reports to the Sixteenth International Congress of Comparative Law, Brisbane 2002(Antwerpen: Intersentia, 2002), pp. 1 15 ff, also available electronically in vol 6.4ElecTronIcJouRnalOfCompaRativELaw,(deceMber2002),<http://www.eicl.org/64 html 4
4 Goods can be delivered constituto posessorio: the transferor is still in control of the goods, though no longer as possessor, merely as ‘holder’ (détenteur). Under the old Civil Code, giving notice to the debtor of the assigned claim was not a conditio sine qua non for assignment.10 Not informing the debtor, however, resulted in the protection of the debtor paying bona fide to the assignor and not the assignee. The ownership of the creditor/transferor for security purposes was not, however, complete. If the debtor did not pay his debts, the rules on pledge applied as far as possible to any forced sale of the goods or claims.11 The transferor was not able to invoke his ownership rights against certain privileged creditors.12 Parallel to this use of ownership for security purposes, old Dutch property law allowed the broad retention of title clauses.13 Clearly, the underlying policy was that ownership, whether transferred or retained, could be used for security purposes. This created an atmosphere in which a limited form of ownership fragmentation became accepted. The debtor/transferee for security purposes could be seen as ‘economic owner’, the creditor/transferor was the formal owner. In the case of retention of title, the seller/owner was the formal owner, the buyer/‘holder’ of the goods sold and delivered was the ‘economic owner’, especially if he was allowed to dispose of the goods in the ordinary course of business.14 This all changed when the new Civil Code entered into force, resulting in a fundamental policy change.15 In Book 3, Article 84(3) of the new NCC it is stated: A juridical act which is intended to transfer property for purposes of security or which does not have the purpose of bringing the property into the patrimony of the acquirer, after transfer, does not constitute valid title for transfer of that property. With regard to the assignment of claims, Book 3, Article 94 now provides: In cases other than those provided for in the preceding article [viz. rights payable to bearer or to order, the instrument of which is under the control of the transferee, JvE], rights to be exercised against one or more specifically determined persons are delivered by means of a deed intended for that purpose and 10 This is different under the new NCC. See the text above. 11 Hoge Raad, 3 January 1941, Nederlandse Jurisprudentie 1941, 470 (Boerenleenbank Hazerswoude v Los). This decision was reaffirmed in Hoge Raad, 19 May 1995, Nederlandse Jurisprudentie 1996, 119 (Keereweer q.q. v Sogelease). Cf. Asser-Mijnssen, Zakenrecht 3-III (Zwolle: W.E.J. Tjeenk Willink, 1986), nos. 185 ff.; see also Asser-Mijnssen-De Haan, Goederenrecht 3-I (Deventer: W.E.J. Tjeenk Willink, 2001), nos. 468 ff. Older editions of the Asser series (a series of leading manuals concerning Dutch p atrimonial law) are still important for their analysis of old Dutch civil law. 12 See Asser-Mijnssen, Zakenrecht 3-III, nos. 179 f. 13 Cf. Asser-Mijnssen-De Haan, Goederenrecht 3-I, no. 222. 14 See Asser-Mijnssen-De Haan, Zakenrecht 3-I (Zwolle: W.E.J. Tjeenk Willink, 1992), nos. 538 ff., especially no. 544; Asser-Mijnssen-De Haan, Goederenrecht 3-I, nos. 483 ff. 15 For a brief overview of Dutch law, see J.H.M. van Erp and L.P.W. van Vliet, Real and Personal Security, in: E. Hondius and C. Joustra (eds.), Netherlands Reports to the Sixteenth International Congress of Comparative Law, Brisbane 2002 (Antwerpen: Intersentia, 2002), pp. 115 ff., also available electronically in vol. 6.4 ELECTRONIC JOURNAL OF COMPARATIVE LAW, (December 2002), <http://www.ejcl.org/64/art64- 7.html>
notice thereof given by the alienator or acquirer to those persons Furthermore, Book 3, Article 92 of the NCC severely curtails the possibilities to create retention of title 16 The underlying policy change is clear: ownership should no longer be used as security There is only one exception: if an existing right of ownership is used as security, but even in such a case this is possible only to a limited degree. The policy change is in conformity with the ideas of Meijers, the auctor intellectualis of the main structure and basic underlying principles of the new Civil Code. In his De algemene begrippen van het burgerlijk recht(the general principles of civil law ) Meijers wonders whether it makes sense in a civil law system to accept both pledge and ownership limited vis-a-vis third parties, such as ownership for security purposes. His answer is distinctly negative: in a general theory of law(or civil law) such a distinction is foolishness,. 7 He reiterated this approach during the parliamentary debates on the new Civil Code. If it is desirable that property be transferred for security purposes, a pledge should be created; if property is to be administered for the benefit of a person a bew ind (administration )should be established. 8 In his view, rules of mandatory law which have become obsolete should be replaced by new rules; if they are not, evasion of the law would undermine the authority of mandatory law When one reads the parliamentary documents and debates, one gets the stron o d to impression that, with respect to property law, the drafters of the new Civil Code wante return to principles of pure civil law. The policy choices that resulted from this thought process are the following: (1)ownership is the most complete absolute right and is, as such unitary in nature; (2)a pre-formulated statutory list of other absolute rights, with pre formulated mandatory contents(numerus clausus of absolute rights) must be strictly adhered to; (3)these other absolute rights (limited real rights)are burdens resting on the right of ownership, not rights that are split off from the full right of ownership; and(4) freedom of contract does not apply to the creation of limited real rights, except in so far as the law explicitly allows the parties to give shape to these rights. It will be clear that these policies are interrelated. If, e.g., parties are free to create new limited real rights, numerus clausus has become simply a model and fragmentation of ownership can no longer be stopped The above meant that a new statutory framework had to be created to allow the need See Book 3, Article 92(2), which reads: Reservation of title may only be validly stipulated with benefit of the acquirer, as well as with respect to cla ims for failure to perform such contace ontract lor ne o respect to claims conceming the counterprestation for things delivered or to be delivered by the alienatorto acquirer pursuant to a contract, or for work performed or to be performed pursuant to such a o E M. Meijers, De algemene begrippen van het burgerlijkrecht(Leiden: Universita ire Pers, 1958),p 285: In een algemene rechtsleer wordt echter het onderscheid maken tussen twee zakelijke zekerheidsrechten een pandrecht en een ook ten aanzien van derden beperkte eigen dom, een dwaasheid Van Zeben, Du Pon and Olthof, Parlementaire geschiedenis, p. 317 and a Explanation by Meijers under draft Article 3. 4.2.2(now Book 3, Article 84), in: Van Zeben, Du Pon of, Parlementaire geschiedenis, p. 317: Wie een goed tot zekerheid van een schuld wil overdragen, moet een pandrecht vestigen; wie hem toekomende goederen door een ander wenst te laten beheren, moet deze goederen onder bewind stellen' and Het recht wordt echter veel beter gediend door in zodanige gevallen de verouderde dwingende wet te veranderen dan door toe te laten dat door wetsontduiking het gezag van
5 notice thereof given by the alienator or acquirer to those persons. Furthermore, Book 3, Article 92 of the NCC severely curtails the possibilities to create retention of title.16 The underlying policy change is clear: ownership should no longer be used as security. There is only one exception: if an existing right of ownership is used as security, but even in such a case this is possible only to a limited degree. The policy change is in conformity with the ideas of Meijers, the auctor intellectualis of the main structure and basic underlying principles of the new Civil Code. In his De algemene begrippen van het burgerlijk recht (the general principles of civil law), Meijers wonders whether it makes sense in a civil law system to accept both pledge and ownership limited vis-à-vis third parties, such as ownership for security purposes. His answer is distinctly negative: in a general theory of law (or civil law) such a distinction is ‘foolishness’.17 He reiterated this approach during the parliamentary debates on the new Civil Code. If it is desirable that property be transferred for security purposes, a pledge should be created; if property is to be administered for the benefit of a person a bewind (administration) should be established.18 In his view, rules of mandatory law which have become obsolete should be replaced by new rules; if they are not, evasion of the law would undermine the authority of mandatory law.19 When one reads the parliamentary documents and debates, one gets the strong impression that, with respect to property law, the drafters of the new Civil Code wanted to return to principles of pure civil law. The policy choices that resulted from this thought process are the following: (1) ownership is the most complete absolute right and is, as such, unitary in nature; (2) a pre-formulated statutory list of other absolute rights, with preformulated mandatory contents (numerus clausus of absolute rights) must be strictly adhered to; (3) these other absolute rights (‘limited real rights’) are burdens resting on the right of ownership, not rights that are split off from the full right of ownership; and (4) freedom of contract does not apply to the creation of limited real rights, except in so far as the law explicitly allows the parties to give shape to these rights. It will be clear that these policies are interrelated. If, e.g., parties are free to create new limited real rights, numerus clausus has become simply a model and fragmentation of ownership can no longer be stopped. The above meant that a new statutory framework had to be created to allow the needs 16 See Book 3, Article 92(2), which reads: ‘Reservation of title may only be validly stipulated with respect to claims concerning the counterprestation for things delivered or to be delivered by the alienator to the acquirer pursuant to a contract, or for work performed or to be performed pursuant to such a contract for the benefit of the acquirer, as well as with respect to claims for failure to perform such contracts. . . .’ 17 E.M. Meijers, De algemene begrippen van het burgerlijk recht (Leiden: Universitaire Pers, 1958), p. 285: ‘In een algemene rechtsleer wordt echter het onderscheid maken tussen twee zakelijke zekerheidsrechten, een pandrecht en een ook ten aanzien van derden beperkte eigendom, een dwaasheid.’ 18 Van Zeben, Du Pon and Olthof, Parlementaire geschiedenis, p. 317. 19 Explanation by Meijers under draft Article 3.4.2.2 (now Book 3, Article 84), in: Van Zeben, Du Pon and Olthof, Parlementaire geschiedenis, p. 317: ‘Wie een goed tot zekerheid van een schuld wil overdragen, moet een pandrecht vestigen; wie hem toekomende goederen door een ander wenst te laten beheren, moet deze goederen onder bewind stellen’ and ‘Het recht wordt echter veel beter gediend door in zodanige gevallen de verouderde dwingende wet te veranderen dan door toe te laten dat door wetsontduiking het gezag van dwingende bepalingen wordt ondermijnd.’