European Land Law

In his remarkable, path-breaking new book, Peter Sparkes takes stock of the development of a distinctive body of Europea...

Author: Peter Sparkes

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In his remarkable, path-breaking new book, Peter Sparkes takes stock of the development of a distinctive body of European land law, within an internal market composed of 30 countries (the EU-27, including Bulgaria and Romania, and the EEA-3), whose property systems differ so markedly and which reflect such widely differing cultures. Yet the internal market has already effected a gradual equalisation and standardisation across Europe as foreign capital spreads to create equality of yield. ‘We all become better off by joining a larger trading block but the social consequences will be profound: Brits will need to emigrate to the continent to afford a home, Bulgarians will need to make way for them along the Black Sea coast, and title deeds will be reshuffled all over Europe on a giant Monopoly board’ writes the author in his preface, before embarking on a dispassionate examination of the beginning of that process of profound change. The opening chapters are devoted to an explanation of how the internal market has created a substantive European land law. Chapter 3 examines the rise of a distinctive European land law, and the development of conflicts principles applying to recovery of land. Chapters 5 to 9 on the marketing and sale of land focus upon Community competence on consumer protection. The decision to treat land as a product like any other in the Unfair Commercial Practices Directive will have wide ranging and far reaching implications and, apart from marketing of land and of timeshares, other chapters deal with conveyancing, contracting and the emerging market in mortgage credit. The book concludes with a miscellany of conflicts rules which are gradually coalescing and form the elements from which a substantive European land law can be forged. A number of topics which it is not possible to cover in detail (VAT, other taxes, environmental controls and agriculture) are touched on briefly, and the same is true of international aspects of trusts and succession.

European Land Law Peter Sparkes

Oxford and Portland, Oregon 2007

Hart Publishing c/o International Specialized Book Services 920 NE 58th Avenue, Suite 300 Portland, OR 97213-3786 USA Tel: +1 503 287 3093 or toll-free: (1) 800 944 6190 Fax: +1 503 280 8832 E-mail: [email protected] Website: http://www.isbs.com

© Peter Sparkes 2007 Peter Sparkes has asserted his right under the Copyright, Designs and Patents Act 1988, to be identified as the author of this work.

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British Library Cataloguing in Publication Data Data Available ISBN: 978-1-84113-758-2

Typeset by Forewords, Oxford Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall

CO N TEN TS

Contents CO N TEN TS

Preface Table of Cases — European Table of Cases — United Kingdom Table of Cases — Foreign Table of Legislation — European Table of Legislation — United Kingdom Table of Legislation — Foreign Table of Reports Land as a European Commodity

xi xvii xxxi xli xlv lxv lxxvii lxxxi 1

Market Culture Capital Club Outside the Capital Club Other Europes Cross-border Transactions Capital Freedom Land as Capital Land Transactions Nomenclaturised Movement of Landowners Factors Generating Movement of Buyers Business Rights to Buy Land Workers Self-supporters Market Elements

1 5 12 16 18 22 25 28 35 38 42 49 56 61

Controls on European Buyers

63

Restrictions and Controls Military Regions Second Homes Agricultural Land and Forests Direct and Indirect Controls

63 65 68 76 79

vi

Contents Justification of Controls Authorisation and Declaration Schemes Swiss Controls

81 87 90

Towards a European Land Law?

95

National and European Laws Immovables The Site Selection of Land Law Property of the European Institutions Respect for Territoriality Subsidiarity Fundamental Rights in the EU Specific Fundamentals Convergence A Substantive Miscellany Value Added Tax Single Farm Payment Special Agricultural Regimes Dairy Towards What?

95 97 101 104 108 109 118 120 123 126 130 137 141 147 150 153

Actions Affecting Land

155

Europeanisation of Actions European Conflicts Club Provisional Measures Exclusive Forum over Land Trespass Used to Assert Title Public Registers Tenancies, Holiday Lets and Timeshares Personal Actions

155 156 162 163 172 177 178 186

Marketing Land

191

Pointillism Consumption of Land Unfair Commercial Practices Affecting Land Doorstep Selling of Land

191 194 200 202

Contents

vii

Distance Rentals Unfair Marketing Practices Unfair Advertising and Statements Internet Advertising (e-Commerce) Information in an Invitation to Purchase Information about Distance Contractors Withdrawal Rights Credit Cancellation Remediation and Reform

211 216 223 228 230 231 234 240 245

Timeshare

247

Regulation of Timeshare Marketing Timeshares and Timeshare-likes Information Withdrawal Rights Timeshare Vehicles Unregulated Aspects Cross-border Timesharing Reform

247 254 261 265 269 275 281 283

Conveyancing

285

Conveyancers and Lawyers Practice Rights and Qualification Mechanics of Transfer Registration Laundering Activity Confiscation Orders Conveyancers as Launderers Conveyancers as Cops Customer Due Diligence Reporting Internet Advertising by Conveyancers

285 292 300 301 306 312 315 316 319 325 331

Contracts

333

Advanced E-Signatures Simple E-Signatures Buying Land from Websites

333 341 345

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Contents

Unfair Terms Legislation Unfairness of Terms European Contract Law The Contract/Property Interface

347 354 360 367

Mortgages and Debt

377

Mortgage Credit European Mortgage Markets Information Rights Consumer Protection Security Mortgage Procedures Primary and Secondary Lending Secured Rights on Cross-border Insolvency Main (Europe-wide) Insolvency Secondary (Territorial) Insolvency Judgment Debts in the Judgment State Judgment Debts in the Enforcing State

377 381 387 392 396 401 406 412 416 424 426 430

Contract Conflicts

437

Conflicts and Land Contracts Property Core Choice of Site-based Law Site-based Selection Non-site Contracts Choice of Law and Forum Anti-contractual Claims Home Court Forum

437 439 443 444 448 458 462 468

Family Property

475

Europeanisation of Family Law Connection to the Family Family Law Formality for Testation Patterns of Testation Succession Trust Vehicles

475 480 483 487 489 493 499

Contents

ix

Trust Forum Trust Law Interaction of Trust Law and Forum

502 509 518

Outro

521

Index

525

PR EFACE

Preface PR EFACE

In matters European I have been an opsimath, one who begins to learn late in life. My legal education had already begun when the United Kingdom at last lunged into the EEC and so I was in the very final cohort to escape that torture which is the study of European law, and found little need to lose my innocence through the succeeding years spent writing on English land law. My first book cited article 295 for the proposition that the EC Treaty1 is not to ‘prejudice the rules in Member States governing the system of property ownership’ and from that I drew the conclusion that, like the Euro-sceptics of Mrs Thatcher’s cabinet, ‘property lawyers have a licence to be dry’.2 But, as that book adumbrated and as this book explains at length, this is a half-truth. No European element enters into the basic structure of ownership rights in land, conveyancing systems, succession on death, and family law. Equally certainly, Brussels has constructed a law capable of flooding into all the nooks and crannies of our domestic property system,3 simply because the workings of the internal market are immune from the article 295 proscription. Hence the epiphany which occurred when I realised the potentiality of a continent-wide property law, and since then, like most converts, I have become more European than the Europeans. So too did Arthur Cockfield when Mrs Thatcher sent him to Brussels as a Commissioner to clip the wings of Jacques Delors but who responded with a detailed blueprint for successful implementation of the internal market; he was not selected to serve a second term.4 Nor is this the only warning to be drawn from great European lives. Cardinal Wolsey fell foul of the Tudor monster, Henry VIII, but it is a shock to realise that the specific crime of which he was convicted was praemunire and that the charge sheet included the grave offence of having imported aspects of civil law into England.5 Worse, I think, Étienne Aubert left the comfort of his position as a professor of civil law at Toulouse to be elected Pope under the name Innocent VI.6 How he must have longed to get back to teaching property! Casanova, on the other hand, declined in his career as a rake to such an extent that he was reduced to attempting the seduction of women by pretending to be a property

1 EC §295 ex §222; see below [3.18ff]. (I use ‘Treaty of Rome’ to refer to the Treaty in its original form). 2 P Sparkes A New Land Law (Oxford, Hart, 1999, 1-84113-013-3) 34. 3 HP Bulmer v J Bollinger [1974] Ch 401 CA, 418 Lord Denning MR. 4 Obituary Guardian January 11th 2007. 5 The speed of the fall is most terrifying; Wolsey presided as Lord Chancellor in Chancery on October 9th 1529 but by October 22nd he had been stripped of all his property. 6 C Hibbert Rome — the Biography of a City (London, Viking, 1985) 106.

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lawyer,7 but surely the reverse technique — pretending not to be a property lawyer — would have yielded better results. If the Papacy has, perhaps, passed me by, the other fates must terrify anyone daring to describe themselves as a purveyor of European Land Law. When setting out I intended to write a book that would embrace the land law of the European Union and property aspects of the European Convention on Human Rights,8 and even the substantive land laws of European countries.9 Large enterprises are often driven by a touch of naiveté,10 and it soon became apparent just how vast was the seam of material waiting to be mined11 and how greatly my scale had to be limited to create a manageable volume. Like Caesar arriving to subdue Gaul, I found a terrain divided into three parts, differing from each other in language, customs and law.12 The opening chapters (1 and 2) are devoted to an explanation of how the internal market, specifically the internal market in capital agreed at Maastricht and implemented at the start of 1994, has created a substantive European land law. Previously land law had to hang to the tail of the business freedoms, and we are indebted specifically to the Austrian equivocation about the impact of the free market on Alpine homes for the rich seam of cases derived from Konle.13 From there I move on in chapter 3 to the development of a distinctive European land law, beginning here the survey of conflicts principles which is continued into chapter 4 where actions for recovery of land are the subject, the conflicts principles thoroughly Europeanised and to the eyes of a common lawyer thoroughly messed up. I have maintained throughout a distinction between site-based and non-site rules, a prism through which the initial policy decision of the European Court of Justice to limit site-based rules seems misguided.14 I move to a group of chapters (5 to 9) on the marketing and sale of land, much of it relying for Community competence on consumer protection. I adopt the B2B and B2C jargon for business and consumer transactions.15 The decision to treat land as a product like any other in the Unfair Commercial Practices Directive16 will have wide-ranging and 7 G Casanova Memoirs of Jacques Casanova de Seingalt (London, Eles, 1894, ed A Machen); though, if one accepts the recent reinterpretation by a female Belgian psychoanalyst, Casanova was really the model of a new man and woman the seducing sex: L Flem Casanova or the Art of Happiness (London, Allen Lane, 1998, 0-713-99248-4). 8 I abbreviate Human Rights as HR and Fundamental Rights as FR, and the various institutions as indicated below [1.19]. 9 BA Hurndall Property in Europe (London, Butterworths, 1998, 0-406-01309-8); S Van Erp Ius Commune Casebook: Property Law (Oxford, Hart, forthcoming 2007); CU Schmid & C Hertel Real Property Law and Procedure in the EU (Florence, European University Institute, , 2005); the author was privileged to act as rapporteur for England and Wales in the latter study. 10 H Kissinger Diplomacy (London, Simon & Schuster, 1992, 0-671-65991-X), 470. 11 The EU acquis amounts to around 45K pages of text: Monitoring Report, COM (2006) 549 final, Appendix I [3]. 12 Julius Caesar Gallic War (many editions) Book I, I. 13 C-302/97 Konle v Austria [1999] I ECR 3099 ECJ; and numerous other cases involving Austria discussed in [ch 1], [ch 2]. 14 See below [4.20ff]. 15 See below [5.05]. 16 See below [5.12].

Preface

xiii

far-reaching implications and, apart from marketing of land and of timeshares, other chapters deal with conveyancing, contracting and the emerging market in mortgage credit. The book concludes (chapters 10 to 11) with a miscellany of conflicts rules which are gradually coalescing and form the elements from which a substantive European land law can be forged. My intention is to plough new ground and so there is only the merest sketch (in chapter 3) of a number of topics to which I would be unable to add anything useful to existing accounts, these areas including VAT, other taxes, environmental controls and agriculture, and I touch only very briefly (in chapter 11) on international aspects of trusts and succession. Nor can this book be a practical primer nor a substitute for proper tax advice. There can be no doubting the power of the beast unleashed in 1994. Methods of land-holding permitted by a legal system both shape and reflect the attitudes of the landowners and society in general.17 What is quite unpredictable is the impact of an internal market imposed on a Community of 30 consisting of EU-27, including Bulgaria and Romania, and the EEA-3,18 their property systems differing so markedly at the outset and which reflect such widely differing cultures. The power of the capital market is still constrained by transitional limits on the free movement of persons, and this is just as well. We British brought to the Maastricht table the most sophisticated property market in the European Community.19 An internal market effects a gradual equalisation and standardisation across an area in which foreign capital is spread around to create equality of yield. We all become better-off by joining a larger trading block but the social consequences will be profound: Brits will need to emigrate to the continent to afford a home, Bulgarians will need to make way for them along the Black Sea coast, and title deeds will be reshuffled all over Europe on a giant Monopoly board. In this book I attempt to describe the beginning of that process of profound change while standing aloof from judgment. On a technical level20 there is one matter of serious concern as this process of transformation gets under way. Whatever others may think of it, English is emerging as the language of commerce and the language of legal enactment.21 Brussels is a Dantesque vision of the Inferno in which supposed friends fail to understand one another, where 1.6K translators are needed for business meetings at a cost of €1 billion (€2 for every person every year).22 English property terminology is losing its purity and precision. Our subject is European Land Law and HW Wilkinson ‘Towards 1992: the European Property Market’ [1990] Conv 409–412. For an explanation of the EU-27, EEA-3, EEA-30 and EFTA, see below [1.04ff]. 19 Edward Erdman Property (London, WH Allen, Mercury, 1990) quoted by Wilkinson (n 14). 20 I have used the publisher’s citation style as supplemented by OSCOLA but with the following additional abbreviations: ECL for European Current Law; ECLYB for the European Current Law Year Book; ELJ for the European Law Journal; ERPL for the European Review of Private Law; and ILP for International Legal Practitioner. 21 G Alpa ‘European Commission Resolution and Codification of Private Law’ (2000) 8 ERPL 321–334, 332. 22 Translation in the Commission (DG for Translation, MEMO/06/173) gives slightly lower figures than these reported in the press. 17 18

xiv

Preface

not European Real Property, a matter not of linguistic fashion but of right and wrong. European lawyers trained across the Atlantic often talk about ‘real estate’, an Americanism which carries the suggestion that our lean and efficient conveyancing system is as poor and flabby and antiquated as the American system, one of the worst in the world. European mortgage terminology inaccurately describes the home as ‘collateral’, when it should be the ‘security’, and uses ‘foreclosure’ to describe enforcement procedures involving sale.23 It will soon be an unfair commercial practice to use undue influence on a consumer,24 but the malpractice that is prohibited is about as far divorced from our common law conception of undue influence as it is possible to be. We need a new language for pan-European development.25 I hope all readers of this book will rail aloud whenever they encounter our cherished terminology being mangled in the European machine. Abe Lincoln once observed that of the eight hours available for felling a tree, six hours should be devoted to sharpening the axe.26 The Research Assessment Exercise is not conducive to that wisdom, and favours unjustly the small detailed sketch over the broader canvas. I owe, therefore, a great debt of gratitude to my employers at Southampton for allowing me the time needed to complete this book.27 In her novel Mistral’s Daughter, so I am told, Judith Krantz nailed the lie of the writer who complains of the loneliness of his work, for in truth: there are few places less lonely than that privileged space in which the mind is free to concentrate on its work.28

The space that I have enjoyed has, I hope, been well used. By Ruskin’s test the end product should be worthwhile, for any ornament faced from him the single question, ‘Was it done with enjoyment?’29 My pleasure during the carving is of course no guarantee of quality, and this book inevitably falls short of the high ideal I had in mind, ‘the cleverest [law] book imaginable’, for one cannot contradict the rule of nature by which ‘like gives birth to like’.30 All the grind is as nothing compared to the forbearance that Helen has once again shown during the time it has taken to write this book. When the Wife of Bath took over the reins of her fifth husband’s household, if Chaucer is to be believed, she made him burn his book on the spot, and from that day they never

Green Paper on Mortgage Credit, COM (2005) 327, Annex III; see below [9.37]. See below [5.11]. 25 V Hütger ‘Towards a Common European Legal Understanding’ [2005] London Law Review 205–213. 26 An internet search reveals many quotations or misquotations of this aphorism, but no source, so this may be an apocrypha, another modern American myth. 27 Joy Caisley, the Law Librarian, has invariably been able to find materials that had left me stumped. 28 J Krantz Mistral’s Daughter (London, Sidgwick & Jackson, 1983) 357. 29 J Ruskin ‘The Lamp of Life’ ch V in The Seven Lamps of Architecture (London, 1849) Essay IV. Like him ‘I could have done something if I had not had books to write’. 30 Miguel Cervantes Don Quixote (many editions) Author’s Preface. 23 24

Preface

xv

had a quarrel, ‘so help me God’.31 Helen has adopted a more benign approach to this volume as a rival for my affections, and I am deeply indebted to her for her support. People interested in studying or researching in comparative or European land law (in English) are invited to contact the author at Southampton. [email protected] New Forest April 200732

31 32

Geoffrey Chaucer Wife of Bath’s Prologue (Oxford, OUP, 1964, ed D Wright) 239. I have included selected updating to August 2007.

TA B L E O F CA SES — EUR O PEA N

Table of Cases — European TA B L E O F CA SES — EUR O PEA N

C-453/03 Opinion 2/94 Case 31/59 Case 107/83

E-2/03 C-423/98 C-81/98 C-295/03 C-384/93 C-289/02 C-281/98 C-47/02 C-309/96 C-6/01 C-1/02SA C-4/03 C-369/96 etc C-18/01 C-107/94 C-54/99

Case 220/84 C-403/98 C-251/98 C-204/90 C-386/02

Abna v Secretary of State for Health [2005] I ECR 10423 ECJ . . . . . . . . 3.38 Accession to the European Convention [1996] I ECR 1759 ECJ . . . . . . . 3.33 Acciaeria di Breschia [1960] ECR 71 ECJ . . . . . . . . . . . . . . . . . . . . . . . . 3.40 Advocats de Paris v Klopp [1984] ECR 2971 ECJ . . . . . . . . . . . . . . . . . . 7.10 Aid by Charleroi Airport to Ryanair Commission Decision 2004/393/EC, [2004] OJ L137 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20 Akaeruvaldid v Ásgeivsson [2003] December 12 EFTA Ct . . . . . . . . . . . 3.33 . . . . . . 1.21, 1.22, 1.33, 1.46, 1.74, 2.06, 2.38, 2.44 Alcatel Austria [2006] I ECR 7671 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 3.57 Alessandrini v Commission EC [2005] I ECR 5673 ECJ . . . . . . . . . . . . . 3.38 Alpine Investments v Minister van Financien [1995] I ECR 1141 ECJ. . 7.15 Amok Verlags [2003] I ECR 15059 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13 Angonese v Cassa di Risparnio di Bolzano [2000] I ECR 4139 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.24, 1.63 Anker v Germany [2003] I ECR 10447 ECJ . . . . . . . . . . . . . . . . . . . . . . . 1.87 Annibaldi v Sindaco del Gamme di Guidonia [1997] I ECR 7493 ECJ . 3.24 Anomar v Portugal [2003] I ECR 8621 ECJ. . . . . . . . . . . . . . . . . . . . . . . 1.23 Antippas v Commission EC [2003] I ECR 2893 ECJ . . . . . . . . . . . . . . . . 9.89 Antriebstechnik v Lamellen [2006] FSR 145 ECJ . . . . . . . . . . . . . . 4.20, 4.23 Arblade [1999] I ECR 8453 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 10.07, 10.21 Arkkitehtuuritoimisto [2003] I ECR 5321 ECJ . . . . . . . . . . . . . . . . . . . . 3.57 Asscher v Staatssecretaris van Financien [1996] I ECR 3089 ECJ . . . . . 1.22 th

1.27, 1.28, 1.29, 1.44, 1.53, 2.35 2.38, 2.42, 2.44, 2.45, 2.47 Autoteile Service v Mahle [1985] ECR 2267 ECJ . . . . . . . . . . . . . . 4.16, 9.80 Aziende Agricola Monte Arcosu v Sardegna [2001] I ECR 103 ECJ . . . . 3.68 Baars [2000] I ECR 2787 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.53, 1.63 Bachmann v Belgium [1992] I ECR 249 ECJ . . . . . . . . . . . . . . . . . 2.36, 2.41 Baldinger v Pensionsversicherungsanstalt der Arbeiter [2004] I ECR 8411 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.38

C-7/98 C-364/01

9.76, 9.86, 10.21 Barbier’s Heirs v Inspecteur van de Belastingdienst Particulieren [2003] I ECR 15013 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22, 1.47, 2.41, 3.13

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Table of Cases — European

C-413/99 C-185/95 C-45/96 C-355/97 C-284/03 C-269/95 C-208/98 C-256/00 Case 150/77 C-512/03 C-346/95 C-352/85 C-20/00

Case 234/95 C-265/04 C-61/89 C-384/00

C-157/85 C-213/04 C-390/99

Baumbast v Secretary of State for Home Department [2002] I ECR 7091 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.83, 1.92 Baustahlgewebe v Commission EC [1998] I ECR 8417 ECJ . . . . . . . . . . 3.41 Bayrische Hypotheken -und Wechselbank v Dietzinger [1998] I ECR 1199 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.26 Beck’s Application [1999] I ECR 4977 ECJ . . . . . . . . . . 1.21, 1.33, 2.18, 3.23 Belgian Golden Share see Commission EC v Belgium Belgium v Temco Europe [2004] I ECR 11237 ECJ . . . . . . . . . . . . . . . . . 3.62 Benincasa v Dentalkit [1997] I ECR 3767 ECJ 5.05, 5.07, 8.37, 10.30, 10.32 Berliner Kindl Brauerei v Siepert [2000] I ECR 1741 ECJ . . . . . . . 5.05, 9.26 Besix v Wasserneienguurbau Alfred Kretzschmar [2002] 1 ECR 1699 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.12, 10.22 Betrand v Paul Ott [1977] ECR 1437 ECJ . . . . . . . . . . . . . . . . . . . . . . . . 5.01 Blanckaert v Inspecteur van de Belastingdienst [2005] I ECR 7685 ECJ 2.41 Blasi v Finanzamt München [1998] I ECR 481 ECJ . . . . . . . . . . . . . . . . 3.62 Bond van Adverteerders v Netherlands [1988] ECR 2085 ECJ . . . . . . . . 7.15 Booker Aquaculture v Secretary of State for Scotland [2003] I ECR 7411 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.34 Bordessa see Ministero Fiscal Bosphorus v Irish Ministry of Transport [1996] I ECR 3953 ECJ . 3.33, 3.37 Bouanich v Skatteverket [2006] I ECR 923 ECJ . . . . . . . . . . 1.37, 1.44, 2.41 Bouchoucha, Re [1990] I ECR 3551 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 1.22 Bredemeier v Landwirtschaftskammer Hannover [2002] I ECR 4517 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.84 British American Tobacco see R(JR) British American Tobacco Brugna [1986] ECR 2013 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.34, 2.36 1.33, 2.15, 2.17, 2.50

Canal Satélite Digital v Spain [2002] I ECR 607 ECJ . . . . . . . . . . . . . . . 1.33 Cantor Fitzgerald see Customs & Excise C-541/99 etc Cape SNC v Idealservice [2001] I ECR 9049 ECJ . . . . . . . . . 5.06, 5.09, 8.37 C-60/00 Carpenter v Secretary of State for Home Department [2002] I ECR 6279 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63, 1.83 Case 203/80 Casati v Italy [1981] ECR 2595 ECJ . . . . . . . . . . . . . . . 1.35, 1.51, 2.35, 2.47 Case 120/78 Cassis de Dijon [1976] ECR 181 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.44 Case 15/74 Centrafarm v Sterling Drug [1974] ECR 1147 ECJ . . . . . . . . . . . . 3.28, 3.29 C-386/04 Centro di Musicologia Walter Stauffer v Finanzamt München für Karperscahften [2006] I ECR 8203 ECJ . . . . . . . . . . . . 1.46, 1.63, 1.71, 2.41 C-212/97 Centros v Erhvervs -og Selskabsityrelsen [1999] I ECR 1459 ECJ . 1.65, 2.38 Charleroi Airport see Aid by Charleroi C-434/03 Charles v Staatssecretarias von Financien [2005] I ECR 7037 ECJ . . . . 3.61 Case 60/84 etc Cinéthèque [1985] ECR 2065 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . 2.44, 3.34 C-94/04 etc Cipolla Fazari [2007] 1 CMLR 4 @ 139 ECJ . . . . . . . . . . . . . . . . . . . . . . 7.03 C-350/96 Clean Car Autoservice v Landeshauptmann van Wien [1998] I ECR 2521 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.15

Table of Cases — European C-400/00 C-19/89 C-264/02 C-330/03 C-138/02 C-107/04 C-147/03 C-320/03 C-478/98 C-503/99 C-110/02 C-265/95 C-483/99 C-23/99 C-334/02 C-57/95 Case 153/78 Case 427/85 Case 249/86

xix

Club Tour v Garrido [2002] I ECR 4051 ECJ . . . . . . . . . . . . . . . . . . . . . 6.18 Cnl-Sucal v HAG II [1990] I ECR 3711 ECJ (‘HAG II’). . . . 3.26, 3.27, 3.28 Cofinga Merignac v Sachithananthan [2004] I ECR 2157 ECJ . . . . . . . 9.19 Colegio de Ingenieros de Caminos v Administracion del Estado [2006] I ECR 801 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.19, 7.20 Collins v Secretary of State for Work and Pensions [2004] I ECR 2703 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.79, 1.80 Comite Andaluz [2005] I ECR 7137 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 3.79 Commission EC v Austria (Access to Higher Education) [2005] I ECR 5969 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.96 Commission EC v Austria (Ban on Lorries) [2005] I ECR 9871 ECJ . . . 1.68 1.20, 1.27, 1.28, 1.29, 1.33, 2.35, 2.36, 2.38, 2.39, 2.40, 2.41, 2.47 Commission EC v Belgium (Golden Share) [2002] I ECR 4809 ECJ. . . 1.44, 2.44, 2.47, 3.21, 3.22 Commission EC v Council EU (Aid to Pig Farmers) [2004] I ECR 6333 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.56 Commission EC v France (Agricultural Blockades) [1997] I ECR 6959 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.35 Commission EC v France (Golden Share) [2002] I ECR 4781 ECJ1.44, 2.42, 2.45, 2.47, 3.21 Commission EC v France (Goods in Transit) [2001] I ECR 7653 ECJ . . 3.29 Commission EC v France (Income Tax on Investments) [2004] I ECR 2229 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.41 Commission EC v France (Pensions Fund Communication) [1997] I ECR 1627 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.31 Commission EC v Germany (Imported Meat) [1979] ECR 2555 ECJ . . 3.28 Commission EC v Germany (Lawyers’ Services) [1988] ECR 1123 ECJ 7.07 Commission EC v Germany (Workers’ Living Conditions) [1989] ECR 1263 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.87

Case 305/87 C-62/96 C-401/98 C-358/97 C-134/05 C-174/04 Case 63/86 C-212/99 Case 3/88 C-279/00 C-32/95 C-367/98

1.21, 1.23, 1.63, 1.68, 1.73, 1.74, 1.80, 1.87, 2.05, 2.38, 2.43 Commission EC v Greece (Ship Registers) [1997] I ECR 6725 ECJ . . . . 1.73 Commission EC v Greece (Timeshare Transposition) [1999] I ECR 5543 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07 Commission EC v Ireland (VAT on Road Tolls) [2000] I ECR 6301 ECJ 3.62 Commission EC v Italy (Debt Collection Services) [2007] July 18 ECJ . 1.71 Commission EC v Italy (Golden Share) [2005] I ECR 4933 ECJ . . . . . . 2.42 Commission EC v Italy (Housing Aid) [1988] ECR 29 ECJ . . . . . 1.41, 1.73, 1.74, 1.87, 2.38 Commission EC v Italy (Language Assistants) [2001] I ECR 4923 ECJ . 7.15 Commission EC v Italy (Public Contracts) [1989] ECR 4035 ECJ . . . . . 2.38 Commission EC v Italy (Recruitment Agencies) [2002] I ECR 1425 ECJ1.63 Commission EC v Lisrestal [1996] I ECR 5373 ECJ . . . . . . . . . . . . . . . . 3.41 Commission EC v Portugal (Golden Share) [2002] I ECR 4731 ECJ . . 2.42, 2.44, 2.47, 3.19, 3.20, 3.21, 3.22 th

xx


C-463/00

Commission EC v Spain (Golden Share) [2003] I ECR 4581 ECJ . . . . . 1.27, 1.37, 2.35, 2.47, 3.21 C-135/03 Commission EC v Spain (Use of ‘Bio’) [2005] I ECR 6909 ECJ . . . . . . . 3.79 C-478/99 Commission EC v Sweden (Unfair Terms Transposition) [2004] 1 ECR 4147 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.45 C-349/03 Commission EC v UK (Gibraltar Exemption from VAT) [2005] I ECR 7321 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.05 1.23, C-98/01 1.27, 1.28, 1.63, 1.68, 2.43, 2.47 C-466/98 etc Commission EC v UK (Open Skies) [2002] I ECR 9427 ECJ . . . . . . . . . 3.49 C-30/90 Commission EC v UK (Patent Licensing) [1992] I ECR 829 ECJ . . . . . 3.18, 3.19, 3.27, 3.28, 3.29 C-30/90 Commission EC v UK (State Aids) [1992] I ECR 829 ECJ . . . . . . . . . . . 3.22 Opinion 1/03 Competence of the EC to Conclude a New Lugano Convention [2006] I ECR 1145 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.07 C-473/00 Confidis v Fredant [2002] I ECR 10875 ECJ . . . . . . . . . . . . . . . . . . . . . . 8.46 (see also Case 56/64 etc Grundig-Consten) . . . . . . . . . . . . . . . . . . . . . . . . . 1.69, 3.19, 3.22, 3.27, 3.28 C-387/98 Coreck Maritime [2000] I ECR 9337 ECJ . . . . . . . . . . . . . . . . . . . . . . . 10.35 Case 6/64 Costa v Ente Nazionale per l’Energia Elettrica [1964] ECR 585 ECJ . . . 3.20 C-453/99 Courage v Crehan [2001] I ECR 6297 ECJ. . . . . . . . . . . . . . . . . . . . . . . . 3.53 Case 186/87 Cowan v Trésor Public [1989] ECR 195 ECJ. . . . . . . . . . . . . . . . . . 1.80, 2.38 5.18, 5.19, 5.28, 5.77, 5.83, 5.86, 5.88 C-229/04 C-410/96 Criminal Proceedings v Ambry [1998] I ECR 7875 ECJ . . . . . . . . . . . . . 1.53 C-369/96 Criminal Proceedings v Arblade [1999] I ECR 8453 ECJ . . . . . . . . . . . . 1.69 C-370/05 Criminal Proceedings v Festersen [2007] 2 CMLR 7 ECJ. . . . . . . . 2.19, 2.27 C-243/01 Criminal Proceedings v Gambelli [2003] ECLYB [160] ECJ. . . . . . . . . . 1.73 C-448/98 Criminal Proceedings v Guimont [2000] I ECR 10663 ECJ . . . . . . . . . . 1.24 C-151/04 Criminal Proceedings v Nadin [2005] I ECR 11203 ECJ. . . . . . . . . . . . . 1.87 C-232/01 Criminal Proceedings v Van Lent [2004] 3 CMLR 23 @ 465 ECJ. . . . . . 1.87 C-108/99 Customs & Excise Commissioners v Cantor Fitzgerald International [2001] I ECR 7257 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.62 C-122/99P C-376/03 C-224/98 C-8/98 C-268/03 Case 14/76 Case 143/78 Case 120/79 C-406/04 C-381/05 Case 42/76

D v Council EU [2001] I ECR 4319 ECJ . . . . . . . . . . . . . . . . . . . . 3.40, 11.01 D v Inspecteur van de Belastingdienst [2005] I ECR 5821 ECJ . . . 1.37, 2.41 D’Hoop v Office National de l’Emploi [2002] I ECR 6191 ECJ . . . . . . . 1.79 Dansommer v Götz [2000] I ECR 393 ECJ. 4.16, 4.21, 4.38, 4.40, 4.43, 4.46 De Baeck v Belgium [2004] I ECR 5961 ECJ . . . . . . . . . . . . . . . . . . . . . . 2.40 De Bloos v Bouyer [1976] ECR 1497 ECJ . . . . . . . . . . . . . . . . . . 10.12, 10.35 De Cavel (No 1) [1979] ECR 1055 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 11.02 De Cavel (No 2) [1980] ECR 731 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02 De Cuyper v Office National de l’Emploi [2006] I ECR 6947 ECJ . . . . . 1.80 De Landtsheer Emmanuel v Comité Interprofessionel du Vin de Champagne [2007] 2 CMLR 43 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.55 De Wolf v Cox [1976] I ECR 1759 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . 9.77

Table of Cases — European C-120/95 Case 149/77 C-234/89 Case 12/86 Case 125/79 Case 148/84 Case 78/70 C-37/02 etc Case 267/83 T-148/99 C-31/00 Case 288/82 C-297/88 C-15/95 C-412/97 Case 38/81 E-8/04

Case 341/87 C-27/02 C-116/02 Case 260/89

C-341/04 C-540/03 C-451/05

C-446/04 C-279/93 C-135/92 C-128/93 C-290/04

xxi

Decker v Caisse de Maladie des Employ [1998] I ECR 1831 ECJ . . . . . . 2.44 Defrene v Sabena [1978] ECR 1365 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Delimitis v Henninger Brau [1991] I ECR 935 ECJ. . . . . . . . . . . . . . . . . 3.54 Demirel’s case [1987] I ECR 3719 ECJ. . . . . . . . . . . . . . . . . . 1.84, 3.34, 3.39 Denilauler v Couchet Frères [1980] ECR 1553 ECJ. . . . . . . . . . . . . . . . . 9.81 Deutsche Genossen [1985] ECR 1981 ECJ . . . . . . . . . . . . . . . . . . . . . . . . 9.84 Deutsche Grammophon v Metro [1971] ECR 487 ECJ . . . . . . . . . . . . . . 3.28 Di Lenardo [2004] I ECR 6911 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.38 Diatta v Land Berlin [1985] ECR 567 ECJ . . . . . . . . . . . . . . . . . . . . . . . 1.84 Diputación Floral de Álavar v Commission EC [2002] II ECR 1275 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.56 Dreessen [2002] I ECR 663 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.18 Duijnstee v Goderbauer [1983] ECR 3663 ECJ . . . . . . . . . . . . . . . 4.20, 4.36 Dzodzi v Belgium [1990] I ECR 3763 ECJ . . . . . . . . . . . . . . . . . . . . . . . . 1.24 EARL de Kerlast [1997] 1 ECR 1961 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . 3.85 ED v Italo Fenocchio [1999] I ECR 3845 ECJ . . . . . . . . . . . . . . . . . . . . . 2.39 Effer v Kantner [1982] ECR 825 ECJ . . . . . . . . . . . . . . . . . 4.04, 10.49, 10.52 EFTA Surveillance Authority v Liechtenstein [2005] July 1 EFTA Ct. . . 7.15 Église de Scientologie see Association Église . . . . . . . . . . . . . . . . . . . . . . . . . . . ELISA see Européenne et Luxembourgoise d’Investissements . . . . . . . . . . . . . EMI Electrola v Patricia Im- und Export [1989] ECR 79 ECJ . . . . 3.19, 3.27 Engler v Janus Versand [2005] I ECR 481 ECJ . . . . . . . . . . . . . . 10.02, 10.30 Erich Gasser v MISAT [2004] I ECR 14693 ECJ . . 4.18, 10.37, 10.58, 10.59 ERSA see Friuli-Venezia ERT case [1991] I ECR 2925 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.34 Euro Port v Denmark Commission Decision 94/119/EC [1994] OJ L55 52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.55 Eurobonds see Commission EC v Belgium Eurofoods IFSC [2006] I ECR 3813 ECJ . . . . . . . 9.56, 9.57, 9.58, 9.59, 9.64, 9.65, 9.66, 9.67 European Parliament v Council EU (Family Reunification) [2006] I ECR 5769 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.86, 3.34, 3.40 Européenne et Luxembourgoise d’Investissements v Directeur General des 1.44, 1.46, 2.41 Impots (ELISA) [2007] April 26th, AG Mazak st

Family Reunification see European Parliament Festersen see Criminal Proceedings v Festersen FII Group Litigation v Commissioners of Inland Revenue [2006] STI 2750 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.25, 1.37, 1.44, 2.41 Finanzamt Koln-Altstadt v Schumacker [1995] I ECR 225 ECJ. . . . . . . 7.15 Fiskano v Commission EC [1994] I ECR 2885 ECJ . . . . . . . . . . . . . . . . . 3.41 Fisscher [1994] I ECR 4583 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.84 FKP Scorpio Konzertproduktionen v Finanzamt Hamburg-Eimsbüttel [2006] STI 2274 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.69

xxii


E-1/04 C-334/00

Fokus Bank v Norway [2004] November 23 EFTA Ct . . . . . . . . . . 1.07, 1.44 Fonderie Officine Meccaniche Tacconi v Heinrich Wagner Sinto Maschinenfabrik [2002] I ECR 7357 ECJ . . . . . . . . . . . . . . . . . . 10.02, 10.45 Food Supplements see R(JR) Alliance for Natural Health C-265/02 Frahuil v Assitalia [2004] I ECR 1543 ECJ . . . . . . . . . . . . . . . . . . . . . . 10.02 Case 188/80 etc France v Commission EC (State Aids) [1982] ECR 2545 ECJ. . . . . . . . . 3.20 C-202/88 France v Commission EC (Telecommunications Terminals) [1991] I ECR 1223 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20, 3.25 C-237/02 Freiburger Kommunalbauten v Hofstetter [2004] I ECR 3403 ECJ. . . . 8.26, 8.29, 8.34, 8.37, 8.47 French Golden Share see Commission EC v France French Telecoms see France v Commission EC Friuli-Venezia Giulia (ERSA) v Ministero delle Politiche Agricole e Forestale [2005] I ECR 3785 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.37, 3.38 C-250/95 Futura Participations v Administration des Contributions [1997] I ECR 2471 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.38 C-518/99 C-55/94 Case 36/59 etc Case 280/93 C-233/94 C-376/98 C-234/01 C-440/97 C-257/00

T-199/94 Case 133/78 C-249/96 C-321/95 C-412/98

C-184/99 C-210/96

C-280/90

rd

Gaillard v Chekili [2001] 1 ECR 2771 ECJ . . . . . . . . . . . . . . . . . . . . . . 10.50 Gebhard v Avocati di Milano [1995] I ECR 4165 ECJ . . . . . 1.65, 2.38, 7.10 Geitlung Case [1960] ECR 423 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Germany v Council EU (Bananas) [1994] I ECR 4973 ECJ . . . . . . . . . . 3.37 Germany v Council EU (Deposit Guarantee Directive) [1997] 1 ECR 2405 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.31 Germany v European Parliament (Tobacco Advertising) [2000] I ECR 8419 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.31, 8.55 Gerritse v Finanzamt Neuköln-Nord [2004] I ECR 5933 ECJ . . . . . . . . 2.41 GIE Groupe Concorde v Sukadiwarno Panjan [1999] I ECR 6307 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.22 Givane v Secretary of State for Home Department [2003] I ECR 345 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.80, 1.84 Gloszczuk see R(JR) Gloszczuk Goed Wonen see Stichting ‘Goed Wonen’ Gosch v Commission EC [2002] II ECR 391 CFI. . . . . . . . . . . . . . . . . . . 3.84 Gourdain v Nadler [1979] ECR 733 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 9.63 Grant v South West Trains [1998] I ECR 621 ECJ. . . . . . . . . . . . . . . . . . 3.36 Greek Border Regions see Commission EC v Greece Greenpeace v Spain (1998) 19 HRLJ 376 ECJ . . . . . . . . . . . . . . . . . . . . . 3.33 Group Josi Reinsurance Co v Universal General Insurance Co [2000] I ECR 5925 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.10 Grundig-Consten iv/a–004–03344 [1964] OJ 2545. . . . . . . . . . . . . . . . . 3.28 Grzelczyk v Centre Public d’Aide Sociale Ottignies-Louvain-la-Neuve [2001] I ECR 6193 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.79, 1.96 Gut Springheide v Oberkreisdirektor des Kreises Steinfurt [1998] I ECR 4657 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43 Hacker v Euro-Relais [1992] I ECR 111 ECJ . . . . . . . . . . . . . 4.21, 4.46, 4.47


HR 11855/85 C-1/93 C-28/91 Case 44/79 C-481/99

xxiii

HAG II see Cnl-Sucal Håkansson v Sweden (1991) 13 EHRR 1 E Ct HR . . . . . . . . . . . . . . . . . 2.46 Halliburton Services [1994] I ECR 1137 ECJ. . . . . . . . . . . . . . . . . . . . . . 2.41 Handte Case [1992] I ECR 3967 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02 3.20, 3.33, 3.37, 3.38

5.16, 5.17, 5.18, 5.19, 5.26, 5.27, 5.28, 5.83, 5.84, 5.85, 5.86, 5.88, 9.25 Heirs of van der Heijden v Inspecteur can de Belastingdienst [2006] STI 535 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.37, 2.41 C-78/95 Hendrikman v Magentra Druck [1996] I ECR 4943 ECJ . . . . . . . . . . . . 9.86 C-98/91 Herbrink [1994] I ECR 223 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.85 C-99/96 HH Mietz v Intership Yachting Sneek [1999] I ECR 2277 ECJ . . . . . . . . 4.11 Case 46/ 87 etc Höchst v Commission [1989] ECR 2859 ECJ. . . . . . . . . . . . . 3.35, 3.37, 3.39 C-238/98 Hocsman v French Ministrie d’Emploi et de la Solidarité [2000] I ECR 6623 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.19 Case 145/86 Hoffmann v Kreig [1988] ECR 645 ECJ . . . . . . . . . . . . 9.84, 9.85, 9.86, 9.88 1.44, 2.41 C-157/05 Holbock v Finanzamt Salzburg-Land [2007] May 24 ECJ C-513/03

th

E-1/00 C-9/93 HR 42389/98 C-381/98 Case 11/70 C-230/01

Case 32/65

C-97/98 C-26/91 C-268/99 C-222/84 T-231/99 E-8/97 C-466/00 Case 189/87 C-117/01

Icelandic State Debt Management Agency v Islandsbanki [2000] July 14 EFTA Ct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.48, 2.32, 2.38 IHT v Ideal Standard [1994] I ECR 2789 ECJ. . . . . . . . . . . . . . . . . . . . . 3.28 Ilić v Croatia [2000] September 19 E Comm HR . . . . . . . . . . . . . . . . . . 1.56 3.12, 4.09, 10.07, 10.21, 10.40 3.33, 3.35, 3.37, 3.38 Intervention Board v Penycoed Farming Partnership [2004] I ECR 937 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.83 Italian Competition Agreements see Italy v Council EC Italian Housing Aid see Commission EC v Italy Italy v Council EC (Competition Agreements) [1966] ECR 389 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20, 3.27, 3.28, 3.29 th

th

Jägersköld v Gustafsson [1999] I ECR 7319 ECJ . . . . . . . . . . . . . . . . . . . 1.20 Jakob Handte v Societe Traitements Mecano-Chimiques des Surfaces [1992] I ECR 3967 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.44 Jany v Staatssecrtaris van Justitie [2001] I ECR 8615 ECJ . . 1.63, 1.65, 1.66, 1.92, 2.39 Johnston v Chief Constable RUC [1986] ECR 1651 ECJ . . . . . . . . . . . . . 9.86 Joynson v Commission EC [2002] II ECR 2085 CFI . . . . . . . . . . . . . . . . 3.53 JV 1000 Sverige v Norway [1998] June 12 EFTA Ct . . . . . . . . . . . . . . . . 3.33 th

Kaba v Secretary of State for S Home Department [2003] I ECR 2219 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55, 1.83 Kalfelis v Schröder [1988] ECR 5565 ECJ . . . . . . . . . . . . 10.44, 10.54, 10.60 KB v NHS Pensions Agency [2004] I ECR 541 ECJ . . . . . . . . . . . . . . . . . 3.40

xxiv


C-513/04 Case 144/81 C-73/04 C-346/93 Case 166/80 Case 115/78 C-302/97

C-109/04 C-19/92

Case 39/86 C-305/88 C-363/93 C-343/04 C-479/04 C-189/92 Case 152/79 C-443/03 C-168/00 C-315/02 C-356/04 C-292/93 HR 15318/89 Case 29/76 Case 286/82 etc C-168/98 C-269/03 C-39/02 C-315/00 C-106/95 C-190/01 T-112/98 C-319/02 C-446/03 C-344/98 C-250/03R

Kerckhaert-Morres v Belgium [2006] STI 2508 ECJ . . . . . . . . . . . . . . . . 2.41 Keurkoop v Nancy Kean Gifts [1972] ECR 2853 ECJ . . . . . . . . . . . 3.19, 3.28 4.16, 4.21, 4.37, 4.47, 5.41, 6.02, 6.06, 6.14, 6.40, 6.54, 6.66, 10.44, 10.49 Kleinwort Benson v Glasgow CC [1995] I ECR 615 ECJ . . . . . . . 4.08, 10.50 Klomps v Michel [1981] ECR 1593 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 9.87 Knoors v Secretary of State for Economic Affairs [1979] ECR 399 ECJ . 1.22 Preface 1.06, 1.21, 1.24, 1.33, 1.63, 1.68, 2.08, 2.15, 2.16, 2.17, 2.42, 2.43, 2.47, 2.48, 2.49, 2.50, 3.21, 3.22, 3.23, 3.29 Kranemann v Land Nordrhein-Westfalen [2005] I ECR 2421 ECJ . . . . 7.20 Kraus v Land Baden-Württemberg [1993] I ECR 1663 ECJ. . . . . . . . . . 1.22 Krombach (Nos 1 & 2) see Bamberski v Krombach Lair v Univeristat Hannover [1988] ECR 3161 ECJ . . . . . . . . . . . . . . . . 1.79 Lancray v Peters und Sickert 1990] I ECR 2725 ECJ . . . . . . . . . . . . . . . . 9.87 Lancry [1994] I ECR 3957 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23 Land Oberosterreich v EZ [2006] I ECR 4557 ECJ. . . . 4.04, 4.06, 4.25, 4.27 Laserdisken v Kulturministeriet [2006] I ECR 187 ECJ . . . . . . . . . 3.28, 3.33 Le Nan [1994] I ECR 261 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.85 Lee v Minister of Agriculture [1980] ECR 1495 ECJ . . . . . . . . . . . . . . . . 3.68 Leffler [2005] I ECR 9611 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.57 Leitner [2002] I ECR 2631 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.55 Lenz v Tirol [2004] I ECR 7063 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.40 Lidl Belgium v Franz Colruyt [2007] 1 CMLR 9 @ 269 ECJ. . . . . . . . . . 5.55 4.16, 4.22, 4.37, 4.38, 10.49 Loizidou v Turkey (1997) 23 EHRR 513 E Ct HR . . . . . . . . . . . . . . . . . . 4.31 LTU v Eurocontrol [1976] ECR 1541 ECJ . . . . . . . . . . . . . . . . . . . . . . . 11.02 Luisi v Italian Ministero del Tesoro [1984] ECR 377 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.35, 1.37, 1.67, 2.47 Luxembourg v European Parliament (Practice as a Lawyer) [2000] I ECR 9131 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.16 Luxembourg v Kirckberg [2004] I ECR 8067 ECJ . . . . . . . . . . . . . . . . . . 3.64 Maersk Olie & Gas v De Haan & De Boer [2004] I ECR 9657 ECJ . . . 9.77, 9.87 Maierhofer [2003] I ECR 563 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.62 Mainschiffahrts-Genossenschaft v Granières Rhénanes [1997] I ECR 911 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.09, 10.22, 10.35 Mannermannrohren-Werke v Commission EC [2001] July 28 ECJ . . . . 3.41 Mannermannrohren-Werke v Commission EC [2001] II ECR 729 CFI. 3.41 Manninen [2004] I ECR 7477 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41 Marks and Spencer v Halsey [2005] I ECR 6443 ECJ . . . . . . . . . . . . . . . 2.41 Masterfoods v HB Ice Cream [2000] I ECR 11369 ECJ. . . . . . . . . . . . . . 3.24 Mauri v Ministero della Giustizia [2005] I ECR 1267 ECJ. . . . . . . . . . . 7.16 th

Table of Cases — European C-462/98 Case 23/78 HR 10522/83 C-267/95 C-123/91 Case 21/76 T-362/04 C-358/93 etc

xxv

Case 120/86 C-104/89 C-313/99 C-125/92 C-253/00

Mediocurso v Commission EC [2000] I ECR 783 ECJ. . . . . . . . . . . . . . . 3.41 Meeth v Glacetal [1978] ECR 2133 ECJ. . . . . . . . . . . . . . 10.35, 10.60, 11.47 Mellacher v Austria (1990) 12 EHRR 391 E Ct HR . . . . . . . . . . . . 1.19, 3.36 Merck v Pridedean [1996] I ECR 6285 ECJ . . . . . . . . . . . . . . . . . . 3.28, 4.14 Minalmet v Brandeis [1992] I ECR 5661 ECJ . . . . . . . . . . . . . . . . . . . . . 9.87 Mines de Potasse d’Alsace [1976] ECR 1735 ECJ . . . . . . . . . . . . . 4.51, 10.45 Minin v Commission EC [2007] January 31 ECJ. . . . . . . . . . . . . . . . . . . 3.30 1.25, 1.28, 1.31, 1.33, 1.51, 2.40, 2.44, 2.47 Mirror Group v Commissioners of Customs and Excise [2001] I ECR 7175 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.62 Modelo v Diretor-General dos Registros e Notariados [1999] I ECR 6427 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.03 7.18, 7.19, 7.20 Mulder [1988] ECR 2321 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 Mulder v Council EC [1992] I ECR 3061 ECJ . . . . . . . . . . . . . . . . . . . . . 3.84 Mulligan v Minister for Agriculture & Food [2002] I ECR 5719 ECJ. . . 3.85 Mulox IBC v Hendrick Geels [1993] I ECR 4075 ECJ . . . . . . . . . . . . . . . 4.01 Muñoz v Frumar [2002] I ECR 2289 ECJ . . . . . . . . . . . . . . . . . . . . . . . . 3.68

Case 59/85 HR 13710/88 C-413/01 Case 4/73 C-136/97

Netherlands v Reed [1986] ECR 1283 ECJ. . . . . . . . . . . . . . . . . . . . . . . . 1.83 Niemitz v Germany (1993) 16 EHRR 97 E Ct HR . . . . . . . . . . . . . . . . . 3.35 Ninni-Orasche [2004] I ECR 13187 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 1.80 3.22, 3.28, 3.29, 3.33, 3.37, 3.38 Norbury v Customs & Excise Commissioners [1999] I ECR 2491 ECJ. . 3.64

C-240/98 C-258/04 HR 19441/92 C-36/02 C-305/05 C-452/01 C-465/00 C-351/89

Océano Grupo Editorial v Quintero [2000] I ECR 4941 ECJ. . . . . 8.37, 8.47 Office National de l’Emploi v Ioannidis [2005] I ECR 8275 ECJ . . . . . . 1.79 Ohg v Austria (1994) 18 EHRR CD107 E Comm HR . . . . . . . . . . . . . . 2.46 Omega [2004] I ECR 9609 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.69 Ordre des Barreaux Francophone [2007] June 26 ECJ . . . . . . . . . . . . . . 7.63 1.06, 1.07, 1.33, 2.17, 2.27, 2.49 Osterreichischer Rundfunk [2003] I ECR 4989 ECJ . . . . . . . . . . . . . . . . 3.40 Overseas Union Insurance v New Hampshire Insurance [1991] I ECR 3317 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.18 Owens Bank v Bracco [1994] I ECR 117 ECJ. . . . . . . . . . . . . . . . . . . . . . 9.80 Owusu v Jackson [2005] I ECR 383 ECJ . . . . . . . . . . . . . . . . . . . 10.56, 10.59

C-409/98 C-56/98 C-313/01

C-129/92 C-281/02 T-116/01 C-442/03P C-327/02 Case 24/67

st

th

P&O European Ferries (Vizcaya) v Commission EC [2003] II ECR 2957 CFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20, 3.56 P&O European Ferries (Vizcaya) v Commission EC [2006] All ER (D) 06 (June) ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20 Panayotova v Minister voor Vreemdelingenzaken en Integratie [2004] I ECR 11055 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63 Parke Davis v Probel [1968] ECR 55 ECJ . . 3.18, 3.19, 3.20, 3.22, 3.27, 3.28

xxvi


C-79/01 Case 228/81 Case 34/82 C-92/92 HR 41087/98 E-10/04 C-44/01 C-473/04 Case 59/75

E-2/01

Payroll Data Services (Italy) [2002] I ECR 8923 ECJ . . . . . . . . . . . . . . . 1.69 Pendy Plastic v Pluspunkt [1982] ECR 2723 ECJ . . . . . . . . . . . . . . . . . . 9.87 Peters v Zuid Nederelandse [1983] ECR 987 ECJ. . . . . . . . . . . . 10.02, 10.44 Phil Collins v Imtrat [1993] I ECR 5145 ECJ . . . 1.63, 3.22, 3.27, 3.28, 3.29 Phillips v UK (2001) 11 BHRC 280 E Ct HR. . . . . . . . . . . . . . . . . . . . . . 7.40 Piazza v Schurte [2005] July 1 EFTA Ct . . . . . . . . . . . . 1.07, 1.48, 1.63, 2.39 Pippig Augenoptik [2003] I ECR 3095 ECJ. . . . . . . . . . . . . . . . . . . 5.52, 5.55 Plumex v Young Sports [2006] ILP 13 ECJ. . . . . . . . . . . . . . . . . . . . . . . 10.57 Portuguese Golden Share see Commission EC v Portugal Pubblico Ministero v Manghera [1976] ECR 91 ECJ. . . . . . . . . . . . . . . . 3.25 Public Service Compensation Commission Decision 2005/842/EC, [2005] OJ L312 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20 Pucher, Re [2002] July 1 EFTA Ct . . . . . . . . . . . . . . . . . . . . . . . . . . 7.15, 7.17 st

st

Quintero see Océano Grupo Editorial

Case 7/78 C-109/01 C-154/04 etc C-292/89 C-257/99 C-2/92 C-491/01 C-221/89 C-257/99 etc C-372/98 C-192/99 C-37/98 C-210/03 C-16/05 E-3/98 C-106/91

R(CP) Criminal Prosecutions R(CP) v Thompson [1978] ECR 2247 ECJ . . . . . . . . . . . . . . . . . . . 1.35, 1.51 R(JR) Judicial Review cases R(JR) Akrich v Secretary of State for Home Department [2003] I ECR 9607 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.83 R(JR) Alliance for Natural Health v Secretary of State for Health (Food Supplements) [2005] I ECR 6451 ECJ. . . . . . . . . . . . . . . . . . . . . . . 3.33, 3.38 R(JR) Antonissen v Immigration Appeal Tribunal [1991] I ECR 745 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.79 R(JR) Barkocki v Secretary of State for Home Department [2001] I ECR 6003 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.67 R(JR) Bostock v Ministry of Agriculture Food & Regional Affairs [1994] I ECR 955 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.67 R(JR) British American Tobacco (Investments) v Secretary of State for Health [2002] I ECR 11453 ECJ. . . . . . . . . . . . . . . . . . . . . . . 3.29, 3.31, 3.33 R(JR) Factortame v Secretary of State for Transport [1991] I ECR 3905 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.65 R(JR) Gloszczuk v Secretary of State for Home Department [2001] I ECR 6369 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63, 1.67 R(JR) JH Cooke & Sons v Ministry of Agriculture Fisheries & Food [2000] I ECR 8683 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.78 R(JR) Kaur v Secretary of State for Home Department [2001] I ECR 1237 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55 R(JR) Savas v Secretary of State for Home Department [2000] I ECR 2927 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.17 R(JR) Swedish Match v Secretary of State for Health [2004] I ECR 11893 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.38 R(JR) Tum v Secretary of State for Home Department [2004] 1 CMLR 33 @ 1012 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.67 Rainford-Towning [1999] 1 CMLR 871 EFTA Ct . . . . . . . . . . . . . . . . . . 7.15 Raurath [1992] I ECR 3351 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.73

Table of Cases — European C-115/88

xxvii

4.23, 4.25, 4.36, 4.47, 10.43, 10.44, 10.50

C-261/90 C-515/99

Case 2/74 C-152/03 Case 182/83 T-25/99 C-94/00 C-241/83 C-363/89 Case 48/75 C-241/91P C-314/89 T-187/94 C-113/89 Case 136/75 C-118/96 C-300/01 Case 5–11 etc Case 73/77 C-439/97 Case 25/79 C-163/94 C-522/03 Case 158/87 C-112/00 C-419/92 Case 265/87 C-350/03 C-269/00 Case 40/64 Case 266/85

9.80, 11.40 1.07, 1.21, 1.23, 1.24, 1.27, 1.28, 1.29, 1.33, 1.35, 1.37, 1.41, 1.46, 1.49, 1.63, 1.64, 1.65, 1.74, 2.17, 2.39, 2.43, 2.48, 2.49, 2.50 Reyners v Belgium [1974] ECR 631 ECJ . . . . . . . . . . . . . . . . . . . . . 1.63, 7.07 Ritter-Coulais v Finanzamt Germersheim [2006] I ECR 17111 ECJ . . . 2.41 1.20, 1.21, 2.27, 2.40, 3.23, 3.29, 3.36 Roberts v Commission EC [2001] II ECR 1581 CFI . . . . . . . . . . . . . . . . 3.53 Roquette Frères v Directeur Général de la Concurrence de la Consummation et de la Répression des Frauds [2002] I ECR 888 ECJ . . . . . . . . . . . . . . . 3.39 3.13, 4.16, 4.37, 4.38, 4.40, 4.41 Roux [1991] I ECR 273 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.73 Royer [1976] ECR 497 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.73 RTE v Commission EC [1995] I ECR 743 ECJ. . . . . . . . . . . . . . . . . . . . . 3.28 Ruah [1991] I ECR 1647 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 Rudolph v Council EU [2002] II ECR 391 CFI . . . . . . . . . . . . . . . . . . . . 3.84 Rush Portuguesa v Office National d’Immigration [1990] I ECR 1417 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.64 Rutili v French Minister of Interior [1975] ECR 1219 ECJ . . . . . . 2.44, 2.45 Safir v Skattemyndighete I Dalarnaslän [1998] I ECR 1897 ECJ . 1.63, 1.68 1.07, 1.21, 1.23, 1.33, 2.17, 2.18, 2.48, 2.50 San Michele v European Coal and Steel Community [1962] ECR 449 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.39 4.21, 4.37, 4.39 1.22, 1.28, 1.31, 1.37, 2.32, 2.36, 2.40, 2.41, 2.47 Sanicentral v Collin [1979] ECR 3423 ECJ. . . . . . . . . . . . . . . . . . 4.36, 10.35 1.25, 1.28, 1.31, 1.37, 1.44, 1.51, 2.35, 2.36, 2.40, 2.42, 2.44, 2.45, 2.47, 3.22 Scania Finance France v Rockinger Spezialfabrik für Anhangerkupplungen [2005] I ECR 8639 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.57 3.11 Schmidberger [2003] I ECR 5659 ECJ. . . . . . . . . . . . . . . . . . . . . . . 3.33, 3.35 Schnitzer see Staatsanwaltschaft Augsburg . . . . . . . . . . . . . . . . . . . . . . . . . . . Scholz v Opera Universitaria di Cagliari [1994] I ECR 505 ECJ . . . . . . 1.22 Schräder [1989] ECR 2237 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.38 5.18, 5.19, 5.21, 5.28, 5.83, 5.86, 5.88 Seeling v Fin Starnberg [2004] 2 CMLR 32 @ 757 ECJ. . . . . . . . . . . . . . 3.62 Sgarlata v Commission [1965] ECR 215 ECJ. . . . . . . . . . . . . . . . . . . . . . 3.37 Shenavai v Kreisher [1987] ECR 239 ECJ . . . . . . . . . . . . . . . . . . . . . . . 10.12

xxviii


C-68/93 C-42/95 Case 35/76 C-275/01 C-414/92 C-159/89 C-350/92 C-145/04 C-159/90 HR 8790/79 C-463/93 C-104/03 C-215/01 C-35/98 C-1/04 C-326/99 Case 1/58 Case 29/69 C-484/93 E-2/02 Case 5/77 Case 119/75 Case 35/87 Case 71/76 C-401/99 C-112/99 C-329/03 C-423/97 C-456/02 C-222/97 C-159/02 C-84/94

Shevill v Presse Alliance [1995] I ECR 415 ECJ . . . . . . . . . . . . . . . . . . . . 4.04 Siemens v Nold [1996] I ECR 6017 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Simmenthal v Italian Minister of Finance [1976] ECR 1871 ECJ . . . . . 3.28 Sinclair Collins [2003] I ECR 5965 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 3.62 Solo Kleinmotoren v Boch [1994] I ECR 2237 ECJ . . . . . . . . . . . . . . . . . 9.77 Spagl [1990] I ECR 4539 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 Spain v Commission EC (Medicinal Products) [1995] I ECR 1985 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19, 3.20, 3.22, 3.25, 3.27, 3.28, 3.29 Spain v UK (European Elections) [2007] 1 CMLR 3 @ 87 ECJ . . . . . . . 1.05 Spanish Golden Share see Commission EC v Spain SPUC Ireland v Grogan [1991] I ECR 4685 ECJ . . . . . . . . . . . . . . . . . . . 3.34 Sramek v Austria (1985) 7 EHRR 351 E Ct HR . . . . . . . . . . . . . . . . . . . 2.46 St Martinus Elten [1997] I ECR 255 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . 3.85 St Paul Dairy Industries v Unibel Exser [2005] I ECR 3481 ECJ . . . . . . 4.14 1.65, 1.66, 1.69, 1.74, 1.91 Staatssecretaris van Financien v Verkooijen [2000] I ECR 4071 ECJ . . . 2.44 9.60, 9.65, 9.70 Stefan see West Deutsche Landesbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stichting ‘Goed Wonen’ v SS for Finance [2001] I ECR 6831 ECJ . 3.62, 3.63 Stork v ECSC [1959] ECR 17 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Strauder v Ülm [1969] ECR 419 ECJ . . . . . . . . . . . . . . . . . . . . . . . 3.33, 3.37 1.25, 1.37, 1.48, 2.32, 2.36 Technologien Bauschaftsberatung v EFTA [2003] June 19 EFTA CT . . . 3.33 Tedeschi v Denhasit [1977] ECR 1555 ECJ . . . . . . . . . . . . . . . . . . . . . . . 3.28 Temco Europe see Belgium v Temco Europe Terrapin (Overseas) v Terranova Industrie [1976] ECR 1039 ECJ. . . . . 3.28 Thetford v Fiamma [1988] ECR 3585 ECJ . . . . . . . . . . . . . . . . . . . 3.19, 3.28 Thieffry v Carisel de Avocats de Paris [1977] ECR 765 ECJ . . . . . . . . . . 7.19 Thompson see R v Thompson Thomsen v Amt für landlichte Ramme Husum [2002] I ECR 5775 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.85 Toshiba Europe [2001] I ECR 7945 ECJ. . . . . . . . . . . . . . . . . . . . . . . . . . 5.55 Trapeza tis Ellados v Banque Artesia [2005] I ECR 9341 ECJ . . . . . . . . 1.44 4.47, 5.16, 5.19, 5.20, 5.21, 5.77, 5.78, 6.06, 6.14, 6.20, 6.33, 6.35, 6.54, 6.66 Trojani [2004] I ECR 7573 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.80 1.03, 1.21, 1.22, 1.25, 1.37, 1.41, 1.46, 1.49, 1.51, 2.33, 2.42, 2.45, 7.27, 9.28, 9.36 Turner v Grovit [2004] I ECR 3565 ECJ . . . . . . . . . . . . . . . . . . . . . . . . 10.58 th

UK v Council EU (Working Time Directive) [1996] I ECR 5755 ECJ . . 3.31 UK Golden Share see Commission EC v UK UK Patent Licensing see Commission EC v UK


xxix

Case 222/86 C-134/95 C-38/98

UNECTEF v Heylens [1987] ECR 4098 ECJ . . . . . . . . . . . . . . . . . . . . . . 1.26 Unito Socio-Sanitaria Locale 4 v di Biela [1997] I ECR 195 ECJ . . . . . . 1.23 Usines Renault v Maxicar [2000] I ECR 2973 ECJ . . . . . . . . 4.05, 9.84, 9.86

T-274/01 C-44/89 Case 41/74 C-391/95 C-203/99 C-315/92

Valmont Nederland v Commission EC [2005] II ECR 3145 CFI . . . . . . 3.56 Van Deetzen II [1991] I ECR 5119 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 Van Duyn v UK [1974] ECR 1337 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . 3.34 Van Uden v Deco Line [1998] I ECR 7091 ECJ . . . . . . . . . . . . . . . . . . . . 4.11 Veedfald [2001] I ECR 3569 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.26, 5.28 Verband Sozialer Wettbewerb v Clinique Labatories SNC and Estee Lauder Cosmetics [1994] I ECR 317 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.43 Verdoliva v Van de Hoeven [2006] I ECR 1579 ECJ . . . . . . . . . . . . . . . 10.57 Verein fut Konsumenteninfomation v Henkel [2002] I ECR 8111 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.46, 10.44 Vlassopoulou [1991] I ECR 2357 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.19 Volvo v Erik Veng [1988] ECR 6211 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . 3.28

C-3/05 C-167/00 C-340/89 Case 238/87 Case 5/88 C-294/92

Wachauf v Germany [1989] ECR 2609 ECJ 3.28, 3.29, 3.33, 3.34, 3.37, 3.38 2.34, 4.21, 4.36, 4.50, 11.39, 11.40, 11.44, 11.45, 11.47

C-464/98 C-506/04 C-306/93

1.21, 1.37, 1.41, 1.49 7.12, 7.13, 7.16 Wizersekt [1994] I ECR 5555 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.38

C-200/98

X & Y v Riksskatteverket [1999] I ECR 8261 ECJ. . . . . . . . . . . . . . 1.53, 2.38

T-306/01

Yusuf v Council EU [2005] II ECR 3533 CFI . . . . . . . . 3.35, 3.41, 7.40, 7.41

Case 56/97 C-200/02

Zelger v Salinitri [1980] ECR 89 ECJ. . . . . . . . . . . . . . . . 10.11, 10.12, 10.22 Zhu v Secretary of State for Home Department [2004] I ECR 9925 ECJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.64, 1.83, 1.92 Zino Davidoff v A&G Imports [2001] I ECR 8691 ECJ. . . . . . . . . . . . . . 3.28

C-414/99

TA B L E O F CA SES — UN I TED KI N G DO M

Table of Cases — United Kingdom TA B LE O F CA SES — UN I TED KI N G DO M

A, Re [2003] EWHC 2911 (Fam), [2004] 1 All ER 912 Sumner J . . . . . . . . . . . . . . . . . . 11.13 Adams v Cape Industries [1990] Ch 433 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.86 Adams v Clutterbuck (1883) 10 QBD 403 QBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13 Adams v National Bank of Greece [1961] AC 255 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 Adams, Re [1982] July 31 Browne-Wilkinson VC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.30 Adams, Re [2004] EWHC 2739, [2004] Times December 6 , Lightman J . . . . . . . . . . . . . 7.42 Admiral Palliser’s Case discussed in Mostyn v Fabrigas (1774) 1 Cowper 161, 180 Lord Mansfield MR, 98 ER 1021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.04 Aeolian Shipping v ISS Machinery Services [2001] EWCA Civ 1162, [2002] 2 Lloyd’s Rep 641 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.40 Agassi v Robinson [2006] UKHL 23, [2006] 1 WLR 1380 . . . . . . . . . . . . . . . . . . . . . . . . . 3.01 Agnew v Länsforsäkringsbolangens [2001] 1 AC 223 HL . . . . . . . . . . 4.07, 10.28, 10.43, 10.52 Agnew v Usher (1884) 14 QBD 78 QBD; (1885) 51 LT 752 CA . . . . . . . . . . . . . . . . 4.28, 4.38 AIC v Federal Government of Nigeria [2003] EWHC 1357 Admin Stanley Burnton J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.85 AIG Capital Partners v Kazakhstan [2005] EWHC 2239 (Comm), [2006] 1 WLR 1420 9.85 Air Foyle v Center Capital [2002] EWHC 2535, [2003] 2 Lloyd’s Rep 753 Gross J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.13 Alfred Dunhill v Diffusion Internationale de Maroquinerie de Prestige [2001] CLC 949 QBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.44, 10.45 Ali v Secretary of State for Home Department [2006] EWCA Civ 484, [2006] ELR 423 . 1.64, 1.92 Allcard v Skinner (1887) 36 Ch D 145 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.15 Allen Wilson Shopfitters v Buckingham [2005] EWHC 1165 (QB) . . . . . . . . . . . . . . . . . . 5.09 Allgemeine case [1980] QB 390 CA Donaldson J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50 HL . 10.28, 10.41 Annesley, Re [1926] Ch 692 Russell J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.29 Anstruther v Adair (1834) 2 Mylne & Keen 513, 39 ER 1041 Lord Brougham LC. . . . . 11.60 Anziani, Re [1930] 1 Ch 407 Maugham J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Apostolakis see Standard Bank of London Arglasse v Muschamp (1682) 1 Vern 75, 23 ER 322 Lord North LK. . . . . . . 4.48, 10.49 11.44 Ark Therapeutics v True North Capital [2005] EWHC 1585, [2006] 1 All ER (Comm) 138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.27 Arkwright Mutual Insurances v Bryanstone Insurance Co [1990] 2 QB 649 Potter J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.27 4.38, 9.63, 11.41 Ashurst v Pollard [2000] 2 All ER 772 Jacob J; [2001] Ch 595 CA Assets Recovery Agency v Creaven [2005] EWHC 2726, [2006] 1 WLR 622, Stanley Burnton J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.43 st

th

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Table of Cases — United Kingdom

Assets Recovery Agency v Singh [2005] EWCA Civ 580, [2005] 1 WLR 3747 . . . . . . . . . . 7.43 Assets Recovery Agency v Szepietowski [2006] EWHC 2406, [2006] Times October 25 Silber J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.43 Assunzione, The [1974] P 150 CA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09 Att-Gen v Drapers Co [1894] 1 IR 185 CA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.39 Att-Gen v Jewish Colonisation [1901] 1 QB 123 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.56 Att-Gen v Johnson [1907] 2 KB 885 Bray J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54 Att-Gen v M’Kenzie (1822) 11 Price 284, 147 ER 474. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08 Att-Gen v (Lord) Sudeley [1897] AC 11 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 Autologic [2005] UKHL 54, [2006] 1 AC 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41 th

Bairstow Eves London Central v Smith [2004] EWHC 263, [2004] 2 EGLR 25 Gross J . 8.38, 8.44 Baker v JE Clark & Co (Transport) [2006] EWCA Civ 464, [2006] Pension Law Reports 131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.25 Balabel v Air India [1988] Ch 317 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.64 Banco Nacional de Comercio Exterior v Empressa de Telecommunications de Cuba [2007] EWCA Civ 662, [2007] 21 LSG 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.73 Bank of Africa v Cohen [1909] 2 Ch 129 CA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13, 11.44 Bank of Dubai v Abbas [1997] ILP 308 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.54 Bank of Scotland v A [2001] EWCA Civ 52, [2001] 1 WLR 751 . . . . . . . . . . . . . . . . . . . . 7.63 Barclays Bank v O’Brien [1994] 1 AC 180 HL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.26 Barclays Bank v Quistclose Investments [1970] AC 587 HL . . . . . . . . . . . . . . . . . . . . . . . 11.35 Barratt International Resorts v Martin [1994] SLT 434 Court of Session OH. . . . . 4.39, 4.47 Barton decd, Re [2002] EWHC 264, [2002] WTLR 469 Lawrence Collins J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.56, 11.60 Base Metal Trading v Shamurin [2004] EWCA Civ 1316, [2005] 1 WLR 1157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.54 Bates v Microstar [2003] EWHC 661 (Ch), [2003] Times April 15 . . . . . . . . . . . . . . . . . . 9.81 Batthyany v Walford (1886) 33 Ch D 624 affirmed (1887) 36 Ch D 269 CA in Ch . . . . 4.16, 10.44, 10.49 Baybut v Eccle Riggs [2006] All ER (D) 161 (Nov) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.44 Berchtold, Re [1923] 1 Ch 192 Russell J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04, 11.54 Birtwhistle v Vardill (1840) 7 Clark & Finnelly 895, 7 ER 1308 . . . . . . . . . . . . . . . . . . . . 11.28 Bols Distilleries v Superior Yacht Services [2005] UKPC 45, [2007] 1 WLR 12. . . . . . . . . 4.08 Bowman v Fels [2005] EWCA Civ 226, [2005] 1 WLR 3083 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.45, 7.46, 7.59, 7.62, 7.64 Boys v Chaplin [1971] AC 356 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.46 Brae Rent-A-Car International, Re [2003] EWHC 128 (Ch), [2003] 2 All ER 201 . . . . . 9.59 Bree v Narescaux (1881) 7 QBD 434 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.23 Bristow Helicopters v Sikorsky Aircraft Corporation [2004] 2 Lloyd’s Rep 150 . . . . . . . . 10.59 British South Africa Co v Companhia de Moçambique [1893] AC 602 HL, [1892] 2 QB 4.30, 11.44 358 CA Bryen & Langley v Boston [2004] EWHC 2456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.37 th

C v S [1999] 1 WLR 1551 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.63


xxxiii

C Inc v L [2001] CLC 1054 Aikens J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.81 Caithness, Re (1891) 7 TLR 354 Chitty J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 Caledonia Subsea v Micoperi [2002] SLT 1022 Ct of Session IH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09, 4.27, 10.26, 10.27, 10.28 Cambridge Gas Transport Group v Navigator Holdings [2006] UKPC 26, [2006] 3 WLR 689 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.49, 9.54 Canada Trust Co v Stolzenberg (No 2) [1996] 1 WLR 547 CA, [2002] 1 AC 1 HL4.05, 4.07, 5.05, 10.54, 10.57 Canterbury v Wyburn [1895] AC 89 PC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.44 Carapiet, Re [2002] EWHC 1304, [2002] WTLR 989 Jacobs J . . . . . . . . . . . . . . . 11.04, 11.56 Carnegie v Giessen [2005] EWCA Civ 191, [2005] CP Rep 24 . . . . . . . . . . . . . . . . . . . . . . 9.89 Carter v Lotus Leisure Group [2002] 2 P & CR 2 @ 26 CA . . . . . . . . . . . . . . . . . . . . . . . . . 4.46 Cartney, Re (1840) Montagu & Chitty 239 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13 Casey v Arnott (1876) 2 CPD 24 Denman J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.23 Casio Computer Co v Sayo (No 3) [2001] EWCA Civ 661, [2001] ILP 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.48, 11.42 Castelli see (R(JR) Castelli Chase Manhattan Bank v Israel-British Bank (London) [1981] Ch 165 Goulding J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.48 Chatfield v Berchtoldt (1871) LR 7 Ch App 192 CA in Chancery. . . . . . . . . . . . . . . 3.04, 4.28 Chelleram v Chelleram (No 2) [2002] EWHC 632, [2002] 3 All ER 17. . . . . . . . . . . . . . 11.04 ci4net.com, Re [2004] EWHC 1941 (Ch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.61 Cigala’s ST, Re (1877) 7 Ch D 351 Jessel MR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54 Cohn, Re [1945] Ch 5 Uthwatt J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.01 Collier v Rivaz (1841) 2 Curteis 855, 163 ER 608 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.29 Collins v Secretary of State for Work & Pensions [2006] EWCA Civ 376, [2006] ICR 1033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.79 Commission for the New Towns v Cooper (GB) [1995] Ch 259 CA . . . . . . . . . . . . . . . . . . 8.15 Commissioner for Stamp Duties, Queensland v Livingston [1965] AC 694 PC . . . . . . . . 11.55 Compagnie d’Armement Maritime v Compagnie Tunisienne de Navigation [1971] AC 572 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.42 Cookney v Anderson (1863) 1 De Gex Jones & Smith 365, 46 ER 146. . 3.07, 3.08, 3.13, 4.28, 10.24, 11.21, 11.44 Coppin v Coppin (1725) 2 Peere Williams 291, 24 ER 735 . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 Cottage Holiday Associates v Commissioners for Customs and Excise [1983] QB 735 Woolf J 6.20, 6.46, 6.48 Countess Derby’s case (c1502) Keilwey 202, 72 ER 381 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.30 Cranstown (Lord) v Johnston (1796) 3 Ves 170, 30 ER 952 Arden MR . . . . . . . . . . . . . . 10.24 Credit Lyonnais v New Hampshire Insurance Co [1997] 2 Lloyd’s Rep 1 CA . . . . . . . . . 10.27 Crehan see Inntrepreneur Pub Co Cricklewood Property & Investment Trust v Leighton’s Investment Trust [1945] AC 221 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.03 Crown Prosecution Service v Richards [2006] EWCA Civ 849, [2006] 2 FCR 452 . . . . . . 7.42 Cutcliffe’s WT, Re [1940] Ch 565 Morton J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28, 11.54 Cyganik v Agulian [2006] EWCA Civ 129, [2006] 1 FCR 406. . . . . . . . . . . . . . . . 10.54, 11.21

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Daisyteck-ISA, Re [2004] BPIPR 30 Ch D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.59, 9.65 Deschamps v Miller [1908] 1 Ch 856 Parker J . . . . . . . . . . . . . . . . . . . . . . . . 4.30, 10.24, 11.44 Dexter v Harley [2001] Times April 2 Lloyd J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.48 Director General of Fair Trading v First National Bank [2000] 1 All ER 240 Evans-Lombe J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.31, 8.36, 8.40, 8.41 Director General of Fair Trading v First National Bank [2000] QB 647 CA . . 8.31, 8.36, 8.41, 8.46 Director General of Fair Trading v First National Bank [2001] UKHL 52, [2002] 1 AC 481 8.31, 8.36, 8.39, 8.42, 8.44, 8.46 Downie v Downie’s Trustee (1866) 4 Macpherson (Session Cases) 1067 . . . . . . . . . . . . . 3.05 Dresser UK v Falcongate Freight Management [1992] 1 QB 502 CA . . . . . . . . . . . . . . . . 10.57 Duncan v Lawson (1889) 41 Ch D 394 Kay J. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04, 3.05, 3.13 nd

Earl of Derby, Re (1611) 12 Coke’s Report 114, 77 ER 1390. . . . . . . . . . . . . . . . . . . . . . . . 4.48 Egon Oldendorff v Liberia Corp [1996] 1 Lloyd’s Rep 350 Clarke J . . . . . . . . . . . . . . . . . 10.42 El Ajou v Dollar [1993] 3 All ER 717 Millett J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.48 Electricity Supply Nominees v IAF Group [1993] 1 WLR 1059 QBD . . . . . . . . . . . . . . . . . . . 8.30 Elitestone v Morris [1997] 1 WLR 687 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04 EMM Capricorn Trustees v Compass Trustees [2001] WTLR 997 Royal Ct of Jersey . . . 11.47 Ennstone Building Products v Stanger [2002] EWCA Civ 916, [2002] 1 WLR 3059 . . . 10.28, 10.45, 10.59 Evans v Cherry Tree Finance [2007] April 13 , [2007] WL 2186988 Ch D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.07, 9.03, 9.04 th

Fagins Bookshop, Re [1992] BCLC 118 Harman J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.35 Falco Finance v Gough [1998] October 28 Macclesfield CC . . . . . . . . . . . . . . . . . . . . . . . 8.36 Favorke v Steinkopff [1922] 1 Ch 174 Russell J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54 Ferguson v Ferguson [1990] SLT Sh Ct 73 . . . . . . . . . . . . . . . . . . . . . . . . 4.23, 4.35, 9.63, 11.41 First National Bank see Director General of Fair Trading Fitzgerald v Williams [1996] QB 657 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.39 Flightline v Edwards [2003] 3 All ER 1200 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.81 Formula One Holdings (No 2) see Speed Investments Fourie v Le Roux [2007] UKHL 1, [2007] 1 All ER 1087 . . . . . . . . . . . . . . . . . . . . . . . . . . 9.73 Freke v (Lord) Carbery (1873) LR 16 Eq 461 Lord Selborne. . . . . . . . . . . . . . . . . . 3.05, 11.27 Front Comor, The [2007] UKHL 4, [2007] ILP 20 (ECJ reference) . . . . . . . . . . . . . . . . . 10.38 th

Gaines-Cooper v Revenue & Customs Commissioners [2006] UKSPC 568, (2006) 9 International Trust Law Reports 274.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07 Gammell v Sewell (1860) 5 Hemmings & Miller 728, 157 ER 1371 . . . . . . . . . . . . . . . . . 3.13 Ghana Bank v C [1997] Times March 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.48 Gienar v Meyer (1796) 2 Hy Bl 603, 126 ER 728 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.40 Global Marketing Europe v Berkshire Trading Standards Department [1974] July 21 Div Ct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.38 Grassi, Re [1905] 1 Ch 594 Buckley J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.29 rd

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Harding v Wealands [2006] UKHL 32, [2006] 3 WLR 83 . . . . . . . . . . . . . . . . . . . . . . . . 10.46


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Harries v Barclays Bank [1977] 2 EGLR 15 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 Harrods (Buenos Aires), Re [1992] Ch 72 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.59 Havair v Vile [2000] CLYB [848] County Ct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17 Havenridge v Boston Dyers [1994] 2 EGLR 73 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.30 Hawthorne, Re (1883) 23 Ch D 743 Kay J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.30 3.13, 4.35, 9.63, 11.02, 11.37, 11.41 Hayward, Re [1997] Ch 45 Rattee J Hernando, Re (1884) 27 Ch D 284 Pearson J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.30 Hesperides Hotels v Aegean Turkish Holidays [1979] AC 508 HL. . . . . . . . . . . . . . . . . . . . 4.31 Hog v Lashley (1791) 3 Paton 247 Ct of Session . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Holding v Haling (1685) 3 Keble 150, 84 ER 646 Hales CJ . . . . . . . . . . . . . . . . . . . . . . . . . 4.38 Holman v Johnson (1775) 1 Cowper 41, 98 ER 1120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.48 Hoyles, Re [1910] 2 Ch 333, [1911] 1 Ch 179 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 HP Bulmer v J Bollinger (No 2) [1974] Ch 401 CA. . . . . . . . . . . . . . . . . . . . Preface 3.01, 3.30 Hugh le Pape v Florence Merchants in London (1280–1281) 8–9 Edward I. . . . . . . . . . . . 4.29 Hussien v Chong Fook Ham [1970] AC 942 PC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.61 Ikimi v Ikimi [2001] EWCA Civ 873, [2002] Fam 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.09 Inntrepreneur v Boyes (1994) 68 P & CR 77 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.52 Inntrepreneur Pub Co v Crehan [2006] UKHL 36, [2006] 3 WLR 148; [2004] EWCA Civ 637, [2004] 3 EGLR 128; [2003] EWHC 1510 (Ch) Park J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.53, 3.54 Inntrepreneur v Mason (1994) 68 P & CR 53 QBD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.52 Inntrepreneur Pub Co (CPC) v Sweeney [2002] EWHC 1060 . . . . . . . . . . . . . . . . . . . . . . 3.53 Interdesco v Nullfire [1992] 1 Lloyds Rep 180 Phillips J . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.84 Interfoto Library v Stiletto [1989] QB 433 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.40 J Fernandes Pereira v Mehta [2006] EWHC 813 (Ch), [2006] 1 WLR 1543 Judge Pelling QC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.14 Jackson v Petrie (1804) 10 Ves 164, 32 ER 807 Eldon LC . . . . . . . . . . . . . . . . . . . . . . . . . 10.24 Jarrett v Barclays Bank [1999] QB 1 CA 4.05, 4.16, 4.21, 4.37, 4.39, 4.40, 4.44, 4.46, 4.47, 6.16, 6.20, 6.45, 10.31 Jerningham v Herbert (1828) 4 Russ 388, 38 ER 851. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 Jordan Grand Prix v Baltic Insurance Group [1999] 2 AC 127 HL. . . . . . . . . . . . . . . . . . 10.35 JP Morgan Europe v Primacom [2005] EWHC 508 (Comm), [2006] ILP 11 4.18, 10.37, 10.37, 10.58 Cooke J K v National Westminster Bank [2006] EWCA Civ 1039, [2006] 4 All ER 907 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.61, 7.63 Kakkar v Szelke [1988] FSR 97 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.39 Kaur v Lord Advocate [1980] 3 CMLR 79 CS OH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Kenburn Waste Management v Bergmann [2002] EWCA Civ 98, [2002] Times February 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.12 Keppel-Palmer v Exus Travel [2003] EWHC 3529 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18 Khatun see Newham LBC v Khatun Kindlance v Murphy [1997] High Ct of Northern Ireland . . . . . . . . . . . . . . . . . . . . . . . . . 8.36 King v Crown Energy Trading [2003] EWHC 163, [2003] ILP 28 . . . . . . . . . . . . . . . . . . 10.54 th

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Kleinwort Benson v Glasgow CC [1999] 1 AC 153 HL; [1996] QB 678 CA 4.08, 10.43, 10.50 Kolchmann v Meurice [1903] 1 KB 534 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.53 Kuwait Airways v Iraqi Airways [2002] 3 All ER 209 HL . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07 Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 and 5) [2000] Times November 21st CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.86 Kuwait Oil Tanker Co v Qabazard [2003] UKHL 31, [2004] 1 AC 300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.15, 4.53, 9.89 Lewis v Eliades (No 1) [2002] EWHC 335 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11 London Helicopters v Heliportugal [2006] EWHC 108, [2006] ILP 28 . . . . . . . . . . . . . . 10.45 London North Securities v Meadows [2005] EWCA 956 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.24 Lysaght v Edwards (1876) 2 Ch D 499 Jessel MR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.21, 8.59 Macdonald v Macdonald (1932) SC HL 79. . . . . . . . . . . . . . . . . . . . . . . 3.02, 3.03, 3.05, 11.27 MacMillan v Bishopsgate Investment Trust (No 3) [1996] 1 WLR 387 CA. . . . . . . 3.02, 10.48 Mahme Trust Reg v Lloyds TSB Bank [2004] EWHC 1931 (Ch), [2004] 2 Lloyd’s Rep 637 Morritt VC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.10, 10.53 Mark v Mark [2004] EWCA Civ 168, [2005] Fam 267 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.09 Marks & Spencer v Commissioner of Customs and Excise [2003] EWCA Civ 1418, [2004] STC 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.31 Maronier v Larmer [2002] EWCA Civ 774, [2002] 3 All ER 848 . . . . . . . . . . . . . . . . . . . . 9.87 Mazur Media v Mazur Media [2004] EWHC 1566, [2004] 1 WLR 2966 Lawrence Collins J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.07, 10.57 7.53 McPhail v Doulton [1971] AC 424 HL Mehta see J Fernandes Pereira Messier-Dowty v Sabena [2000] 1 WLR 2040 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.59 MG Rover Espana, Re [2006] EWHC 3426 (Ch), [2005] BPIR 1162 . . . . . . . . . . . . 9.62, 9.71 Micoperi see Caledonian Subsea Midleton’s Settlement, Re [1947] Ch 583 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54 Miliangos v George Frank (Textiles) (No 1) [1976] AC 433 HL . . . . . . . . . . . . . . . . . . . . . 9.89 Miller v Miller [2006] UKHL 24, [2006] 2 AC 618 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.13 Minwalla v Minwalla [2004] EWHC 2823, [2005] 1 FLR 771. . . . . . . . . . . . . . . . . . . . . 11.35 Molins v GD [2000] 1 WLR 1741 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.57 Montagu Evans v Young [2000] SLT 683 Ct of Session OH . . . . . . . . . . . . . . . . . . . . . . . 10.12 Montila see R(CP) v Mority v Stephan (1885) 58 LT 850 North J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.53 Mostyn v Fabrigas (1774) 1 Cowper 161, 98 ER 1021. . . . . . . . . . . . . . . . . . . . 3.04, 4.04, 4.30 Motorola Credit Corp v Uzan (No 1) [2002] EWCA Civ 989, [2002] 2 All ER (Com) 945 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.81 Motorola Credit Corp v Uzan (No 6) [2003] EWCA Civ 752, [2004] 1 WLR 113 . . . . . . 9.81 Mount Albert BC v Australian Temperance and General Mutual life Assurance Society [1938] AC 224 PC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09 Munckenbeck & Marshall v Harold [2005] EWHC 356 QBD . . . . . . . . . . . . . . . . . . . . . . 8.38 National Carriers v Panalpina (Northern) [1981] AC 675 HL . . . . . . . . . . . . . . . . . . . . . . 3.03


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Navigators Insurance Co v Atlantic Methanol Production Co [2003] EWHC 1706, [2004] Lloyds Rep IR 418 David Steel J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.42 Nelson (Earl) v Bridport (Lord) (1846) 8 Beaven 547, 50 ER 215 . . . . . . . . . 2.04, 3.13, 11.28 Neste Chemicals v DK Line (‘The Sargasso’) [1994] 3 All ER 180 CA . . . . . . . . . . . . . . . 10.57 Newham LBC v Khatun [2004] EWCA Civ 55, [2005] QB 37 5.12, 8.24, 8.26, 8.28, 8.29, 8.35 Newlands v Chalmers (1832) 11 Shaw & Dunlop 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Ngyuyen v Searchnet Associates [1999] 3 CMLR 413 Scottish CS . . . . . . . . . . . . . . . . . . . 2.39 Norris v Chambres (1861) 3 De Gex Fisher & Jones 583, 45 ER 1004, on appeal from (1861) 29 Beav 246, 54 ER 621 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.25 O’Donoghue, Re [2004] EWHC 176 Lightman J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.42 Official Solicitor v Stype Industries (Jersey) [1983] 1 WLR 214 Whitford J . . . . . . . . . . 11.39 Olafsson v Gissurarson [2006] EWHC 3162 (QB), [2006] All ER (D) 345 Mackay J . 10.57 Ophthalmic Innovations International (UK) v Ophthalmic Innovations International [2004] EWHC 2948, [2005] ILP 10 Lawrence Collins J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.27 4.32, 9.87 Orams v Apostolides [2006] EWHC 2226, [2007] 1 WLR 241 Jack J P v P [2003] EWHC 2260 (Fam), [2004] Fam 1 Butler-Sloss P. . . . . . . . . . . . . . . . . . . . . 7.63 Paget v Ede (1874) LR 18 Eq 118 Bacon VC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.53 Paragon Finance v Nash [2001] EWCA Civ 1466, [2002] 1 WLR 685. . . . . . . . . . . . . . . . 9.48 9.48 Paragon Finance v Pender [2005] EWCA Civ 760, [2005] 1 WLR 3412 Parry v Edward Geldard (No 2) [2001] PNLR 44 Jacob J . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84 Passmore v Morland [1999] 1 CMLR 1129 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.52 PB v Secretary of State for Home Department [2005] Imm AR 586 Immigration Appeal Tribunal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.83 Pearce v Ove Arup [2000] Ch 403 CA; [1997] Ch 293 Lloyd J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.05, 4.27, 10.10, 10.46, 10.57 Peer International Corp v Termidor Music Publishers (No 1) [2003] EWCA Civ 1156, [2004] Ch 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.07, 9.85 Penn v Lord Baltimore (1750) 1 Ves Sen 444, 27 ER 1132 Hardwicke LC . . . . . . . . . . . . 10.24 Pepin v Bruyère [1902] 1 Ch 24 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.05 Philipson-Stow v IRC [1961] AC 727 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54 10.57 Phillips v Symes [2006] EWCA Civ 654, [2006] 1 WLR 2598 Phull v Secretary of State for Home Department [1996] Imm AR 72 CA 1.20, 1.55, 3.25 Picardi v Cuniberti [2003] BLR 487 Judge Toulmin QC . . . . . . . . . . . . . . . . . . . . . . . . . . 8.37 Piercy, Re [1895] 1 Ch 83 North J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13, 11.44 Polly Peck International (No 2), Re [1998] 3 All ER 812 CA. . . . . . . . . . . . . . . . . . . . . . . . 4.31 Prazic v Prazic [2006] EWCA Civ 497, [2007] ILP 31 . . . . . . . . . . . . . . . . . . . . . . . 4.50, 11.40 Price v Dewhurst (1839) 8 Simon 617, 59 ER 244 Shadwell VC . . . . . . . . . . . . . . . . 3.05, 4.28 Primacom see JP Morgan Provimi v Aventis Animal Nutrition [2003] EWHC 961, [2003] ECLYB [262] . . . . . . . . . 10.44 R(CP) Criminal Prosecutions on Indictment Da Silva 2006 EWCA Crim 1654, 2006 2 Cr App R 35 . . . . . . . . . . . . . . . . . . . . . . . . . 7.61

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Duff 2002 EWCA Crim 2117, 2003 1 Cr App R (S) 88 . . . . . . . . . . . . . . . . . . . . . . . . . 7.60 Goodenough 2004 EWCA Crim 2260, 2005 1 Cr App R (S) 88 . . . . . . . . . . . . . . . . . . 7.40 Griffiths 2006 EWCA Crim 2155. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.60 7.35, 7.39, 7.45 Montila 2004 UKHL 50, 2004 1 WLR 3141 Olubitan 2003 EWCA Crim 2940, 2004 2 Cr App R (S) 14 (also known as Olupitan) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 Omar 2004 EWCA Crim 2320, 2005 1 Cr App R (S) 86. . . . . . . . . . . . . . . . . . . . . . . . 7.42 Palmer (No 1) 2002 EWCA Crim 2202, 2003 1 Cr App R (S) 112 . . . . . . . . . . . . . . . . 6.52 Palmer (No 2) 2002 EWCA Crim 2683, 2003 2 Cr App R (S) 2 . . . . . . . . . . . . . . . . . . 6.52 Rezvi 2002 UKHL 1, 2003 1 AC 1099 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.40 7.39 Saik 2006 UKHL 18, 2006 1 AC 18 Soneji 2005 UKHL 49, 2006 1 AC 340 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.40 Szepietowski [2007] EWCA Civ 766, [2007] July 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.43 R(JR) Judicial review cases Castelli v City of Westminster (1996) 28 HLR 616 CA . . . . . . . . . . . . . . . . . . . . . 1.41, 1.87 Countryside Alliance v Att-Gen 2006 EWCA Civ 817, 2006 3 ELR 97 . . . . . . . . . . . . . 1.63 Eastside Cheese Co v Secretary of State for Health 1999 3 CMLR 123 CA . . . . . . . . . . 3.34 Else (1982) v International Stock Exchange of UK and Republic of Ireland 1993 QB 534 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.05 H v Secretary of State for Work & Pensions 2004 EWHC 1097, 2004 3 CMLR 11 @ 236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.82 Loutchansky v First SS 2005 EWHC 1779, 2005 3 CMLR @ 43 Moses J . . . . . . . . . . . 1.64 Mohtasham v Visitor of Kings College London 2003 EWHC 2372, 2004 ELR 29 Richards J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.33 Professional Contractors Group v Inland Revenue Commissioners 2001 Times April 5 Burton J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.38 UMBS Online v Serious Organised Crime Agency [2007] EWCA Civ 406. . . . . . . . . . 7.63 R Griggs Group v Evans [2005] Ch 103 Ch D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.23, 4.30 R v International Trustee for Protection of Bondholders [1937] AC 500 HL . . . . . . . . . . 10.40 R v R [2003] EWHC 2113, [2005] 1 FLR 386 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.13 Raiffeisen Zentralbank Osterreich v Five Star General Trading [2001] EWCA Civ 68, [2001] QB 825. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.02, 4.09, 10.20 10.30, 10.31, 10.45 Rayner v Davies [2002] EWCA Civ 1880, [2003] ILP 15 Revenue and Customs Prosecution Office v Hill [2005] EWCA Crim 3271, [2005] Times December 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41 Riverside Housing Association v Revenue & Customs Commissioners [2006] EWHC 2383, [2006] STC 2072 Lawrence Collins J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.66 Robertson’s Electrical v Customs & Excise Commissioners [2007] STC 612 . . . . . . . . 3.53, 5.31 Rogers v Dove (1652) Style 331, 82 ER 752 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.48 Ross, Re [1930] 1 Ch 377 Luxmoore J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.29 Ross v Ross’s Trustee (1809) Faculty College July 4 (1815 ed) 377 . . . . . . . . . . . . . . . . . . . 4.28 Royal Bank of Canada v Cooperatieve Centrale Raiffeisen-Boerenleenbank [2004] EWCA Civ 7, [2004] 1 Lloyds Rep 471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.35 Royal Bank of Scotland v Etridge (No 2) [2001] UKHL 44, [2002] 2 AC 773 . . . . . . . . . . 9.26 Royal Brunei Airlines v Tan [1995] 2 AC 378 PC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.48 th

th

th

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Rucker, Ex p (1834) 3 Deacon & Chitty 704. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Sabah Shipyard (Pakistan) v Pakistan [2002] EWCA Civ 1643, [2002] 2 Lloyd’s Rep 57 9.85 Saik see R(CP) Samcrete Egypt Engineers and Contractors v Land Rover Exports [2001] EWCA Civ 10.27, 10.28 2019, [2002] CLC 533 Sarrio v Kuwait Investment Authority [1999] 1 AC 32 HL . . . . . . . . . . . . . . . . . . . . . . . . 10.48 Saunders v Vautier (1841) 4 Beaven 115, 49 ER 282, affirmed Craig & Phillips 240, 41 ER 482 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.46, 11.56 Seegert, Re (2005–2006) 8 ITELR 1 Royal Court of Jersey . . . . . . . . . . . . . . . . . . . . . . . . 11.17 Seton v Slade (1802) 7 Ves 265, 32 ER 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.30 Shamil Bank of Bahrain EC v Beximco Pharmaceuticals [2004] EWCA Civ 19, [2004] 1 WLR 1784 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.41 Shierson v Vlieland-Boddy [2005] EWCA Civ 974, [2005] 1 WLR 966 9.56, 9.58, 9.60, 9.62, 9.64, 9.65, 9.67, 9.70 SISRO v Ampersand Software [1994] ILP 55 CA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.79 Skjevesland v Geveran Trading (No 4) (1546 of 2000) [2002] EWHC 2898, [2003] BCC 391 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.58, 9.59 Smallwood v Sheppards [1895] 2 QB 627 Wright J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.46 Snookes v Jami-King (GB) [2006] EWHC 289, [2006] ILP 19 Silber J . . . . . . . . . . . . . . 10.35 Société Eram Shipping Co v Companie Internationale de Navigation [2003] UKHL 30, [2004] 1 AC 260. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.53, 9.89 Source v TUV Rheinland Holding [1998] QB 54 CA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.44 Speed Investments v Formula One Holdings (No 2) [2004] EWCA Civ 152, [2005] 1 WLR 4.07, 4.08, 4.18, 4.35, 10.54 1936 Spiliades Maritime Corp v Consulex [1987] AC 460 HL . . . . . . . . . . . . . . . . . . . . . . . . . . 10.59 Squirrell v National Westminster Bank [2005] EWHC 664 (Ch), [2006] 1 WLR 637 Laddie J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.61, 7.63 Standard Bank London v Apostolakis (No 1) [2000] ILP 766, Longmore J; (No 2) [2001] 5.07, 8.31, 8.36, 8.37, 10.30, 10.32 Lloyd’s Rep Bank 240 Steel J Star Rider v Inntrepreneur Pub Co [1998] 1 EGLR 53 Blackburne J . . . . . . . . . . . . . . . . . . . . 8.30 Starmark Enterprises v CPL Distribution [2001] EWCA Civ 1252, [2002] Ch 306 . 8.28, 8.35 Stolzenberg (No 2) see Canada Trust Street v Mountford [1985] AC 809 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.62 Sudeley (Lord) v Att-Gen [1897] AC 11 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54, 11.55 Swift v Dairywise Farms (No 2) [2001] EWCA Civ 145, [2003] 1 WLR 1606n; [2000] 1 3.84 WLR 1177 Jacob J T & N (No 2), Re [2005] EWHC 2990 (Ch), [2006] 1 WLR 1792. . . . . . . . . . . . . . . . . . 10.01 Tasarruff Mevduati Sigorta Fonu v Demirel [2007] ILP 8 Lawrence Collins J . . . . . . . . . 9.81 Tassell v Hallen [1892] 1 QB 321 Coleridge LCJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.38 Tavoulareas v Tsavliris (No 1) [2004] EWCA Civ 48, [2004] ILP 29 . . . . . . . . . . . . . . . . 10.57 Tavoulareas v Tsavliris (No 2) [2005] EWHC 2140, [2006] ILP 14 . . . . . . . . . . . . . . . . . . 9.83 Tavoulareas v Tsavliris (No 3) [2005] EWHC 2643, [2005] 2 CLC 848 Andrew Smith J; [2006] EWCA Civ 1772, [2006] 2 CLC 1034 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.85, 10.57

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Tavoulareas v Tsavliris (No 4) [2006] EWHC 414, [2006] 1 CLC 466; [2006] EWCA Civ 1772, [2006] 2 CLC 1034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.84, 9.87, 10.57 Tayeb v HSBC Bank [2004] EWHC 1529, [2004] 4 All ER 1024 Colman J . . . . . . . . . . . 7.63 Three Rivers DC v Bank of England [2004] UKHL 48, [2005] 1 AC 610. . . . . . . . . . . . . . 7.64 Toller v Carteret (1705) 1 Salkend 404, 91 ER 351 Wright LK . . . . . . . . . . . . . . . . . . . . . . 4.53 Tsn Kunststoffrecycling v Jurgens [2002] EWCA Civ 11, [2002] 1 All ER (Comm) 282 . . 9.87 Viking Line v International Transport Workers’ Federation [2005] EWHC 1222, [2006] ILP 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63 Vita Food Products v Unus Shipping Co [1939] AC 277 HL . . . . . . . . . . . . . . . . . . . . . . . 10.40 Vitale v Secretary of State for Home Department [1996] Imm AR 275 CA . . . . . . . . . . . . 1.79 W v Secretary of State for Home Department [2006] EWCA Civ 1404, [2007] 1 CMLR 17 @ 558 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.92 Walsh v Lonsdale (1882) 21 Ch D 9 CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.59 Wellington (Duke of), Re [1947] Ch 506 Ch D, [1948] Ch 118 CA . . . . . . . . . . . . . . . . . 11.30 Wermuth v Wermuth [2003] EWHC 3049, [2003] 1 FLR 1022 Bracewell J . . . . . . . . . . 11.13 Westminster Building Co v Beckingham [2004] EWHC 138, [2004] BLR 163 . . . . . . . . . 8.34 White v Hall (1806) 12 Ves 321, 33 ER 122 Erskine LC . . . . . . . . . . . . . . . . . . . . . . . . . . 10.24 Williamson v Bank of Scotland [2006] EWHC 1289 (Ch), [2006] BPIR 1085 Judge George Bompas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.09, 8.37 WPP Holdings Italy v Benatti [2007] EWCA Civ 263, [2007] ILP 33 . . . . . . . . . . . . . . . 10.57 Zealander v Laing Homes (2000) 2 TCLR 724 QBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.34

TA B L E O F CA SES — F O R EI G N

Table of Cases — Foreign TA B L E O F CA SES — F O R EI G N

Australia Paramasivan v Flynn (1998) 160 ALR 203 Federal Ct . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.48

Austria A v N [1998] BGE III 103, [1999] ECLYB [2314] I Zivilabteilung . . . . . . . . . . . . . . . . . . 3.13 Oberster Gerichtshof 6 Ob 124/Q92 [2000] wbl 86, [2000] ECLYB [483] . . . . . . . . . . . 7.15 Oberster Gerichtshof 1 Ob 12/00 x [2001] ECLYB [491] . . . . . . . . . . . . . . . . 1.33, 1.63, 2.16 Oberster Gerichtshof 1 Ob 216/02 z [2003] ECLYB [322] . . . . . . . . . . . . . . . 1.33, 2.16, 2.48 Oberster Gerichtshof 5 Ob 58/04 x [2005] ECLYB [273] . . . . . . . . . . . . . . . . . . . . . 1.33, 2.16 Verwaltungsgerichtshof 2002/04/0066 [2003] ECLYB [288]. . . . . . . . . . . . . . . . . . . . . . . 2.39

Belgium A v B [2003] JT 55, [2003] ECLYB [1355] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14 Cour d’Arbitrage [2005] JT 787, [2006] 06 ECL [51] . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.64

Canada Green v Jernigan (2003–2004) 6 ITELR 330 Supreme Court British Columbia . . . . . . 11.47

Denmark Agder Lagmannsrett (93-830 K) [1994] RG 1258, [1995] ECLYB [2250] . . . . . . . . . . . 10.23 Frederiksvaerk Kommune v Sorensen B-4022-05 [2006] UfR 27940, [2006] 12 ECL [113] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06, 4.23, 10.28 Hjertviksten v Dansommer B-1500-00 [2001] UfR 2556, [2002] ECLYB [1228] . . . . . . . 4.40 King v Fødevare-Og Landbrugsministerei R-3660-97 [2000] Uf R 1276, [2000] ECLYB [466] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.27, 2.40 King v Ministeriet for Fødevarer Landburg og Fiskeri [2001] UfR 1249, [2001] ECLYB 493 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.27, 2.40 M v H B-1024-03 [2003] UfR 18970, [2003] ECLYB [896] . . . . . . . . . . . . . . . . . . . . . . . 11.13

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Table of Cases — Foreign

Mørk v Ejendomsmaalglerfimach Esner Ved Torben Eisner [2000] UfT 631, [2000] ECLYB [1204] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.19 Royal Classic Rumaensk Vinimport v Sörensen B-57-04 [2004] VfR 1404, [2004] ECLYB [218] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.46 Słresnsen v Pedersen B-581-04 [2005] ECLYB [150]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.23 T v Justitsministereit 195/2005, [2007] UfR 99H, [2007] 03 ECL [54] . . . . . . . . . . . . . . . 2.19

France American Trading Company v Quebec Steamship Co (1911) Rev Crit 395 Cassation . . 10.40 Fondation Guggenheim v Helion [1997] ILP 457 Cassation . . . . . . . . . . . . . . . . . . . . . . . 10.23 Ford Soloman [1997] ILP 457 Cassation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.23 Fourgeau v Conseil de l’Ordre des Avocats au Bureau de Bayonne [2002] Dalloz Jurisprudence 121, [2002] ECLYB [498] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.19 Gilgert v Commerzbank [2001] Rev Crit DIP 135, [2001] ECLYB [1072] . . . . . . . . . . . 10.31 Le Meilleur v Trehout [2001] II JCP 10620, [2002] ECLYB [1188] . . . . . . . . . . . . . . . . . . 3.13 Moussard v Ballestrero [2000] Dalloz Jur 539, [2000] ECLYB [2337] Cassation . . . . . . 11.20 Pordea v Times Newspapers [2000] ILP 763 Cassation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.83 UFC v Papeterie Tissot [1999] II JCP 10205, [2000] ECLYB [2216] Cassation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.09, 8.30, 8.34

Germany Amtsgericht Munich 1501 1E2 1276/04 [2005] ECLYB [283]. . . . . . . . . . . . . . . . . . . . . . 9.59 Bavarian Court of Appeal December 12 1952, I Z 247/1952. . . . . . . . . . . . . . . . . . . . . . 11.05 Bayerisches Oberlandesgericht 2Z BR 7/02 [2003] ECLYB [1930]. . . . . . . . . . . . . . . . . . 4.18 Bezirksgericht Erfurt 2 T 12/92 [1992] NJ 417, [1992] ECLYB [5677]. . . . . . . . . . . . . . . 7.02 Bundesgerichtshof October 12 1989, 1990 IPRAX 318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.45 V ZR 184/94, [1996[ ECLYB [2091] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.44, 6.49 IV ZR 171/99, [2000] N Jus 546, [2000] ECLYB [2239] . . . . . . . . . . . . . . . . . . . . . . . . 3.04 IX ZB 23/97, [2001] ECLYB [2062] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.87 XI ZR 91/99, [2002] ECLYB [417] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.87 IX ZB 104/00, [2003] ECLYB [119] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.34 IX ZB 104/00, [2003] ECLYB [874] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 XI ZR 151/99, [2003] ECLYB [265] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.87 II ZR 327/04, [2005] ECLYB [1573] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.18 XI ZR 169/05, [2006] 06 ECL [7] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05 VIII ZR 48/05, [2006] 06 ECL [8]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.43 XI ZR 255/04, [2006] 08 ECL [64] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.18 VII ZR 249/04, [2006] 09 ECL [62] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.31 1 ZR 124/03, [2006] 12 ECL [45] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.55 Bundesvervaltungsgericht 3C 35/03 [2005] 06 ECL 43 . . . . . . . . . . . . . . . . . . . . . . 3.84, 3.85 Claim for Payment for a Timeshare, Re [1997] ILP 524 District Court Damstadt . . . . . . 4.47 th

th


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Kammergericht Berlin 2 U 1947/99 [20001] ECLYB [1071] . . . . . . . . . . . . . . . . . . . . . . 10.12 Landgericht Berlin 26 0 530/02 [2006] 05 ECL [47] . . . . . . . . . . . . . . . . . . . . . . . 10.35, 10.52 Oberlandesgericht Bremen ZU 20/02, [2006] 07 ECL [37] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.88 Düsseldorf 2001 RIW 63, [2001] ECLYB [1019]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.40 Düsseldorf 2001 RIW 380, [2002] ECLYB [1207]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.23 Düsseldorf 2005 3W 91/03, [2005] ECLYB [236] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.87 Frankfurt am Main 2000 Iprax 525, [2001] ECLYB [1055] . . . . . . . . . . . . . . . . . . . . 10.55 Frankfurt am Main 5UF 11/99, [2001] ECLYB [1563] . . . . . . . . . . . . . . . . . . 11.09, 11.13 Frankfurt 2002 Iprax 523, [2003] ECLYB [878] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.81 Karlsruhe 1999 RIW 538, [2000] ECLYB [494]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.87 Köln 2W 82/01, [2003] ECLYB [890]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.58 München 19 U 3717/04, [2006] 04 ECL [63] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.28 Saarbrucken 2001 Iprax 238, [2001] ECLYB [1036] . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.77 Verfassungsgerichtshof G 79/04 [2005] Ecolex 660, [2006] 01 ECL [48]. . . . . . . . . . . . . 2.27 Verwaltungsgerichtshof Mannheim 9 S 31/05 [2006] 03 ECL [56]. . . . . . . . . . . . . 7.13, 7.20

Greece Areois Pagos [2001] NV 49/230, [2002] ECLYB [1232] . . . . . . . . . . . . . . . . . . . . 11.29, 11.37 Mikropolis-Infomedica v Amstrad [2005] ILP 27 Areios Pagos . . . . . . . . . . . . . . . . . . . . . 9.87 Monomeles Protodikeio 8181/2002 [2002] 8 DEE 493, [2002] ECLYB [419]. . . . . . . . . 3.52 Polimeles Protodikeio Athens 8032/2001 [2003] ILP 29 . . . . . . . . . . . . . . . . . . . . . 5.07, 8.37

Ireland Maher v Ministry of Agriculture F&RD Case 340/2000 [2000] 2 CLMR 48 Supreme Ct . . 3.84

Italy Agea v Malzani [2002] Foro it No 5 I col 1335, [2002] ECLYB [386] Cassation . . . . . . . 3.83 Allianz Subalpina v Contino [2001] Foro it 12, I, col 3587 . . . . . . . . . . . . . . . . . . . . . . . . 10.32 PNP Italia v Agenzia del Terrirotira [2005] Foro It 9 I 2515, [2006] 01 ECL 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.24

Luxembourg Central Bank Of Iraq v OS [2000] Pas Lux 2, [2003] ECLYB [1920] CA . . . . . . . . 4.11, 11.02 V v R 784/00 [2003] ECLYB [876] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.85

The Netherlands Arrondismentsrechtbank Amsterdam Chamber 1B, November 25th 1975. . . . . . . . . . 10.23

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Bus Berzelius Umwelt Service v Chemconserve Reakt C99/245/HR [2004] ILP 9 Hoge Raad. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.45 Hof Arnheim [2001] NJ 622, [2002] ECLYB [409] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.45 Hof Gravenhage [2001] NJ 87, [2001] ECLYB [1056] . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.81 Hoge Raad [2001] NJ 375, [2001] ECLYB [1029]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.53 NAP v Christophery [1970] April 1 1970 CA of Amsterdam . . . . . . . . . . . . . . . . . . . . . . 10.28 Société Nouvelle des Papèteries de l’Aa v Machinefabriek (1992) Nederlandse Jurisprudenti 750 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.27 st

Spain B v XX [2002] J Aran 3107, [2002] ECLYB [1227] Tribunal Supremo . . . . . . . . . . . . . . . 3.14 Denney v Denney [1999] May 21 Tribunal Supremo . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.30 Gaspar Peral v Vinalmar [2000] RJ 766, [2000] ECLYB [493] Tribunal Supremo. . . . . . 9.82 Mustang Rent a Car v Holiday Autos [1999] RJ 8864, [2000] ECLYB [492] . . . . . . . . . . . 9.87 RP v Registrar of Torrevieja [2003] RJ 2199, [2004] ECLYB [1709] DGR . . . . . . . . 1.41, 2.33 Sparkasse Tulzer Land v XX [2000] RJ 4382, [2001] ECLYB [1038] . . . . . . . . . . . . . . . . . 9.80 Star Gemini Navigation Co v X [2001] J Aran 9419, [2002] ECLYB [401] Tribunal Supremo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.81 Transportes Font v XX [2000] RJ 8058, [2001] ECLYB [1067] . . . . . . . . . . . . . . . . . . . . . . 9.82 U v XX [2001] J Aran 3968, [2002] ECLYB [398] Tribunal Supremo. . . . . . . . . . . . . . . . 4.08 XX v XX [2002] J Aran 3286, [2003] ECLYB [261] Tribunal Supremo . . . . . . . . . . . . . 11.13 YV v YV [2002] J Aran 4875, [2003] ECLYB [1935] Tribunal Supremo . . . . . . . . . . . . 11.36 st

Sweden Swedish Law Society v H Ö 386-99 [2000] NJA 214, [2000] ECLYB [528] . . . . . . . . . . . . 7.20 Tob v Styrelsen Für Sveriges Advokatsaufund Ö 2906-01 [2002] NJA 130. . . . . . . . . . . . . 7.19

Switzerland [1996] BGE III 213, [1997] ECLYB [1995] Cour Civile . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02 Baciocchi v Banque Cantonale de Geneve [2000] II JCP 10248, [2000] ECLYB [1074] . . 4.53 M v Statthalteramt Des Bezirkes Zurich [1997] BGE IV 167, [1998] ECLYB [2345] Kassationshof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.51

United States of America Erie RR v Tompkins (1938) 304 US 64 Supreme Court . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07 Massie v Watts (1810) 10 US (6 Cranch) 148 Supreme Court. . . . . . . . . . . . . . . . . . . . . 11.44 Swift v Tyson (1842) 41 US 1 Supreme Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07

TA B LE O F LEG I SLATI O N — EUR O PEA N

Table of Legislation — European TA B LE O F LEG I SLATI O N — EUR O PEA N

Abolition of Restrictions on Freedom of Establishment, General Programme (1962) OJ (English Special Edition, Second Series) IX 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.65 Accession Act of Malta, Cyprus and 8 Eastern European States [2003] OJ L236 33 (‘Accession+10’) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.08, 2.24 §24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.82 §37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.29 §57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.67 Annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.82, 2.24, 2.25, 2.29, 2.31 Protocol 6 [2003] OJ L236 947 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.21 Protocol 10 [2003] OJ L236 955 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.32 Accession Act of Bulgaria and Romania [2005] OJ L157 11 . . . . . . . . . . . . . . 1.09, 2.26, 2.30 Protocol [2005] OJ L157 58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.75 Accession Partnership with Turkey Council Decision 2006/35/EC [2006] OJ L22 394 . 1.15 Association Agreement Croatia COM 2001 371 final [2005] OJ L26 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.12 FYR Macedonia [2004] OJ L84 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.12 Turkey [1973] OJ C113 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.15 Banking (Second) Directive 89/646/EEC [1989] OJ L386 1 . . . . . . . . . . . . . . . . . . . . . . . 9.28 Brussels Convention [1978] OJ L304 36 (original), [1998] OJ C27 1 (final version) . 4.06, 6.65, 10.01, 11.37 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.38, 11.16, 11.41 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.53 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.51, 10.01, 10.22, 10.44 §5[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.36 §5[6] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.36, 11.38 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.26 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.30, 10.31 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.31 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.31 §16[1]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14, 4.16, 4.20, 4.22, 4.27, 4.37, 4.41, 9.80 §16[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.35 §16[4] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.20, 11.40 §17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.35, 10.55, 11.47 §18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17, 4.18, 10.34, 10.55 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.58 §21–§22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.57

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Table of Legislation — European

§23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.19 §24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11 §§25–49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 §25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.77 §27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83, 9.86, 9.87 §28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83, 9.85 §29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.84 §31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 §32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 §33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83 §34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82, 9.83, 9.84, 9.86 §35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83 §38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82, 9.84 §39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83, 9.84 §42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.77 §43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.80 §45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83 §§46–48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 §53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.38 §54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06 §59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.85 Brussels I Proposal [1998] OJ C33 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 Brussels Protocol on the Interpretation of the Rome Convention by the ECJ [1998] OJ C27 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09 CAP see Single Farm Payment Capital Directive First Capital Directive 60/62/EEC [1960] OJ L43 921 . . . . . . . . . . . . . . . . . . . . . . . . . 1.27 Second Capital Directive 86/566/EEC [1986] OJ L332 22. . . . . . . . . . . . . . . . . . . . . . 1.27 Third Capital Directive /361/EEC [1988] OJ L178 5. . . . . . . . . . . . . . . . . 1.07, 1.28, 2.08 §1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.28, 1.35 §6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07, 1.28, 1.29, 2.08 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.28 Annex I (‘Capital Nomenclature’). . . . . . . . . . . . . . . . 1.28, 1.29, 1.35, 1.37, 1.44–1.53 Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07, 1.28, 2.08 Civil Jurisdiction Regulation (‘Regulation on Civil Jurisdiction’) (‘Brussels I’) (EC) 44/2001 [2001] OJ L12 1 . . . . . . . . . . . . . . . . . . . . 3.01, 4.04, 5.07, 9.62, 9.76, 10.01, 11.02 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06, 9.63, 10.38, 11.02, 11.37 §1[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02, 11.16, 11.41 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.53 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.51, 10.01, 10.11, 10.22 §5[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01 §5[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.44 §5[5] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.54


xlvii

§5[6]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.30, 10.31, 11.36, 11.38 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.26, 10.60 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.47 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.07 §16ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.07, 10.31, 11.47 §18ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.19, 11.47 §22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.44, 4.45, 6.14, 9.80, 10.11 §22[1]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.14, 4.20, 4.22, 4.27, 4.37, 4.41 §22[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.35 §22[4] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.39 §23ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.34, 10.35, 10.55, 11.47 §25ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17, 4.18, 10.58 §27ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.18, 9.85, 10.35, 10.57, 10.60 §31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11 §32ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76, 9.77 §33ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.79, 9.83, 9.84, 9.86 §34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.87, 4.14 §38ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82, 9.83, 9.84 §53ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 §57ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06, 9.78 §59ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.54, 11.36, 11.38 §66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06, 9.76 §67ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06, 4.08 §76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.04 Annexes as amended. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04, 9.78, 9.82, 9.83 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.04, 4.05, 4.06, 9.82, 9.84, 9.85 Explanatory Memorandum COM (1999) 348 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06, 4.44 Civil Jurisdiction Amendment Regulation (EC) 1496/2002 [2002] OJ L225 13 . . . . 4.04 Civil Jurisdiction Amendment Regulation (EC) 1937/2004 [2004] OJ L334 3 . . . . . 4.04 Commission Implementing Measures (Money Laundering), Directive 2006/70/EC [2005] OJ L309 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49, 7.55, 7.56 Common Organisation of Market Agricultural Markets Proposal COM (2006) 822 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82 Cotton etc Proposal COM (2003) 698 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.71 Fruit and Vegetable Proposal COM (2007) 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.82 Milk Proposal February 15 2007 IP/07/195. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.83 Comparative Advertising see Misleading and Comparative Advertising Consumer Credit (First) Directive 87/102/EC [1987] OJ L42 48 . . . . . . . . . . . . . . 5.02, 9.02 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.85, 9.03, 9.19, 9.20 §1a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.19, 9.20 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.10, 5.85, 8.32, 9.03, 9.14 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.03, 9.14 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.19 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.23 th

xlviii


§12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.41 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 9.03 Annexes I–III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.19 Consumer Credit (Second) Directive 90/88/EEC [1990] OJ L61 14 . . . . . . . 9.03, 9.19, 9.20 Consumer Credit (Third) Directive 98/7/EEC [1998] OJ L101 17 . . . . . . . . . . . . . . . . . . 9.19 Consumer Credit Proposal COM (2002) 443 (Original), COM (2005) 483 (Second Revised). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.04 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.04, 9.26 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.19, 9.26 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.25 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.23 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.23 §18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.19, 9.20 §19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.41 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.23, 9.41 Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.19 Consumer Sales and Associated Guarantees Directive 1999/44/EC [1999] OJ L171 12 5.05, 5.10 Contracts Negotiated Away from Business Premises see Doorstep Selling Directive Convention for the Protection of Human Rights and Fundamental Freedoms see European Convention of Human Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . 1.19, 3.01, 3.33 Convention on Laundering, Tracing, Seizure and Confiscation of Proceeds of Crime (Council of Europe, 1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 Convention on Protection of the EC’s Financial Interests [1995] OJ C316 49 . . . . . . . . 7.36 Council EEC Programme (Establishment) December 18 1961 [1962] JO 32 . . . . . . . . . 1.73 Council EU Decision 2004/368/EC (Enlargement Packages) [2004] OJ L130 1. . . . . . . . . . . . . . . . . . . . . . . 3.75 2004/926/EC (Schengen Acquis) [2004] OJ L395 70 . . . . . . . . . . . . . . . . . . . . . . . . . 1.91] 12582/04 (Free Movement EU-Switzerland) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.54, 2.56 2005/790/EC (EC-Denmark) [2005] OJ L299 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06 2006/35/EC (Turkish Accession) [2006] OJ L22 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.15 2006/79/EC (EU Accession to Hague Convention) [2006] OJ L297 1 . . . . . . . . . . . 11.03 2006/145/EC (Croatian Accession) [2006] OJ L55 30 . . . . . . . . . . . . . . . . . . . . . . . . . 1.12 COM (2007) 387 (New Lugano) July 6 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07 Council EU Conclusions Tampere SI (1999) 800 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.48 Council (Justice and Home Affairs) Conclusions JHA/15801/06 Brussels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.48 JHA/13758/01 Laeken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.48, 8.58, 11.05 Council (Justice and Home Affairs) Framework Decisions on Money Laundering 2000/642/JHA [2000] OJ L271 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34, 7.59 2001/500/JHA [2001] OJ L182 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.36, 7.40 2002/475/JHA [2002] OJ L164 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.38 2003/577/JHA [2003] OJ L196 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34, 7.44 2005/212/JHA [2005] OJ L68 49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.35, 7.40, 7.43 Council (Justice and Home Affairs) Joint Action th

th


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98/699/JHA [1998] OJ L333 1 (money laundering) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.36 98/733/JHA [1998] OJ L351 1 (organised crime) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.36 Credit Transfer Directive see Cross-border Credit Cross-border Credit Transfer Directive 97/5/EC [1997] OJ L43 25. . . . . . . . . . . . . 7.29, 7.30 Cross-border Payments in Euros Regulation (EC) 2560/2001 [2001] OJ L344 13 . . . . . 7.31 De Minimis Aid EC Regulation §§87–88 (EC) 1998/2006 [2006] OJ L379 5 . . . . . . . . . 3.56 Declaration on EC §73d (Residence-based Taxation) [1992] OJ C192 99. . . . . . . . . . . . 2.40 Declaration re Portugal (Insolvency Proceedings) [2000] OJ C183 1 . . . . . . . . . . . . . . . 9.71 Direct Support Schemes under the Common Agricultural Policy Regulation see Single Payment Direct Support Schemes Regulation (EC) 1259/1999 [1999] OJ L160 113 . . . . . . . . . . . 3.70 Directive see substantive topic Distance Marketing of Financial Services Directive 2002/65/EC [2002] OJ L271 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.02, 5.30, 8.32 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30, 5.47 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.30, 5.31, 5.64 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52, 5.65, 5.70, 5.75, 5.76 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52, 5.65 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.32, 5.70, 5.71, 5.74 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.34, 5.74, 5.75, 5.76, 5.81 §6[7] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38, 5.76, 5.81 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.74, 5.76 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.49 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.76 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 8.32 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.74 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.89 §17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.74 §18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30 Recitals [1ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 5.30, 5.89 Recitals [10ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30, 5.31, 5.32, 5.47 Recitals [20ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47, 5.64, 5.65, 5.74 Recitals [30ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04 Distance Selling Directive 97/7/EC [1997] OJ L144 19 . . . . . . . . . . . . . . . . . 5.02, 5.30, 6.12 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.31 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.31, 5.32 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30, 5.32, 5.33, 5.36, 5.37 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52, 5.64, 5.65, 5.70 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52, 5.64, 5.71, 6.36 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38, 5.68, 5.71, 5.72, 5.73, 5.81, 5.84 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.37, 5.73

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§8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.49 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 8.32 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.65 Annex I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.32 Annex II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30 Recitals [1ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 5.31, 5.32 Recitals [10ff] Recitals [20ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 5.47, 5.64, 5.65, 5.73 Doorstep Selling Directive, the Contracts Negotiated Away from Business Premises Directive 85/577/EEC [1985] OJ L372 31 . . . . . . . . . . . . . . . . . . . . . 5.02, 5.17, 5.77, 6.33 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.16, 5.17 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.17 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.19, 5.22, 5.24, 5.26, 5.27 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.77, 5.84 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.77, 5.78, 5.84 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.78 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.26, 5.29, 5.77 Draft see Substantive Topic E Conv HR see European Convention EC (Treaty Establishing the European Community) [2002] OJ C325 33 EC §2 ex §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63 EC §3 ex §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.29 EC §4 ex §3A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.26 EC §5 ex §3b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.30 EC §6 ex §3c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.49 EC §12 ex §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.74, 2.38 EC §14 ex §7a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.26, 1.63 EC §17 ex §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55 EC §29 ex §48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.79 EC §30 ex §36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.27, 3.28 EC §33 ex §39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.73 EC §39 ex §48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.02 EC §40 ex §49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.78 EC §42 ex §51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.80 EC §§43–48 ex §§52–58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.65, 1.68, 1.73, 2.05 EC §§45 ex 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.02, 7.09, 7.18 EC §49–§55 ex §§59–66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.66 EC §§55 ex 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.02, 7.09 EC §56 ex §73b . . . . . . . . . . . . . . . . . . . . . . . . . 1.25, 1.29, 1.31, 1.33, 1.34, 1.39, 2.33, 2.39 EC §§57–60 ex §§73C–73h. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25, 1.35, 2.38, 2.40, 2.44


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EC §§61–69 ex §§73i–73q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.33, 1.55 EC §61 ex §73i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 EC §62 ex §73j . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 EC §65 ex §73m. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.25, 4.01 EC §67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07 EC §81 ex §85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.24, 3.28, 3.51, 3.52, 3.53 EC §82 ex §86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.24, 3.28, 3.55 EC §§84–85 ex §§88–89. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.53 EC §86 ex §90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.20 EC §87 ex §92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.56 EC §88 ex §93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.56 EC §§174–176 ex §§130r–130t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.49 EC §282 ex §211 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.17 EC §295 ex §222 . . . . . . . . . . . . . . . . . . . . . . Preface 3.01, 3.18, 3.29, 6.16, 8.55, 8.62, 9.76 EC §308 ex §235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.30 EC Annex I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07, 3.69 EC Protocols Protocol 1 (Secondary Residences in Denmark) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.56 Protocol 2 (Secondary Residences in Åland Islands) . . . . . . . . . . . . . . . . . . . . . . . 2.56 Protocol 30 (Subsidiarity) [1992] OJ C342 105. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.31 E- see Electronic E-Commerce see Electronic Commerce E-Signatures see Electronic Signatures EEA see European Economic Area Electronic Commerce Directive (‘E-Commerce Directive’) 2000/31/EC [2000] OJ L178 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.56, 7.66, 8.01, 8.10 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.61, 7.66, 8.11 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.13, 5.56, 5.61, 5.62, 7.66, 8.21 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.61, 8.11, 8.20, 8.21 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.56, 5.61, 8.20, 8.21 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.56, 8.20, 8.21 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.62 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.62 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.66 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.13 §9[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.11, 8.12, 8.16, 8.20 §9[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.11, 8.12, 8.20 §9[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.11 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.22 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.23 §12–§15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.61 Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.61, 8.11, 8.21 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.56, 5.61, 8.11, 8.21, 8.22, 8.23 Electronic Signatures Directive 1999/93/EC [2000] OJ L13 19. . . . . . . . . . . . . . . . . . . . 8.01

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§1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.02, 8.09, 8.12, 8.17 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.06, 8.07, 8.13 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.01, 8.09, 8.17 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08 Annex I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08 Annex II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08 Annex III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.06 Annex IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.06 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.08, 8.09 Energy Performance of Buildings Directive 2002/91/EC [2002] OJ L1 65 . . . . . . . . . . . 3.50 Establishment Directive 67/43/EEC [1967] OJ (English Special Edition) 3. . . . . . . . . . 1.65] EU Charter of Fundamental Rights [2000] OJ C364 1 . . . . . . . . . . . . . . . . . . . . . . 3.01, 3.33 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.40 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.40 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.96 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.79 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.65 §17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.19, 1.65, 1.66, 2.46, 3.36 §§20–23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.41 §34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.80 §45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55 §47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.41, 4.03 §51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.34 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.33, 3.35 §53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.33 European Coal and Steel Community Treaty §83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 European Constitution (Draft) [2004] OJ C310 1 . . . . . . . . . . . . . . . . . 1.30, 3.18, 3.31, 3.33 European Convention of Human Rights (Rome, 1950, CETS 5) §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.41 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.86, 3.40, 4.03 §46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.19 Protocol 1 (Paris, 1952, CETS 9) §1 . . . . . . . . . . . . . . . . . 1.19, 1.56, 2.46, 3.35, 5.23, 8.28 European Economic Area (EEA) EEA Agreement [1992] OJ L12 13 . . . . . . . . . . . . . . . . . . . . . . . 3.18, 6.01, 6.63, 8.10, 9.03 Adjusting Protocol [1994] OJ L1 572 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06 Enlargement Agreement [2004] OJ L130 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06 §28ff, Annex V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55, 1.78, 1.79 §31ff, Annexes VIII–XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.65 §36ff, Annexes IX–XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.66 §40ff, Annex XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07 §43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07


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§53ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.51 §54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.55 §61ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.56 §72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.01, 6.01, 6.63 §73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.49 §126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.20 Annex XIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.01, 6.01, 6.63, 8.10 Annex XX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.49 EEA Council Decision 1/95 (Liechtenstein) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.07 84/2003 (Consumer Protection) [2003] OJ L257 41. . . . . . . . . . . . . . . . . . . . . . . . 9.14 European Enforcement Order for Uncontested Claims Regulation (EC) 805/2004 [2004] OJ L143 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.90 European Order for Payment Procedure Regulation (EC) 1896/2006, [2006] OJ L399 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.91 European Parliament Motion 2005/214 (INI) . . . . . . . . . . . . . . . . . . . . . 11.01, 11.02, 11.12, 11.17, 11.25, 11.33 Resolution [1997] OJ C115 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05 Resolution A2–157/89 [1989] OJ C158 400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.48 Resolution A3–0329/94 [1994] OJ C205 518 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.48 Resolution B5–0228–0229–0230 [2000] OJ C377 323 . . . . . . . . . . . . . . . . . . . . 8.48, 8.58 Resolution 96–TA (2006) 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.48 Resolution on Timeshares PS–TA (2002) 0368, (2000/2208 1Nl) . . . . . . . . . . . 6.06, 6.65 [1]–[10] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.19, 6.34, 6.35, 6.40, 6.50, 6.55 [11]–[20]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.19, 6.33, 6.40, 6.51, 6.54, 6.58, 6.61 [21]–[30] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.23, 6.30, 6.51, 6.57 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07, 6.57, 6.58, 6.60 Europol Convention [1995] OJ C316 95 and Protocols 1996 and 1997. . . . . . . . . . . . . . 7.34 Family Reunion Directive 2003/86/EC [2003] OJ L251 12. . . . . . . . . . . . . . . . . . . . 1.86, 1.94 Financial Action Task Force 40 Recommendations , 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34, 7.52 FATF 40 [1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36 FATP 40 [2a] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.45 FATF 40 [3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.40, 7.43 FATF 40 [4] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.61 FATF 40 [5] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51, 7.57 FATF 40 [10] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.57 FATF 40 [12] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49 FATF 40 [14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.63 FATF 40 [16] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49, 7.64 FATF 40 [18] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.56 FATF 40 [26ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59 FATF 40 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.47, 7.53 FATF 40 Terrorist Financing 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.38

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First see substantive topic First Capital Directive see Capital First Consumer Credit see Consumer Credit First General System see Recognition of Professional Qualifications First Money Laundering Directive see Money Laundering Directive Guidelines Application of EC §81[3] (Size of Market Share) [2004] OJ C101 8 . . . . . . . . . . . . . 3.51 Applicability of EC §81 (Horizontal Cooperation Agreements) [2001] OJ C3 2 . . . 8.52 Hague Conference on Private International Law . . . . . . . . . . 11.03 Hague Convention XI (Testamentary Form 1961) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.17 §1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.17, 11.18 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.17 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.18 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.17 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.17 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.18 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.17 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.18 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.18 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.18 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.17 Hague Convention XII (Legalisation, 1961) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06 Hague Convention XIV (Service Abroad, 1965). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.57 Hague Convention XXV (Matrimonial Property, 1978) . . . . . . . . . . . 11.03, 11.10, 11.16 §1[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.20 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.16 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03, 11.10, 11.16 §4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.10, 11.16 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.10 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03, 11.10, 11.16 §§7–8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.10, 11.16 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.16 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.10, 11.16 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.16 Hague Convention XXX (Trusts, 1985) §1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04, 11.48 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.12 §3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.53, 11.63 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.53 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.56 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.60 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.56


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§8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.56 §§9–10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.56 §11ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.57, 11.60 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.57 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.57 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.58, 11.60 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.57, 11.60 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.50 11.56 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.50, 11.56 §17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04, 11.36, 11.50, 11.56 §18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.36, 11.57 §19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.56 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.53, 11.63 §21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.57, 11.60 §22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04 §§23–24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04, 11.50 Hague Convention XXXII (Succession, 1989) §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.11 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.24 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.33 Implementation of Cross–Compliance etc Regulation (EC) 796/2004 [2004] OJ L141 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.70, 3.76, 3.80, 3.81 Indication of Prices of Products offered to Consumers Directive 98/6/EC [1998] OJ L80 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.10 Infrastructure for Spatial Information in the Community ‘INSPIRE’ Proposal 2004/175 (COD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.28 Injunctions Directive 98/27/EC [1998] OJ L166 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.89 Insolvency Proceedings Regulation (‘Insolvency Regulation’) (EC) 1346/2000 [2000] OJ L160 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.49, 9.57 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.62 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.50, 9.62, 9.70 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.50, 9.56, 9.57, 9.59, 9.71, 9.74 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.55, 9.67 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.51, 9.52, 9.53, 9.69 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.52 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.52, 9.69 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.55 §§9–12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.67 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.55 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.67 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.55 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.66, 9.71

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§17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.66, 9.71 §18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.69 §19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.68 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.69 §§21–22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.68 §§25–26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.66, 9.71 §27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.71 §28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.71 §29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.71 §30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.71 §32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.68, 9.69 §36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.74 §37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.74 §38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.62, 9.73 §39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.68 §40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.68 §41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.54, 9.68 §42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.68 §§43–44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.49, 9.56 Annexes A–C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.62 Recitals [1ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.56, 9.62, 9.64 Recitals [10ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.56, 9.57, 9.58, 9.62, 9.71, 9.73 Recitals [20ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.54, 9.65, 9.67, 9.69 Recitals [30ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.56, 9.62 Regulation (EC) 603/2005 [2005] OJ L100 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.62 Regulation (EC) 694/2006 [2006] OJ L121 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.62 Insurance Companies Directive 91/674/EEC [1991] OJ L374 7 . . . . . . . . . . . . . . . . . . . . 3.56 Land Purchase in Accession States Commission Proposal IP/01/645. . . . . . . . . . . . . . . . 2.28 Late Payments Directive 2000/35/EC [2000] OJ L200 35 . . . . . . . . . . . . . . . . . . . . . . . . . 3.58 Law Applicable to Contractual Obligations Proposal for a Regulation ‘Rome I Proposal’ COM (2005) 650 final . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02, 3.12, 3.16, 4.09, 4.27, 10.01 Law Applicable to Non-contractual Obligations (‘Rome II’) Proposed Regulation COM/2003/0427 final, COM (2006) 83 final . . . . . . . . . . . . . . . . . . . . . . 4.09, 4.52, 10.01 Lawyers’ Establishment Directive 98/5/EC [1998] OJ L77 36 . . . . . . . . . . . . . . . . 7.01, 7.10 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.02, 7.11, 7.12 §6ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10 Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11 Lawyers’ Services Directive 77/249/EEC [1977] OJ L78 17. . . . . . . . . . 7.01, 7.07, 7.09, 7.13


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§1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.02, 7.07, 7.08 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.07 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.07 §4–7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.07 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.07 Life Insurance Directive 90/619/EC [1990] OJ L330 50. . . . . . . . . . . . . . . . . . . . . . . . . . . 5.74 Lugano Convention on Civil Jurisdiction and Judgments (EEA/EFTA states) [1988] OJ L319 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.07, 6.65, 9.76, 11.37 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.38, 11.16 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.53 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.51, 10.01, 10.10, 10.22, 10.53 §5[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.44 §5[6] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.38 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.26 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.30, 10.31 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.31 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.31 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.14, 4.20, 4.40, 10.23 §16[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.22, 4.27, 4.37, 4.41, 4.44 §16[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.18 §16[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.35 §16[5] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.89 §17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.34, 10.35, 11.47 §18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.55 §19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.55 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.58 §§21–22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.57 §23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17 §24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11 §25–§49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 §53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.38 §54B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.07, 9.85 Protocol 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.07 Lugano Convention Revision (‘New Lugano’) COM (2007) 387 Annex . . . . 4.07, 4.41, 4.44 Matrimonial Jurisdiction Regulation (EC) 2201/2003 [2003] OJ L338 1 11.02, 11.09, 11.13 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02, 11.09, 11.13, 11.14 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.09, 11.13 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02, 11.14 §§17–22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.13, 11.14 §§24–27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.14 §37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.14 §39, Annex 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.14

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§41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.13 Milk Levy Regulation (EC) 1788/2003 [2004] OJ L375 1 . . . . . . . . . . . . . . . . . . . . . . . . . 3.83 Milk Levy Regulation (EC) 1406/2006 [2006] OJ L265 8 . . . . . . . . . . . . . . . . . . . . . . . . . 3.83 Misleading Advertising Directive 84/450/EEC [1984] OJ L25017 (see also Misleading and Comparative Advertising Directive). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02, 5.51, 5.55 Misleading and Comparative Advertising Directive 84/450/EEC [1984] OJ L25017, as amended by 97/55/EC, [1997] OJ L290 18 . . . . . . . . . . . . . . . . . . . . . . . . . 5.02, 5.51, 5.55 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.51, 5.52, 5.55 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.51, 5.55, 5.59 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.51 §3a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.54, 5.55 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52, 5.89 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.89 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.51, 5.55 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.51, 5.55 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.51, 5.55 Misleading and Comparative Advertising Proposal COM (2006) 222 final . 5.02, 5.04, 5.09, 5.51 Money Laundering Directive (‘First Money Laundering Directive’) 91/308/EEC [1991] OJ L166 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.33 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.36, 7.45 §1[A]–[E]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.36, 7.37, 7.49 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36 §2a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47, 7.49 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.50, 7.51, 7.52, 7.54, 7.56 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.57 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.56 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.58, 7.59, 7.64 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.58, 7.62 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.63 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.61 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.60 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34, 7.47, 7.51 Money Laundering Directive (‘Second Money Laundering Directive’) 2001/97/EC [2001] OJ L344 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.33 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.36, 7.37, 7.45, 7.49 §1[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35 §1[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47, 7.49 §1[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.50, 7.51, 7.52, 7.54, 7.56 §1[4]–[8] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.57, 7.59, 7.61, 7.62, 7.63, 7.64 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.33 §5–6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.58 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.47


lix

Money Laundering Directive (‘Third Money Laundering Directive’) 2005/06/EEC, [2005] OJ L309 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34, 7.36 §1[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.38 §1[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.36, 7.37, 7.39, 7.45 §1[3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36 §1[4] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.38 §1[5] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.45 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47, 7.48, 7.49, 7.55 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.38, 7.49, 7.51, 7.53, 7.56 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.51 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47, 7.51 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.50, 7.51, 7.52, 7.53 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51, 7.52 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49, 7.55 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.54, 7.55 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.54, 7.55 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.56 §§14–19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.54 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.60, 7.64 §22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59 §23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.58, 7.64 §24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.62 §26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59, 7.61 §27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.61 §28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.63, 7.64 §§30–32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.57 §33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34, 7.57 §34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.38, 7.59 §35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59 §37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.37, 7.53 §39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34, 7.36 §41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 §44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34, 7.36, 7.38, 7.47, 7.49, 7.54, 7.60, 7.64 Third Money Laundering Directive Proposal 2004/0137 (COD), Explanatory Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47, 7.51, 7.60, 7.61 Mountain and Hill Farming Directive 75/268/EEC [1975] OJ L128 1 . . . . . . . . . . . . . . . 3.74 Movement and Residence Directive see Residence Directive Organic Food Regulation (EC) 1804/1999 [1999] OJ L222 1 . . . . . . . . . . . . . . . . . . . . . . 3.79 Organic Production Regulation (EEC) 2092/91/EEC [1991] OJ L198 1 . . . . . . . . . . . . . 3.79 Package Travel Directive 90/314/EEC [1990] OJ L158 59 . . . . . . . . . . . . . . . . 5.52, 6.18, 6.55

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Payments in Euros Regulation see Cross-border Payments Pre-Contractual Information About Home Loans, Commission Recommendation 2001/193/EC [2001] OJ L 69 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.14 Processing of Personal Data Directive 2002/58/EC [2002] OJ L201 37 . . . . . . . . . . . . . . 5.62 Product Liability Directive 85/374/EEC [1985] OJ L210 29 . . . . . . . . . . . . . . . . . . . . . . . 5.10 Protection of the Community’s Financial Interests Proposal COM/2001/0272 [2001] OJ 240E 125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 Protocol on Privileges and Immunities of the ECs [1967] OJ 152 13. . . . . . . . . . . . . . . . 3.59 Public Procurement Directive 2004/18/EC [2004] OJ L134 114. . . . . . . . . . . . . . . . . . . . 3.57 Recognition of Professional Qualifications First General System Directive 89/48/EEC [1989] OJ L19 16. . . . . . 7.18, 7.19, 7.20, 7.66 Second General System Directive 92/51/EC [1992] OJ L209 25. . . . . . . . . . . . . 7.18, 7.66 Recognition of Professional Qualifications Directive 2005/36/EC [2005] OJ L255 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10, 7.18, 7.20 Regulation see substantive topic Regulation on Civil Jurisdiction see Civil Jurisdiction Regulation Residence Directive (Movement and Residence by EU Citizens and their Family Members) 2004/38/EC [2004] OJ L229 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17, 1.54 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55, 1.64, 1.79 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.54, 1.55, 1.83 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.83 §§4–5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.84, 1.91, 1.92 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55, 1.84, 1.91 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55, 1.84, 1.92, 1.93, 1.96 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.80, 1.84, 1.92, 1.96 §§12–15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.79, 1.84, 1.91, 1.92 §§16–21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.55, 1.81, 1.92, 1.93 §23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.93 §26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.92 §27ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.56, 1.92 §35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.83 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.56, 1.83, 1.91, 1.92 Right of Residence for Nationals Proposal COM (79) 215 final . . . . . . . . . . . . . . . . . . . . 1.92 Rome Convention on the Law Applicable to Contractual Obligations (‘Rome I’) [1980] OJ L266 1 (original), [2005] OJ C334 1 (consolidated) . . 3.02, 3.12, 4.09, 8.53, 10.01, 11.15 §1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12, 10.02, 10.08, 10.38, 10.42, 11.15, 11.48 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09, 4.27 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.06, 10.40 §4[1]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.11, 10.09, 10.13, 10.18 §4[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.27 §4[3]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.16, 4.45, 10.13, 10.18, 10.26, 10.27 §4[5] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.18, 10.26, 10.27 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.54 §5[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.33


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§5[2] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.64 §5[4]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.16, 4.45, 10.15, 10.33 §5[5] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.16, 10.15, 10.33 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09, 8.54, 10.07, 10.21, 10.41 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.19, 10.40 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.06, 10.40 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09, 10.19 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.19, 10.40 §12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.19 §13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.20 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.19 §16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.21 §19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09 §20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.53, 10.07, 10.21 §21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.07, 10.21 §22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.21 §30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.10 §32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.53 Rome I Proposal see Law Applicable to Contractual Obligations Rome II Proposal see Law Applicable to Non-Contractual Obligations Sales Promotions Proposed Regulation COM (2002) 585 final . . . . . . . . . . . . . . . . . . . . 5.46 San Sebastian Convention (Accession of Spain and Portugal to the Brussels Convention on Civil Jurisdiction and Judgments) [1989] OJ L285 1 . . . . . . . . . . . . . . 4.06, 4.26, 4.41 Schengen Acquis [2000] OJ L239 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.91 Schengen Borders Proposal 2004/127 (COD) Second see substantive topic Second Banking see Banking Directive Second Capital see Capital Directive Second Consumer Credit see Consumer Credit Second Money Laundering Directive see Money Service Regulation (EC) 1348/2000 [2000] OJ L160 37. . . . . . . . . . . . . . . . 4.02, 10.57, 10.58 Services Directive 2006/123/EC [2006] OJ L376 36 . . 1.66, 1.70, 1.71, 1.72, 7.01, 7.07, 7.09 Single Area Payment Scheme Envelopes Regulation (EC) 864/2004 [2004] OJ L161 48 3.75 Single Area Payment Scheme Envelopes Regulation (EC) 118/2005 [2005] OJ L24 15 . 3.75 Single Europe Act 1986 [1987] OJ L169 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.63 Single Payment Regulation (Direct Support Schemes under the Common Agricultural Policy Regulation) (EC) 1782/2003 [2003] OJ L270 1 . . . . . . . . . . . . . . . . . . . . 3.67, 3.70 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.68, 3.69 §3ff, Annex III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.80 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.69, 3.78 §§10–12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.73, 3.81 §§17–27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.69, 3.70 §33ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.70, 3.71, 3.76, 3.77

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§37ff, Annex VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.77 §41, Annex VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.77 §§43–46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.77, 3.78 §47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 §53ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.78 §58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.74 §63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.74 §64ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 §66, Annex IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.78 §70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.74 §71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.71, 3.82 §71a ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.75, 3.78, 3.83 §88ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.78 §§72–94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 §§95–97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.83 §98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.74 §§107–108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.76, 3.78 §111ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 §121ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 §§127–128. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 §§133–136. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.82 Annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.81, 3.82 Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.71 Single Payment Implementation Regulation (EC) 795/2004 [2004] OJ L141 1 . . 3.70, 3.74, 3.77, 3.78, 3.83 Single Payment Scheme Amendment Regulation (EC) 319/2006 [2006] OJ L158 32 . . 3.67, 3.82 Single Payment Scheme Amendment (Date) Regulation (EC) 1540/2004 [2004] OJ L79 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.83 Single Payment Scheme Eastwards Accession Regulation (EC) 583/2004 [2004] OJ L91 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.75, 3.76, 3.78, 3.82, 3.83 Single Payment Scheme (Financial Envelopes) Regulation (EC) 118/2005 [2005] OJ L24 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.75, 3.82 Support Schemes Implementation Regulation (EC) 1973/2004 [2004] OJ L345 1. . . . . 3.78 Sixth VAT Directive see Value Added Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.60–3.64 Small Claims Procedure Proposal COM (2005) 87 final Statement by the Council and the Parliament re §6[1] (Distance Selling) [1997] OJ L144 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.72 TCN see Third Country National Technical Standards Information Directive 98/34/EC [1998] OJ L204 37. . . . . . . . . . . . 5.61 Technical Standards Information Amendment Directive 98/48/EC [1998] OJ L217 18 5.61 Third see substantive topic Third Capital see Capital Third Consumer Credit see Consumer Credit


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Third Money Laundering see Money Laundering Third Country National Long-term Residence Directive 2003/109/EC [2004] OJ L16 44 (TCN). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.85, 1.94 Timeshare Directive 94/47/EC [1994] OJ L280 83. . . . . . . . 5.02, 5.10, 6.01, 6.05, 6.07, 6.51 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.11, 6.12, 6.40 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05, 6.11, 6.12, 6.13, 6.16, 6.17, 6.18, 6.20, 6.48 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52, 6.25, 6.28 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.24, 6.26, 6.28 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.31, 6.35, 6.36 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.34 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38, 6.38, 6.55 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07, 6.65 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.47, 6.63, 6.65 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 6.07 Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.26, 6.27, 6.28, 6.35, 6.55 Recitals [1ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.24, 4.47, 6.07, 6.16, 6.25, 6.40, 6.60 Recitals [10ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.24, 6.31, 6.34, 6.38, 6.40, 6.65 Timeshare Proposal [1992] OJ C222 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.31 Timeshare and Long-term Holiday Products Proposal COM (2007) 303 final . . . 6.01, 6.66 Trade in Agricultural Products Regulation (EC) 1184/2006 [2006] OJ L214 7. . . . . . . . 3.51 Trade in Agricultural Products Regulation (EC) 1683/2006 [2006] OJ L314 18. . . . . . . 3.75 Treaty of Rome (Rome 1957) §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63 §§52–58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63 §§59–66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.63 §§67–73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.22, 1.25, 1.29, 1.35, 1.39 Treaty on European Union (Maastricht, 1992) [1992] OJ C191 1 §1 ex §A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.31 §2 ex §B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.26, 1.33, 3.30, 7.29 §6 ex §F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.14, 3.33 §8 ex §G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.29, 1.35, 1.55 §49 ex §O . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.14 Protocol 1 (Acquisition of Property in Denmark) [1992] OJ C191 68 . . . . . . . 1.05, 2.19 Protocol (Enlargement of the EU) [2001] OJ C80 51 §4 . . . . . . . . . . . . . . . . . . . . . . . 1.12 Treaty to Settle Questions Relating to the Saar (Franco-German) (Luxembourg, October 27 1956, UNTS 1053 3) Annex 12 §49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14 TV Without Frontiers Directive 89/552/EEC [1989] OJ L298 23 . . . . . . . . . . . . . . . . . . . 5.56 th

UN Conventions Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna, 1988) . 7.34, 7.36 Suppression of Financing of Terrorism (New York, 1999). . . . . . . . . . . . . . . . . . . . . . 7.38 Transnational Organised Crime (Palermo, 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34 Unfair Commercial Practices Directive (‘Unfair Practices Directive’) 2005/29/EC [2005] OJ L149 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02, 5.04, 5.09, 5.14, 6.11, 6.12, 6.52, 6.54 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05, 5.11, 5.40, 5.42, 5.43, 5.48, 5.63, 5.89

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§3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.11, 5.14, 5.15, 5.40 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.40, 5.43, 5.46, 5.47, 5.48, 5.53, 5.58, 5.59 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.44, 5.51, 5.52, 5.54, 5.59 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.52, 5.63 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.47, 5.48 §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.43, 5.48, 5.51, 5.52, 5.59 §10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.59, 5.89 §11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.59, 5.89 §14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.54, 5.55, 5.89 §15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47 §17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.59 §19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.14 Annex 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.46, 5.47, 5.50, 5.53, 5.58, 6.06 Annex II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.52 R[6ff]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.09, 5.11, 5.15, 5.40, 5.43 R[10ff]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14, 5.40, 5.41, 5.43, 5.47, 5.52, 5.63 R[15ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.46, 5.47, 5.48, 5.53, 5.58 R[20ff] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.59, 5.89 Unfair Practices Common Position 2003/0134 (COD) . . . . . . . . . . . . . . . . . . . . . . . . 5.14 Unfair Practices Explanatory Memorandum (‘EM’) COM (2003) 356 final . . . . . 5.02ff Unfair Practices Proposal 2003/0134 (COD), EM COM (2003) 356 final . . . . . . . . . 5.14 Unfair Practices Parliamentary Amendments TA–PROV (2005) 0048 . . . . . . . . . . . 5.14 Unfair Terms in Consumer Contracts Directive 93/13/EEC [1993] OJ L95 29 . . . 5.02, 8.24 §1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.09, 8.44 §2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.06, 8.35 §3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.39, 8.41, 8.45 §4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.44, 8.45 §5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.43 §6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.37, 8.46 §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.46 §8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04, 8.47 Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.41, 8.45 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.25, 8.37, 8.41, 8.44, 8.45 Utilities Procurement Directive 2004/17/EC [2004] OJ L134 1 . . . . . . . . . . . . . . . . . . . . 3.57 Value Added Tax (Sixth) Directive 77/388/EC [1977] OJ L145 1 . . . . . . . . . . . . . . 3.60–3.64 Vines Regulation (EEC) 1162/76 [1976] OJ L135 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.37 Wire Transfers Regulation (EC) 1781/2006 [2006] OJ L345 1 . . . . . . . . . . . . . . . . . . . . . 7.31

TA B LE O F LEG I SLATI O N — UN I TED KI N G DO M

Table of Legislation — United Kingdom TA B LE O F LEG I SLATI O N — UN I TED KI N G DO M

Accession (Immigration and Worker Registration) Regs 2004, SI 2004/1219 . . . . . . . . . 1.82 Accession (Immigration and Worker Registration) (Amendment) Regs 2004, SI 2005/2400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.82 Accession (Immigration and Worker Authorisations) Regs 2006, SI 2006/3317. . . . . . . 1.82 Accession (Immigration and Worker Registration) (Amendment) Regs 2007, SI 2007/475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.82 Accommodation Agencies Act 1953, c 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11 Act to Empower His Majesty to Regulate Trade and Commerce To and From the Isle of Malta 1801, 41 Geo III (1801) ch 103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08 Administration of Estates Act 1925, c 23, ss 1–3 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.25, 11.27 Administration of Justice Act 1970, c 31, s 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.37 Administration of Justice Act 1973, c 15, s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.37 British Nationality and Status of Aliens Act 1914, c 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05 Building (Amendment) Regs 2001, SI 2001/3335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.17 Business Advertisements (Disclosure) Order 1977, SI 1977/1918 . . . . . . . . . . . . . . . . . . 5.58 Business in the Regulated Sector Order see Proceeds of Crime Act (Business etc) Business Protection from Misleading Marketing Regs 2007 (Draft) in Consultation on Draft Consumer Protection from Unfair Trading Regulations 2007 (London, DTI, 2007, URN 07/1047) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.02, 5.09, 5.52 Cancellation Information Order 2003 see Timeshare (Cancellation Information) Order 2003 CAP see Common Agricultural Policy Caravan Sites and Control of Development Act 1960, c 62 . . . . . . . . . . . . . . . . . . . . . . . . 6.12 Charging Orders Act 1979, c 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.89 Civil Jurisdiction and Judgments Act 1982 (‘CJJA’), c 27 . . . . . . . . 9.76, 10.01, 10.50, 11.38 s 2–3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.05 s 3B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.07 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.83 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.80 s 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.31, 11.38, 11.39 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 s 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.82 s 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.05 ss 18–19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 s 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.08 s 22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.59

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ss 24–25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11, 9.81 ss 27–28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11 s 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.30 s 32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.35 s 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.85 s 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 ss 41–44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.54 s 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.38 s 49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.59 s 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.08 sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.04, 4.06 sch 3C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.07 sch 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.08, 4.11, 4.15, 4.17, 4.26, 4.51, 9.76, 10.01 sch 4 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.53, 11.39 sch 4 para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.05, 10.01, 10.44 sch 4 paras 7–9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.30, 10.31 sch 4 para 11. . . . . . . . . . . . . . . . . . . . . . . 4.08, 4.14, 4.15, 4.18, 4.20, 4.22, 4.35, 4.37, 4.41 sch 4 para 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.34, 10.35, 11.38, 11.47 sch 4 para 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.55 sch 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.08, 11.39 Civil Jurisdiction and Judgments Act 1991, c 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07 Civil Jurisdiction and Judgments SIs Civil Jurisdiction and Judgments (Authentic Instruments and Court Settlements) O 2001, SI 2001/3928 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.90 Civil Jurisdiction and Judgments O 2001, SI 2001/3929 . . . . . . . . . . . . . . . . . . . . . . . 4.04 Civil Jurisdiction and Judgments Act 1982 (Amendment) O 1990, SI 1990/2591 . . 4.06 Civil Jurisdiction and Judgments Act 1982 (Amendment) O 2000, SI 2000/1824 . . 4.08 Civil Partnership (Jurisdiction and Recognition of Judgments) Regs 2005, SI 2005/3334 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.01 Civil Procedure Rules, SI 1998/3132 as amended 6.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.04, 4.28, 10.49, 10.57, 11.38 6.20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04, 4.11, 4.51, 10.24, 10.45, 10.49, 10.57, 11.38 6.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.57 6.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.57 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.15, 10.35 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76, 9.78, 9.80, 9.82, 9.90 Practice Direction 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.04, 4.28, 10.57 Practice Direction 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.76 Practice Direction 74B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.90 CJJA see Civil Jurisdiction and Judgments Common Agricultural Policy (‘CAP’) CAP Single Payment and Support Schemes (Integrated Administration and Control System) Regs 2005, SI 2005/218 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.70 CAP Single Payment and Support Schemes Regs 2005 SI 2005/219 3.74, 3.76, 3.77, 3.83


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CAP Single Payment and Support Schemes (Amendment) Regs 2006, SI 2006/239 3.74, 3.76, 3.77, 3.78, 3.83 CAP Single Payment Scheme (Set-aside)(England) Regs 2004, SI 2004/3385 . . . . . . 3.78 CAP Single Payment Scheme (Set-aside)(England) (Amendment) Regs 2007, SI 2007/633 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.78 CAP Single Payment Scheme etc (Cross Compliance)(England) Regs 2004, SI 2004/3196 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.80 CAP Single Payment Scheme etc (Cross Compliance)(England) (Amendment) Regs 2005, SI 2005/918 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.80 Commonhold and Leasehold Reform Act 2002, c 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.41 Consumer Credit Act 1974, c 39 s 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.38 s 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.85 s 126. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.03 s 137–s 140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.24, 9.48 ss 140A–140B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.24, 9.48 Consumer Credit Act 2006, c 14, ss 19–22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.24, 9.48 Consumer Credit SIs Consumer Credit (Agreements) (Amendment) Regs 2004, SI 2004/1482 . . . . . . . . . 9.14 Consumer Credit (Early Settlement) Regs 2004, SI 2004/1483 . . . . . . . . . . . . . . . . . . 9.23 Consumer Credit (Advertisements) Regulations 2004, SI 20004/1484. . . . . . . . . . . . 9.21 Consumer Credit (Advertisements) (Amendment) Regulations 2007, SI 2007/827. 9.21 Consumer Protection Act 1987, c 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.58 Consumer Protection (Cancellation of Contracts Concluded Away from Business Premises) Regs 1987 (Doorstep Selling) (‘Contracts away from Business Premises Regs’), SI 1987/2117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.02, 6.33 reg 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.23, 5.79 reg 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05, 5.16, 5.17, 5.22, 5.23, 5.24, 5.29 reg 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.79, 5.85 regs 4A–4H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.17, 5.79 reg 5ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.77, 5.78, 5.79 reg 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.85 reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04 reg 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.79 sch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.79 Consumer Protection (Cancellation of Contracts Away from Business Premises)(Amendment) Regs 1998, SI 1998/3050. . . . . . . . . . . . . . . . . . . . . . . . 5.17, 5.79 Consumer Protection (Code of Practice for Traders on Price Indications) Approval Order 2005, SI 2005/2705 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.58 Consumer Protection (Distance Selling) Regs 2000 (‘Distance Selling Regs’), SI 2000/2334 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.02, 5.30 reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05, 5.31, 5.32, 5.81, 5.89 reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30, 5.32, 5.33, 5.36 reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38 reg 7–20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38

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reg 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.65, 5.70 reg 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.64, 5.71 reg 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.71 reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.71, 5.73 reg 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 reg 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 reg 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73, 5.81 reg 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.81 reg 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 reg 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38, 5.73 reg 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 reg 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47 reg 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04 Consumer Protection (Distance Selling) (Amendment) Regs 2005, SI 2005/689 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.71, 5.74, 5.81 Consumer Protection from Unfair Trading Regulations 2007 see Unfair Trading Regs (Draft) Consumer Transactions (Restrictions on Statements) O 1978, SI 1978/127 . . . . . . . . . . 5.58 Consumers, Estates Agents and Redress Act 2007, c 17`, s 59 . . . . . . . . . . . . . . . . . . . . . . 5.25 Contracts (Applicable Law) Act 1990, c 36 . . . . . . . . . . . . . . . . . . . . . . 3.02, 3.12, 4.09, 10.01 s 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.07, 10.19, 10.21 Contracts (Applicable Law) Act 1990 (Amendment) O 1994, SI 1994/1900 . . . . . . . 4.09 Contracts (Applicable Law) Act 1990 (Commencement) O 1991, SI 1991/707 . . . . 4.09 Contracts (Applicable Law) Act 1990 (Amendment) O 2000, 2000/1825 . . . . . . . . . 4.09 Contracts (Applicable Law) Act 1990 (Commencement No 2) O 2004, SI 2004/3448 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09 Contracts Away from Business Premises (Doorstop Selling) see Consumer Protection Control of Misleading Advertisements Regs 1988, SI 1988/915. . . . . . . . . . . . . . . . 5.02, 6.07 Control of Misleading Advertisements (Amendment) Regs 2000, SI 2000/914 . . . . . . . 5.02 Criminal Justice Act 1988, c 33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.33, 7.39, 7.59 Criminal Justice Act 1993, c 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.33 Criminal Justice (International Co-operation) Act 1990, c 5, s 9 . . . . . . . . . . . . . . . . . . . 7.44 Cross-border Credit Transfer Regs 1999, SI 1999/1876 . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.29 Cross-border Payments in Euros Regs 2003, SI 2003/488 . . . . . . . . . . . . . . . . . . . . . . . . . 7.31 Dairy Produce Quotas SIs Dairy Produce Quotas Regs 2005, SI 2005/465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.83, 3.85 Dairy Produce Quotas (Amendment) Regs 2006, SI 2006/120 . . . . . . . . . . . . . . . . . . . . . 3.83 Dairy Produce Quotas (Amendment) Regs 2007, SI 2007/106 . . . . . . . . . . . . . . . . . . . . . 3.83 Dairy Produce Quotas (General Provisions) Regs 2002, SI 2002/458 . . . . . . . . . . . . . . . 3.83 Dairy Produce Quotas (General Provisions) (Amendment) Regs 2005, SI 2005/466. . . 3.83 Distance Selling see Consumer Protection (Distance Selling) Doorstep Selling (Property Repairs) Bill 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.25 Doorstep Selling Regs see Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regs


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Draft see substantive topic Draft Bill see Unfair Contract Terms Draft ML Regs see Money Laundering Drug Trafficking Act 1986, c 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.33, 7.59 Drug Trafficking Act 1994, c 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.33 EC (Jurisdiction and Judgment in Matrimonial and Parental Responsibility Matters) Regs 2005, SI 2005/265 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02 EC (Lawyers’ Practice) Regs 2000, SI 2000/1119. . . . . . . . . . . . . . . . . . . . . . . . 7.07, 7.13, 7.14 EC (Lawyers’ Practice) (Amendment) Regs 2004, SI 2004/1628 . . . . . . . . . . . . . . 7.07, 7.17] EC (Recognition of Professional Qualifications) Regs 1991, SI 1991/824 . . . . . . . . . . . . 7.18 E- see Electronic E-Commerce see Electronic Commerce E-Communciations see electronic Communications E-Signature see Electronic Signature Electronic Commerce SIs E-Commerce (EC Directives) Regs 2002, SI 2002/2013 . . . . . . . . . . . . . . . . . . . 8.10, 8.22 E-Commerce Directive (Financial Services and Markets) Regs 2002, SI 2002/1775 . 5.61 E-Commerce Directive (Financial Services and Markets) (Amendment) 2002, SI 2002/2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.10 E-Commerce Directive (Financial Services and Markets) (Amendment No 2) Regs 2002, SI 2002/2157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.10 E-Commerce Directive (Financial Services and Markets) (Amendment) Regs 2004, SI 2004/3378 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.61 Electronic Communications Act 2000, c 7, ss 7–10 . . . . . . . . . . . . . . . . 8.03, 8.05, 8.18, 8.19 Electronic Signatures Regs 2002, SI 2002/318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08 Enterprise Act 2002, c 40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.15, 5.89, 9.62 Enterprise Act 2002 (Part 8 Community Infringements of Specified UK Laws)Order 2003, SI 2003/1374 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.15 Estate Agents Act 1979, c 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.11, 7.48 European Union (Accessions) Act 2006 c 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.09, 1.82 Exchange Control Act 1947, c 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.34 Fair Trading Act 1973, c 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.58 Finance Act 2003, c 14, s 71–72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.13 Finance Act 2005, c 7, s 94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.13 Finance Act 2006, c 25, ss 156–157. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.35 Financial Services (Land Transactions) Act 2005, c 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35 Financial Services and Markets Act 2000, c 8. . . . . . . . . . . . . . . . . . . . . . 5.35, 5.61, 9.13, 9.18 Financial Services (Distance Marketing) Regs 2004 (‘FS Distance Marketing Regs 2004’), SI 2004/2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.02, 5.30, 8.45 reg 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.05 reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.31, 5.64, 5.89 reg 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.89 reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47

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reg 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.65, 5.70 reg 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.32, 5.71 reg 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.75, 5.76 reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.74, 5.75 reg 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.74, 5.81 reg 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.81 reg 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.74, 5.76 reg 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.73 reg 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.47 reg 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.04 reg 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30 sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.65 sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.70 Financial Services (EEA State) Regs 2007, SI 2007/108 . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.18 Foreign Judgments (Reciprocal Enforcement) Act 1933, c 13 . . . . . . . . . . . . . . . . . 4.33, 9.76 Forfeiture Act 1870, 33 & 34 Vict c 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.04 FS Distance Marketing see Financial Services (Distance Marketing) Hill Farm Allowance Regulations 2005, SI 2005/154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.74 Home Information Pack (No 2) Regs 2007, SI 2007/1667. . . . . . . . . . . . . . . . . . . . . . . . . 3.50 Housing Act 1961, c 65, ss 32–33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.46 Human Rights Act 1988, c 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.19 Immigration (EEA) Regs 2006, SI 2006/1003 . . . . . . . . 1.55, 1.78, 1.83, 1.84, 1.92, 1.96, 2.54 Inheritance (Provision for Family and Dependants) Act 1975, c 63 . . . . . . . . . . 11.22, 11.23 Insolvency Act 1986, c 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.49, 9.57, 9.62, 9.71 Insolvency Act 1986 (Amendment) Regs 2002, SI 2002/1037 . . . . . . . . . . . . . 9.49, 9.57, 9.71 Insolvency Act 2000, c 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.49 Insurance Companies Act 1982, c 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.22 Land Registration Act 1925, c 21 s 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.23 s 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.05 Land Registration Act 2002, c 9 s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.41 s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.46 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.46 ss 91–95, sch 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.36, 8.05, 9.35 ss 96–98, sch 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.23 Landlord and Tenant Act 1985, c 70, ss 11–17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.46 Law of Property Act 1925, c 20 s 1–s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.63 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.64 s 34–s 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.41


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s 52–s 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.33, 5.36, 8.04 s 85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.29 s 101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.37 s 205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.33, 5.36 Law of Property (Miscellaneous Provisions) Act 1989, c 34 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.04 s 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.36, 8.04, 10.06 S 2A (Draft). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.05 Law Society Practice Rule 10.01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.14 Lawyers’ Practice Regs see EC (Lawyers’ Practice) Local Government Act 2003, c 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.08 Local Government Finance Act 1992, c 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.08 Misrepresentation Act 1967, c 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.40 ML Regs see Money Laundering Mock Auctions Act 1961, c 47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.11 Money Laundering Regulations Money Laundering Regs 1993, SI 1993/1933. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.59 Money Laundering Regs 2003, SI 2003/3075. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.33 reg 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.48, 7.49, 7.51 reg 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.50, 7.51 reg 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.64 Money Laundering Regs 2007, SI 2007/2157 . . . . . . . . . . . . . . . . . . 7.34, 7.49, 7.51, 7.54 reg 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36, 7.51 reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.47, 7.49, 7.63 reg 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49, 7.55 reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51 reg 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51, 7.53 reg 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51, 7.52 reg 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.51 reg 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49 reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49 reg 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.52, 7.56 reg 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.53, 7.54 reg 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.54, 7,557 reg 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.56 reg 19–21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.56, 7.5849 reg 22ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49 reg 45ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.38 sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.49 sch 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.58 Notary (Qualification) Rules 1998 7.02

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Package Holiday Regs 1992, SI 1992/3288 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18, 6.63 PIL (Miscellaneous Provisions) Act 1995 see Private International Law PoCA see Proceeds of Crime Act Practice Direction on Enforcement 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.89 Practice Direction see Civil Procedure Rules Price Indications (Method of Payment) Regs 1991, SI 1991/199 . . . . . . . . . . . . . . . . . . . 5.58 Private International Law (Miscellaneous Provisions) Act 1995, c 42 ss 1–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.80 ss 9–15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.30, 4.52, 10.01, 10.44, 10.46 Proceeds of Crime Act 2002 (‘PoCA 2002’), c 29. . . . . . . . . . . . . . . . . . . . . . . 7.33, 7.39, 7.59 s 1–s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41 s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41 s 6ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 s 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 s 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41 s 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41 ss 45–53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 s 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 ss 82–84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 s 239. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35 s 240ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.43 ss 241–242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 s 245A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41, 7.43 s 308. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.43 s 327. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35 ss 327–329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.37, 7.39, 7.59, 7.64 s 328. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.46, 7.64 s 329. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35 s 330. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.48, 7.60, 7.64 ss 330–332 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.37 s 331. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59 s 333. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.63 s 335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.62 s 338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.61, 7.62 s 339. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59 s 340. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.35, 7.39, 7.45 s 342. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.63 sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.42 sch 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.48, 7.59 Proceeds of Crime Regs PoCA 2002 (Business in the Regulated Sector) Order 2003, SI 2003/3074. . . . . . . . . 7.48 PoCA 2002 (Business in the Regulated Sector) Order 2006, SI 2006/2385 . . . . 7.48, 7.59


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PoCA 2002 (Business in the Regulated Sector ) Order 2007, SI 2007/208 . . . . . . . . . 7.47 PoCA 2002 (Moneylaundering) (Exceptions to Overseas Conduct Defence) Order 2006, SI 2006/1070 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.37 PoCA 2002 and Moneylaundering Regs 2003 (Amendment) Order 2006, SI 2006/308 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.64 Property Misdescriptions Act 1991, c 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11 Property Repairs (Prohibition of Cold Calling) Bill 2004 . . . . . . . . . . . . . . . . . . . . . . . . . 5.25 Recognition of Trusts Act 1987, c 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12, 11.04, 11.58 s 1(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04, 11.50 s 1(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04, 11.50 s 1(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.50 s 1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04, 11.50 s 1(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04 Recognition of Trusts SIs Recognition of Trusts Act 1987 (Overseas Territories) O 1989, SI 1989/673 11.04, 11.50 Recognition of Trusts Act 1987 (Commencement) O 1987, SI 1987/1177 . . . . . . . 11.04 Regulation of Financial Services (Land Transactions) Act 2005, c 24, s 1 . . . . . . . . . . . . 9.13 Requirements of Writing (Scotland) Act 1995, c 7, s 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.36 Rules of the Supreme Court Order 11 rule 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Sale of Goods Act 1979, c 54, s 61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.23 Scotland Act 1998, c 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.47 Settled Land Act 1925, c 18, s 75(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.54 Singe Payment see Common Agricultural Policy Social Security (Persons from Abroad) Regs 2006, SI 2006/1026 . . . . . . . . . . . . . . . . . . . 1.82 Serious Organised Crime and Police Act 2005, c 15 s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59 ss 93–98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.41, 7.43, 7.44 s 102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.37 ss 104–105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.59, 7.60 Statute of Frauds 1677, 29 Charles II c 3, s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14 Statute of Frauds (Ireland) 1695, 7 & 8 William III c 22 . . . . . . . . . . . . . . . . . . . . . . . . . . 5.36 Stop Now Orders (EC Directive) Regs 2001, SI 2001/1422 . . . . . . . . . . . . . . . . . . . . . . . . 5.89 Supply of Beer (Loan Ties) Order 1989, SI 1989/2258. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.52 Supreme Court of Judicature Act 1873, 36 & 37 Vict c 66. . . . . . . . . . . . . . . . . . . . . . . . . 4.28 Taxation of Chargeable Gains Act 1992, c 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.08 Terrorism Act 2000, c 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.36 Timeshare Act 1992, c 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38, 6.01, 6.08, 6.31, 6.53 s 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11, 6.12, 6.13, 6.14, 6.18, 6.20, 6.21, 6.63 s 1(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.11, 6.21 s 1(3A) ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.16, 6.17, 6.38 s 1(7–7B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.63, 6.64 s 1A–1E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.08, 6.16, 6.24, 6.25, 6.26, 6.28

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s 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.16, 6.28, 6.31, 6.32, 6.39 s 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.16, 6.38, 6.39 s 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.17, 6.38, 6.39 s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.32, 6.39 ss 5A, 5B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.16, 6.34, 6.35 s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.39 s 6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.16, 6.38 s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.39 s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.28 s 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.28 s 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.28 s 10A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.08 s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.28 s 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07, 6.08, 6.24, 6.36, 6.38, 6.63, 6.65 sch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.28 Timeshare SIs Timeshare Act 1992 (Cancellation Notices) Order 1992, SI 1992/1942 . . . . . . . . . . . 6.08 Timeshare Act 1992 (Repayment of Credit on Cancellation) Order 1992, SI 1992/1943 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.08 Timeshare Regulations 1997, SI 1997/1081. . . . . . . . . . . . . . . 6.01, 6.08, 6.47, 6.63, 6.64 Timeshare Act 1992 (Amendment) Regs 2003, SI 2003/1922. . . . . 6.01, 6.32, 6.63, 6.64 Timeshare (Cancellation Information) Order 2003, SI 2003/25796.01, 6.08, 6.32, 6.39 Tourism (Sleeping Accommodation Price Display) Order 1977, SI 1977/1877. . . . . . . . 5.11 Trade Descriptions Act 1968, c 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09, 5.58, 6.06 Trading Schemes Regulations 1997, SI 1997/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.46 Treaty of Union 1707 §XVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.47 Trustee Act 2000, c 29, s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.50 Trusts of Land and Appointment of Trustees Act 1996, c 47. . . . . . . . . . . . . . . . . . . . . . 11.54 Unfair Contract Terms Act 1977, c 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08, 5.40, 8.24 s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.09, 5.10 sch 1 para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.09, 5.10, 5.12, 8.30 Unfair Terms Bill attached to Unfair Terms in Contracts (see Reports) 5.08, 8.24, 8.30, 8.37, 8.39, 8.44, 8.46 Unfair Terms in Consumer Contracts Regs 1994, SI 1994/3159 . . . . . . . . . . . 5.06, 5.12, 8.24 reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.30 reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.46 reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.43 reg 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.37 Unfair Terms in Consumer Contracts Regs 1999, SI 1999/2083 3.24, 5.02, 5.12, 5.40, 8.24, 8.30 reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.06, 5.07, 5.09, 8.35 reg 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.06, 8.39, 8.44 reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.39, 8.45 reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.44, 8.45


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reg 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.43 reg 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.46 reg 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.37 reg 10–15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.46 sch 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.45 Unfair Terms in Consumer Contracts (Amendment) Regs 2001, SI 2001/1186 . . 5.02, 8.24 Unfair Trading Regs 2007 (Draft), the Draft Consumer Protection from Unfair Trading Regulations 2007 in Consultation on Draft Consumer Protection from Unfair Trading Regulations 2007(London, DTI, 2007, URN 07/1047) . . . . . . . . . . . . . . . . . . . . 5.02, 5.09 reg 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.14, 5.42, 5.43, 5.63 regs 3-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.14, 5.43 reg 20ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.89 reg 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.15 reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.41, 5.45 reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.52, 5.44, 5.59 reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.52, 5.63 reg 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.43, 5.47 reg 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.41 regs 8-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.15, 5.89 sch 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.14, 5.45, 5,47, 5.53, 5.59 sch 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.14, 5.15, 5.59 schs 2–4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.89 sch 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.11, 5.14 Value Added Tax (Place of Supply of Services) Order 1992, SI 1992/3121 . . . . . . . . . . . 3.60 Value Added Tax Act 1994, c 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.60–3.66

TA B LE O F LEG I SLATI O N — F O R EI G N

Table of Legislation — Foreign TA B LE O F LEG I SLATI O N — F O R EI G N

Austria Agriculture (Amendment) Law 2005 2004/102, 2003/35 . . . . . . . . . . . . . . . . . . . . . . . . . 2.27 Salzburg Grundverkehrsgesetz (‘GVG’). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.17 Timeshare Law 1997 Bundesgesetzblatt 1-167 [1997] ECLYB [390] . . . . . . . . . . . . . . . . 6.44 Tyrol Grundverkehrsgesetz (‘GVG’) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33, 2.16, 2.46, 2.48

Bulgaria Forests (Amendment) Law 2005 [2005] ECLYB [426]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.30 Land Ownership Law [2007] DV 24, [2007] 05 ECL [70] . . . . . . . . . . . . . . . . . . . . . . . . . 1.09

Cyprus Circular of the Ministry of the Interior to District Officers September 30th 1999 . . . . . 2.23 Decision 50.228 of the Council of Ministers August 25th 1999 . . . . . . . . . . . . . . . . . . . . 2.23 Land Acquisition by Aliens Law c 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.23 Laws 52/1969, 55/1972 and 50/1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.23 Timesharing Act 2001 [2001] EE I 3496, 3517, [2002] ECLYB [1382] . . . . . . . . . . . . . . . 6.07

Czech Republic Act 229/1991 Coli on Ownership of Land and Agricultural Property, as amended . . . . 2.29 Foreign Exchange Act 219/1995 Sb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.24, 2.29 Foreign Exchange Act 229/1991 Sb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.29

Finland Law on Land Purchase by Non-residents [1993] ECLYB [4069] . . . . . . . . . . . . . . . 2.07, 2.20

France Civil Code §§2, 7ff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.15

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Decree 2005-1450 [2006] JORF 18364, [2006] 01 ECL [54] . . . . . . . . . . . . . . . . . . . . . . . 5.30 French Fiducie Law 2007-211. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.52 Government Declaration May 23rd 1966 (controls of foreign purchase) . . . . . . . . . . . . 2.02 Law 2004-1123 [2004] JORF17825, [2004] ECLYB 340. . . . . . . . . . . . . . . . . . . . . . . . . . . 7.17 Timeshare Law 86/1986. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.57 Timeshare Law 98-566 [1998] JO 10486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07

Germany [2000] BGBL (D) I 182, [2000] ECLYB [616] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02 [2000] BGBL (D) I 897, [2000] ECLYB [580] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30 [2002] BGBL (D) I 564, [2002] ECLYB [552] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07 Bürgerliches Gesetzbuch (Civil Code) §312 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.87 §313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.05 §358ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.87 §491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.87 §631ff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.10 §641 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.26 §873 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.05 §925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.05 Code of Civil Procedure, 1990 BGBl I, 2840 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.85 Consumer Credit Act §9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.87 Estate Agents and Building Companies Law (Makler- und Bautragerverordnung) §7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.26 Federal Act on Lawyers (HAG) §16(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.02 Gesetz über den Widerruf von Haustaugeschaften, BGBl I 122, §1 . . . . . . . . . . . . . . . . . 5.27 Gesetz über Verbraucherkredite, VerbrKrG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.85 Haustürwiderrufsgesetz (HWiG) §5[2]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.85 Property Ownership in Respect of Flats Law (WEG) §31 . . . . . . . . . . . . . . . . . . . . . . . . . 6.44 Timeshare consolidation [2000] BGBL (D) I 2452 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.47 Timeshare Law [1997] Bundesgesetzblatt 1-167 [1997] ECLYB [390]. . . . . . . . . . . . . . . 6.64 Timeshare Sales Law [1996] I Bundesgesetzbtatt 2154, [1997] ECLYB [406]. . . . . 6.64, 6.47

Greece Civil Code §§29, 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.37 Emergency Law 1366/1938, amended by Laws 1629/1939 and 21123/1939 . . . . . . . . . . 2.05 Presidential Decree 293/2001 [2001] Fek A 205. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07 Presidential Decree June 22nd to 24th 1927 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05


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Hungary Land (Acquisition by Foreign Nationals) Government Decree 1996 [1996] ECLYB [2042] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.24, 2.29

Ireland Companies Act 1963, No 33/1963, s 220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.64 Land Act 1965 s 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.02

Italy Law 898/1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.06 Law 104/1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.06 Law 218/1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.31 Legislative Decree 1998/427 [1998] Gazzetta Ufficiale (Serie Generale) 291, 48. . . . . . . 6.07

Luxembourg Decree July 19th 1983 (Fiducairy Contracts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.51

Malta Distance Selling Regulations 2001 [2001] ECLYB [589] . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30 Immovable Property (Acquisition by Non-residents) Act 1974 as amended, c 246 . . . . 2.21

The Netherlands [2000] Stb 617, [2001] ECLYB [553] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30 Dutch Civil Code §48C as amended in 1997, (1997) Staatsbiad 287/8 [1997] ECLYB [408] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.31

Norway Timeshare Law [1997] Norsk Lovtidend 1129, [1997] ECLYB [405] . . . . . . . . . . . 6.31, 6.65

Poland Acquisition of Land by Foreigners Law March 24th 1920 . . . . . . . . . . . . . . . . . . . . 2.24, 2.31 Acquisition of Land by Foreigners Amendment Dz U 1996 54, poz 245 . . . . . . . . 2.24, 2.31

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Portugal Decree 22/2002 [2002] ECLYB [624] (Timeshare). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07 Decree 275/93 (Timeshare) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07, 6.55 Decree May 22nd 1999 (Timeshare) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.43, 6.49 Law 22/2002 (Timeshare) [2002] DR 880, [2002] ECLYB [624]. . . . . . . . . . . . . . . . . . . . 6.43 Law 355/81 (Timeshare) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.43 Law 368/83(Timeshare). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.43 Special Declaration [2000] OJ C183 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.74

Romania Constitution §44 as amended in 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.09

Slovakia Act 95/1999 Sb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.29 Foreign Exchange Act 202/1995 Coli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.29

Spain Civil Code §§9, 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.30 Civil Code §1255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.36 Decree [2000] RCL 2555, [2001] ECLYB [585] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.26, 8.02 Doorstep Selling Law 26/91, Boletin Oficial del Estado November 26th 1991 . . . . . . . . 5.78 Judicial Powers Law §22[1] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.14 Mortgages (Reglamento Hipotecario) §92 as amended in 1982 . . . . . . . . . . . . . . . . . . . . 2.33 Timeshare Law 42/1998 (1998) 300 Boletin Oficial del Estado 42076 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02, 6.11, 6.12, 6.14, 6.18, 6.28, 6.34, 6.42, 6.57 Timeshare Law 47/2002 [2003] ECLYB [350]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30

Switzerland Acquisition of Land by Foreign Residents 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.51 EU-Switzerland Bilateral Agreement on Free Movement [2002] OJ L114 7 . . . . . 2.54–2.56 Federal Law 1988, FL SR 211.412.41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.51 Lex Koller, Federal Law on Acquisition of Real Estate by Foreigners . . . . . . . . . . . . . . . . 2.51 Ordinance 1984 OFL SR 211.412.411 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.51

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First citation in each chapter Action Plan on Contract Law COM (2003) 68 final [2003] OJ C63 1 . . . . . . . . . . . . . . . 8.48 Annan, Kofi Comprehensive Settlement of the Cyprus Problem (UN, November 21 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.33 Applicable Law and Jurisdiction in Divorce Matters Green Paper (‘Rome III’) CP 18/05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.01 Application of the Directive on E-Commerce COM (2003) 702 final . . . . . . . . 5.56, 7.66, 8.10 Application of the Timeshare Directive (‘Timeshare Transposition Report’) SEC (1999) 1795 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01ff Attachment of Bank Accounts SEC (2006) 1341. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.76 st

Borras Report (Matrimonial Jurisdiction) [1998] OJ C221 27 . . . . . . . . . . . . . . . . . . . . . 4.06 Bowman v Fels Guidance (London, Law Society, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.62 Case-law Concerning Unfair Contractual Terms (CLAB, ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.47 Code of Conduct on Pre-contractual Information for Home Loans (CML website 2005, revised 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.14 Commission Communication on Competition in Professional Services COM (2004) 83 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.07 Commission Communication see substantive topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Commission Staff WP on Family Law COM (2005) 82 final . . . . . . . . . . . . . . . . . . . . . 11.02 Committee of the European Parliament on Legal Affairs Report A5-0384/2001 (Contract Law) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.58 Common Classification of Territorial Units for Statistics ‘NUTS’ COM (2001) 83 final [2001] OJ C180E 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.28 Common Frame of Reference, Second Progress Report COM (2007) 447 final . . . . . . . . 8.50 Communication see substantive topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Competition in Professional Services, Commission Communication, COM (2004) 83 final;. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.09 Consumer Complaints in Respect of Distance Selling and Comparative Advertising COM (2000) 127 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.38 Contract Communication see European Contract Law and the Revision of the Acquis: The Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contract Law Green Paper COM (2001) 398 final [2001] OJ C 255 1 . . . . . . . . . . . . . . . 8.48 Cross-border Credit Transfer Report, COM/2002/0666 final . . . . . . . . . . . . . . . . . . . . . . . 7.30 Cruz, Real & Jenard Report (San Sebastian Convention) [1990] OJ C189 35 . . . . . . . . . 4.06

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Defining Home Reversions (HM Treasury, 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35 Distance Contracts Commission Communication COM (2006) 514 final. . . . . . . . . . . . 6.33 Distance Marketing of FS COM Commission Communication (2006) 161 final . . . . . . 5.30 Distance Selling Complaints March 2000 COM (2000) 127 final. . . . . . . . . . . . . . . . . . . . 5.49 Doorstep Selling and Cold Calling (DTI 2004/1331) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11 Dörner, H & Lagarde, P Comparative Law Study on the Rules governing Conflicts of Jurisdiction and Conflicts of Laws in Wills and Succession in the EU (Berlin, German Notary Institute, 2004, 3-931199-19-3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07 Dumortier, J, et al The Legal & Market Aspects of Electronic Signatures (DG Information Society C 28-400, Leuven, Katholieke Universiteit, Leuven, 2006) . . . . . . . . . . . . . . . 8.01 E-Commerce Report see Application E-Commerce: Formal Requirements in Commercial Transactions (Law Commission, 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.03 Effect of Interest Rate Controls in Other Countries, The (DTI, 2004) . . . . . . . . . . . . . . . . . 9.24 Enlargement Strategy Progress Report, COM (2005) 561 final . . . . . . . . . . . . . . . . . . . . . 1.15 Eurobarometer 56 Public Opinion in the EU (2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06 Eurobarometer 60.2 Financial Services (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02, 9.06 Eurobarometer 65 Public Opinion in the EU (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.09 European Contract Law and the Revision of the Acquis, Second Working Document, (DT\623512EN.doc, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.50 European Contract Law and the Revision of the Acquis: The Way Forward (‘the Contract Communication’) COM (2004) 651 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.48 European Neighbourhood Policy Strategy COM (2004) 373 final 8 . . . . . . . . . . . . . . . . . . 1.16 Exemption Clauses, Second Report (Law Commission 69, 1975) . . . . . . . . . . . . . . . . . . . 8.35 Extension of Civil Jurisdiction Regime to Denmark COM (2005) 145-2, 2005/0055/ CNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06 Financial Services — Meeting Consumers’ Expectations Green Paper COM (96) 209 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30 Financial Services Policy 2005–2010 (White Paper, Internal Market DG, December 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.70, 7.09 Future Status of the EU Charter (HL Paper 48, Session 2002–2003). . . . . . . . . . . . . . . . . 3.33 Giuliano Lagarde Report (Rome Convention) [1980] OJ C282 1 . . . . . . . . 3.02, 4.09, 10.01 Green Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applicable Law and Jurisdiction in Divorce Matters (‘Rome III’) CP 18/05 . . . . . . . 11.01 Contract Law COM (2001) 398 final 2001 OJ C 255 1 . . . . . . . . . . . . . . . . . . . . . . . . . 8.48 Mortgage Credit in the EU COM (2005) 327 final . . . . . . . . . . . . Preface, 7.24, 7.27, 9.01 Review of the Consumer Acquis COM (2006) 744 final . . . . . . . . . . . . . . . . . . . . 5.90, 8.49 Succession and Wills SEC (2005) 270 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01 Handbook on Implementation of the Services Directive (EC, 2007) [2.1.2] at 14 1.71, 7.02 Harpum, C Electronic Conveyancing — A Draft Order (Lord Chancellor’s Department, 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.05

Table of Reports

lxxxiii

Housing Statistics in the EU 2004 (National Board of House Building and Planning, Boverkot, 2005, 91-7147-865-5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.06 Implementation of the Directive on Unfair Terms COM (2000) 248 final . . . . . . . . . . . . . 8.34 Implementing the EU Directive on Unfair Commercial Practices (DTI, December 2005, URN 05/1815) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.02, 6.11 Implementing the Third ML Directive — a Consultation Paper (HM Treasury, 2006) . 7.34ff Implementing the Third ML Directive — Draft Money Laundering Regulations (HM Treasury, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.34 Implementing the Unfair Practices Directive (URN 06/2121, 2006).. . . . . . . . . . . . . 5.02, 6.06 Integration of EU Mortgage Credit Markets (Brussels, DG Internal Market, 2004) (‘Mortgage Credit Forum Group Report’) . . . . . . . . . . . . . . . . . . . . . . . . . 1.58, 7.24, 9.05 Intra-EU Investment Commission Communication [1997] OJ C220 15 . . . . . . . . . . . . . 1.44 Jenard Report (Brussels Convention) [1979] OJ C59 1 . . . . . . . . . . . . 1.73, 3.13, 4.01, 10.30 Jenard-Möller Report (Lugano Convention) [1990] OJ C189 57. . . . . . . . . . . . . . . . . . . 4.07 Land Registration for the Twenty-first Century: A Conveyancing Revolution (Law Commission 271, 2001) part XIII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.35 Lea, MJ, Welter, R & Dobel, A ‘Study on the Mortgage Credit in the EEA’ (EEA, Tender No XXIV/96/U6/21, DG XXIV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.09 Legal Nature of the EU Charter of FR in the EU Communication COM (2000) 644 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.33 London Economics Report: The Costs and Benefits of Integration of EU Mortgage Markets (Brussels, London Economics for DG Internal Market, 2005) . . . . . . . . . . . . . . 7.24, 9.01 Madelin, R A Common Frame of Reference for a More Coherent European Contract Law (DG Health & Consumer Protection, 2004) 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.48 Mercer Oliver Wyman Study Financial Integration of European Mortgage Markets (Brussels, European Mortgage Federation, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.06 Milk Quotas Report SEC (2002) 789 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.83 Monitoring Report (Bulgarian and Romanian Accession) COM (2006) 214 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preface 1.08, 1.09, 1.58 Monitoring the Uptake and Effectiveness of the Voluntary Code of Conduct on Pre-contractual Information for Home Loans (Hamburg, Institut für Finanzdinstieistungen, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.17 Mortgage Credit Forum Group Report The Integration of EU Mortgage Credit Markets (Brussels, DG Internal Market, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.58, 7.24, 9.05 Mortgage Credit in the EU Green Paper, COM (2005) 327 final . . . . Preface 1.58, 7.24, 9.01 Operation of the Directive Concerning Consumer Credit, Report, COM (95) 117 final . . 9.24 Our Countryside: The Future (London, Cm 4909, 2000) (‘Rural White Paper’) . . . . . . . 2.13 Payment Services in the Internal Market Proposal COM (2005) 603 final. . . . . . . . . . . . . 7.31 Private International Law: Choice of Law in Tort and Delict (Law Commission 193, 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.30 Problem of Consumer Indebtedness, The (London, ORC Marco, 2001). . . . . . . . . . . . . . . 9.33

lxxxiv

Table of Reports

Regulating Home Reversion Plans (HM Treasury, 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35 Review of the Consumer Acquis Green Paper COM (2006) 744 final . . . . . . . . . . . . 5.90, 8.49 Review of the Timeshare Directive (EU Commission, 2006) see Timeshare Directive Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 Rights Brought Home (Cm 3782, 1997).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.19 Rome I Green Paper COM (2002) 654 final . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02, 4.09, 10.01 Rural White Paper 2000 Our Countryside: The Future (London, Cm 4909, 2000) . . . . . 2.13 Schlosser Report (UK etc Accession to the Brussels Convention) [1979] OJ C59 71 . . 4.15, 7.21, 9.52, 10.23, 11.36 Schmid, CU Conveyancing Services Market, COMP/2006/D3/003, (Zentrum für Rechtspolitik, University of Bremen, 2007 forthcoming) . . . . . . . . . . . . . . . . . . 7.01, 7.03 Schumann Declaration May 9 1950 ‘Symbols of Europe’, . . . . . . . . . . . . . . . . . . . . . . . . . 3.20 Scottish Committee on Jurisdiction and Enforcement (Maxwell Report, HMSO, 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.57 Second Commission Report on Moneylaundering COM (2006) 72 . . . . . . . . . . . . . . . . . . 7.40 Segré, C Development of a European Capital Market (Brussels, EEC Commission, 1966). . . 9.29 State Aid Elements in Sales of Land and Buildings by Public Authorities Commission Communication [1997] OJ C209 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.56 Succession and Wills Green Paper SEC (2005) 270. . . . . . . . . . . . . . . . . . . . . . . . . . 4.36, 11.01 th

Timeshare and Long-term Holiday Products Proposal, Explanatory Memorandum and Impact Assessment COM (2007) 303 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01 Timeshare Consultation CCP 007/02 DTA (DTI, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08 Timeshare Consultation Responses (Health & Consumer Protection Directorate website) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 Timeshare Directive Review (EU Commission, 2006) see Review . . . . . . . . . . . . . . . . . . . . . . Timeshare Sales Improving the Protection of Consumers Summary of Responses to Consultation (Department of Trade and Industry, 2002). . . . . . . . . . . . . . . . . . . . . . . 6.08 Timeshare Transposition Report Application of the Timeshare Directive SEC (1999) 1795 final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 Tourism and the Internet in the EU (Eurostat 20/2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.56 Towards the National Spatial Address Infrastructure (ODPM, 2005) . . . . . . . . . . . . . . . . 7.28 Translation in the Commission (DG for Translation, MEMO/06/173) . . . . . . . . . . . . Preface Ukraine Action Plan EU-UA-1051/05. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.14 Unfair Terms in Contracts and Unfair Contract Terms Draft Bill (Law Commission 292, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.08, 8.24 Unfair Terms in Tenancy Agreements (London, OFT, 2005). . . . . . . . . . . . . . . . . . . . . . . . 8.35 Updating and Simplifying the Community Acquis Commission Communication COM (2003) 71 [2002] OJ C137 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.50 VAT Notice 742 Land and Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.62 VAT Notice 742A Option to Tax Land and Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.64

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Virgos, M & Schmidt, E Report on the Convention on Insolvency Proceedings (EC) 6500/96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.51, 9.53, 9.55, 9.68 Von Bar, C & Drobnig, U Study on Property Law and Non-Contractual Liability Law as it Related to Contract Law (DG Health & Consumer Protection, SANCO B5-1000/02/00574) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.10, 9.30, 11.35 Western Balkans on the Road to the EU COM 2006 27 final. . . . . . . . . . . . . . . . . . . . . . . . 1.13 White Paper Financial Services Policy 2005–2010 (Internal Market DG, December 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.09

LA N D A S A EUR O PEA N CO MMO DI TY

1 Land as a European Commodity Market Culture. Capital Club; Ouside the Capital Club; Other Europes. Cross-border Transactions. Capital Freedom: Land as Capital; Land Transactions Nomenclaturised. Movement of Landowners: Factors Generating Movement of Buyers; Business Rights to Buy Land; Workers; Self-supporters. Market Elements.

MA R KET CULTUR E

Market Culture 1

Ont- and other ologies

[1.01] Many legal commentators admire Craig Raine’s A Martian Sends a Postcard Home in which the visitor of the title observes our world without any comprehension, causing him to misconstrue familiar phenomena such as books, weather, cars and watches. When we sleep we are not in fact watching television in colour, but dreaming about a holiday home on the Med.1 So when he, this Martian — but it would be just the same for a Venusian — gets hold of the wrong end of the stick it is because he, or she or it, lacks the common knowledge necessary for an understanding of how we interpret these things. There is a serious risk that a Bulgarian seller and an English buyer may approach each other as extra-terrestrials, each with their own separate assumptions and unable to guess what the other is thinking. Buyers and sellers of land need common ideas about the way the world is to remove the need for constant renegotiation. Ontology is our knowledge of the essence of objects, activities and actions, in particular something about the constitution, function, form or origin of an entity. Duina and Breznam2 stress the importance in market building of common 1 From a volume of the same title (Oxford, OUP, 1979, 0-19-211896-X); H Peto & C Stoakes ‘A Martian Sends a Postcard Home’ (1998) 18 Litigation 2–9, an unkind take on the legal aid reforms; it is a shame that Raine has not applied the same technique to give us a picture of life within the colleges of his home city, Oxford. 2 F Duina & N Breznam ‘Constructing Common Cultures: the Ontological and Normative Dimensions of Law in the EU and Mercasur’ (2002) 8 ELJ 574–595; J Basedow ‘A Common Contract Law for the Common Market’ (1996) 33 CMLR 1169–1195, 1180; G Alpa ‘European Commission Resolution and Codification of Private Law’ (2000) 8 ERPL 321–334, 327 (can be constructed by mimicking economic laws).

2

Land as a European Commodity

ideas about what is being exchanged and a shared perception of what are properly treated as commodities. Creation of an internal market in European land requires an articulation of a pre-existent supranational market culture or else, since ontological notions can be created by market actors, the development of common ideas as the market forms and grows. Methods of land-holding permitted by a legal system reflect the attitudes of the landowners and society so it helps when buying or selling in a market to know where the other party is coming from. Deontic or normative notions are also needed to guide a legal system about conceptions of desirability using common concepts, shared principles and value judgments, and a legal regime carries the risk of failure if it lacks moral authority. In terms of the theory of the method of law Van Gerven has concluded that it is epistemologically feasible to build a European private law,3 and this can only be because Europeans already share a sufficient commonality of moral purpose. So normative matters can wait while this first chapter conducts a search for the basic building blocks of a European market in land. Already it seems superfluous to ask whether there exists a European market in land, the more relevant issues being the volume of cross-border transactions and the extent to which the market reveals homogeneity and a European identity distinct from its national components. This chapter then tries to settle on an agreement about what we mean by ‘Europe’, nails down the main pattern of transactions with land — capital movement and purchase by a consumer — and then identifies economic migrants and self-supporters as the main players in the market. These then are the themes of this first chapter.

2

Ownership and nesting

[1.02] One might, just, guess the identity of the two EU-25 states with the highest and lowest percentages of home ownership — Hungary and Germany — but who other than an expert would put Hungary highest and Germany lowest? Mass privatisations in eastern Europe have resulted in some 90 per cent of Hungarians becoming owner occupiers, a significant contrast with the plight of the poor old capitalist heartland of Germany, where only 42 per cent of Germans own their own homes.4 Of course, the comparison would have yielded quite different results before the lifting of the socialist yoke when east was east and west was west.5 Home ownership is also much more deeply entrenched around the shores of the Mediterranean than in the hard borrowing, Protestant, north, and somewhere in the middle is the EU-15 average of 64 per cent.

3 W Van Gerven ‘Codifying European Private Law? Yes If ’ (2002) 27 EL Rev 156–176, 161; on normative notions see W Van Gerven ‘The Future Meeting the Past?’ (2001) 9 ERPL 485–503, 494–495, 499. 4 F Earley ‘What Explains the Differences in Homeownership Rates in Europe?’ [2004] 09 Housing Finance International 25–30. 5 ‘And never the twain shall meet’: R Kipling The Ballad of East and West (1889).

Market Culture

3

Central and Eastern Europe has embraced market-based solutions, but from a base of standards of living far below those in the West. If owner occupation now predominates, the living accommodation is small6 and high rise.7 Further, there is inadequate investment in construction, house building is low even by UK standards, and there is an urgent need for structural funding.8 Only a smug minority of 15 per cent of Western Europeans respond in a positive way to financial matters, looking on their money benignly, the same percentage that attaches financial priority to buying a house,9 while far more (65 per cent) struggle simply to cover the bills. Buying a house is big in the UK (22 per cent), and also in Italy and Spain, but has a curiously low priority in Scandinavian countries. The urge to nest declines as one gets older, when those who will buy have done so, and there is a strong correlation to standards of education. No doubt it is a general aspiration but financial imperatives also respond to cultural, economic and legal diversity and in particular to patchy national markets.10

3

Market rises

[1.03] Much of our wealth is in homes, the collective weight of which dwarfs the value of British business, a legacy of crazy inflation of house prices, one league which we can expect to win comfortably most years. So strong has the pressure been that the Royal Institution of Chartered Surveyors described the market as ‘faltering’ in 2005 when prices rose by no more than 11 per cent.11 France, Spain and Ireland have also briefly experienced double digit inflation in house prices, but most of Western Europe is divided between a middle tier running at around 5 per cent 12 and a lower tier with inflation in the 0–2 per cent band.13 Mathematical certainty of stable land values is a lost world.14 Over time the highest rises have occurred in Ireland, the Netherlands, EU-15 84 sq m living space; eastern accession states 58 sq m. In the UK 2.4% of households live in high rise as against 15% in EU-15 and 35% in the eastern accession states, a figure even higher in Poland: Housing Statistics in the EU 2004 (National Board of House Building and Planning, Boverkot, 2005, 91-7147-865-5) Table [2.5]. 8 M Ball European Housing Market Review 2005 (London, RICS, 2005) ch 3; M Ball European Housing Market Review 2006 (London, RICS, 2006); M Ball ‘Restructuring Housing Provision and Central and Eastern Europe’ ch 5 in Markets and Institutions in Real Estate and Construction (Oxford, Blackwells, 2006, 978-1-405-11099-0); J Palacin & RC Shelburne ‘Private Housing Market in Eastern Europe and the CIS’ (UNECE, Discussion Paper 6, 2005) 37–38 (significant growth will improve fiscal situation). 9 Financial Services (Eurobarometer, 2004) 60.2 [1.1], [1.3] (figures for EU-15). It may be as well that Eurobarometer is yet to test the water on European Land Law. 10 Eurobarometer 60.2 [1.2.4]; Quarterly Statistics (European Mortgage Federation, ). 11 Market Review 2005 (n 8 above) 5; Market Review 2006 (n 8 above) 2–4; by 2005 this had dropped to 4% and the torch had passed to Estonia (28%), Denmark (22%) and Spain (15%). 12 Belgium, Sweden, Finland, Italy and Denmark. 13 The Netherlands, Switzerland, Germany, and Austria; Greece was the one EU-15 state where prices fell in 2004; the next year prices were static in Austria and falling in Germany. 14 C-222/97 Trümmer’s Application [1999] ECR 1661 ECJ, AG[15] Pergola. 6 7

4


Spain and the United Kingdom, but it is unclear why differential growth is manifested.15 Into this heady mix one must add the two island economies of Cyprus and Malta in 2004, eight states of central Europe in 2004 followed by Romania and Bulgaria in 2007, the last ten mentioned recently emerged from post-Socialist transitions and exposed to a forcible alignment with western land regimes, which is causing explosive growth stimulated by western capital.16 Hence in the most recent year prices in the Latvian capital Riga grew by 39 per cent, more than anywhere else in Europe, with a pre-accession Bulgaria flying on 19 per cent.17 It is unclear whether price rises can be sustained and if not whether European markets are in for a sharp correction. English readers scarcely need reminding of the unique environment that they inhabit. It is quintessentially English to be obsessed with estate agents’ windows and private home ownership.18 We are used to chains, the property ladder, stock turnover of 7% a year and moving every few years.19 Much of our wealth is in homes, the collective weight of which dwarfs the value of business. We British brought to the Maastricht table the most sophisticated property market in the EC, rivalled only by Ireland, the Netherlands and Denmark and, as Erdmans reported: no other property market in the EC can compare in terms of liquidity, institutional involvement, transparency and ease of trading.20

A subsequent chapter will demonstrate how old-fashioned many European markets look to English eyes, and the pressure building for some standardisation of conveyancing systems.21 An internal market effects a gradual equalisation and standardisation across an area in which foreign capital is spread around to create equality of yield but the signs of convergence are low, even within the Eurozone. A larger trading block leads to greater wealth but only at the price of profound social consequences. Brits will need to emigrate to the continent to afford a home, Bulgarians will need to make way for them along the Black Sea coast, and title deeds will be reshuffled all over Europe on a giant Monopoly board. This book describes the

15 Housing Review 2006 (n 8 above) 9–13; M Ball ‘House Price Cycles’ ch 3 in Markets and Institutions (n 8 above). 16 The Costs and Benefits of Integration of EU Mortgage Markets (Brussels and London, Economics for DG Internal Market, 2005) [A2]; Salans ‘European Accession and Beyond in Central Europe’ (2004) 40 European Lawyer 59–61; M Babin & C Rose ‘From Privatisation to Private Equity’ (2004) 37 European Lawyer 32–33; M Lea ‘Housing Finance in the Accession States’ (2004) 135 Mortgage Finance Gazette 36–38. 17 Knight Frank Guardian November 21st 2006; Market Review 2006 (n 8 above) 2 found Estonia to be on top at 28%. 18 J Paxman The English (London, Michael Joseph, 1998, 0-718-14263-2) 120–123. 19 Compared to a mere 1–2% in Scandinavia. 20 Edward Erdman Property (London, WH Allen, Mercury, 1990); HW Wilkinson ‘Towards 1992: the European Property Market’ [1990] Conveyancer 409–412. 21 See below [7.01ff].

Capital Club

5

framework under which those profound changes will occur, while standing aloof from judgment.

CA PI TA L CLUB

Capital Club 1

The internal market in capital

[1.04] A fundamental tenet of the European Community after implementation of the Maastricht reforms in 1994 is that there is an internal market in which all participants are free to acquire land, that freedom extending across an European Economic Area of 30 states consisting of EU-27 plus EEA-3.22 Market players are free to move capital across that internal market and one of the major uses of that freedom has been to buy land. A subsequent chapter describes the extent of this freedom and the possibility of retaining national controls.23 There can be no doubting the power of the beast unleashed at Maastricht. Its effect was to create a European land law.24 Free movement of capital is not unconstrained. All states attempt to limit market freedoms and those rules which survive European testing for justification may continue to operate in the internal market and other states enjoy transitional protections against outside buyers of second homes and agricultural land.25

2

The Maastricht Capital Club (EU-12)

[1.05] In its treatment of capital, Europe has come to display an uncommon geometrical unity26 applying across a current market of 30 states, consisting of EU-27 plus EEA-3. That is a static snapshot and what is needed is a dynamic view because land transactions often fall for scrutiny many years after they are concluded and the best investment opportunities and strongest new markets are opened up by accession so account must be taken of periods for adaptations. It is convenient to start tracing the evolution of the Community at the time that the Maastricht realignment opened up the internal market in capital across the Community. The European club had originally been formed by the six countries which signed the Treaty of Rome in 1957 — France,27 Italy and West Germany with the See below [1.07]. See below [ch 2]. 24 See below [1.29ff]. 25 See below [2.19ff], [2.28ff]. 26 JA Usher The Law of Money and Financial Services in the EC (Oxford, OUP, 2nd edn, 2000, 978-0-198-29877-9) ch 9. 27 Also French overseas territories which are départements of the French Republic. 22 23

6


three Benelux countries, Belgium, Luxembourg and the Netherlands. The United Kingdom finally overcame the French ‘non’ in 1973,28 an expansion which also brought in the Euro enthusiasts of Ireland29 and a second recalcitrant partner in Denmark,30 a sign of things to come being the Danish insistence on maintaining existing controls on second homes.31 Norway stayed out after a referendum.32 Greece joined in 1981 and Spain and Portugal were added in 1986.33 This last accession brought to the fore the awkward situation of Gibraltar, seized by force and later ceded to Britain by the Treaty of Utrecht 1713, a usurpation never accepted in Spain. United Kingdom jurisdiction has consistently and understandably been challenged in Spain, for example in relation to the extension of the conflicts club to Gibraltar.34 It was Nelson’s base just before Trafalgar and Gibraltarians are staunch supporters of a continuing British link, at least as long as the Barbary apes remain. A recent thaw in relations has allowed the border to be opened more freely, enabling the airport to operate as a tourist portal and a means of servicing the hinterland in Spain.35 Reunification of Germany in 1990 following demolition of the Berlin wall brought in the Länder36 of eastern Germany, the former German Democratic Republic. The east had to sign up to western law which had long since removed all restrictions on the land market, so there was nothing to stop western money flooding in to buy up prime real estate and nothing to encourage money into the ghettos where social investment was most needed. Around €1.5 trillion has flowed east37 but social divisions persist, driven by high unemployment and little new job creation.38 A fifth of bingo-playing Britons define the fall of the Berlin Wall as the most significant moment in all history39 but a quarter of West Germans (the Wessis) and an eight of East Germans (the Ossis) would like the wall back. This then was the EU-12 between whom capital movement was liberalised. Land purchase across national boundaries within that western core has, since the

28 European Communities Act 1972, c 68. This included the sovereign base areas of the UK in Cyprus but not the Channel Islands. 29 Support for the EU in 2006 ran at 77% compared to 42% in Britain and 55% in EU—25: Eurobarometer 65 [2.2]. 30 Excluding the Faroes and, since 1985, Greenland: JA Jensen ‘Greenland and the Faroe Islands within the Danish Realm’ (2003) 9 European Public Law 170–178. 31 Treaty on EU Protocol 1 [1992] OJ C191 68; see below [2.19]. 32 It is now part of the EEA; see below [1.07]. 33 Including in the Atlantic the Azores, Madeira and the Canaries and also two tiny Spanish enclaves in northern Africa. 34 C-349/03 Commission EC v UK (Gibraltar Exemption from VAT) [2005] I ECR 7321 ECJ; C-145/04 Spain v UK (European Elections) [2007] 1 CMLR 3 @ 87 ECJ; see below [4.08]. 35 Guardian September 19th 2006. 36 Regions or states. 37 Guardian November 15th 2006. 38 Times September 21st 2004; Observer April 3rd 2005. 39 Independent April 20th 2005 ‘Statistic of the Day’ citing a National Bingo Game Association survey.

Capital Club

7

end of 1993, involved, and must be determined primarily as, a movement of capital.

3

Austria and the fifth expansion (EU-15)

[1.06] Austria, Sweden and Finland40 joined in 1995, giving a 15-member Western Europe. In our narrative of European land law the good Europeans of Sweden and Finland are bit players, like all goodies, but the Austrians are of central importance because their battle to retain controls on second home ownership in the Alps figures in so many of the cases. Land of Mozart, Sigmund Freud, and Arnie Schwarzenegger, the decision to accede was a surprise and half-hearted and the country has since proved deeply sceptical about the European project.41 Mountainous areas predominate, where land available for housing or development is at a premium and there is severe pressure from tourism and outsiders wanting to acquire second homes. A free-for-all risked destabilising the economic and ecological structure of these fragile mountain fringes. Second home acquisition was controlled in many rural parts of Austria and this control was tested for EU compatibility and found wanting in Konle.42 Without the Austrian legislators European land law would be poor in case law indeed. These three countries had formed part of the European Economic Area in the brief period between its coming into existence in 1994 and their defection to the EU in 1995.43 EEA states participate in the internal market and the four fundamental freedoms as well as some collateral aspects of the Community. At the time that Austria was a party, the EEA Agreement reflected the Third Capital Directive,44 then the cutting edge of analysis and exposition but which has proved to be a half-way stop on the way to full liberation of capital. At that intermediate stage, controls over second homes were allowed to continue and several important capital freedom cases litigated by Austria have involved this interim period.45 Contemporaneous with these developments the pre-Accession Agreements were being implemented by Austria and its two companion states with a gradual move to full EU rules.

4

European Economic Area (EEA-3)

[1.07] The European Economic Area enables the rump of the European Free Trade Association to participate in the internal market. Three of the original 40 Land purchase is controlled in Finland generally and particularly in the Åland Islands, see below [2.20]. 41 Support for EU-25 in Austria ran at 34% in 2006: Eurobarometer 65 [2.2]. 42 C-302/97 Konle v Austria [1999] I ECR 3099 ECJ; see below [1.33], [2.15ff]. 43 For remaining states see below [1.07]. 44 See below [1.28]. 45 Eg C-452/01 Ospelt [2003] 1 ECR 9743 ECJ, J[31–36].

8


seven — Austria, Finland and Sweden — left to join the EU within a year, and Switzerland stayed out altogether after rejection of the negotiated terms in a referendum.46 This leaves an EEA-3 consisting of Norway,47 Iceland and Liechtenstein,48 the last a principality sandwiched between Switzerland and Austria so small that the Berne to Vienna express whistles through without stopping; after long being considered by the OECD to be ‘uncooperative’ in money laundering issues it has now been pulled into line.49 For those three states the Oporto Agreement50 had to be adjusted51 in order that it could come into force in 1994 and it has again required amendment in 2004 to reflect the eastwards expansion of the EU.52 EEA-3 states participate in the internal market as well as ‘flanking areas’ such as social policy, consumer protection, environment, company law, and statistics, areas which collectively include most of European land law and in which EC legislation is incorporated by decision of a Joint Committee. Excluded are all the contentious political and monetary aspects, notably the Common Agricultural Policy, fishing, customs union, justice and home affairs and monetary union. EU legislation may be extended to the EEA either in a pure form or adulterated by modifications or derogations, and the institutional structure is quite different: a dispute involving EEA facts will go to the EFTA Court whereas an EU-EEA case goes to the European Court of Justice.53 Foreign ownership of land has been liberalised to EU standards.54 Reluctance to agree to this was one of the factors motivating Swiss repudiation of the terms of entry. Free movement of capital applies to the EEA-30 under the terms of an annex to the EEA Agreement. When it was first negotiated the EEA Agreement55 followed the terms of the Third Capital Directive56 then the cutting edge of analysis and exposition, allowing capital to move across this area without nationality-based or residence-based discrimination, and freeing current payments, though with power to introduce temporary measures to overcome exchange rate difficulties57 and controls on second homes.58 Adjustment of the See below [2.51ff]. LM Bargen ‘Norway and EEA’ [1997] ECLYB xxiv–xxvii. 48 EEA-3 accounts collectively for 2% of world trade. 49 The current position can be found from the website of the Financial Action Task Force: . 50 Oporto Agreement on the EEA [1992] OJ L21 3 () in force January 1st 2004; F Webb ‘A Legal Still Life’ [1992] Yearbook of European Law 385–431. 51 Adjusting Protocol [1994] OJ L1 572. 52 EEA Enlargement Agreement [2004] OJ L130 3, in force May 1st 2004; further agreements dated respectively March 24th 2006 and August 10th 2006 reflect Bulgarian and Romanian accession. 53 Ospelt (n 45 above) J[27–31]; C-300/01 Salzmann [2003] 1 ECR 4899 ECJ, J[58], J[65]; C Bauddenbacker ‘The EFTA Court’ (2003) 28 EL Rev 880–899. 54 See below [ch 2]. 55 EEA Agreement (n 50 above) Annex XII. 56 Third Capital Directive, Directive 88/361/EEC for the implementation of EC §67 [1988] OJ L178 5, Annex 1; E-1/04 Fokus Bank v Norway [2004] November 23rd EFTA Ct, J[25]; Salzmann (n 53 above); see below [1.28]. 57 EEA Agreement (n 50 above) §§40–43. 58 These had been preserved in the original form: EEA Agreement (n 50 above) Annex XII, [1](e); Third Capital Directive (n 56 above) R[6–7], §6[4]; see below [2.08]. 46 47

Capital Club

9

Agreement during the protracted adoption process led to a restructuring to reflect the full EU capital freedom,59 freeing second homes, movements to and from third countries, and the case of serious turbulence in the domestic economy or external money markets.60 Capital freedom within EEA-3 is now the same as in EU-2761 and conferring rights directly on market players in the same way.62 Land markets within EEA-3 should no longer be compartmentalised on national lines.63 Transitional periods were allowed for the continuation of domestic EEA state legislation regulating ownership of capital investments by foreign nationals or non-residents, varying from state to state and from investment to investment. The most important category for our narrow focus is investments in ‘real estate’ situated on national territory, where the deadlines for complete freedom were the start of 1995 for Norway, 1996 for Iceland and 1999 for Liechtenstein.64 Controls were allowed which existed when the EEA Agreement came into force, but treatment less favourable than that benchmark was prohibited. These transitional periods have now been overtaken but retain relevance when assessing past transactions.

5

Central and Eastern Europe (EU-25 and EU-27)

[1.08] Europe is bounded by three clear and obvious borders — the Atlantic, the Arctic Ocean, and the Mediterranean — while the Ural mountains provide a clear and distant parameter to block off the eastern extremity. On a hillock some 15 kms north of the Lithuanian capital, Vilnius, at 54 degrees 54 minutes of latitude and 25 degrees 19 minutes of longitude, is a stone marking the heart of Europe. This may be limited as a day out, even in summer, though the visit may be improved by the planned sculpture park.65 Geography thus joins statistics on the list of disciplines accused of lying to us. The facts can be made to fit more comfortably with our preconceptions by eliminating Russia and the Caucasus which are unlikely ever to participate in the European project beyond UEFA football tournaments and the Eurovision Song Contest.66 This pulls the centre of Europe further south and west but still a long way from the EU corridors of

EEA Agreement as adjusted and amended (nn 50–52 above) §§40ff. EEA Agreement as adjusted and amended (nn 50–52 above) §43. 61 Fokus Bank (n 56 above) J[23]; E-10/04 Piazza v Schurte [2005] July 1st EFTA Ct, J[33]. 62 Fokus Bank (n 56 above) J[25]; Piazza (n 61 above) J[32]. 63 C-515/99 Reisch v Burger Meister Der Landeshauptstadt Salzburg [2002] I ECR 2157 ECJ, AG[46] Geelhoed. 64 EEA Agreement as adjusted and amended (nn 50–52 above) Annex XII; EEA Council Decision 1/95 allowed Liechtenstein the right to a review at the end of the transitional period. 65 Independent on Sunday December 24th 2000. 66 Azerbaijan, Armenia and Moldova though Georgia is a more likely long-term candidate; a partnership has been formed with each of these states. 59 60

10


power in Brussels,67 and this fact helps to focus our attention on the eastwards march of the Union. Winston Churchill was the first to observe publicly how an iron curtain was descending across the continent after the Second World War,68 and the Soviet bloc formed a barrier to eastwards development of the European vision. Around the time that the Community was transmogrifying itself into the European Union, the path to the east was opened by the collapse of Soviet power. Formal expression of the eastward-lookingness was given in May 2004 when ten new members were admitted, the biggest enlargement to date and probably for ever.69 Poland is the largest new entrant in economic terms, a core part of the old Warsaw Pact along with the Czech Republic,70 Slovakia, and Hungary, along with the post-Socialist Baltic republics of Estonia, Latvia and Lithuania; the 2004 expansion also brought in two Mediterranean islands — Malta71 and Cyprus72 — and the EU secured a tentative first toehold in the Balkans73 in Slovenia. These newcomers add, collectively, the economic clout of another Netherlands, but more tempting are 80 million new consumers and extra lebensraum amounting to 22% of the total land area, and all those cheap holiday homes. These are protected along with farmland and forestry from the full blast of capital freedom for a transitional period, as explained in a later chapter.74 Eastern leaders were so keen to join that they accepted second class terms and delayed access to western labour markets in the expectation of securing a ‘full envelope’ later.75 [1.09] Next in from the old Soviet bloc are Bulgaria and Romania, after a fraught accession process76 culminating in entry at the start of 200777 despite

67 The geographical heart of EU-25 seems to be very roughly around Frankfurt, and of EU-27 around Prague. 68 Winston Churchill address at Westminster College, Fulton, USA, March 5th 1946. In our happier times it is to be converted into a footpath, though completing it will involve a challenge of no less than four million one-metre paces: Independent September 14th 2005. 69 Accession Act of Malta, Cyprus and eight Eastern European states [2003] OJ L236 33; K Lenaerts & D Gerard ‘The Emperor is Getting Dressed’ (2004) 29 EL Rev 289–322, 289; SL Kaleda ‘Immediate Effect of Community Law in the New Member States’ (2004) 10 ELJ 102–122; K Inglis ‘The Union’s Fifth Accession Treaty’ (2004) 41 CML Rev 937–973. 70 O Humlova-Ueltzhoffer ‘Real Property Acquisition by Foreign Investors in the Czech Republic’ (2001) 26 ILP 2–3. 71 This merely reiterates what our Parliament had already enacted: ‘that the said Island of Malta and Dependencies thereof shall be deemed… to be Part of Europe for all Purposes [notwithstanding] any Law…, Usage or Custom… to the contrary’: An Act to Empower his Majesty to Regulate Trade and Commerce To and From the Isle of Malta 1801, 41 Geo III ch 103; see Att-Gen v M’Kenzie (1822) 11 Price 284, 302–303, 147 ER 474. 72 J Theodore & G Pantelides ‘EU Pre-accession Agreements and their Impact on the Cyprus Tourism Industry’ (2001) 29 International Business Law 204–206. 73 See below [1.12]. 74 See below [2.22ff]. 75 The 2007–2013 budget finds increased aid for eastern states within a reduced overall budget. 76 Monitoring Report COM (2006) 214 final [4.1.4] (capital provisions generally ready); Z Kühn ‘Application of EU law in Central European Candidate Countries’ (2003) 28 EL Rev 551–560. 77 Accession Act of Bulgaria and Romania [2005] OJ L157 11 Annex VI [3]; EU (Accessions) Act 2006 c 2 s 1.

Capital Club

11

Germany wariness about enlargement fatigue.78 These countries bring lots of land, smallish economies and average incomes well below the EU standard. Specific land law concerns in both countries are the implementation of a land parcel identification system to facilitate agricultural payments79 and enforcement of the legislative structures targeted at money laundering.80 Agreement to proceed with accession is grudging, Bulgaria being the worst prepared addition to date,81 and facing continuing and significant reform and the possibility that legal judgments will not be recognised because of concerns about corruption. In the property field there is a boom in building apartments close to the Black Sea, Bubble-like rises in values of 40% a year, and extreme volatility in exchange rates and inflation.82 Rentals in Sofia at £70 a square metre compare favourably to the £1K a square metre common in London,83 and many western property firms are in the process of investing. Substantial transition periods are to be allowed for adaptation of land law during which existing controls can be maintained against EU/EEA citizens on acquisition of agricultural lands, forests and forestry for seven years until the end of 2013, and second homes for five years until 2011.84 Romania is reportedly better prepared.85 The state has emerged from its communist phase86 and re-privatisation procedures with a private market in dwellings87 with clear methods of ownership and use. By European standards a high percentage of the workforce is employed in agriculture.88 Farming has high costs and low yields, and privatisation has led to excessive fragmentation calling for a programme of consolidation of holdings. A new law on private property rights for foreign citizens, homeless persons and foreign companies will be in force at the time of accession, though still requiring Romanian residence, and register and cadastre (that is, a geographical survey) are being developed. The Accession Treaty provides for capital movements to be liberalised in full.89 Substantial transition periods are to be allowed for adaptation of land law during which existing controls can be maintained against EU/EEA citizens on acquisition of agricultural lands, forests and forestry for seven years until the end of 2013, and second homes for five years until the end 2011.90 For one hundred Eurobarometer 65 [2.2] (45% support in EU-25); Guardian August 23rd 2006. Monitoring Report (n 76 above) [2.2], [3.3.2]. 80 Monitoring Report (n 76 above) [2.1], [3.3.1], Annex I [1.2] and [2.3.2] (Bulgaria), Annex I [4.1.4] (Romania still falling short on enforcement). 81 RL Slaidin et al ‘Enforcement in the New Europe’ (2004) 44 European Lawyer 42–45. 82 Independent March 23rd 2005. 83 Independent May 15th 2006; property law is reformed by the Land Ownership Law [2007] DV 24, [2007] 05 ECL [70]. 84 See below [2.22ff], [2.28ff]. 85 Monitoring Report (n 76 above) [4.1.4]. 86 Emergency legislation was needed to return property confiscated by the former communist regime after the Constitutional Court blocked an earlier form of the legislation: Independent July 9th 2005. 87 Monitoring Report (n 76 above) Annex II [2.1]. 88 Guardian September 27th 2006, 14. 89 Accession Act of Bulgaria and Romania (n 77 above) Annex VII [3]. 90 See below [2.26], [2.30]. 78 79

12


years Romanian land has been preserved for Romanians, with a direct prohibition on foreign ownership, though it never applied to buildings nor to ‘dismemberments’ such as usufructs, a basic prohibition which was copied out into the first post-Soviet era Constitution in 1991. Restriction of ownership to Romanian citizens was easily side-stepped by the vehicle of a Romanian company. A revised version of the Constitution91 will allow foreign citizens and stateless persons to own land, to buy, sell or inherit, but only on the basis of reciprocity; of course, that reciprocity will exist with EU states after accession, so the new ownership law will bite in 2007. Workers from both states face a delay of seven years before gaining full access to European labour markets.92

O UTSI DE THE CA PI TA L CLUB

Outside the Capital Club 1

Territorial unity

[1.10] Legal empires find it easy to achieve a general sense of unity, but it takes a long time to squeeze out enclaves, bring in exclaves, and achieve a uniformity approaching territorial integrity. The process is by no means complete in Europe.93 Within the United Kingdom the offshore islands retain a marginal status, half in but technically out of the EU, as does the Isle of Man.94

2

Switzerland

[1.11] Switzerland is a particularly important enclave of independence and prosperity in the heart of Europe, which loiters in the EFTA but outside the EU and EEA.95 It now participates in selected aspects of the internal market under bilateral agreements negotiated to cover seven areas, notably free movement of persons, via the mechanism of a Joint EU-Swiss Committee. In order to share continued access to the internal market Switzerland ought to be required to shoulder the responsibilities of membership. Opening of property markets is considered elsewhere.96 A desire to keep Switzerland pure in terms of property using the highly restrictive Lex Friedrich was one of the factors fuelling Swiss reluctance to take the plunge into Europe, though secondary to protection of 91 Romanian Constitution §44 as amended in 2003, described as a ‘succinct’ text: Salans (n 16 above) 59–61. 92 See below [1.82]. 93 HCW Lindahl ‘The EU’s Claim to Territorial Unity’ (2004) 29 EL Rev 461–484. 94 A Pearce ‘When is a Colony not a Colony?’ (2003) 32 Common Law World Review 368–398. 95 L Goetschel ‘Swiss Relations with the EU’ (2003) 8 European Foreign Affairs Review 313–330. 96 See below [2.52].

Outside the Capital Club

13

Swiss banking secrecy. The very strictest controls have been watered down, victims of the stagnation caused by excessive concern to control landownership, so under the Lex Koller freer — freer rather than free — access is now allowed to EU and EEA state nationals whilst an impenetrable barrier remains for non-Europeans. These matters are all described as a postscript to the chapter on controls.97

3

Reassembling the Balkans

[1.12] Slovenia provides a tentative EU foothold in the Balkans, but all of the remaining states are potential targets for EU expansion,98 beginning with stabilisation and association to secure the economic reforms which are a precondition for membership discussions. Top of the list are Croatia and the Former Yugoslav Republic of Macedonia. Progress is stalled not least by the need to secure new constitutional arrangements when the EU reaches 27.99 Croatia,100 apparently a new and more affordable version of Tuscany,101 has adopted reciprocal free trade and moved towards internal market freedoms including complete freedom to make current account payments and direct investments in companies, to liquidate and repatriate the proceeds of investments, and service provision by or to residents, as well as longer-term loans and credits. Portfolio investments and loans and credits of shorter maturity will be freed within four years. The acquisition of land in Croatia by EU nationals should be freed subject to some exceptions — presumably second homes and agricultural land — but after four years Croatians and other EU nationals must be treated equally.102 Full capital freedom is tempered by the possibility of new restrictions on the movement of capital and the scope for temporary measures to protect exchange rates and monetary policy, as well as the possibility of more favourable treatment by bilateral agreement, pending consultation and a review leading to full implementation.103 Permission is required to buy land at present and there is a substantial backlog of applications by EU nationals as well as slow progress on identification of agricultural land parcels.104 Accession is stalled by Croatian failure to co-operate with the International War Crimes Tribunal. Capital freedom has also been agreed with Macedonia, which now has candidate status. Current liberalisation of payments and capital is very similar to See below [2.51ff]. D Phinnemore ‘Stabilisation and Association Agreements: the Western Balkans’ (2003) 8 European Foreign Affairs Review 72–103. 99 Treaty on EU Protocol [2001] OJ C80 51 §4. The current aim is to reach agreement by the end of 2007! 100 Association Agreement with Croatia COM 2001 371 final [2005] OJ L26 3 59–61, in force February 1st 2005. 101 Guardian August 8th 2006. 102 Association with Croatia (n 100 above) Annex VII (review at the end of the fourth year). 103 Association with Croatia (n 100 above) §§60–61. 104 Council Decision 2006/145/EC [2006] OJ L55 30. 97 98

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Croatia though with a bar on new restrictions other than temporary measures to protect exchange rates and monetary policy. Internal market rules are to be implemented in full at the end of the first stage.105 [1.13] Further potential additions include Albania, Bosnia and Herzegovina, Serbia and Montenegro. These last two formed a single state after EU intervention106 but a subsequent referendum has caused Montenegro to break away, against EU wishes. The two new countries continue to argue about their place in the Eurovision Song Contest, surely a sacrifice our Government could make in the cause of European unity? Reunification of Yugoslavia within the EU remains a work in progress.107

4

Soviet republics

[1.14] Russia is an important friend and strategic partner but unlikely Union member,108 but four states remain in Eastern Europe that might join. Kaliningrad is a tiny Russian exclave on the Baltic coast sandwiched between Poland and Lithuania, safely out of sight of the Kremlin, where the black economy apparently accounts for 50% of gross domestic product and the state is said to be riddled with poverty, disease, pollution and crime. The EU looks on disapprovingly, unable to do anything beyond offer to buy out the Russian interest in this unwelcome neighbour. Ukraine109 and Georgia are currently neighbours and potential candidate countries — no doubt some years in the future, given the ennui that greets Romania and Bulgaria. Belarus is the outsider which, uniquely, remains aloof from the Council of Europe, a New Labour and new-look Conservative paradise in which the state disdains the need to observe the European Convention on Human Rights. Adherence to human rights principles is, however, an essential precondition for membership of the EU and nothing will happen there in advance of democratic elections.110 Asian states are not eligible for membership, though this certainly does not preclude limited partnership and friendship.111

105 Association Agreement with the FYR (Former Yugoslav Republic) of Macedonia [2004] OJ L84 13, §§59–60; candidate status was granted in December 2005. 106 N Tocc ‘EU Intervention in Ethnopolitical Conflicts: Serbia Montenegro’ (2004) 9 European Foreign Affairs Review 551–573. Again, progress is stalled by the issue of war criminals. 107 Western Balkans on the Road to the EU COM 2006 27 final. 108 A strategic partnership involving four common spaces was agreed at St Petersburg in May 2004, but there is no timetable for approximation of market regulations. 109 Ukraine Action Plan EU-UA-1051/05 [2.3.3] provides for direct investments and the repatriation of proceeds, with future consultation on a wider liberalisation of capital. Prices in Kiev are said to have risen six-fold in three years: Independent January 6th 2007. 110 Treaty on European Union §6 ex §F, §49 ex §O. 111 B Berdiyev ‘The EU and Former Soviet Central Asia: Partnership and Co-operation Agreements’ (2003) 22 Yearbook of European Law 463–481.

Outside the Capital Club

5

15

Turkey

[1.15] Turkey first applied for membership of the EEC in 1954, secured a form of Partnership as long ago as 1970, and was finally recognised as a candidate in 2004,112 at which time its Association Agreement was revised.113 Obstacles are French and German opposition, enlargement fatigue, human rights abuses, Turkish support for the unrecognised regime in northern Cyprus, and the refusal to open Turkish ports to Greek shipping and public hostility.114 The most that can be said is that there has been no ‘train crash’, that enlargement is not yet completely off.115 Existing Association arrangements116 have liberalised payments but not yet direct investments, and it is merely an aspiration to consider capital movement in an internal market. A reciprocity principle was established for purchases of land by foreigners in 2003, but registrations had to be suspended after this was annulled by the Constitutional Court in March 2005. Reform of foreign ownership laws have taken place in 2001 and 2005.117 The first of these opened up the possibility of foreign ownership, which had previously been barred, and the 2005 reforms have introduced freedom to citizens of states offering reciprocity to Turks. Over 50K homes are owned by foreigners, around a fifth of them in British hands. Foreigners are free to buy in any city, town, or village over 2K inhabitants, except in designated military zones,118 but rural property is restricted and there is an absolute limit of 30 hectares beyond which acquisition requires the consent of the Council of Ministers. Acquisition by foreign individuals or companies is subject to reciprocity except for residents of three years’ standing, stateless persons, and the acquisition of ancillary rights such as mortgages or servitudes. Eventual Turkish entry could create a free-for-all in property, a Mecca of easyJet destinations and cheap second homes close to the Mediterranean replete with cash-rich tourists.119 Is Turkey really, really sure that it wants to join?

6

The Mediterranean rim

[1.16] The Barcelona Process led to a partnership in 1995 with a number of states on the southern shores of the Mediterranean, mainly very poor, to which the EU is offering the prospect of short-term improvement in the investment Independent December 16th 2004. Accession Partnership with Turkey Council Decision 2006/35/EC [2006] OJ L22 34. 114 Eurobarometer 65 [2.2]. 115 Margaret Becket, Foreign Secretary, quoted in Independent December 12th 2006. 116 Association Agreement with Turkey [1973] OJ C113 6 §§19–20; Enlargement Strategy Progress Report, COM (2005) 561 final, 62–63; Council Decision 2006/35/EC Annex [3.1]. 117 Independent Property September 27th 2006, 15; Salans (n 16 above) 59–61. 118 Turks are prohibited from buying in first degree areas, foreigners also in second degree areas. 119 Times February 18th 2005. 112 113

16


climate and a longer-term stake in the internal market.120 Agreements are little more than an agreement to talk about capital liberalisation in the cases of Egypt, Jordan, Palestine, Tunisia and Morocco, and even looser than that in the case of the most powerful economy, Israel, as well as Algeria, Lebanon and Syria. Libya is currently an observer. A decision has recently been taken to downgrade the Middle East policy.121

O THER EUR O PES

Other Europes 1

EEA-30 movement club

[1.17] A right to buy land is of limited value without the right to move to occupy the land after it has been bought. Most people buying land abroad do so to make use of it as a home — or it might be a shop or a farm or an office — so capital value and investment need to be coupled with use value and rights of free movement.122 Europe is uncommonly unified in its geometry, with a basic movement club of EEA-30. Nationals from a home state within EEA-30 should be able to use land in a host state also within the EEA-30, though there is a requirement to be either economically active or self-sufficient and workers from eastern accession states will not receive full freedom until the end of a lengthy transition period.

2

Conflicts clubs

[1.18] Europe remains a mass of variant property laws kept in harmony by conflicts rules. These have two functions: to allocate the law to be applied to a particular matter and to allocate a disputed case to a particular forum for resolution. The site of the land is used to determine both law and forum for pure property matters, but this will not necessarily apply to contractual obligations. Further complexity is introduced because the rules are sectoral, with land, civil jursidiction, contract, trust, tort, family, succession and trusts, not to mention procedural aspects such as service, the enforcement of foreign judgments and insolvency. The geometry of Europe is simple in outline but complex in detail. 120 European Neighbourhood Policy Strategy COM (2004) 373 final 8, 16; Mediterranean Association Agreements and Actions Plans on the EC Commission website: ; G Harpaz ‘When East Meets West’ (2006) 43 CML Rev 993–1022; J Kelley ‘New Wine in Old Wineskins’ (2006) 44 Journal of Common Market Studies 29–55; R Dannreuther ‘European Neighbourhood Policy’ (2006) 11 European Foreign Affairs Review 183–201. 121 Guardian July 17th 2006. 122 Movement and Residence Directive 2004/38/EC (Movement and Residence by EU Citizens and their Family Members) [2004] OJ L229 35, R[2]; see below [1.54ff].

Other Europes

17

The basic conflicts club is EU-27, though some variants apply to EEA-3 states, and to a greater or lesser extent Denmark, the United Kingdom and Ireland opt out of particular parts of the community conflicts rules and Hague Conventions are used for some sectors not yet covered by European legislation.123

3

European Convention on Human Rights

[1.19] ‘Convention rights’ are those imposed continent-wide by the European Convention on Human Rights,124 which is supervised by the Council of Europe rather than the EU and which is administered judicially by the European Court of Human Rights whose seat is in Strasbourg. The Convention is observed by all European states other than Belarus and all citizens enjoy the right of individual petition to the court.125 However, many cases raise temporal issues and so it may be important to determine when a state acceded and when the right of individual petition was ceded. A substantive guarantee of property rights is provided by article 1 of the First Protocol to the Convention126 in three interlocking paragraphs which127 are, in order of application, rights to: 앫 freedom from arbitrary deprivation of possessions; 앫 freedom from unjustified controls on the use of property; and 앫 peaceful enjoyment of possessions. Three ancillary and procedural protections are also particularly important in property law: the article 6 guarantee of fair trial of claims to property rights and other civil claims, the article 8 right to respect for the home and for family life, and the article 14 freedom from discrimination in the exercise of Convention rights. None of these rights is absolute since interferences with the rights may be, and commonly are, justified in the wider public interest and the possibility of public interest justification is the usual human rights battleground. The Human Rights Act 1998128 ‘brought home’129 rights so that they became enforceable in the UK courts. This aligns our domestic law with the constitutional arrangements in most continental countries. This book does not attempt to replicate the existing excellent accounts130 but confines itself to a brief consideration of the extent to which fundamental property See below [ch 4] (actions), [ch 10] (contracts), [ch 11] (family). Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 1950, CETS 5); a table of ratifications (every European state except Belarus) is available on the Council of Europe website . 125 E Conv HR (n 124 above) §46; the CoE website (n 124 above) has a table of national declarations. 126 E Conv HR Protocol 1 (Paris, 1952, CETS 9) §1; the table of ratifications (CoE website n 124 above) excludes Andorra, Monaco and Switzerland as well as Belarus. 127 HR 10522/83 Mellacher v Austria (1990) 12 EHRR 391 E Ct HR 408, now a Strasbourg cliché. 128 Human Rights Act 1988, c 42, in force October 2nd 2000 but prospective only in civil matters. 129 Rights Brought Home (Cm 3782, 1997). 130 D Rook Property Law and Human Rights (Oxford, Blackstones, 2001, 978-1-84174-154-3); AR Çoban Protection of Property Rights and Human Rights (Aldershot, Ashgate, 2004, 0-7546-2387-4). 123 124

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rights are part of the European legal system via case law of the European Court of Justice and the promulgation of the European Charter of Fundamental Rights.131

CR O SS-B O R DER TR A N SACTI O N S

Cross-border Transactions 1

Internal matters

[1.20] European law has no impact on the internal affairs of nation states, including the rules laid down by member states for property ownership by its own nationals.132 It is only when a national boundary is crossed that European rights are in play.133 The market is ‘internal’ to the EU, not to constituent parts, so an Irish landholding company cannot claim a European-derived right to set up business in Ireland.134 How should we transfer these platitudes to the specific context of land? Essentially, if land is sited in Austria (state A) a transaction between people from Austria is internal,135 as is the case of Finns fishing in Finnish waters,136 but it becomes a European matter when one or more of the parties is a national of, or is resident in, Belgium, or any other state B from among the EEA-30 states. Suppose it is a cottage in the Dordogne, part of that golden strip of south western France which Henry II received as a dowry when he married Eleanor of Aquitaine, a land of contentment long since reclaimed by France. If the cottage is sold by one local to another the matter is French, and so it is in the more likely situation in which it is sold to a Parisian as a holiday home. Regulation of French land owned by its citizens and paid for with French funds is a matter for the French state. That these run of the mill cases are archetypically national shows how peripheral and tangential is the future Europeanisation of property law.

2

Cross-border land transactions

[1.21] Land is inherently different from goods as an object of European property law because, as two Brights have observed:

EU Charter of Fundamental Rights [2000] OJ C364 1, §17[1]; see below [3.33]. Phull v Secretary of State for Home Department [1996] Imm AR 72 CA, 75–77 Leggatt LJ. 133 NN Shuibhne ‘The Wholly Internal Rule’ (2002) 39 CML Rev 731–771; C Ritter ‘Purely Internal Situations’ (2006) 31 EL Rev 690–710. 134 Case 182/83 Robert Fearon & Co v Irish Land Commission [1984] ECR 3677 ECJ, AG[8] Darmon; C-478/98 Commission EC v Belgium (Eurobonds) [2000] I ECR 7587 ECJ, AG[26] Jacobs, J[16–17]. 135 See below [1.23]. 136 C-97/98 Jägersköld v Gustafsson [1999] I ECR 7319 ECJ, J[49]; A Biondi ‘In and Out of the Internal Market’ [1999–2000] 19 Yearbook of European Law 469–491. 131 132

Cross-border Transactions

19

land is immoveable and consequently not something that itself requires marketopening measures to allow cross border trade.137

An internal market in cars calls for the lifting of customs barriers and elimination of quotas, so that cars can be imported physically in order to be sold in competition with home grown production. Market players must move to the site of the land. The concern is to ensure that a foreign national who wants to lease a shop in Paris can do so on the same terms as a local Parisian, that the market on the Costa del Sol is open to Balts (from Latvia, Lithuania or Estonia) on the same terms as Spaniards. It is necessary to open up capital markets to allow the means of payment for a purchase to be brought to the country where the price is to be paid,138 and steps are also needed to ensure that the market is non-discriminatory and to eliminate unnecessary restrictions on purchase. How different then if our cottage in the Dordogne is sold to an English couple, a not unlikely outcome when one considers that the people complaining about Anglo-Saxon emigration to the Dordogne are the Brits who have already arrived and not the French who long since sold out. Then European law is engaged by crossing a national boundary, the key to Community competence, and the precise cross-border element needs to be isolated to ascertain the width of EU competence. Divergence of nationality is clearly sufficient139 and the pattern in most reported cases is of land in state A sold by a national of A to a national of state B resident in B.140 State A must not discriminate against foreign nationals.141 Divergence of residence is equally clearly sufficient as a Europeanising factor,142 a point demonstrated most potently by loans between companies in different EU states.143 It also includes a non-resident national returning to buy land back home144: a Brit living in Paris investing in a house back in London or a Dutch national resident in Belgium transferring legal title to investment land in the Netherlands.145 A national may be caught by the laws of his own state and

137 C Bright & S Bright ‘Europe, the Nation State and Land’ ch 14 in S Bright & J Dewar Modern Studies in Property Law (Oxford, OUP, 1998, 0-19-876455-3) 356. 138 C-423/98 Re Albore [2000] I ECR 5965 ECJ, AG[9–10] Cosmas. 139 Robert Fearon (n 134 above) AG[6] Darmon; L Gormley ‘Owning Land in the Emerald Island’ (1985) 10 EL Rev 47–48. 140 Konle (n 42 above); C-355/97 Beck’s Application [1999] I ECR 4977 ECJ; Case 305/87 Commission EC v Greece (Border Regions) [1989] ECR 1461 ECJ; Trümmer (n 14 above); C-464/98 West Deutsche Landesbank Girozentrale v Stefan [2001] I ECR 173 ECJ; Albore (n 138 above). This excludes the internal cases Reisch (n 63 above) and Salzmann (n 53 above), discussed below [1.24]. 141 See below [2.38]. 142 Treaty of Rome §67 talked of residence but the reshaped EC §56 talks of movements of capital between EU states; Trümmer (n 14 above) AG[10] Pergola. 143 C-439/97 Sandoz v Finanzlanderdirecktion für Wien [1999] I ECR 7041 ECJ, J[31–38], AG[9] Léger; see also below [2.39]. 144 Albore (n 138 above) AG[39] Cosmas. 145 C-364/01 Barbier’s Heirs v Inspecteur van de Belastingdienst Particulieren [2003] I ECR 15013 ECJ.

20


can pray European law in his aid.146 Some cases may depend upon how the transaction is analysed but emigration and immigration in their nature are border-crossing activities.147 It remains to be seen whether the source of funds, the currency used,148 or the place of execution of the transfer149 is a sufficient cross-border element.

3

Attacks on internality

[1.23] Our fantasy cottage and hectarage in the Dordogne shows that French land transferred between French people using French-sourced funds is dealt with by national law and EU law is held at bay. Two qualifications illustrated by Reisch may enable the EU dogs to snap back. Consideration of internal cases may take place in the European Court of Justice under a peculiarity of jurisdiction150 which allows a domestic court to refer an issue for decision in Luxembourg. Since the European Court decides issues of law without investigating the facts it is not until the case is sent back to the referring court that it becomes apparent that the reference was a waste of time and money. This labyrinthine procedure makes it possible in a case of slack pleading for a European adjudication upon a case which is internal in character since the European remit covers any case where there is a mere possibility of facts that would raise a legitimate issue. Thus in Reisch151 an Austrian wanted to buy a second home in Salzburg, and the decision invalidated legislation to the prejudice of the internal party (Reisch) not on his account but because of a hypothetical Swede or Greek who might be hindered by the existence of the legislation.152 This is not an isolated lapse since Salzmann involved an internal squabble concerning a plot at Fuâach in the Austrian canton of Vorarlberg sold by an Austrian man Schneider to an Austrian woman Salzmann.153 [1.24] Reverse discrimination allows EU principles to be internalised. It occurs where a non-national (B) has a particular right in EU law superior to the right applied internally to a national A. Party A can now use domestic 146 Case 115/78 Knoors v Secretary of State for Economic Affairs [1979] ECR 399 ECJ; C-61/89 Re Bouchoucha [1990] I ECR 3551 ECJ; C-19/92 Kraus v Land Baden-Württemberg [1993] I ECR 1663 ECJ; C-419/92 Scholz v Opera Universitaria di Cagliari [1994] I ECR 505 ECJ; C-107/94 Asscher v Staatssecretaris van Financien [1996] I ECR 3089 ECJ. 147 See below [1.52]. 148 Trümmer (n 14 above) J[18–19], J[25–26], J[34]. 149 Sandoz (n 143 above) AG[12–13] Léger. 150 C-134/95 Unito Socio-Sanitaria Locale 4 v di Biela [1997] I ECR 195 ECJ, J[19]. 151 Reisch (n 63 above) AG[88] Geelhoed; C-6/01 Anomar v Portugal [2003] I ECR 8621 ECJ; C-98/01 Commission EC v UK (Golden Share) [2003] I ECR 4581 ECJ, J[41–43]; Greek Border Regions (n 140 above); L Flynn ‘Coming of Age’ (2002) 39 CML Rev 773–805, 784; Biondi (n 136 above) 483ff. 152 Reisch (n 63 above) AG[102] Geelhoed, J[25]; C-363/93 Lancry [1994] I ECR 3957 ECJ, J[29]. 153 Salzmann (n 53 above) J[23], J[28–36]; Konle (n 42 above) J[33]; C-281/98 Angonese v Cassa di Risparnio di Bolzano [2000] I ECR 4139 ECJ, J[18].

Cross-border Transactions

21

non-discrimination rules to insist that he is treated as well as the offcomed-un154 B, litigating not in Luxembourg but in the domestic courts, nationals gaining in this way a domestic right to invoke EU law. In Reisch155 restrictions on second homes in Austria breached European law, but Reisch’s personal position was left to the Austrian courts where he would be able to take advantage of Austrian reverse discrimination principles. Few states will wish to legislate more harshly for their own citizens than for European outsiders, so the rule against European involvement in internal matters is a time-wasting fatuity. A guarantee should be provided against reverse discrimination156 which would expunge the cross-border requirement for internal market transactions, to the general benefit.

4

Movements from inside to outside the EU

[1.25] Capital is free to move ‘between member states and third countries’157 and payments to third countries should be without restriction.158 Transfers to non-EU states are treated generously,159 and third-country nationals can enforce capital freedom with direct effect,160 but they are still treated less favourably than EC nationals. Sanz de Lera161 was stopped by French police when he was driving from his home in Spain to Switzerland, the car stuffed full of almost 20 million pesetas in notes which he was going to deposit at his bank in Geneva. Spanish law required prior authorisation before the export of notes of this quantity, but that proved to be irreconcilable with his right to move capital, including banknotes, from Spain (an EU state) to Switzerland (a non-EU state). Some restrictions were allowed on direct investment, but the moving of money as notes was not an investment in this sense and was unrestricted.162 However, movements to non-EU members are less secure than when both payer and recipient are within the Union since the Treaty framework imposes some limitations.163 Restrictions can continue if they existed under national or

154 The author reveals his Yorkshire ancestry (never before acknowledged in public); spelling from . 155 Reisch (n 63 above) AG[114–115] Geelhoed; RCA White Workers, Establishment and Services in the EU (Oxford, OUP, 2004, 0-19-826776-2) 42–46. 156 C-448/98 Criminal Proceedings v Guimont [2000] I ECR 10663 ECJ; C-297/88 Dzodzi v Belgium [1990] I ECR 3763 ECJ; Ritter (n 133 above). 157 EC §56[1] ex §73b[1]; Flynn (n 151 above) 785 ff; C Peters & J Gooijer ‘Capital and Third Countries’ (2005) 45 European Taxation 475–481; Usher (n 26 above) 231–238. 158 EC §56[2] ex §73b[2]. 159 Trümmer (n 14 above) AG[9] Pergola. 160 C-163/94 Sanz de Lera v Spain [1995] I ECR 4821 ECJ, J[44–45]. 161 Sanz de Lera (n 160 above); S Mohamed ‘Recent Case Law in the Field of Free Movement of Capital’ (2001) 3 Journal of International Banking Regulation 178–191; C-358/93 Ministerio Fiscal Spain v Bordessa [1995] I ECR 361 ECJ, J[23ff]; C-484/93 Svensson [1995] I ECR 3955 ECJ. 162 Sanz de Lera (n 160 above) AG[12–18] Tesauro. 163 EC §§56–60 ex §§73b–73g.

22


community law at the end of 1993164; these could relate to direct investment (including in real estate), establishment, the provision of financial services or the admission of securities to capital markets.165 Temporary emergency measures may be needed to control flows of capital to or from non-EU states to avert serious difficulties arising from economic and monetary union.166 Relations may be suspended with a particular country as an aspect of foreign policy or security policy Europe-wide167 or unilaterally by a particular EC state for serious and urgent political reasons.

CA PI TA L F R EEDO M

Capital Freedom [1.26] A capital movement occurs when payment is made to buy land and again when it is sold and the proceeds of sale are received and disbursed and if a cross-border element is involved and the capital must be free to flow unhindered within an internal market,168 an area without internal frontiers in which the free movement of goods, persons, services, and capital is ensured in accordance with the provisions of this Treaty.169

These freedoms are often said to be ‘fundamental’, a strange expression of priorities when compared to core human rights such as respect for life and freedom from arbitrary arrest.170 A common market in goods was realised in the period after the signing of the Treaty of Rome in 1957 and significant progress was also made towards freeing the movement of workers and securing the right to establish a business or to provide services freely across Europe,171 but the free market in capital lagged behind, as an aspiration. Starting with a Directive in 1988 and proceeding through the adaptations of the Treaties agreed at Maastricht and the practical implementation of the Treaty provisions, something resembling a free market in capital was created in 1994. At the same time it was recognised that controls on landownership affected the free movement of capital and thus that sale and purchase and most other transactions with land involved capital movements. Hence the dawn of 1994 represented the birth of European land law, a Midnight’s Child. The process of securing capital freedom is now described. 164 EC §57[1] ex §73c[1]. The Council may act unanimously to impose new controls: §57[2] ex §73c[2]. Original EC members pledged themselves to ‘progressively abolish’ (sic) restrictions, but there was no mechanism for enforcement: Treaty of Rome §67[1]. See now C-445/04 FII Group Litigation v Commissioners of Inland Revenue [2006] I ECR 11753 ECJ, J[174ff]. 165 EC §57[1] ex §73c[1]. 166 EC §59 ex §73f; EC §60 ex §73g. 167 EC §60[1] ex §73g[1]. 168 AG Toth Law of the Internal Market (Oxford, Clarendon, 2005, 0-19-825600-0); C Barnard Substantive Law of the EU (Oxford, OUP, 2004, 0-19-925135-5) ch 17. 169 EC §4 ex §3A; EC §14 ex §7a, [2]; Treaty on EU §2 ex §B. 170 Case 222/86 UNECTEF v Heylens [1987] ECR 4098 ECJ, J[14]. 171 See below [1.65ff].

Capital Freedom

1

23

Capital unchained — to Maastricht and beyond

[1.27] In the past, European law scarcely seemed to scratch the surface of domestic land laws, or, as one complacent little Englander commented, ‘property lawyers have a licence to be dry’.172 Capital investment was, up until Maastricht, the runt of the litter, with only ten cases litigated in 35 years.173 Since then it has become an equal partner with equivalent development, strong cross-fertilisation and a pre-eminent role in developing land law. This odyssey must now be chronicled.174 Although the Treaty of Rome articulated the aspiration of achieving a free market in capital, it imposed no duty on states to open up their frontiers to foreign land grabbers.175 Early attempts to flesh out this skeleton by Directive176 were largely nugatory.177 Activities in line for the greatest liberalisation were set out in two lists, of activities freed immediately and of those for which a general permission was at first granted, though this second list was soon amalgamated into the first and added to.178 Wide restrictions remained in two further lists setting out respectively matters for which restrictions could be maintained subject to justification179 and capital movements that were not to be liberalised at all — deposit accounts, the physical import and export of cash and securities, and personal loans.180 [1.28] Major steps towards a free market in capital were taken by the Third Capital Directive in 1988,181 which instructed states to abolish restrictions on movements of capital,182 a term undefined but accessible in its meaning through a Nomenclature which describes those activities which were to be classed as capital movements.183 Comprehensive liberalisation as envisaged in its sweep was less than complete,184 given that controls on second homes would continue, that freedom for capital from non-EC countries remained aspirational and subject to reciprocity, and a get-out was left in cases of serious turbulence in the domestic or external money markets.185 The Directive was in force between mid-1990 and the end of 1993 when the Maastricht reforms were implemented, but this narrow 172 P Sparkes A New Land Law (Oxford, Hart, 1st edn, 1999, 1-84113-012-5) 34. The reference is to Mrs Thatcher’s division of her cabinet into pro-European wets and Euro-sceptic dries. 173 Flynn (n 151 above) 773 fn 1. 174 C-463/00 Commission EC v Spain (Golden Share) [2003] I ECR 4581 ECJ, J[3–7], J[51]. 175 C-54/99 Association Église de Scientologie de Paris v French Prime Minister [2000] I ECR 1335 ECJ, AG[2] Saggio. 176 First Capital Directive 60/62/EEC [1960] OJ L43 921; UK Golden Share (n 151 above) J[2]. 177 Eurobonds (n 134 above) AG[9ff] Jacobs; Reisch (n 63 above) AG[46–48] Geelhoed. 178 First Capital Directive (n 176 above) Annex 1 Lists A & B; these were combined into a single List A by Directive 86/566/EEC [1986] OJ L332 22. 179 First Capital Directive (n 176 above) Annex 1 List C, redesignated B as above (n 178 above). 180 First Capital Directive (n 176 above) Annex 1 List D, redesignated C as above (n 178 above). 181 Third Capital Directive (n 56 above). 182 Third Capital Directive (n 56 above) §1[1]. 183 Third Capital Directive (n 56 above) Annex 1. 184 UK Golden Share (n 151 above) J[4–6]. 185 Third Capital Directive (n 56 above) §§6[4], 7[1–2]; on second homes see below [2.08].

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window attracted a number of cases, moths drawn to this bright new light, including Sanz de Lera heard on backward-looking facts.186 Despite its effect the European land market remained compartmentalised on national lines, its time not quite ripe.187 [1.29] The European Union agreed in 1992 to create the largest market in the world, outstripping the United States of America by a ratio of 6:5,188 and it has since expanded further.189 This major realignment was accomplished by the Treaty of European Union agreed at Maastricht, taking effect at the start of 1994. This swept away the earlier distinct category of payments for goods and services,190 prohibited all substantial restrictions on capital movements,191 and imposed a scheme for the progressive abolition of controls192 bolstered by effective implementation of an approximation of national laws and procedures.193 A caveat left by the Third Directive about combined controls on second homes was removed.194 It paved the way for the partial implementation of a monetary union. Abolition of all exchange controls has provided a strong stimulus to cross-border investment, as was anticipated at the time in Portugal and Sweden and elsewhere,195 the overall effect being a doubling of intra-community investment in a decade196 but with plenty of unrealised scope. The single market in land was further advanced by effective policing of the intended freedoms of movement of persons and establishment of business. [1.30] A proposal to integrate capital freedom into the text of the Constitution is in abeyance as a consequence of the French ‘non’.197

2

Direct effect of capital freedom

[1.31] If land law is to have any meaning on a Europe-wide scale, European legislation must have direct effect binding on and benefiting individuals and companies as landowners or potential landowners can take advantage of them. 186 Sanz de Lera (n 160 above) J[13], AG[9] Tesuaro; Bordessa (n 161 above); Église de Scientologie (n 175 above) AG[13] Saggio; Eurobonds (n 134 above) AG[9ff] Jacobs. 187 Reisch (n 63 above) AG[46] Geelhoed; Sandoz (n 143 above) AG[7], Léger. 188 P Anderson ‘Under the Sign of Interim’ in P Gower & P Anderson The Question of Europe (London, Verso, 1997) quoted in JHH Weiler The Constitution of Europe (Cambridge, CUP, 1999, 978-0-521-58473-9) 325. 189 See above [1.04ff]. 190 Treaty of Rome §§67–73; see below [1.35]. 191 Treaty on EU §8 ex §G. 192 EC §56[1] ex §73b[1]; Reisch (n 63 above) J[4]; Église de Scientologie (n 175 above) AG[4] Saggio; Eurobonds (n 134 above) AG[16] Jacobs. 193 EC §3[1] ex §3[1], paras (c), (g)–(h). 194 Third Capital Directive (n 56 above) §6, Annex I [4]. 195 A Bonte ‘Focus on Portugal’ [1990] EG Supp March 10th, 122; J Berney ‘Focus on Sweden’ at 114. 196 IP/97/477. 197 Draft European Constitution [2004] OJ C310 1, Pt II §III–45ff.

Land as Capital

25

The Treaty of Rome merely expressed ambitions about capital movements198 which suffered the fate of most good intentions.199 Direct effect was achieved by the pre-Maastricht Third Directive200 and is clear beyond argument201 in the Treaty provisions as rewritten at Maastricht.202 So the capital provisions can be enforced in a vertical direction by an individual landowner against the state, national law being brushed aside to allow enforcement of the European right. It is a further short step to allow horizontal enforcement between one citizen wishing to assert his European right in an action against another citizen — that is, to treat a citizen as an addressee of the fundamental economic freedom to move capital — which will equate the current Treaty provisions on capital203 to the other fundamental economic freedoms, but there is as yet no jurisprudence204 to confirm this huge leap towards a functioning European land law.

L A N D A S CA PI TA L

Land as Capital 1

Capital and movements

[1.32] Ever since the EEC was formed in 1957 the Treaties have fought shy of defining their terms, an omission which continues even after Maastricht and is compounded by a dearth of specialist literature, only recently corrected.205 The concept of capital movement shows the widest possible scope for European land law, though its actual width is much narrower because of the possibility of justified controls.206

2

Land as capital

[1.33] It was first decided that investment in land abroad was a capital affair, a Flynn (n 151 above) 773. Rights were insufficiently precise to be enforced directly: cf Marks & Spencer v Commissioner of Customs and Excise [2003] EWCA Civ 1418, [2004] STC 1. 200 Bordessa (n 161 above) J[33]; Sanz de Lera (n 160 above) AG[21] Tesauro, J[40ff]; Usher (n 26 above) 24–25. 201 C-57/95 Commission EC v France (Pensions Fund Communication) [1997] I ECR 1627 ECJ, J[20]; Sandoz (n 143 above) AG[6] Léger; Flynn (n 151 above) 786–787. 202 EC §56 ex §73b. 203 Sanz de Lera (n 160 above) J[43]; Flynn (n 151 above) 786–787, 787; P Oliver & W-H Roth ‘The Internal Market and the Four Freedoms’ (2004) 41 CML Rev 407–441, 421ff. 204 R Mastroianni ‘Vertical and Horizontal Direct Effects’ (1999) 5 European Public Law 417–435; M Lenz ‘Horizontal What?’ (2000) 25 EL Rev 509–522; D Colgan ‘Triangular Situations’ (2002) 8 European Public Law 545–568; T Tridimas ‘Black, White and Shades of Grey: Horizontality of Directives Revisited’ [2002] Yearbook of European Law 327–354. 205 Now being rectified: Flynn (n 151 above); A Landsmeer ‘Movement of Capital and Other Freedoms’ (2001) 28 Legal Issues of European Integration 57–69; Mohamed (n 161 above). 206 See below [ch 4]. 198 199

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truly momentous jurisprudential leap, in Konle v Austria,207 a leading case in two separate senses since it both decides a truly vital issue and it also ushered in a host of pale imitators, a second cadre of litigators seeking to exploit the breach thus created. Konle’s purchase of a plot of land in the Austrian Tyrol in 1994 was well-timed, just before Austrian accession to the EU and soon after the Maastricht liberalisation of capital,208 though it took ten years for the legal aspects of the purchase to reach the European Court of Justice. By then the focus had shifted from business freedoms to capital and the Tyrol GVG209 requiring a non-Austrian to obtain administrative authorisation for the purchase of land in the Tyrol was struck down as a hindrance to the free movement of capital.210 This opened the way for the use of capital in connection with any investment in the purchase of land.211 Konle, a German, bought his plot from the Lienz District Court at a judicial auction but his application for the authorisation needed to hold on to it was rejected and final authorisation was delayed until 1998. A capital movement was manifest, and the main issue in the case was the justification for, or as the court found the unjustified nature of, the Austrian rules on second homes.212 There are a number of subsequent domestic decisions,213 cases arising during the accession process,214 a discussion of the similar controls on the acquisition of farmland,215 and considerable explication of variant procedures involving declarations of intended use of land subsequent to the purchase as opposed to prior authorisation.216

3

Capital and income

[1.34] Capital seems to have been transformed in the cauldron that was Maastricht so that a new autonomous meaning of this word ‘capital’ has emerged217 which is far from conventional English. When Marx wrote Das Kapital he was thinking of a factor in economic production, what the capitalist laid out in order to reap profits in future, in other words an investment capable of yielding income.218 That economic orthodoxy is also a commonplace of 207 Konle (n 42 above); A Lengauer ‘Konle Judgment’ (2000) 37 CML Rev 181–190; Barnard (n 168 above) 472–474; Eurobonds (n 134 above) AG[24] Jacobs. 208 EC §§56–69 ex §§73b–73q; Treaty on EU §2 ex §B. 209 Grundverkehrsgesetz (Land Transfer Law). 210 Konle (n 42 above) AG[18] Pergola; Bordessa (n 161 above); Albore (n 138 above). 211 Konle (n 42 above) J[3–4], J[22]. 212 Konle (n 42 above) J[3–4]; see below [2.15ff]. 213 Oberster Gerichtshof 1 Ob 216/02 z7 [2003] ECLYB [322]; Oberster Gerichtshof 1 Ob 12/00 x [2001] ECLYB [491]; Oberster Gerichtshof 5 Ob 58/04 x [2005] ECLYB [273]. 214 Beck (n 140 above); Salzmann (n 53 above) J[53ff]; see above [1.06]. 215 Ospelt (n 45 above); see below [2.27]. 216 C-213/04 Burtscher v Stauderer [2005] I ECR 10309 ECJ; Konle (n 42 above) J[40]; C-390/99 Canal Satélite Digital v Spain [2002] I ECR 607 ECJ, J[33], Reisch (n 63 above) J[33], Salzmann (n 53 above) J[42]; see below [2.47ff]. 217 EC §56 ex §73b. 218 K Marx Das Kapital (Hamburg, Meissner, 1867).

Land as Capital

27

English legal dialogue, for example when a receipt is directed to be taxed either to income tax or capital gains tax, when long-term spending is deducted from business profits as a capital allowance, when a trustee has to decide whether trust income or the capital fund is to be debited with particular items of expenditure, or when landlord and tenant dispute whether a payment is for a repair or an improvement. Capital is a resource which can be invested to yield an income.219 [1.35] The Treaty of Rome encapsulated this distinction when it divided the totality of payments between two separate chapters, one for capital movements and the other for current payments for the cost of goods and services.220 Equality of treatment was required by the Third Directive in terms of exchange rate conditions as between capital movements and current transactions,221 implying that the two remained otherwise distinct. This over-intricacy was removed at Maastricht, where it was agreed to assimilate capital and income payment by amalgamation of the two categories.222 ‘Capital’ has become a portmanteau word covering both a means of payment223 and an investment designed to yield an income or capital growth.224 For ‘capital’ read ‘capital and income’ — assets, readies — a wondrous new beast for which even the capacious English language fails to yield a precise, concise equivalent any more euphonious than ‘capital (new sense)’. [1.36] Land transactions are often capital in the conventional sense: a freeholder buys land for a capital sum and a long leaseholder buys the use of the land for a capital premium, even if he must also keep the lease on foot with annual payments of rent and service charge. There are many other transactions with land of an income character, notably a rack rental which cedes possession for a shortish period in return for an annual payment of an income character called a rent, the essence of the rack rent being that it matches the market value and so leaves no capital value in the leasehold interest. The common law lease has a beautiful malleability, stretching from long leaseholds virtually equivalent to ownership to short-term rack rental arrangement, which, once upon a time, European law would have mangled, treating one as a capital investment and the other as a provision of services to the tenant. No more since all these transactions now fall within the portmanteau sense of capital. How much easier this makes the mortgage! A borrower receives a capital advance on which he makes income payments called interest and gradually repays what he has borrowed by making periodical payments (a mix of capital and income) called instalments, but now

219 C Whitehouse Revenue Law — Principles and Practice (London, LexisNexis UK, 21st edn, 2003, 0-75-452154-0) [3.43], [41.3]. 220 Treaty of Rome §§67–73; Case 286/82 etc Luisi v Italian Ministero del Tesoro [1984] ECR 377 ECJ, J[2]. 221 Third Capital Directive (n 56 above) §1[2], Annex I. 222 EC §§56–60 ex §§73b–73g; Treaty on EU §8 ex §G; Flynn (n 151 above). 223 Case 7/78 R v Thompson [1978] ECR 2247 ECJ; Case 203/80 Casati v Italy [1981] ECR 2595 ECJ. 224 Reisch (n 63 above) AG[39] Geelhoed; Flynn (n 151 above) 776.

28


we can see the whole caboodle as a single transaction using the portmanteau sense of capital. Capital is now so broad that it could embrace any consideration paid for any transaction affecting land.

LA N D TR A N SACTI O N S N O MEN CLATUR I SED

Land Transactions Nomenclaturised 1

A redundant Nomenclature

[1.37] Movements of capital are not defined in the Treaties,225 an omission continued even after the Maastricht realignment. For guidance we must go back to the superseded and repealed Third Directive,226 for what survives of it is a Nomenclature, or classification, of capital movements. This was adopted as a point of reference in Trümmer and its use is now standard practice.227 Capital movements were classified into 13 categories according to the economic nature of the assets and liabilities in issue, but of course the Nomenclature needs considerable tweaking to make it helpful as a basis for analysing transactions with land, and it leaves a lot to be desired because a mass of descriptive detail conceals the lack of coherent statements of principle. Changes between the Third Directive and the Maastricht Treaty render some of the basic points of taxonomy redundant,228 especially given the new portmanteau use of the word capital, so the Nomenclature is best seen as a map of the total ambit of ‘capital movement’ rather than as a categorisation of sub-movements. Accession and association agreements have often been drafted with one eye looking back to the Nomenclature when liberalisation of capital activity is agreed at differential speeds.

2

Transactions or flow of funds?

[1.38] Those drafting the Nomenclature fudged one vital issue, which is the basic nature of capital movements, and whether they are switches of value, flows of funds, or transactions. The first is easily dismissed, but the Nomenclature hovers between the second and third, creating an indiscriminate mixture of flows

Luisi (n 220 above) J[21]; Trümmer (n 14 above) J[20]; Sandoz (n 143 above) AG[33] Léger. Third Capital Directive (n 56 above) Annex 1. 227 Trümmer (n 14 above) J[21]; Sanz de Lera (n 160 above) AG[15] Tesauro; Sandoz (n 143 above) AG[34] Léger; Svensson (n 161 above) J[37]; Stefan (n 140 above) J[3–6]; Reisch (n 63 above) AG[39] Geelhoed, J[30]; Spanish Golden Share (n 174 above) J[53]; C-376/03 D v Inspecteur van de Belastingdienst [2005] I ECR 5821 ECJ, J[24]; C-265/04 Bouanich v Skatteverket [2006] I ECR 923 ECJ, J[29]; C-513/03 Heirs of van der Heijden v Inspecteur can de Belastingdienst [2006] STI 535 ECJ J[39]; FII Group Litigation (n 164 above) J[179ff]. 228 See above [1.28]. 225 226

Land Transactions Nomenclaturised

29

of funds and transactions by which they are generated, but the third (transaction-based) analysis is generally to be preferred. [1.39] At first sight it might be attractive to limit the concept of capital movement to a switch of value. However, the sale of a Tuscan villa worth €1 million for €1 million effects no overall shift in economic power, since a change in the form of asset held by each party in no way alters the net worth of either party. Nor does much change if mortgage finance is thrown in, because the finance provided by the bank is matched by the borrower’s correlative obligation to repay the loan over time with interest. These transactions call to mind the Lawsonian analysis of overreaching the beneficial interest under a trust229 which emphasises that a beneficial interest is an interest in a fund since it makes no difference whether the assets held by the trustees are land or shares or money. Clearly this is not what the EC Treaty is getting at when it talks about capital moving230 and our definition must include run-of-the-mill commercial sales. Capital movement may involve either movement of value or switches of value between investments. [1.40] Flows may seem the most natural equivalent of ‘movements’, but analysis of land purchase in this way is problematic since it causes the fission of a single transaction into constituent pieces, an artificial over-refinement of analysis which can lose the cross-border elements needed to bring EU law into play. These are more obvious with a larger picture. Suppose a family falls in love with a house in Marbella while on holiday and decides on the spur of the moment to buy it. They would need to find a notary in Marbella and to arrange for the necessary funds to be wired out to his office in Andalucia. The sellers, buyers and the notary then sit down at the notary’s office in Marbella to complete the purchase. The first step, the movement of funds, is clearly a capital movement, one which crosses a state line and which should therefore be unimpeded. How is the sale itself to be handled? When the sale is completed, funds pass from the British couple via the notary to the Spanish sellers and the economic value in the houses passes in exchange under the escritura. The whole transaction has a cross-border flavour, given the non-residence of the buyers, but the flow of funds on completion is not. The camera is too close in and we need to pan out and switch to a wider angle to capture the fullest and most meaningful picture. Clearly, this transaction does have a European flavour. [1.41] A more satisfactory general picture is obtained by looking at a land purchase as an overall transaction including, as the Nomenclature suggests, all ancillary transactions.231 A commercial deal should not be broken down into technical legal parts at the risk of losing cross-border elements. Thus an 229 FH Lawson & B Rudden Introduction to the Law of Property (Oxford, Clarendon, 3rd edn, 2002, 0-19-829993-1) 44–46. 230 EC §56 ex §73b; Treaty of Rome §67. 231 Flynn (n 151 above) 777. Thus, an Italian who had come to London in search of work had the right to be considered for temporary housing accommodation: R(JR) Castelli v City of Westminster (1996) 28 HLR 616, CA; Case 63/86 Commission EC v Italy (Housing Aid) [1988] I ECR 29 ECJ.

30


arrangement to buy a house in Marbella, secure the funds from home, and complete the transaction creates a single continuum, including marketing, instruction of lawyers, finance, transmission of funds, completion, taking possession and the process of registering title.232 Investment in land could include the process of acquisition, its use during the period of ownership and its subsequent disposal.233 That a transaction includes ancillary activities causes one to think of a transaction in the widest terms. [1.42] In its judgments the European Court of Justice generally analyses whether there is a capital movement before deciding whether there is a restriction on the freedom to move capital and, if so, whether it is justified. A single transaction could be dissected in different ways and sequential analysis obscures the fact that the control under discussion helps to identify what movement of capital has occurred. If a host state imposes exchange controls a transfer of funds needs to be isolated from the completion of the purchase. On the other hand, a control limiting the acquisition of host state territory by outsiders —limiting second homes in Connemara to speakers of Irish — is better seen as a package since this imposes the widest European control. A loan and mortgage security needs to be separated from the purchase being financed. The intention is to sniff out restrictions and controls,234 especially ones which are disguised, and to compel a justification to be provided, a process best accomplished by flexibility in identifying a movement of capital.

3

Nomenclature

[1.43] Almost any transaction with land involves a movement of capital within European land law and we now enumerate those of the 13 categories of the Third Directive Nomenclature235 which might affect land purchase.

4

Business acquisition of land

[1.44] Direct investment236 is investment in a business, for example paying to establish a new business abroad, opening new branches, buying out an existing business or acquiring a controlling shareholding237 in an undertaking. Long-term 232 Trümmer (n 14 above); Stefan (n 140 above) J[19]; RP v Registrar of Torrevieja [2003] RJ 2199, [2004] ECLYB [1709], DGR Spain. 233 Reisch (n 63 above). 234 For terminology, see below [4.01]. 235 Capital Nomenclature in Third Capital Directive (n 56 above) Annex I; Usher (n 26 above) 17–22. The Nomenclature is now repealed but remains indicative, see above [1.37]. 236 Église de Scientologie (n 175 above) AG[2] Saggio; FII Group Litigation (n 164 above) J[180]; C-157/05 Holbock v Finanzamt Salzburg-Land [2007] May 24th ECJ, J[33ff]; C-451/05 Européenne et Luxembourgoise d’Investissements v Directeur General des Impots (ELISA) [2007] April 26th, AG[65] Mazak.


31

loans to businesses — exceeding five years — are also properly treated as direct investments.238 All forms of investment may be carried out by a natural person or any kind of undertaking or a public body, but this category requires a lasting and direct link between the person providing the capital and the entrepreneur to whom it is made available.239 The purchase of land could well be part of the deal, for example when an existing business in a different EU country is acquired with a chain of local convenience stores or a branch network of a bank. A business acquisition amounting to a direct investment [I]240 is excluded from land purchase [II] (to be described next),241 a matter of the greatest importance in accession and association arrangements where the freeing of direct investment often occurs far in advance of the freeing of the land market.242 Two patterns are provided of cross-border activity by way of direct investment: [I]A is investment on national territory by non-residents and [I]B is investment abroad by residents. Investment in an undertaking by acquiring a shareholding or securities constitutes direct investment if a controlling interest is bought but a lesser stake will fall into a series of categories dealing with shares and other types of bonds,243 as the various Golden Share cases illustrate.244

5

Private acquisition of land

[1.45] Shame on the translator but Category [II]245 appears to have transported mysteriously across the Atlantic since it is ‘investments in real estate’, by which the translator obviously means land, a term to include the purchase of buildings, the purchase of land and the construction of buildings, whether for gain or for personal use. These activities may be carried out by private persons (individuals) or by legal persons (companies), but it excludes land purchases in the course of establishment of a business which is properly a direct investment in the earlier category [I].246 Emphasis is placed on the ‘private’ character of the party, to the exclusion of public bodies, possibly because public acquisitions across state For smaller stakes in companies see n 243 below. Examples are loans (1) by a company to its subsidiaries, (2) to part-owned companies, (3) linked to a profit-sharing arrangement, and (4) by financial institutions with a view to lasting economic links. 239 Sanz de Lera (n 160 above) AG[14] Tesauro. 240 Capital Nomenclature (n 235 above) [I]. 241 Capital Nomenclature (n 235 above) [II]. 242 See below [1.12ff]. 243 Capital Nomenclature (n 235 above) respectively [I] and [III]–[V]; C-329/03 Trapeza tis Ellados v Banque Artesia [2005] I ECR 9341 ECJ (liquidation of bonds bought under First Capital Directive); Fokus Bank (n 56 above) J[38] (no dividend credit for non-resident company); Bouanich v Skatteverket (n 227 above) (resale of shares to issuing company). 244 C-483/99 Commission EC v France (Golden Share) [2002] I ECR 4781 ECJ, J[5ff]; C-503/99 Commission EC v Belgium (Golden Share) [2002] I ECR 4809 ECJ, J[38]; Commission Communication on Intra-EU Investment [1997] OJ C220 15. 245 Capital Nomenclature (n 235 above) [II]. 246 See above [1.44]. 237 238

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boundaries are thought to be unlikely. Investment in land includes all operations necessary to bring to fruition a capital movement, including the transaction itself, the conclusion of the transaction, its performance, and any related transfers, since all these aspects need to be scrutinised to ensure that capital is free to move across national boundaries. ‘Real estate’ is to be read expansively as including subsidiary rights in land such as usufructs,247 servitudes (easements) and building rights. [1.46] Typical transactions involve residents of different European states — for example an English person buying a holiday home in Spain — but a cross-border activity by a single person on his own account is also covered when, for example, an English person transmits money to his own account in Spain to provide the funds for an intended purchase; sub-categories are [II]A, purchase of land on national territory by non-residents, and [II]B, purchase of land abroad by residents. Exchange control regulations of each state were used to determine residence or non-residence.248 When the time comes to sell, operations to liquidate the asset or to deal with the proceeds are all protected by the same basic freedom including, for example, resale, assignment, repatriation of the proceeds of sale249 or spending the proceeds. So an English person who has bought a second home in Spain has the right, later on, to sell it and to send the proceeds back to England. A doubt may arise if the original transaction was not a capital movement, for example where an English person inherited a house in Spain before Spanish accession to the Union. Liquidation means the sale of land and its reconversion into money. Proceeds are extended by European exegesis to any capital appreciation, repayment of any loan, and any proceeds from execution of a judgment. Trümmer250 discusses whether a purchase of land is itself a capital movement so as to give a right of sale, but this is clearly so251 since all operations are included which are necessary for the purposes of a capital movement, including operations to liquidate or assign assets built up, the repatriation of proceeds of liquidation thereof and the immediate use of such proceeds.

6

Personal gifts

[1.47] Personal transactions are capital movements,252 and these must be freed, notably loans, gifts, endowments, dowries, inheritances and legacies, including of course all cases where the subject matter of the gift is land. A transfer of ie a civilian right of use for life. This is obsolete after Maastricht. On IIA see C-386/04 Centro di Musicologia Walter Stauffer v Finanzamt München für Karperscahften [2006] I ECR 8203 ECJ, J[23] (capital freedom covers both purchase and active management of land); ELISA (n 236 above) AG[68] Mazak. 249 Proceeds include any capital appreciation, repayments, proceeds from execution of judgments, etc. 250 Trümmer (n 14 above) J[13], J[22]; Albore (n 138 above) AG[6] Cosmas; Reisch (n 63 above) J[29]; also most of the other cases discussed in this chapter. 251 Capital Nomenclature (n 235 above) notes to [II]. 252 Capital Nomenclature (n 235 above) [XI] heads A–D. 247 248


33

beneficial entitlement or of legal entitlement without the beneficial interest is also a capital movement.253

7

Loans etc

[1.48] Loans made by financial institutions such as banks and building societies are capital movements254 where the advance finances commercial transactions, services, financial leasing, note-issuance or, in our particular context, mortgage loans and consumer credit.255 European case law makes clear that loans are indeed a form of capital movement, so issues calling for European scrutiny are the terms of a state guarantee of loans,256 and state interest rate subsidies on loans for home construction.257 The movement created by the loan includes all activities associated with the grant of the loan, the provision of security and subsequent repayments.258 Loans are divided into sub-species on a scale from 1 to 3 according to whether they are short-term (less than one year), medium-term (one to five years) or long-term (for five years or more). A separate category [IX] acts as a repository for sureties, guarantees and pledges, as well as the provision of security for litigation costs.259 [1.49] We must address suggestions that no capital movement is discernible when a mortgage is created, but only to dismiss them. Trümmer’s Application260 provides the fullest analysis of capital movements which occur when a loan is provided to finance an acquisition of land. Trümmer and Meyer had sold a share of a property in Rosenthal, Austria, leaving the price of 13K German marks outstanding but secured by a mortgage. This they wanted to register. Domestic law of the time only allowed registration of a mortgage denominated in the national currency, Austrian schillings, but the mortgage to secure the purchase price of land was itself a movement of capital,261 even if not specifically nomenclaturised, and so the national rule prohibiting registration fell as a prohibited restriction on the movement of capital. Mortgages are the classic method of securing a loan linked to a sale, intricately linked to that sale, and constituting a Barbier’s Heirs (n 145 above). Capital Nomenclature (n 235 above) [VIII]. Included elsewhere are [I] loans to acquire an establishment, VII] credits related to commercial services and [XI] personal, non-institutional, loans. There are minor exceptions: Flynn (n 151 above) 776. 255 Capital Nomenclature (n 235 above) notes to [VIII]. 256 E–1/00 Icelandic State Debt Management Agency v Islandsbanki [2000] July 14th EFTA Ct; Flynn (n 151 above) 778ff. 257 Svensson (n 161 above). 258 Capital Nomenclature (n 235 above) notes to [VIII]. 259 Piazza v Schurte (n 61 above) J[36]. 260 Trümmer (n 14 above); A Landsmeer ‘Capital Movement’ [2000] Legal Issues of Economic Integration 195–200; S Cámara-Lapuente ‘Comparative Remarks on Land Registers within the Frame of European Private Law’ (2005) 6 ERPL 797–839, 803. 261 Trümmer (n 14 above) J[19]; doubts were expressed in AG[9] Pergola and Reisch (n 63 above) AG[74] Geelhoed (finance was service provision). 253 254

34


capital movement.262 Forcing a lender to accept a registration in Austrian schillings could diminish the value of the loan as against German marks and hence also reduce the security and its priority, a potentiality of reduced effectiveness sufficient to say that capital movement has been restricted.263 Stefan264 makes clear that the right of registration in a foreign currency is a new right attributable to the Community. [1.50] Cross-border loans have two patterns: [VIII]A is a loan granted by a non-resident to a resident and [VIII]B is the reverse, granted by a resident to a non-resident.265

8

Means of payment

[1.51] A capital movement leading to an investment in foreign land will generally take the form of a transfer of the price across national boundaries preparatory to the purchase,266 and this will be categorised according to the transaction being paid for.267 Money transferred via a bank account falls into Category [VI], since it includes any activity involved in the operation of a current or deposit account with a financial institution. So a person who wishes to buy abroad must be free to open and run an account in a foreign country to facilitate the delivery of the purchase price for land. A third possibility is the physical import and export of financial assets such as securities or means of payment of every kind.268 A Brit with his eye on a second home in Spain can sell shares to provide the readies for his purchase, or can carry notes or coins in a suitcase if he prefers.269 Sanz de Lera270 was doing more or less that when he was stopped by French police and found to have in his car almost 20 million Spanish pesetas in notes that he was taking to deposit at a Swiss bank. His domestic law prevented the export of large quantities of pesetas without prior authorisation, but this was overridden by his right in Community law to move capital to a non-EU state. Transfer of liquid funds is not properly counted as direct investment.271 Thompson272 suggests that export of silver alloy coins counts as a means of payment, as do gold Krugerrands,273 but half-crowns and other coins withdrawn from legal tender may be better treated as goods.274

262 Trümmer (n 14 above) J[23–24], AG[35–36] Pergola; said to be correctly located within Capital Nomenclature (n 235 above) [IX] though [VIII] seems correct. 263 Trümmer (n 14 above) J[16], J[26–27], J[31]. 264 Stefan (n 140 above). 265 And similar for Capital Nomenclature (n 235 above) [IX]. 266 Deferment of payment could be capital movement: Trümmer (n 14 above) AG[10] Pergola. 267 Capital Nomenclature (n 235 above) [II], for land see above [1.45ff]. 268 Capital Nomenclature (n 235 above) [XII], respectively A or B. 269 Bordessa (n 161 above); subject to any justified national restriction; see below [2.37ff]. 270 Sanz de Lera (n 160 above); Bordessa (n 161 above); Eurobonds (n 134 above) AG[9ff] Jacobs. 271 Sanz de Lera (n 160 above) J[30]. 272 Thompson (n 223 above); Casati (n 223 above).

Movement of Landowners

9

35

Transactions after immigration or emigration

[1.52] Cross-border transactions often follow emigration or immigration, notably after a person moves abroad to buy a home in a foreign country. Those which should be allowed include settlement of debts by immigrants in their previous country of residence, transfers of assets by emigrants or repatriation of savings made by immigrants to their previous country of residence.275

10

Miscellany

[1.53] Insurance payouts and premium payments form Category [X], which spells trouble for any requirement to insure property within a particular national market.276 Miscellaneous ‘other’ capital movements include:277 앫 앫 앫 앫 앫

imposition of death duties; payment of damages of a capital nature; refunds from cancelled contracts or of advance payments; royalties from intellectual property rights; and transfers of monies required for the provision of services.

There is also a final ‘other’ sub-category to sweep up matters left behind by the 13 specific headings.278

MO VEMEN T O F LA N DOWN ER S

Movement of Landowners 1

EEA movement club

[1.54] Europe as a movement club means EEA-30. A Directive279 gives rights to EEA nationals to move and reside elsewhere in the EEA, though workers from eastern accession states do not yet enjoy full rights.280 No attempt is made here to provide a comprehensive discourse on European migration law,281 a subject beyond the limit of anybody’s patience, but rather our focus is on the specific position of buyers and users of land. The two states involved are described as the Thompson (n 223 above) J[25–27]. Thompson (n 223 above) J[30]. A state is entitled to prevent its currency being melted down. 275 Capital Nomenclature (n 235 above) [XI] heads E–F. 276 C-410/96 Criminal Proceedings v Ambry [1998] I ECR 7875 ECJ, J[40] (treated as service provision but the capital breach was equally clear). 277 Capital Nomenclature (n 235 above) [XIII] heads A–E. 278 Capital Nomenclature (n 235 above) [XIII] head F; C-200/98 X & Y v Riksskatteverket [1999] I ECR 8261 ECJ; C-251/98 Baars [2000] I ECR 2787 ECJ; Église de Scientologie (n 175 above) AG[2] Saggio. 279 Residence Directive (n 122 above). 273 274

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home state and the host state,282 and it is assumed that the buyer is a national of a state within the EEA-30.283 [1.55] Individual rights to move and reside freely within the territory of other EEA states are conferred on EU citizens284 (that is, nationals of EU-27 states285) and also on EEA nationals286 (that is, nationals of any EEA state), but the practical rights are those conferred by the Movement and Residence Directive.287 Nationality, the core of movement rights, remains within the domestic domain since each state determines its own nationals,288 the British nationality rules being particularly complex.289 Within each of these categories rights of entry for up to three months are distinct from rights of residence in the longer term, from three months to five years, and permanent residence beyond that.290 Controls during this intermediate period are the ones that need to be considered most carefully by those planning to buy abroad since residence is confined to privileged classes291 of the economically active (business and workers) and self-supporters. Lawful292 residence can act as a gateway to permanent residence rights in a host state after five continuous years,293 and this may well lead on to an application for naturalisation using domestic rules.

See below [1.82]. AP van der Mei Free Movement of Persons in the EC (Oxford, Hart, 2003, 1-84113-288-8); N Rogers & R Scammell Free Movement of Persons in the Enlarged EU (London, Sweet & Maxwell, 2005, 0-421-87570-4); J Apap Freedom of Movement of Persons (The Hague, Kluwer, 2002, 90-411-1768-7); F Weiss & F Wooldridge Free Movement of Persons within the EC (The Hague, Kluwer, 2002, 90-411-1708-3). 282 A less cumbersome version of ‘host Member State’ referred to in Residence Directive (n 122 above) §2[3]. 283 Other people resident in Europe are described as Third Country Nationals (TCNs) and for their position see below [1.85], [1.94]. 284 EC §§61–69 ex §§73i–73q; EU Charter FR (n 131 above) §45[1]. 285 EC §17 ex §8; Residence Directive (n 122 above) §2[1]. 286 EEA Agreement as adjusted and amended (nn 50–52 above) Annex V. 287 Residence Directive (n 122 above) §1; Immigration (EEA) Regs 2006, SI 2006/1003; Phull (n 132 above) 77 Leggatt LJ. 288 Treaty on EU §8 ex §G. National rules on residence may be more favourable than the European base-line. 289 C-192/99 R(JR) Kaur v Secretary of State for Home Department [2001] I ECR 1237 ECJ; R Shah ‘Who is a UK National for EU Purposes?’ [2001] NLJ 580–581; R Shah ‘Why some British Nationals are not EU Citizens’ (2002) 16 Immigration Asylum and Nationality Law 82–96. 290 Residence Directive (n 122 above) §§ 6, 7, 16; Immigration (EEA) Regs 2006 (n 287 above) regs 13–15 calls these rights respectively ‘initial’, ‘extended’ and ‘permanent’ residence. 291 See below [1.75ff], [1.88ff]. 292 Lawful residence depends upon national law: C-466/00 Kaba v Secretary of State for Home Department [2003] I ECR 2219 ECJ; C Jacqueson ‘Something New Under the Sun?’ (2002) 27 EL Rev 260–281, 264. 293 Without expulsion from the host state: Residence Directive (n 122 above) R[22], §§27ff. 280 281

Movement of Landowners

37

2 Use value [1.56] Use value is often more important than investment value, allowing a house to be turned into a home.294 Free movement of persons is fundamental to the internal market.295 Without that a buyer is an investor, in the same position as if she had bought in America, free to buy but not free to stay for long.296 A dichotomy between ownership and use value is familiar from human rights jurisprudence, which shows that fundamental rights to property cannot be deployed to secure rights of access to the territory of the state where the property is owned.297 A Yugoslav owning property in Croatia could be denied access to that country after it split from the former Yugoslavia even after an extended stay,298 since there is no Convention right for a foreign citizen who owns property in another country to reside in that country in order to make use of it.

3

Investors

[1.57] Land is a good medium for pure investment, whether its acquisition is intended to secure an income yield in the form of a rent or for capital growth or a combination of both, the similarity being that a pure investor is concerned not with use of the land but rather with exploiting its use value. It would be possible to buy a house or office block and board it up with a view to some future use, as Harry Hyams did with Centre Point in London in the 1960s,299 and, less morally reprehensible, to place a potential development site in a land bank pending completion of a planning process. Once permission is given an investor will generally develop a vacant site by licensing a developer to carry out the construction work and letting or selling the completed building. Finally, and most commonly, there is the buy-to-let, in which a property is acquired in order to generate income through letting and where the investor may choose to leave all management to a professional agent, the investor being concerned with a net rent though keeping a weather eye open to the possibility of a future sale with a capital gain. Acquisition of land as an investment, and finding the money to pay for it, involve capital movements.300 All these transactions are carried out at arm’s length from the land and so the personal mobility of the investor is not a prerequisite to the feasibility of the investment. Investment across European borders doubled between 1985 and 1995, either 294 Commercial property is less problematic because of the business movement freedoms; see below [1.63]. 295 Residence Directive (n 122 above) R[2]. 296 In the USA six months, or three months in Europe. 297 E Conv HR Protocol 1 (n 126 above) §1. 298 HR 42389/98 Ilić v Croatia [2000] September 19th E Comm HR (case inadmissible). 299 London Landmarks () allege that as a result it was the ‘single most profitable building ever constructed in the UK’. 300 See above [1.36].

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side of the Maastricht implementation,301 but there is plenty of scope for further advance. There is a strong upward trend in funds flowing into the English market302 and strong advantages in a strategy involving outward investment into a portfolio of European property assets.303

4

Borrowers

[1.58] Home loans outstanding in EU-15 amounted to around €4.25 trillion in 2005, that is, in the measure favoured by economists, around 45 per cent of EU gross domestic product. The market remains heterogeneous with the greatest concentration of borrowing activity in the five largest states, relatively low borrowing in Italy, and untapped markets in the accession states of the east. At present there is significant scope for increasing the rate of cross-border borrowing and in this way unlocking substantial savings for borrowers, an ideal application of internal market principles since borrowers do not need to move to borrow.304

FACTO R S G EN ER ATI N G MO VEMEN T O F B UYER S

Factors Generating Movement of Buyers [1.59] A right to buy land is of limited value without the right to move to occupy the land bought. European law separates market players into categories, the most important being pure investors, businesses, workers and self-supporters. This leaves a residual category of economically inactive people lacking the resources needed for self-support from whom freedom to move is withheld, which is just as well for without some constraint capital freedom has the power to cause widespread social disruption and to destabilise land markets.305 Flesh will be provided for these bones, but not before consideration of three major elements of the market culture: uneven earnings, the uneven density of Europeans and the ever-increasing ease of travel around the continent.

HW Wilkinson ‘European Property Market’ [1990] Conveyancer 409–412. DTZ’s 28th Money into Property report; T McConnell ‘Safe Haven Britain’ (2003) 20 Property Week 30–32. 303 J Plender ‘Cross Border Investment in Land’ [2005] 17 EG 46. 304 Mortgage Credit in 2001–2002 (Brussels, European Mortgage Federation, 2002) [1]; Mortgage Credit Forum Group Report The Integration of EU Mortgage Credit Markets (Brussels, DG Internal Market, 2004) [7–9]; Mercer Oliver Wyman Study Financial Integration of European Mortgage Markets (Brussels, European Mortgage Federation, 2003) [6.1] fn 22; Green Paper on Mortgage Credit COM (2005) 327 [6]; London Economics Report (n 16 above) [4.4]; see below [9.07]. 305 RCA White ‘Free Movement, Equitable Treatment and Citizenship of the Union’ (2005) 54 ICLQ 885–906, 905. 301 302

Factors Generating Movement of Buyers

1

39

Disparities in financial clout

[1.60] A survey by the World Bank306 has concluded that the massive migration, documented and undocumented, which followed the collapse of the Soviet Union was driven primarily by economic motivation, players chasing money in a freer market. It seems logical to assume that borders falling in Europe will provoke the same response. Host countries benefit hugely from the supply of labour and home countries benefit from the remittance of earnings by workers back to their country of origin, in Moldova to the extent to 20 per cent of gross domestic product. It seems therefore that the first factors to consider in the emergence of a pan-European market are economic. In this context the range of gross domestic product within the new Europe gives rise to concern. Eurostat suggests that from an EU-27 base of 96 the gross domestic products of member states per capita range from 43 to 227.307 Just on the average are Spain and Italy and slightly above is France. The vast block of EU-15 states are in the range 110–130, including the United Kingdom on 116. Ireland is out ahead of the larger European states, almost up to the average income of Americans, though the special demographics of Luxembourg give it an unchallengeable lead. Compare then the lower end of the range. Right at the bottom in the range 35–38 are Bulgaria and Romania with current candidates such as Macedonia and Turkey even lower. Most of the accession states that joined in 2004 languish in the 50s or 60s, joined only by Portugal from EU-15. A small group in the 80s includes the Czech Republic, Greece, Cyprus and Slovakia. These figures must suggest the huge potential scale of migration when the temporary caps on full rights for workers to migrate are lifted.

2

Density of settlement

[1.61] Europe is growing so fast that it is difficult for statistics to keep pace. At present the internal market covers a European Economic Area, EEA-30, of around 500 million people308 sprinkled unequally over an area of almost five million sq kms,309 which implies that just a little over 100 people inhabit each square kilometre.310 In terms of the general population, the tundra and forests are sparsely populated311 and equally inhospitable are the bogs of central Ireland, 306 A Mansoor & B Quillin Migration and Remittance: Eastern Europe and the Former Soviet Union (Washington, World Bank, , 2006, 978-0821362334) Overview 3. 307 ‘GDP per Capita in PPS’ Eurostat (2007); Housing Statistics in the EU 2004 (Stockholm, Boverkot, 2005, 91-7147-865-5) Table [1.17]. 308 More precisely 493 million for EU-27 and 5 million for EEA–3. 309 More precisely 4.8 million sq kms; EU-27 = 4.336 million sq kms; EEA–3 = 0.488 million sq kms. 310 Densities have dropped with eastwards expansion: Earley (n 4 above). 311 Finland (17/sq km); Sweden (22); by contrast Denmark is well above average at 124/sq km. Even lower in density are the EEA-3 states Iceland and Norway.

40


while the whole of the east of the continent is relatively thinly populated. Britain comes out well towards the top of the table of dense populations312 but still only two and a half times the EU average.313 A map of member states314 reveals Britain at the northern end of a spine of high density that runs through Benelux, Germany and Italy ending up with Malta. Over to the west, France and Portugal are just about on the EU average with Spain slightly less dense.315 An average here includes the vast empty plains of Castille and thus conceals the massive coastal concentrations of Andalucia and Catalonia and more generally regionalised data would give a quite different and truer picture of employment hotspots and densely packed coastal areas, the areas which will grow in attraction as people are increasingly free to follow economic imperatives and personal desires. There should, however, be plenty of lebensraum in Central and Eastern Europe. Massive migration, documented and undocumented, has followed the freeing of borders when Soviet power collapsed and the main motivation behind this movement has been economic, market players chasing money. There is, however, a significant benefit to countries depopulated of their workers in the shape of remittances to the family back home, though these only achieve a full benefit when there are proper savings mechanisms available.316 The internal market is best compared to a centrifuge, which will thicken the coastal fringes and empty the east, just as America has migrated to its ocean seaboards. Huge social problems may lie ahead, and it may be just as well that full personal mobility has not yet taken hold.

3

Travel

[1.62] Europe has been shrunk by the availability of cheap flights, which makes the Mediterranean feasible for homes, holiday homes and commuting. John Ruskin conjured up an image of imagined cultural unity across Europe by imagining what a bird might see as it soared far above its normal range over the continent: Let us, for a moment, try to... imagine the Mediterranean lying beneath us like an irregular lake, and all its ancient promontories sleeping in the sun:… Greece, Italy and Spain, laid like pieces of a golden pavement into the sea-blue... Then let us pass farther towards the north, until we see the orient colours change gradually into a vast belt of rainy green, where the pastures of Switzerland, and poplar valleys of France, and dark forests of the Danube and Carpathians stretch from the mouths of the Loire to those of the Volga, seen through clefts in grey swirls of rain-cloud and flaky veils of the mist of 312 Luxembourg (171); Italy (192); Germany (231); UK (241); Belgium (332). For the EEA-3 state Liechtenstein the figure is 216 and in Switzerland it is 188. 313 An inflow from eastern accession states has increased the UK population and densities: Independent October 21st 2005. 314 EU Housing Statistics 2004 (n 307 above) Table [1.2F]. 315 Spain (80/sq km); Greece (83), Austria (97), France (109), Portugal (112). 316 Migration and Remittance (n 306 above) 3.

Factors Generating Movement of Buyers

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the brooks, spreading low along the pasture lands: and then, farther north still, to see the earth heave into mighty masses of leaded rock and heathy moor, bordering with a broad waste of gloomy purple that belt of field and wood, and splintering into irregular and grisly islands amidst the northern seas, beaten by storm, and chilled by ice-drift.317

With the aid of his atlas, Ruskin put into words a brilliant hypothesis, but one which has become a commonplace, the view from a window seat of an aeroplane flying northwards from Nice to Stockholm and beyond. Before his time the louts we exported to the continent were aristocratic Grand Tourists, but this idling was cut short by the Napoleonic Wars. When travel resumed, in Ruskin’s generation, railways had shrunk the time and labour involved in reaching the south, but Victorians were nevertheless compelled to undertake a real journey to reach the Mediterranean, a fact which necessarily limited the clientele to the moneyed and leisured. Nineteenth-century colonisation was genteel in places like Pau, for the foxhunting, Nice, and Genoa, and the fact is that a gradual osmosis of the upper and upper middle classes did nothing to Europeanise markets in land. Buyers knew full well that they were signing up to the local law and that when in Rome they were to do as the Romans. Mark Twain was already griping about overcrowding in 1878,318 but in truth mass tourism is a post-War phenomenon, coincident in time with the jet. This has created a scrum of potential buyers on the Mediterranean coast, but the market was constrained by controls on the foreign ownership of land and by exchange controls, a fearsome weapon for the oppression of the holidaying classes.319 European land law can only develop in a European market and this is a creature of the last couple of decades of the twentieth century and depends upon a critical mass of potential buyers. A cursory survey of the queue at Gatwick for the easyJet to Nice suggests that things have changed, changed utterly. When holidays are so mundane it is no surprise to find that holiday homes have become a commodity, enabling a family to keep coming back to the sun and a trophy to show off to our friends. A step-change in the market occurred in the mid 1990s.320 Air travel has increased mobility, but it is specifically low cost flights that have changed the perception of how feasible it is to own a holiday home abroad. Some statistics. Around 50 per cent of the British population flies at least once a year,321 though this is mainly confined to the middle and higher socio-economic groups322 who seem able to overcome their scruples about the environmental cost of flying.323 About a fifth of John Ruskin Works (London, Smith Elder, 1872) vol X 185–187. Mark Twain A Tramp Abroad (Oxford, OUP, 1996, 978-0-195-10137-9, a reprint of 1st edn, 1878) ch XXIX passim. 319 See below [2.34]. 320 See below [1.91]. 321 Independent May 28th 2005. 322 Independent November 16th 2006. 323 A single flight from London to Rome creates 1.4 tonnes of carbon dioxide: Independent May 28th 2005. If Ryanair boss Michael O’Leary is to be believed farting cows and the rest of the livestock industry are a greater source of atmospheric carbon: Independent November 7th 2006. 317 318

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Brits fly to Spain each year, the number one destination, spending an average of 11 nights. Trips to France lag behind in number, average length and total spend and overall there is a considerable deficit in the balance of payments on tourism.324 Around 400K Europeans are airborne at any one time,325 and low cost airlines service 1.5K routes.326 British demand has increased five-fold over 30 years and demand is set to increase again three-fold in the next 25 years. Owners of foreign properties want to visit them quickly and often so a low cost air link is important in the way that London commuters once looked for an express line to Waterloo, though airlines emphasise that they owe no duty to second home-owners.327 Cheap flights have fuelled the land market in Europe, and exported British buyers to the continent of Europe. William Sanson had hard words that ‘people should travel less’.328 Property owners should travel less as well.

B USI N ESS R I G HTS TO B UY LA N D

Business Rights to Buy Land 1

Relevance of market freedoms

[1.63] The internal market within which there is freedom to make capital investments is also an area within which there is the right to move to set up businesses and to provide or receive services, and to move employees.329 As for capital, a European dimension is created only when the conduct of a business crosses a national frontier.330 A Londoner relies on domestic law to set up business in Edinburgh, but a European angle arises when a British citizen moves around the continent providing services and takes his wife with him on his travels, her right to move being an adjunct of his right to provide services anywhere he chooses in Europe.331 European land law seemed likely at first to develop in the interstices of the business freedoms332 and even that limited remit carried a serious bite. Land law, as it stood at that moment when European integration became a reality, is captured and encapsulated in an aside by Advocate-General Jacobs in the Phil Collins case, rejecting a spurious argument about copyright, that 324 Holidays Abroad by UK Residents by Destination 2002 (Office of National Statistics, Table 12.20); Guardian November 27th 2003. 325 Guardian July 7th 2005. 326 Times March 11th 2006 quoting the European Low Fares Airline Association. 327 Observer February 8th 2004. 328 W Sanson Grand Tour Today (London, Hogarth, 1968, 978-0-701-20287-3) 206. 329 EC §2 ex §2; EC §14 ex §7a; Single Europe Act 1986 [1987] OJ L169 1 §89. 330 Angonese (n 153 above); R(JR) Countryside Alliance v Att-Gen [2006] EWCA Civ 817, [2006] 3 ELR 97, [15] Clarke MR; see above [1.20]. 331 C-60/00 Carpenter v Secretary of State for Home Department [2002] I ECR 6279 ECJ. 332 Treaty of Rome §§52–58 (establishment), §§59–66 (services).

Business Rights to Buy Land

43

it might just as well be argued that a Member state could prohibit the nationals of other Member states from buying land for business use.333

Economic freedoms are generally enforced both directly and horizontally,334 giving rise to a domestic right to damages when an EU citizen who wishes to establish is improperly obstructed from buying a flat.335 Thus even before there was a common market in land there was this potential for a European land law intended to achieve a common market in other economic factors of production, but the likely sum of these intercalations seemed to be very minimal. Post-Maastricht it is not too important to be fussy about which economic freedom is in play, since the freedoms overlap.336 Business rights are now secondary in the sense that any land transaction and any control on it should first be considered from the capital angle,337 whether the alternative is establishment338 or services.339 Business freedoms remain in the wings to deal with a case in which a particular control is valid as a restriction on capital movement but is open to question as an impediment to business. There seems to be a developing trend towards considering infringement under multiple headings, the more the merrier.340 Rights to conduct business may also be important during the association period which precedes full membership, since business rights are often granted before capital freedom, though often subject to some prior formality such as pre-entry registration and obtaining a temporary residence permit before travelling.341 Association agreements often also pick up a repealed provision of the Treaty of Rome which provided for ‘economic activity’342 to flow across the European market and since it seems clear, reading between the lines of judicial reticence, that transactions with land do constitute economic activity343t his too may help towards a freer market in land even in advance of full accession. [1.64] Rights to set up in self-employment need to be buttressed by the free C-92/92 etc Phil Collins v Imtrat [1993] I ECR 5145 ECJ, AG[22] Jacobs. Case 2/74 Reyners v Belgium [1974] ECR 631 ECJ; Angonese (n 153 above); Viking Line v International Transport Workers’ Federation [2005] EWHC 1222, [2006] ILP 4; C-268/99 Jany v Staatssecrtaris van Justitie [2001] I ECR 8615 ECJ, J[26] (association agreement). 335 Oberster Gerichtshof 1 Ob 12/00 x (n 213 above); White (n 155 above) ch 6. 336 Reisch (n 63 above) AG[59] Geelhoed; Flynn (n 151 above) 787–791. 337 Konle (n 42 above); Centro Walter Stauffer (n 248 above) J[24]. 338 UK Golden Share (n 151 above) J[51–52]; Baars (n 278 above) AG[26–30] Alber. 339 C-118/96 Safir v Skattemyndighete I Dalarnaslän [1998] I ECR 1897 ECJ, J[22–23], J[30–35]; C-279/00 Commission EC v Italy (Recruitment Agencies) [2002] I ECR 1425 ECJ; Piazza (n 259 above) J[50–53]; Flynn (n 151 above) 789–791; Usher (n 26 above) 111ff. 340 Italian Recruitment Agencies (n 339 above). 341 C-257/99 etc R(JR) Gloszczuk v Secretary of State for Home Department [2001] I ECR 6369 ECJ, AG[54] Léger; C-327/02 Panayotova v Minister voor Vreemdelingenzaken en Integratie [2004] I ECR 11055 ECJ; B Bogusz ‘Right of Establishment for Accession State Nationals’ (2002) 27 EL Rev 472–482. 342 Treaty of Rome §7. 343 Greek Border Regions (n 140 above) Report [7], AG[14] Jacobs; Jany (n 334 above) J[32ff], AG[32ff], AG[122] Léger, but decided on other grounds at J[49]. 333 334

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movement of persons.344 This applies to established service providers and to workers of their choosing345 and there is also freedom of movement for recipients of services such as tourists346 which may extend their movement rights.347 Movement rights of the self-employed do not require separate consideration because they are the same as for workers,348 an equivalence reconfirmed by the recent consolidation of residence rights for citizens and EEA nationals.349 A person may move from his home state in order to live in and trade from a host state, and permanence accrues after five lawful years.

2

Establishment and service provision

[1.65] The process of setting up a business and operating it from a permanent or settled place of business over an indefinite period of time is called establishment,350 the stability and permanence of the base being crucial.351 Self-employed and professional people352 invoke the right of establishment, as does a worker who subsequently decides to set up on his own. Other establishers are the promoters of undertakings, companies and firms,353 managers of businesses, and businesses when setting up agencies, branches and subsidiaries (‘secondary establishment’).354 Case law is relatively scarce because the concept of establishment is so broad.355 Obstacles to establishment should by now have been removed, including cross-border estate agency and other self-employed professionals dealing with transactions in commercial and residential land.356

344 Reisch (n 63 above) AG[31] Geelhoed; P Craig & G de Búrca EU Law — Text Cases & Materials (Oxford, OUP, 3rd edn, 2003, 978-0-19-924943-5) 768–769; E Guild ‘Free Movement of Business People in Europe’ (1999) 1 Perspectives in European Business Law 3–5. 345 R(JR) Loutchansky v First SS [2005] EWHC 1779, [2005] 3 CMLR @ 43; C-113/89 Rush Portuguesa v Office National d’Immigration [1990] I ECR 1417 ECJ. 346 Van der Mei (n 281 above) 14. 347 C-200/02 Zhu v Secretary of State for Home Department [2004] I ECR 9925 ECJ; Ali v Secretary of State for Home Department [2006] EWCA Civ 484, [2006] ELR 423, [26], Keene LJ. 348 Van der Mei (n 281 above) 14; N Reich ‘Constitutional Relevance of Citizenship and Free Movement in an Enlarged Union’ (2005) 11 ELJ 675–698, 686. 349 Residence Directive (n 122 above) §1. 350 EC §§43–48 ex §§52–58; EU Charter FR (n 131 above) §§16–17; EEA Agreement as adjusted and amended (nn 50–52 above) §§31ff, Annexes VIII–XI. 351 C-55/94 Gebhard v Avocati di Milano [1995] I ECR 4165 ECJ, J[25]; C-221/89 R(JR) Factortame v Secretary of State for Transport [1991] I ECR 3905 ECJ; Reisch (n 63 above); C-215/01 Staatsanwaltschaft Augsburg Beim Amtsgericht Augsburg v Schnitzer [2002] I ECR 14847 ECJ, AG[19] Mischo. 352 Jany (n 334 above) AG[105] Léger. 353 Including co-operatives, public law corporations and non-profit-making organisations. 354 C-212/97 Centros v Erhvervs -og Selskabsityrelsen [1999] I ECR 1459 ECJ; and many later cases. 355 White (n 155 above) 36. 356 EC §44 ex §54; Abolition of Restrictions on Freedom of Establishment, General Programme, (1962) OJ (English Special Edition, Second Series) IX 7, Annex 1 Group 640; Establishment Directive 67/43/EEC, [1967] OJ (English Special Edition) 3, §2.


45

[1.66] Around 70 per cent of the economic activity of the EU consists of the provision of services.357 Freedom to do this across the EU is a fundamental of the internal market,358 fully achieved and now coequal with the other freedoms.359 Services360 include industrial activities, commercial activities, the work of craftsmen, and professional activities of kinds normally provided for remuneration, not to mention morally dubious activities such as prostitution361 and gambling. The key is that activity is carried out from a base more temporary than a permanent establishment,362 so renting of premises abroad may perhaps be suggestive of service provision. Schnitzer363 is a leading case precisely because it sits so uncomfortably close to the junction of these two freedoms. A Portuguese firm was employed on a construction project in Bavaria to carry out the plastering work, stretching over a three-year period. German domestic law required a service provider to be listed on a trades register but this and the administrative fine imposed in default were improper as a matter of European service provision. The decision that the company had not established in Germany over this period of time was not easy.364 Services vary widely and there is no abstract test for the necessary duration or frequency, but the repetition will be less and the pattern less regular than with an establishment.365 [1.67] Pre-Accession Association Agreements often allow service provision, as well as establishment, usually subject to some prior administrative control.366 Free movement of services will not be fully attained in the ten eastern states (the eight eastern accession states of 2004 plus Bulgaria and Romania) until the end of the transitional period of up to three years after accession.367 An establishment in one state can also be used as a base from which to stray over a border to provide tourist or other services in a second state on a more temporary basis.368

Services Directive 2006/123/EC [2006] OJ L376 36, R[4]. EC §§49–55 ex §§59–66; EEA Agreement as adjusted and amended (nn 50–52 above) §§36ff, Annexes IX–XI; EU Charter FR (n 131 above) §17[2]. 359 M Adenas & W-H Roth Services and Free Movement in EU Law (Oxford, OUP, 2002, 0-19-829938-9). 360 EC §50 ex §60; Schnitzer (n 351 above) J[3–7]; White (n 155 above) 37–42. 361 Jany (n 334 above) AG[118ff] Léger, J[49]; many sex workers are in disguised employment: at J[51ff]. 362 An EU service provider can subsequently establish, and this right may be extended by the Council to the nationals of third countries. 363 Schnitzer (n 351 above) J[3–7], AG[22] Mischo. 364 Schnitzer (n 351 above) AG[18] Mischo; JL Hansen ‘Full Circle’ (2000) 11 European Business Law Review 83–90. 365 Schnitzer (n 351 above) J[30–31], J[40]. 366 Gloszczuk (n 341 above); C-257/99 R(JR) Barkocki v Secretary of State for Home Department [2001] I ECR 6003 ECJ; C-16/05 R(JR) Tum v Secretary of State for Home Department [2004] 1 CMLR 33 @ 1012 ECJ, AG[27] Geelhoed. 367 Accession+10 (n 69 above) §57[1]. 368 Luisi (n 225 above); MC Van de Woude & P Mead ‘Free Movement of the Tourist in Community Law’ [1988] 25 CML Rev 117–140. 357 358

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3

Restrictions on business freedom

[1.68] Restrictions on establishment369 may be imposed in the interests of public policy, public security, public health, or other grounds approved by the EU Council; legitimate purposes included town and country planning, securing a permanent population, economic activity.370 Nationality-based discrimination is banned, whether direct or indirect.371 If a control fails on one ground it becomes unnecessary to consider the other,372 but justification may be needed under both freedoms373 because restrictions on establishment have to be justified on narrower grounds than capital restrictions, which have a broader base.374 So a control has to be justified as a control on capital movements and separately as a control on establishment.375 [1.69] Domestic restrictions on service provision are multifarious, often nefarious, and very frequently in conflict with European principles. German service providers usually have to be listed in a trades register before firms can begin to trade, a clear restriction and one that cannot be tolerated at all unless registration is automatic, free of subscriptions,376 and without delay or complication. Even with these safeguards, it was improper to require a Portuguese firm to register in Germany before carrying out plastering work in Bavaria,377 and there are innumerable other reported cases of unjustified restrictions.378 Of course, controls may be justified, recent examples including taste requirements for computer games,379 respect for the state minimum wage,380 and a duty to deduct tax at source.381 [1.70] A new Directive has been agreed to attack remaining restrictions on service provision.382 It will continue to be necessary for a service provider to comply with regulations of the host state where the service provision is to be carried out. A service provider has a ‘single point of contact’ in a particular EC §46 ex §56. Konle (n 42 above) J[40]. 371 C-320/03 Commission EC v Austria (Ban on Lorries) [2005] I ECR 9871 ECJ, J[38]. 372 UK Golden Share (n 151 above) J[51–52]. 373 Safir (n 339 above) AG[9], AG[16–18] Tesauro. 374 Safir (n 339 above) AG[16] Tesauro. 375 Safir (n 339 above) AG[18] Tesauro; contrast Greek Border Regions (n 140 above) [1989] ECR 1461 ECJ, J[20ff] (pre-Maastricht). 376 C-58/98 Conster [2000] I ECR 7919 ECJ. 377 Schnitzer (n 351 above). 378 Eg C-79/01 Payroll Data Services (Italy) [2002] I ECR 8923 ECJ. 379 C-36/02 Omega [2004] I ECR 9609 ECJ. 380 C-369/96 Criminal Proceedings v Arblade [1999] I ECR 8453 ECJ. 381 C-290/04 FKP Scorpio Konzertproduktionen v Finanzamt Hamburg-Eimsbüttel [2006] STI 2274 ECJ. 382 Services Directive (n 357 above) §§2, 4, but excluding, eg, social housing; financial services are to be subjected to a dynamic consolidation to remove remaining barriers whilst reflecting stakeholder sentiments: Financial Services Policy 2005–2010 (EC Commission White Paper, December 5th 2005, IP/05/1529); Handbook on Implementation of the Services Directive (EC, 2007). 369 370


47

state,383 a single384 regulator from whom he can obtain information about all compliance requirements in that country. [1.71] German chimney sweeps385 are illustrative of the problems, having enjoyed a near monopoly since the fifteenth century under a scheme for allocating sweeps to districts, one sweep being allocated to each of 8K districts created in 1937 by Heinrich Himmler. Since then functions have been changed to include checks on modern heating systems and the system has in theory been open to non-Germans but it is obviously inimical to open competition. Two lists are set out in the new Services Directive of restrictions on establishment by service providers to be eliminated and of such requirements that have to be evaluated. Prohibited requirements relate to386: 앫 앫 앫 앫 앫 앫 앫 앫

nationality of staff; residence of shareholders; establishment in more than one state; primary or secondary establishment; reciprocity requirements; tests of market need; financial guarantees; and registration for a period before commencing provision.

Requirements that will need to be evaluated, and will be subject to a presumption against their acceptance unless a justification can be established,387 relate to: 앫 앫 앫 앫 앫 앫 앫 앫 앫

quotas or territorial restrictions; prescription of the legal vehicle required by service providers; reservation of access to specific providers; bars on multiple establishment within a state; minimum numbers of employees; fixed tariffs; sale price fixed below cost; requirement to allow access to services by other providers; and joint supply.

This list is not exhaustive. Application of this Directive to lawyers is considered elsewhere.388

Services Directive (n 357 above) R[48], §6. There could in fact be more than one in a state. 385 J O’Keefe ‘Brussels Watch’ [2006] 42 LSG 11; Guardian November 4th 2006; C-134/05 Commission EC v Italy (Debt Collection Services) [2007] July 18th ECJ. 386 Services Directive (n 357 above) §14; this Directive is to be implemented by December 28th 2009. 387 Services Directive (n 357 above) §15. 388 See below [7.07ff]. 383 384

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[1.72] Recipients of services will also receive new rights to information about the service and its provider and about the quality of the service offered.389

4

Acquisition of property for business

[1.73] Freedom to set up a business elsewhere in Europe is one of the key drivers of the internal market, which requires the ability to buy and rent premises from which to conduct that business. Controls on the acquisition of land by EEA nationals hinder free establishment and service provision and may well fail for that reason. Establishment includes the right for a national of one EU state to acquire and use land and buildings situated in the territory of another EU state, a right important enough to be mentioned in the EC Treaty itself,390 with a qualification in relation to agricultural activity.391 It is merely one specific example of the right to all facilities and assistance in pursuit of an established business.392 This is why controls on landownership in the Greek ‘border’ regions393 were perceived as infringements of the freedom of establishment. Associated with the acquisition and use of business property394 is the right to all assistive facilities, notably the exploitation and transfer of land, complementary rental rights,395 and the right to obtain loans and to offer land as security.396 Residence rights397 include the acquisition of a second home to be used while exercising that freedom. Land law rules must not have the indirect effect of making it more difficult for people to set up a business, though this will usually reconfirm that a restriction is improper as a hindrance to capital movement.398 Legislation hindering access or exercise of such rights need to be tested and justified, and it will be very difficult to justify treating nationals of different states unequally.399 Italy formerly limited access to social housing to Italian nationals. Limits applied both to access to allocation of 389 Services Directive (n 357 above) §§19ff; these are restrictions on service provision (as opposed to the restrictions on establishment by service providers in §§9–15 just discussed). 390 EC §44 [2](e) ex §54 [3](e); Jenard Report [1979] OJ C59 1, 34. 391 EC §33[2] ex §39[2]; Greek Border Regions (n 140 above) J[21]. 392 EC §43 ex §52. 393 Greek Border Regions (n 140 above) J[20ff], AG[8], Jacobs; J Kalisperas ‘An Outline of the Greek Property Market’ (1978) 248 EG 853–854. 394 Greek Border Regions (n 140 above) J[13]. In Centro Walter Stauffer (n 248 above) J[19] it is stated that an establishment only arises when land is managed actively and not through acting as a landlord of rented property. 395 Greek Border Regions (n 140 above) AG[8] Jacobs; he uses the term ‘second home’ in a sense slightly different from its normal English sense. 396 Council Programme December 18th 1961 [1962] JO 32, 36; Italian Housing Aid (n 231 above) J[14]. 397 C-62/96 Commission EC v Greece (Ship Registers) [1997] I ECR 6725 ECJ, J[19]; C-106/91 Raurath [1992] I ECR 3351 ECJ, J[16–17]; C-363/89 Roux [1991] I ECR 273 ECJ, J[9–10]; Case 48/75 Royer [1976] ECR 497 ECJ, J[50]. 398 Flynn (n 151 above) 788. 399 Greek Border Regions (n 140 above) J[20–23]; C-243/01 Criminal Proceedings v Gambelli [2003] ECLYB [160] ECJ.

Workers

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homes and help with mortgage costs. This restricted improperly establishment, secondary establishment and employment rights — between which no distinction should be made400 — and limited facilities which could encourage and make easier the exercise of those rights.401 Self-employed people must have equal access under housing legislation, irrespective of their nationality.402 Given the transience of service provision, outright ownership of land may seem less likely to be invoked by a service provider,403 but it may need to acquire an office or similar infrastructure.404 A service provider will commonly need to rent business premises and residential accommodation for workers and letting is itself a provision of services.405 In the Greek border regions controls existed on renting land and taking assignments of agricultural property which would seriously affect a person wishing to come temporarily from elsewhere in the EU to trade or farm in Greece.406 It must be remembered that the service freedom applies both to the provider and to the recipient of the service, especially important in tourist areas,407 and there must be no nationality-based discrimination.408

WO R KER S

Workers 1

Main categories of economic migrant

[1.75] Official statistics measure individual workers and retirees, but they do not provide a convenient measure of workers emigrating and establishing a home overseas. Even without clear figures it is plain that a diaspora is taking place of young British families leaving in the face of rising house prices, unable to afford a decent life without moving to France or Spain. Spain is the major destination409 (about 50K a year), followed by France, with Italy trailing far behind. One in six graduates leaves. Conversely, there is a major influx of workers from overseas, though many of these will presumably be forced to rent.410 [1.76] Long-distance commuting within Britain is increasing to the extent that

400 401 402 403 404 405 406 407 408

Italian Housing Aid (n 231 above) J[12]. Italian Housing Aid (n 231 above) J[10], J[14]. Italian Housing Aid (n 231 above) J[15–17]. Greek Border Regions (n 140 above) AG[9] Jacobs, J[27]. Schnitzer (n 351 above) J[28]. Reisch (n 63 above) AG[31] Geelhoed. Greek Border Regions (n 140 above) Report [9], J[24], but decided on other grounds at J[28]. Albore (n 138 above) AG[12] Cosmas. EC §12 ex §6; Italian Housing Aid (n 231 above); Greek Border Regions (n 140 above) Report

[24]. eg, Spain 33 to UK and 88 from UK to Spain every day: Independent November 3rd 2006. Independent August 4th 2006, citing Office of National Statistics figures; immigration of 582K was matched by an exodus of 360K Brits in 2004. 409 410

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800K people travel regularly more than 30 miles,411 and this is now spilling over into Europe. One study predicts a commuter belt stretching from Barcelona, Palma and Marrakech to Dubrovnik.412 Some malcontents already commute to work through the Channel Tunnel from cheap homes in the Pas de Calais,413 but weekly commuting from the continent is the perquisite of self-employed professionals, many of whom rely on budget airlines for transportation between their continental bolt-hole and an office in Britain. [1.77] Workers and commuters both enjoy free movement rights.

2

Workers

[1.78] Implicit in an internal market is the principle that labour must be able to move freely within the market, which means unrestricted residence rights for workers — a concession necessarily extended to ex-workers and related categories. These are not the gentlemen who support themselves but rather those who toil and spin. Rights of movement attach to nationals of any of the EEA-30 states414 and these have emerged unchanged from the recent consolidation.415 EEA nationals may stay in the short term in another EEA state for up to three months without declaring their status and do not require a work permit, except for workers from eastern accession states for whom there are restrictions and pre-entry formalities. [1.79] Job-seekers must be free to move from one state to another in search of work and be offered equal access to employment markets.416 Their entry to the employment market should be facilitated by job-seeker’s allowance417 after local residence of sufficient duration to establish the genuineness of attempts to seek work,418 but a job-seeker can be asked to leave if he fails to find work within six months.419

Guardian September 2nd 2005. D Jones Thomson Future Forum 2016 (London, Thomson, 2006), 10; Independent September 9th 2006 citing survey for the Property Investor Show. 413 Guardian November 22nd 2004; Independent September 9th 2006. 414 EC §40 ex §49; EEA Agreement as adjusted and amended (nn 50–52 above) §28[1]; Immigration (EEA) Regs 2006 (n 287 above) reg 5; see above [1.54]. 415 Residence Directive (n 122 above) §1. 416 EU Charter FR (n 131 above) §15[2]; EC §29[2] ex §48[2]; EEA Agreement as amended and adjusted (nn 50–52 above) §28[3]; Case 39/86 Lair v Univeristat Hannover [1988] ECR 3161 ECJ, J[32–33]; C-184/99 Grzelczyk v Centre Public d’Aide Sociale Ottignies-Louvain-la-Neuve [2001] I ECR 6193 ECJ. 417 Not other benefits: Residence Directive (n 122 above) §14. 418 The UK requires habitual residence: C-138/02 Collins v Secretary of State for Work and Pensions [2004] I ECR 2703 ECJ; Collins v Secretary of State for Work & Pensions [2006] EWCA Civ 376, [2006] ICR 1033; C-224/98 D’Hoop v Office National de l’Emploi [2002] I ECR 6191 ECJ, J[38]; C-258/04 Office National de l’Emploi v Ioannidis [2005] I ECR 8275 ECJ. 419 Vitale v Secretary of State for Home Department [1996] Imm AR 275 CA; C-292/89 R(JR) Antonissen v Immigration Appeal Tribunal [1991] I ECR 745 ECJ. 411 412

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51

[1.80] A worker is a person who has entered the employment market under a contract to perform services for a period of time under the direction of another person in return for remuneration.420 Workers may stay in the host state over the longer term, that is, for a period exceeding three months, subject to registration formalities,421 and may claim social security as a migrant worker422 and protection against expulsion. Former workers may retain residence after their economic activity has ceased, a case law right now consolidated. A former worker retains his status when temporarily unable to work, involuntarily unemployed,423 or embarking on vocational training, though there are detailed qualifications424 and these rights are interpreted strictly.425 Additional categories beyond those already mentioned are part-time workers, student workers and posted workers.426 [1.81] Workers who are EEA nationals establish permanent residence after a five-year stretch served as an employee in a host state.427 Provision is also made for cross-border workers: a worker who has completed three years’ continuous employment in the host state may then take up work in a second host and after commuting for the remainder of the five-year period secure permanent rights in the host state he moved to first. Permanent residence may be accelerated and so acquired in less than five years when workers stop work in certain circumstances, for example after reaching host state pension age, taking early retirement, or suffering permanent incapacity to work.428

3

Workers from accession states

[1.82] Workers from Cyprus and Malta enjoy full access to the EEA-30 employment market.429 Controls apply to workers from the remaining eight states which joined the Union in mid-2004 in the heartlands of central Europe, and from Bulgaria and Romania after their accession at the start of 2007. Western states offer higher wages which are attractive to workers from the east and these states have had to be protected against the vast pool of potentially mobile workers by a deferral of full movement rights,430 the delay varying from host to host and being 420 Van der Mei (n 281 above) 22ff; Collins ECJ (n 418 above); C-456/02 Trojani [2004] I ECR 7573 ECJ (migrant working in a hostel for pocket money; left to domestic court). 421 Residence Directive (n 122 above) §§7–11. 422 EC §42 ex §51; EU Charter FR (n 131 above) §34[2]. 423 C-406/04 De Cuyper v Office National de l’Emploi [2006] I ECR 6947 ECJ, J[47] (unemployment benefit). 424 Residence Directive (n 122 above) §§7–8; Greek Border Regions (n 140 above); Case 186/87 Cowan v Trésor Public [1989] ECR 195 ECJ, J[17]; C-413/01 Ninni-Orasche [2004] I ECR 13187 ECJ; P Dwyer ‘Retired EU Migrants’ (2001) 23 Journal of Social Welfare and Family Law 311–328. 425 C-257/00 Givane v Secretary of State for Home Department [2003] I ECR 345 ECJ. 426 Van der Mei (n 281 above) 14, 34ff. 427 Residence Directive (n 122 above) §§16–21. Entitlement should be certified. 428 Residence Directive (n 122 above) §17[1], with much detail. 429 Accession +10 (n 69 above) §24, Annex VII (Cyprus), Annex XI (Malta). 430 Accession+10 (n 69 above) §24 and Country Annexes; A Adinolfiu ‘Access to Work of Citizens of the New Member States’ (2005) 42 CML Rev 469–498.

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either two,431 five432 or seven433 years. Eastern Europeans who have obtained work permits in the normal way and worked in the west lawfully for 12 months at the time of their home state accession are free to stay in the one host, and a similar one-country right applies to workers admitted after accession and subsequently continuing residence for 18 months. Family members can come and work. Britain has adopted an open doors policy, along with Ireland and Sweden, for which the government has been commended to the rest of Europe,434 but the fact is that the prediction of likely numbers has turned out to have been totally wrong.435 Eastern workers436 in the United Kingdom must apply to the State Worker Registration Scheme within one month of starting work437 and obtain a registration certificate authorising them to work for that employer, and they must be self-supporting during their stay.438 Bulgarian and Romanian workers will face restrictions for up to seven years after their home states joined at the start of 2007, with Germany and Austria opting for the full transition period, and Bulgarians and Romanians coming to Britain will experience the same seven year hitch.439 Many places on the Seasonal Agricultural Workers Scheme will be reserved for workers from Bulgaria and Romania.

4

Family members of workers

[1.83] Family members must be considered separately, since all too often a right of residence for a particular person is accompanied by a refusal to admit members of his440 family. Free movement can mean the freedom to leave behind your partner and family.

Portugal, Spain, Italy, Greece, Finland (ie, to mid-2006). France, Belgium, Netherlands, Luxembourg (ie, to mid-2009). 433 Germany, Austria and Denmark (ie, to mid-2011). 434 Guardian February 6th 2006. 435 A study by University College London suggested a maximum of 13K eastern workers, when 600K have come in total: Independent November 22nd 2006; the figure for net migration is much lower because it takes no account of those who have worked short-term and left: Guardian August 23rd 2006, August 25th 2006; Daily Mail passim. 436 Registration is not required of the self-employed, full-time students, retired workers, those self-sufficient, and those residing lawfully at the time of accession. 437 Accession (Immigration and Worker Registration) Regs 2004 SI 2004/1219 as amended by SI 2005/2400 and recently renewed beyond 2006 by SI 2007/475; S Currie ‘Post Accession Experience of A–8 Migrant Workers in the UK’ (2006) 31 EL Rev 207–229, 212. 438 Social Security (Persons from Abroad) Regs 2006, SI 2006/1026; R(JR) H v Secretary of State for Work & Pensions [2004] EWHC 1097, [2004] 3 CMLR 11 @ 236. 439 EU (Accessions) Act 2006 c 2 s 2; Accession (Immigration and Worker Authorisations) Regs 2006, SI 2006/3317. 440 ‘He’ and ‘his’ and cognate terms are, of course, used in a gender-neutral sense. 431 432

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53

Family members of citizens enjoy rights similar to those enjoyed by citizens, irrespective of their own nationality.441 Full rights are conferred upon the following members of the family of an EEA national citizen442: 앫 앫 앫 앫

a spouse443 (provided the marriage is not one of convenience444), a registered partner treated by the host state as equivalent to a spouse,445 direct descendants under the age of 21 or dependants over that age,446 and relatives in the ascending line (parents and grandparents) who are dependants.447

The extended family is a wider group of people who should be considered domestically to decide whether residence can be granted on the basis that the host state should seek to facilitate entry and residence by people connected to an EEA national in the following groups, even if not themselves nationals,448 that is: 앫 dependants or household members, 앫 family members cared for as a result of serious health problems, and 앫 a partner with a durable and duly attested relationship. Heterosexual cohabitees and unregistered same-sex couples who have chosen not to register their partnership449 thus rely on a host state to recognise their relationship as durable, an unacceptable imposition on those with non-nuclear living arrangements.450 Each case needs to be considered individually, taking account of financial and physical dependence on the national, and any denial of entry or residence must be justified by the putative host state. [1.84] Short-term entry is no problem for family members accompanying or joining an EEA national for up to three months.451 A family that wishes to be together for longer than three months can do so provided that the person they are joining falls into one of the categories of citizens enjoying longer-term residence rights, such as workers and former workers; family members then enjoy 441 Residence Directive (n 122 above) §3[1]; S Peers ‘Family Members Residence Rights’ (2001) 26 EL Rev 76–83; Immigration (EEA) Regs 2006 (n 287 above) regs 7–10. 442 Residence Directive (n 122 above) §2[2]. 443 Kaba v SS Home Department (n 292 above); Carpenter v Secretary of State for Home Department (n 331 above) J[42]. 444 Residence Directive (n 122 above) §35; however, a genuine marriage may be exploited to secure residence advantages: C-109/01 R(JR) Akrich v Secretary of State for Home Department [2003] I ECR 9607 ECJ. 445 Residence Directive (n 122 above) §2[2](b); for other partners, see n 456 below. 446 PB v Secretary of State for Home Department [2005] Imm AR 586 Immigration Appeal Tribunal. A parent caring for a child may obtain derivative rights through the child: C-413/99 Baumbast v Secretary of State for Home Department [2002] I ECR 7091 ECJ; Zhu (n 347 above). 447 Also relatives in the last two categories of the spouse or partner. 448 Residence Directive (n 122 above) R[6], §3[2]. 449 Case 59/85 Netherlands v Reed [1986] ECR 1283 ECJ; L Papdopoulou ‘In(di)visible Citizen(ship): Same Sex Partners in EU Immigration Law’ [2002] Yearbook of European Law 229–262. 450 L Woods ‘Disadvantaging the Disadvantaged?’ (1999) 11 Child & Family Law Quarterly 17–31; R Gaffney-Rhys ‘EU Freedom of Movement’ [2006] International Family Law 65–71. 451 Residence Directive (n 122 above) §§4–6.

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corresponding subsidiary rights when accompanying or joining the active citizen. Family members need a residence card (an EEA family permit in Britain).452 Permanent unconditional residence should be accorded to family members of Union citizens after residence for a continuous period of five years without expulsion, irrespective of their own nationality, and even sooner if living with a worker at the time of his retirement or death in service. Family members enjoy free-standing rights after their family relationship has ended, for example by death, separation,453 or divorce even if they have not yet had time to acquire permanent residence rights, though there are many detailed rules, much tighter conditions for family members who are not themselves EEA nationals,454 and a requirement of self-sufficiency.455 Children of a departed worker may remain behind to complete their education,456 accompanied by the parent with actual custody.

5

Non-EEA workers and their family members

[1.85] A third-country national has residence rights in most EEA states, though not the United Kingdom, Ireland or Denmark. A person who is not a national of any of the EEA states must initially comply with domestic immigration rules of a host in order to begin work within the EEA and may then remain in the host state by renewing his work and residence permits. Long-term resident status457 accrues after residence as a worker458 stretching over five years without withdrawal of his residence permit and with minimal absences.459 Residence, evidenced by a long-term residence permit,460 remains conditional on the demonstration of adequate resources and also sickness insurance.461 Non-nationals were formerly tied to their host state, but those with long-term resident status may now move to work elsewhere in the EU,462 staying in the second host state for more than three months with a view to employment, other economic activity, study or vocational training. Quotas apply to general workers but numbers of posted workers and

452 Residence Directive (n 122 above) §§7–11; Immigration (EEA) Regs 2006 (n 287 above) regs 11–12 (EEA family permit); Case 12/86 Demirel’s case [1987] I ECR 3719 ECJ (Turkey). 453 Case 267/83 Diatta v Land Berlin [1985] ECR 567 ECJ, J[10]. 454 Residence Directive (n 122 above) §§12–13; Givane (n 425 above). 455 Residence Directive (n 122 above) §§7[1](a)–(d), §8[4]. 456 Residence Directive (n 122 above) §12[3]. 457 Third Country National Long-term Residence Directive 2003/109/EC [2004] OJ L16 44, §§1–3; S Boelaert-Suominen ‘TCNs who are Long-term Residents’ (2005) 42 CML Rev 1011–1052; S Peers ‘Implementing Equality?’ (2004) 29 EL Rev 437–460. No attempt is made to describe the special position of Turkish workers. 458 Excluding seasonal workers TCN Residence Directive (n 457 above) §3[1]; students have other rights. 459 TCN Residence Directive (n 457 above) §4 (up to six months and in total ten months). 460 TCN Residence Directive (n 457 above) §8. 461 TCN Residence Directive (n 457 above) R[7], §5. 462 TCN Residence Directive (n 457 above) §§14–23.

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cross-border service providers are unlimited.463 The non-national can then stay on to secure long-term residence rights in the second state or may move back to his original host. [1.86] Family reunification is permitted for the family of a non-citizen,464 again excepting the United Kingdom, Ireland and Denmark. The ‘sponsor’ must have been living lawfully in a host EU state for two years and can then apply for his family members to be allowed to join him,465 on the basis that the entire family will be self-supporting and covered by adequate sickness insurance.466 Reunion rights apply to the sponsor’s spouse, their minor children, and minor children in their joint custody, their adult children who are unmarried and who require care and to dependent parents.467 A host state should also consider granting reunion rights to an unmarried partner who enjoys a stable and long-term relationship with the sponsor.

6

Property law rights of workers

[1.87] A worker needs a place to live. Land law rights are an essential component of the right to work and so national property rules are overridden to ensure that workers are not discouraged from moving.468 The rental market for a French worker in Paris should be no easier and no harder than for an English person who has moved to the French capital in order to work. It is improper to check on the suitability of a worker’s living accommodation before deciding to renew his work permit.469 Controls on foreign ownership were struck down in the Greek Border Regions,470 showing the potency of the European right to work as a means to secure housing, rental rights and landownership.471 Migrant workers have unrestricted access to housing472 and equal treatment with nationals.473 Controls of any kind require justification and their justification will be an uphill battle,474

463 TCN Residence Directive (n 457 above) §16; such people cannot switch to a non-economic basis. 464 Directive 2003/86/EC [2003] OJ L251 12; S Peers ‘Family Reunion’ in N Walker Europe’s Area of Freedom Security and Justice (Oxford, OUP, 2004, 978-0-19-927465-9) 148; G Davies ‘Third Country Family Members of Community Migrants’ [2004] ECLYB lxxvi–lxxix. 465 Family Reunification Directive (n 464 above) §8, subject to any expulsion decision. 466 Family Reunification Directive (n 464 above) §7. 467 Family Reunification Directive (n 464 above) §4; C-540/03 European Parliament v Council EU (Family Reunification) [2006] I ECR 5769 ECJ (annulment claim failed, no breach of E Conv HR §8). 468 Barnard (n 168 above) 461ff. 469 Case 249/86 Commission EC v Germany (Workers’ Living Conditions) [1989] ECR 1263 ECJ. 470 Greek Border Regions (n 140 above). 471 Greek Border Regions (n 140 above) at J[13–19]. 472 Greek Border Regions (n 140 above) Report [20–23], AG[10–11] Jacobs, J[15–18]. 473 Italian Housing Aid (n 231 above); Castelli (n 231 above). 474 eg, nationality requirements for ships’ captains: C-47/02 Anker v Germany [2003] I ECR 10447 ECJ (Germany).

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so that, for example, it is improper to insist upon local registration of workers’ cars.475

SELF -SUPPO RTER S

Self-supporters 1

Categories of self-supporter

[1.88] Emigration is nothing new, only its pattern. There are 5.5 million British expatriates around the globe, around one in 10 of the population born here, but not so much greater than the figure of 4 million recorded in 1881.476 The largest populations then were in Anglophone countries and these remain popular destinations, but widespread emigration to the continent of Europe is relatively new. Emigration to Europe is running at 70K annually, with 5 per cent of British families harbouring the wish to sell up and move.477 Spain has the largest expatriate community, three quarters of a million full-time and one million including second home-owners.478 Most emigration is motivated by the attractiveness of the destination rather than negative feelings towards the home country, ‘pull’ rather than ‘push’, and research also suggests that emigration correlates with increases in house prices. Around a quarter of people who leave ultimately return. [1.89] Many people emigrate when they retire, moving their main residence abroad and living off their pension.479 Numbers of overseas retirees can be estimated from the number of British nationals receiving their pension abroad, an ominous 666K worldwide, but this figure includes the popular American and Commonwealth retirement destinations. Retirement within Europe is smaller in volume than second home- ownership. Dreams of down-sizing and joining a laid-back lifestyle in the sun need to be coupled with an acute assessment of the tax position and consideration of the practical problems of healthcare and family contact. If at all possible retirees should retain an escape route back to Britain which is not, as Betjeman suggested, simply a matter of putting aside the fare to England.480 There are said to be administrative problems with the payment of 475 C-232/01 Criminal Proceedings v Van Lent [2004] 3 CMLR 23 @ 465 ECJ; C-151/04 Criminal Proceedings v Nadin [2005] I ECR 11203 ECJ. 476 D Sriskandarajah & C Drew ‘Brits Abroad’ (London, Institute of Public Policy Research, 2006); Independent December 12th 2006. 477 Times November 22nd 2006. 478 Unofficial guesses treble these figures to account for people not registered; four-tenths are in Andalucia, 50K move each year and 600K are intending to buy; official British communities in France are 200K, Italy 25K and Germany 115K. 479 A Place in the Sun? Trends in the Ownership of UK Foreign Property (London, Grant Thornton with Lombard Street Research, 2006) 2ff. 480 John Betjeman ‘Costa Blanca’ Collected Poems (London, John Murray, 1975) 381.

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pensions overseas, though retirees within the EEA should be entitled to inflationary increases in pension entitlements. [1.90] There is also a small group of wealthy individuals who can live overseas without a regular income and a larger group of economic emigrants.481 [1.91] A person who is planning to buy a holiday home and visit it periodically can rely on entry and exit rights as an EEA national which include the right to reside in another European state for up to three months at a time.482 This right is conferred personally and directly on EU citizens and EEA nationals and is free from the need for a visa and from any other similar administrative formalities, apart from possession of a home state ID card or passport.483 National borders within the EU are no longer controlled484 except when entering Denmark and in the common travel area of Britain and Ireland.485 Those paid to act as our counters suggest that 230K Brits owned bolt-holes overseas in 2005,486 though revised methodology puts the figure higher487 and private sector research suggests a figure closer to 300K, with a big upswing from 1998 onwards and a firmly upward course predicted for the future.488 Beware: most Britons buying abroad are 50-plus, affluent and male — the same profile as for golfers.489 The official average paid for a home in Europe is apparently £109K,490 though it is not recorded whether this takes account of ‘Spanish practices’.491 Our compatriots will buy anywhere that is cheap and has fast rising prices,492 but Spain is the major victim493 with ten per cent of its total population made up of immigrants,494 and where four out of ten new homes are bought by Britons. Global warming may be setting a new trend for the well-watered countries of northern Europe including Scandinavia, Danish weekend cabins, Irish cottages and the Netherlands.495 Most people who have owned a house in Britain See above [1.75]. Residence Directive (n 122 above) §6. This does depend upon how long a person expects his holiday to last. 483 Residence Directive (n 122 above) R[11], §5[1]; expiry of the ID or passport is not a ground for expulsion: §15[2]. 484 Schengen Acquis [2000] OJ L239 1; Schengen Borders Proposal 2004/127 (COD). 485 The UK acceded to parts by Council Decision 2004/926/EC [2004] OJ L395 70; B Ryan ‘Common Travel Area of Britain and Ireland’ (2001) 64 MLR 228–234. 486 Times May 16th 2005 citing official figures which rely on registration with tax authorities, but as many as two-thirds do not register. 487 D Aspden ‘Methodological Improvements to UK Foreign Property Investment Statistics’ (2005) 619 Economic Trends’ 54–60. 488 A Place in the Sun (n 479 above) 2ff. 489 Independent August 25th 2006. 490 Guardian June 16th 2005. 491 In some Romance countries sale prices are misreported to save tax, a practice partially condoned since tax rates are set to reflect likely under-reporting. 492 Independent June 16th 2005; J Hancock ‘Sunshine, Moonlight and Good Times’ (2002) 06 Money Management 60–62. 493 English households head for Spain (27%) and France (20%) with 18% of second homes elsewhere in Europe and 35% outside Europe: Aspden (n 487 above) 55. 494 Ball Housing Review 2005 (n 8 above) 10. 495 Ball Housing Review 2005 (n 8 above) 10. 481 482

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for some time could now afford to buy a property abroad. The second homes market may prove to be volatile since demand is discretionary with no demand other than from holiday buyers and there could be considerable default on loans,496 and Spain, in particular, may be ripe for correction. Roughly equal numbers buy property as holiday homes and as investment, but holiday homes work better.497 Given that overseas property has a value equivalent to 2 per cent of net housing wealth, the reported income is a paltry £70 million annually from Spain.498 Amateurs often fail to appreciate costs and maintenance.499 It goes without saying that careful consideration needs to be given to taxation issues, including possible problems created by corporate ownership vehicles, and careful familiarisation is required with double taxation regimes.500

2

EEA nationals

[1.92] French law in its majesty imposed the same curb on the rich and the poor sleeping under bridges,501 and the same spirit of equality is alive today since Europeans are free to move anywhere within the EEA and to stay, provided only that they have the means for their own support. It was in 1992 that the category of self-supporters was first recognised and since then Europe has been uncommonly unified in its geometry, self-supporters being hosted across the EEA-30,502 even in the awkward squad of Britain, Ireland and Denmark, and even if the home state is in the ten eastward accession states including Bulgaria and Romania,503 and even for the Swiss.504 Doors swing wide open to let in those who are well-off. They can enter as a traveller using their ID or passport, but a person planning to arrive for an extended stay in a host state should follow host state rules about reporting their presence within its territory within a reasonable period of time.505 More importantly, they can remain and live in a host state in the longer term, that is, presence lasting more than three months but less than five years. After that the residence of an EEA citizen will become permanent. In the interim period, conditions of self-sufficiency apply to prevent unemployment moving around the market.506 Sufficient resources must be available to ensure 496 497 498 499 500 501 502 503 504 505

Ball Housing Review 2005 (n 8 above) 4. A Place in the Sun? (n 479 above); Paul Davies at Mintel, Independent November 22nd 2006. Aspden (n 487 above) 54. A Place in the Sun? (n 479 above). A Ashworth Times November 24th 2006. Anatole France Le Lys Rouge (1894) ch 7. Residence Directive (n 122 above) §27. Including under pre-accession agreements: Jany (n 334 above) AG[69ff] Léger. See below [2.51ff]. Residence Directive (n 122 above) §§5, 26; Ali (n 347 above) [26] Keene LJ (restatement of old

law). 506 Proposal for a Directive on the Right of Residence for Nationals COM (79) 215 final; Van der Mei (n 281 above) 45.

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that the resident will not become a burden on the social assistance system of the host state during their period of residence, and it is also necessary to carry comprehensive sickness insurance cover.507 Proof of self-sufficiency, which applies both to the citizen and to family members, is by declaration made when registering with the host state authorities.508 The level of financial safeguards required509 is essentially set at the pension level, considering both the mover and family members moving with him, though less for students. In the United Kingdom the resources must be enough to avoid claims for income support, housing benefit and council tax benefit and sufficiency is assessed against the maximum resources needed to become eligible for social assistance under the British benefits system.510 A child may be able to satisfy the self-sufficiency test through her parents.511 Social assistance will not be available to be claimed in the host state, wherever it is, and residence could be terminated if a supposedly self-supporting person becomes an unreasonable burden on his host state.512 Withdrawal of residence would not be an automatic consequence of subsequent recourse to the social assistance system, but rather each case would need to be assessed on its facts to consider a particular person as a burden. A child born in Ireland without adequate sickness insurance has no right to enter Britain,513 but it is at present unclear whether making National Insurance contributions is sufficient or whether the health insurance must be private,514 but at any rate failure to maintain adequate sickness insurance is not by itself sufficient to ground a deportation.515 The need for adequacy of resources is removed when permanent residence accrues, generally after five years.516 Social security benefits should be made available as they would be to a host state national.517 Entitlement to permanent residence should be certified by the host state.518 Even permanence is only relative and can be lost after acquisition through absence from the host state for more than two consecutive years,519 a problem avoided by naturalisation in the host state using their domestic rules.

Residence Directive (n 122 above) §7[1](b); Ali (n 347 above) [20] Keene LJ. Jacqueson (n 292 above) 276. 509 Van der Mei (n 281 above) 47, ch 3, 117–125. 510 Immigration (EEA) Regs 2006 (n 287 above) reg 4. 511 Zhu (n 347 above) (a girl born to affluent Chinese parents in Northern Ireland). 512 Residence Directive (n 122 above) §14[1]. 513 W v Secretary of State for Home Department [2006] EWCA Civ 1404, [2007] 1 CMLR 17 @ 558; Ali (n 347 above). 514 Contrast Ali (n 347 above) [9] Keene LJ (surely correct?) and [26] Sedley LJ. 515 Residence Directive (n 122 above) §8[1]; Baumbast (n 446 above) J[93]; T Tayleur ‘Citizens of Europe’ [2003] ECLYB lx–lxiv; O Glynker ‘Partial Migration in the EU’ (2004) 15 King’s College Law Journal 367–397. 516 Residence Directive (n 122 above) R[17], §§16–21. 517 Residence Directive (n 122 above) R[18]. 518 Residence Directive (n 122 above) §19. 519 Residence Directive (n 122 above) §16[4]. 507 508

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3

EEA families

[1.93] Family members of self-supporters have rights of residence, the extent of the European family being the same as that already considered in the context of workers, heterosexual cohabitees again being in an inferior position and dependent upon the discretion of the host state.520 A family member who is himself an EEA national and self-supporting with medical insurance has a free-standing right, but the right of a non-national is dependent upon the head of the family demonstrating sufficient means and insurance to cover all the family living with him.521 Family members could take up employment or self-employment.522 Permanent residence should be accorded to family members of Union citizens after residence for a continuous period of five years without expulsion, and this is free of conditions and carries the right to social benefits.523 Rights may survive death, termination of the family relationship by divorce, etc, or departure if self-support and medical insurance can be demonstrated.

4

Third-country nationals

[1.94] Rather more than 3% of the European population live in a country of which they are not nationals, and if they are not citizens of any EEA state, around 9 million of them, they are said to be third-country nationals. As such they have social security rights and limited rights of residence and movement within Europe,524 except that the United Kingdom, Ireland and Denmark have opted out. This is by no means the only complexity. Initial entry and subsequent residence must be lawful, and this is controlled by the host state which may withdraw a residence permit before long-term resident status is attained. Long-term resident status is granted in the host state after residence stretching over five years with minimal absences,525 provided the resident can demonstrate adequate, stable and regular resources and sickness insurance.526 Family reunification is permitted to third-country nationals,527 except in the United Kingdom, Ireland and Denmark. The ‘sponsor’ is a third-country national with two years’ lawful residence under his belt who may then apply for defined family members whom he can support to be allowed to join him. The two-year gap truly makes Europe a philanderer’s paradise.

See above [1.83ff]. Residence Directive (n 122 above) §7[1](d). 522 Residence Directive (n 122 above) §23. 523 Residence Directive (n 122 above) §§16, 18, 23. 524 TCN Residence Directive (n 457 above) R[25–26] as from January 2006. 525 TCN Residence Directive (n 457 above) §§1–13; §9 provides for the loss of status in host A after long-term residence in host B. 526 TCN Residence Directive (n 457 above) §§5–9. 527 Family Reunification Directive (n 464 above), see above [1.86]. 520 521

Market Elements

5

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Students

[1.95] An EU citizen may choose to study or receive vocational training in another EU state at a state-financed or state-accredited establishment528 and European universities must be open to EU students.529 Registration will be required with the host state authorities530 and this requires evidence of comprehensive sickness insurance cover and a declaration of self-sufficiency. A student with resources exceeding the maximum threshold for social assistance in the host state must be admitted, but below that level account has to be taken of the personal circumstances of each student.531 Expulsion is not an automatic consequence of falling below the level of self-sufficiency and consideration needs to be given to individual facts.532

MA R KET ELEMEN TS

Market Elements This chapter has demonstrated that we have the basis for a European market in land with a substantial volume of cross-border transactions, a legislative structure, free movement of funds for purchases and relative freedom for market players to move across the market. Subsequent chapters will show that it is unlikely that a substantive European land law will emerge,533 but that a harmonised transactional law is being constructed.534

528 EU Charter FR (n 131 above) §14; Residence Directive (n 122 above) §7[1](c); Immigration (EEA) Regs 2006 (n 287 above) reg 4 (enrolled at an institution on the Department of Education and Skills Register of Education and Training Providers). 529 C-147/03 Commission EC v Austria (Access to Higher Education) [2005] I ECR 5969 ECJ. 530 Residence Directive (n 122 above) §8[1]. 531 Residence Directive (n 122 above) §8[4]; otherwise the minimum social security pension paid by the host state. 532 Grzelczyk (n 416 above). 533 See below [ch 3]. 534 See below [ch 5], [ch 7], [ch 8], [ch 9].

CO N TR O L S O N EUR O PEA N B UYER S

2 Controls on European Buyers Restrictions and Controls. Military Regions. Second Homes. Agricultural Land and Forests. Direct and Indirect Controls. Justification of Controls. Authorisation and Declaration Schemes. Swiss Controls.

R ESTR I CTI O N S A N D CO N TR O LS

Restrictions and Controls 1

Second homes

[2.01] Broadsheet readers may aspire to the sophisticated lifestyle described by Mairéad Molloy: My partner Chris and I live between Knightsbridge, Cannes and Toulouse, but I also have two homes in Ireland.1

Even the bravest spirit may be a little daunted by the thought of five homes or, as the headline writer put it, ‘four second homes’. After all, Mairéad tells us that such a life involves split wardrobes, multiple repair bills, complex arrangements, much travel and too little time to enjoy the golden glow from the 34-hectare patch of sunflowers in the backyard. Nevertheless, a more modest version of the European lifestyle remains a widespread dream. About 3 per cent of British households already have a holiday home abroad and many city traders plan to invest their bonus in foreign property without bothering to view, while another 28 per cent of the population hold on to the hope that a lottery win will unlock their fantasy of a second home in the sun.2 An unscientific survey suggests that many academics are included among the group of dreamers. The question that this chapter considers is the converse one, that is, the extent to which states can guard themselves against an influx of second home-owners. [2.02] European countries were once closed shops, limiting land ownership to Guardian Weekend June 10th 2006 79. Guardian January 11th 2007, citing a poll for Pure International by Populus ; one may wish to avoid their preferred destinations: France (28%), Italy (21%) and Spain (19%); a luxury property overseas is seen as an important symbol of achievement by 60%, more than an attractive partner (51%) or luxury yacht (18%); Times November 22nd 2006. 1 2

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nationals or long-term residents, and preventing ‘aliens’ from acquiring land. International law allowed each state to determine what restrictions should apply, and this right was widely exercised, as Weisman3 found when he surveyed Western Europe. It went without saying that markets at the time of his work in 1986 were restricted in the socialist east. Some states pursued policy objectives such as military requirements or linking the spread of second homes, such purpose-based rules being called ‘controls’ in this chapter. These stand some chance of surviving accession to the EU, though subject to strict justification. Outright restrictions (‘restrictions’) are limits on land ownership imposed without any policy objective but merely in order to exclude foreigners from the land market as an assertion of national sovereignty, either for historical reasons or to reflect national sentiment of ‘Romania for Romanians’ or ‘a terra corsa à i Corsi’. Their origin was often feudal and hence directed towards defence requirements, but most states moved on later to licensing systems for land and administrative controls on the movement of funds. Lack of a policy reason for a restriction will make it invalid once the state joins the European capital club, subject to any transitional period allowed on accession.4 Entry into the EU and the subsequent expiration of transitional periods precipitated crises in many parts of the continent when closed societies and compartmentalised markets were suddenly jumped into a modern world where wealthy buyers could come from other parts of Europe. Weisman’s5 survey of the Berlin Wall era found that purpose-based controls were used in most states of Western Europe in pursuit of a variety of policies, such as: 앫 preservation of scarce land (Norway, Sweden and Ireland),6 앫 economic control and cultural protection (France),7 and 앫 stabilisation of market prices or nature conservation (Norway). Controls were targeted at particular kinds of land, demarcated according to the land’s quality, use or location. Limits to second home-ownership remain common in modern Europe.8 [2.03] The Third Directive attacked compartmentalisation of the general market in capital whilst reserving the position of second homes; but the more rigorous realignment at Maastricht applied to second homes as to all other forms 3 J Weisman ‘Restrictions on Acquisition by Aliens’ (1980) 28 American Journal of Comparative Law 39–66, 41. 4 See below [2.19ff], [2.28ff]. 5 Weisman (n 3 above); L Keywan ‘Do We Live in Alien Nations?’ (1972) 3 California Western International Law Journal 75–111, 76; D Zagaris ‘Investment by Non-Resident Aliens in US Real Estate’ (1977) 31 University of Miami Law Review 565–614, 604–605; JK Bentil ‘Tenancies of Immovable Property and the EEC’ (1980) 124 SJ 523–525; D Campbell Legal Aspects of Alien Acquisition of Real Property (London, Kluwer, 1980). 6 Irish Land Act 1965 s 45(1)(g)(ix). 7 French Government Declaration May 23rd 1966; Weisman (n 3 above) at 43. 8 See below [2.15ff].

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of capital movement.9 So it was at that moment, the start of 1994, that national laws had to be reformulated and controls had to be tested for utility. European law will assess the legitimacy of the policy objective and then, the test most likely to be failed, test the control adopted for proportionality in relation to its objective; measures adopted must not go beyond what is needed to secure the policy objective so a control will be invalid if a lesser control could achieve the objective. Few controls have in fact survived scrutiny by the European Court of Justice. Succeeding sections consider the policy objectives and the justification process.

MI LI TA RY R EG I O N S

Military Regions 1

Feudal restrictions

[2.04] Until very recently most states imposed some controls on the acquisition and ownership of land by foreigners and in the unhappy past states had reason to be fearful. A continent at war with itself needed land law rules for security. Artois — the region, as all Stella drinkers know, around Arras in northern France — has been ravaged by armies led by Marlborough and the Duke of York and many others and the Great War trenches stuck there for four horrible summers; so regular were the incursions that the customary law of Artois provided that houses were treated as movable property, so frequently were homes destroyed by marauding troops.10 Insecure medieval kings naturally put security ahead of the rights of property owners, assuming that foreigners were potential traitors, and just as much on guard to protect their border regions from erosion by economic assault from without. Hence the concept of fealty as a component of feudal tenure, the idea that a person holding land of the Crown owed in return a personal obligation of loyalty.11 Feudal controls survived much later in many European countries than they did in England, a matter which the lawyers drafting Lord Nelson’s will forgot. His reward from the Bourbons for propping up their corrupt regime in Naples was the gift of the Dukedom of Brönte on the lower slopes of Etna in Sicily. He created a testamentary trust for sale of this estate, which he never had an opportunity to visit, but this direction to sell was held to be illegitimate and so not binding on his trustees.12 Land was held in fee and could not be sold on the open market, though by the time the case came to court the feudal tenure had been abolished and converted to absolute ownership, too late to help the beneficiaries of his will. See above [1.29]. JAC Smith ‘Classification by the Site in the Conflict of Laws’ (1963) 26 MLR 16–33, 22. 11 AWB Simpson History of Land Law (Oxford, Clarendon, 2nd edn, 1986, 0-19-825536-5), 15–16. 12 Nelson( Earl) v Lord Bridport (1846) 8 Beaven 547, 50 ER 215; see below [11.28]. 9

10

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In England the feudal yoke was cracked by Cromwell and formally broken in 1870,13 legislation which survives to this day as re-enacted in 1914.14 Under it real property in the United Kingdom may be taken, acquired, held and disposed of by an alien in the same manner as by a British subject and title may also be obtained by succession on death.15 Controls on aliens are now needed only in war time16 and, let us hope, never again.

2

Border regions

[2.05] Very many countries had restrictions on foreign ownership in border regions or other areas of military significance. France and Spain are no longer likely combatants, but the Pyrenees were once a vital demarcation line. Just to the north at Pau was the home of Cecil William Mercer, a gentleman barrister who made his living writing under the pen name Dornford Yates. Woven into the plot of a Berry book17 is a sub-theme involving the ownership of a barn, registered in the name of an English villain, in which the victim Tass is found buried in quicklime. Englishmen were not, at the time of the story, allowed to buy within 20 miles of the national boundary, so the registration was revoked and the villain’s ill-gotten gains could be confiscated. Greece applied a special acquisition regime to all land in the Greek ‘border’ regions, including islands, islets, coasts and designated parts of the interior, a category which came to occupy about 55 per cent of Greek territory. An attempt by a foreigner to acquire land in the border regions was an absolute nullity to which criminal sanctions also applied.18 ‘Emergency’ laws imposed in 193819 applied to Greeks but the regime was tougher for foreigners, who could acquire land only if the border land designation was revoked, a ludicrous rule often circumvented by using a Greek company as a property-owning vehicle.20 Accession to the EU has led to the controls being struck down as incompatible with the right of any European citizen to establish a business in another country.21 Establishment of a business entails all facilities and assistance needed to pursue that business,22 including the right to acquire and use business property in the territory of a member state, the right to acquire a second home in order to exercise Forfeiture Act 1870, 33 & 34 Vict c 23, s 1. British Nationality and Status of Aliens Act 1914, c 17, s 17. 15 The old common law continues for estates passing prior to May 12th 1870. One would prefer after 1925 to say ‘land’; legislation referring to ‘real property’ suggests that the liberalisation would not extend to leaseholds. 16 Public international law lies beyond the scope of this chapter. 17 Dornford Yates The House That Berry Built (London, Ward Lock, 1945) ch XVI. 18 Presidential Decree June 22nd to 24th 1927, but excluding leases up to three years and mortgages. 19 Greek Emergency Law 1366/1938, amended by Laws 1629/1939 and 21123/1939. 20 J Kalisperas ‘An Outline of the Greek Property Market’ (1978) 248 EG 853. 21 Case 305/87 Commission EC v Greece (Border Regions) [1989] ECR 1461 ECJ; Report [11–I4]; also AG[1–3] Jacobs; J[20–23]; C Bright & S Bright ‘Europe, The Nation State and Land’ ch 14 in S Bright & J Dewar Modern Studies in Property Law (Oxford, OUP, 1998, 0-19-876455-3), 365–366. 22 EC §43 ex §52. 13 14

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that freedom, the right to use and deal freely with the property after its acquisition, and complementary rental rights.23 Any hindrance to access to or exercise of such rights requires justification and the controls in the Greek borders failed all of these tests. [2.06] Italy attached military importance to almost all of the smaller Italian islands,24 including Ischia in the Bay of Naples. Albore25 acted as notary for two German nationals who wanted to buy a home on the island but who were refused registration of their title since the purchase lacked prefectoral authorisation. It seems odd to act against these two men when the island was already practically a German colony,26 and as non-nationals the two were discriminated against by a restriction on capital movements which did not apply to Italians.27 Military justification was in principle available, not merely by alluding to the defence but only by demonstrating real and serious risks to the military interests of the country,28 that is, applying full proportionality. Application of the test is for the local courts.29 They must find a logical connection that must exist between the attainment of the stated objective and the rules enacted, and it would undoubtedly be difficult to justify today controls unchanged since before the Second World War30 and impossible to justify leaving the military authorities an unfettered discretion.31 [2.07] Finnish border regions are designated by legislation currently dated 199232 but originating in the country’s earlier struggle to cope with Russia as a neighbour. Purchase of property in borderland areas is restricted when the buyer has not been domiciled in Finland for the last five years or is a non-Finnish company; permission is required from the local authority, though inheritance and transfers on matrimonial breakdown are exempt from control.33 Similar controls continue in Poland, Turkey and many other countries.

Greek Border Regions (n 21 above) AG[8] Jacobs. Italian Law 898/1976 §18 as amended by Law 104/1990 §9; the case is unusual in that discriminatory treatment was introduced after Italy became an EC member. 25 C-423/98 Re Albore [2000] I ECR 5965 ECJ. 26 P Blanchard Blue Guide to Southern Italy (London, A & C Black, 8th edn, 1996), 232. 27 See below [4.38]. 28 Albore (n 25 above) J[21–24]. 29 Albore (n 25 above) J[19]. 30 Albore (n 25 above) AG[67–70] Cosmas. 31 Albore (n 25 above) AG[77ff] Cosmas. 32 Finnish Law on Land Purchase by Non-residents 1992 [1993] ECLYB [4069]. 33 Finnish Law (n 32 above) §§4–10. 23 24

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Controls on European Buyers SECO N D HO MES

Second Homes 1

European controls

[2.08] Many states maintain controls against the spread of second homes, often confined to particular pressure points such as coastal areas or national parks, and European law has had to adapt to the continuance of these controls. English law almost always refers to ‘second homes’ meaning a home other than the principal residence used for holidays or weekends, possibly rented out to holiday makers for some weeks and otherwise left empty. Problems of categorisation often occur in taxation contexts, for example the reduction in council tax on second homes,34 definition of ‘principal residence’ for the ill-fated poll tax and the private residence exemption from capital gains tax.35 The French term is ‘maison secondaire’ which is almost always translated into English as ‘secondary residence’ a sense not quite consonant with normal English usage. The Third Capital Directive (1988) continued to exclude second homes from the general freedom in the market in capital, in order to preserve stability in particular areas and in border regions.36 However, the Treaty provisions on capital movements agreed at Maastricht37 trampled into this area as well and applied in full to second homes as from the start of 1994. Any remaining national controls had either to be relaxed or to meet the justification requirements of European law. Legitimate reasons for controlling the market in second homes might include the preservation of specific regional characteristics, the need to make sparing use of land where residential development sites are limited and the need to control price rises caused by a rash of second homes, as well as the desire to maintain a permanent population with settled economic activity.38 Few controls have survived scrutiny by the European Court of Justice. The trauma following accession can be great even if a lengthy period is allowed for adjustment.

2

Britain and Ireland

[2.09] The second homes market in Britain provides a good snapshot of what is happening elsewhere, and it is useful to consider purely internal transactions as a prelude to the discussion of second home-ownership with a cross-border dimension. Using council tax registrations, the government estimated that there are 34 Local Government Finance Act 1992, c 14, s 11(2) and s11A added by Local Government Act 2003, c 26, s 75(1) as from April 1st 2006. 35 Taxation of Chargeable Gains Act 1992, c 12, s 222. 36 Third Capital Directive, Directive 88/361/EEC for the implementation of EC §67, [1988] OJ L178 5, R[6–7], §6[4]. 37 See above [1.29]. 38 C-302/97 Konle v Austria [1999] I ECR 3099 ECJ, AG[16] Pergola, J[40].

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236K across the UK in 2005,39 though this is almost certainly an under-estimate,40 and that they are set to double within 20 years. Restrictions on second homes have been proposed to protect vulnerable areas against an influx of outsiders, but schemes run up against the EU concern to protect a few possible European buyers, which often precludes the possibility of locking-out the vast mass of buyers who are actually British. [2.10] The greatest preponderance of second homes is in central London,41 with more than 27% of living units in the City of London having a secondary use, that is, as a London bolt-hole for a worker living in the country. Kensington is considering introducing a local preference, which, as one paper put it, will protect children from well-heeled families from having to move to Chelsea.42 The scheme is out for public consultation. [2.11] More in need of protection are the English beauty areas. Second homes are increasing across most cheaper rural areas,43 but especially in the South West of England,44 especially Scilly (where almost a quarter of all properties are second homes) and South Hams in Devon (one in eight). Residence clauses have been imposed on the resale of former local authority housing bought under the right-to-buy scheme, reducing resale values by up to £100K,45 but the supply of affordable housing is inadequate everywhere. Villages in the National Parks have become depopulated like Goldsmith’s Auburn,46 so the twin issues are the economic dead hand of absentee owners and the displacement of locals from the housing market in tourist areas. There are problems in the New Forest heritage zone47 and Exmoor,48 which boasts the least affordable housing for local residents in the whole of England, and also the Lake District where parts have 60% second homes and buy-to-lets,49 admittedly in a larger market. In all these areas planning policy is the method of control,50 which can only have a marginal impact because it bites only on new building, which is already virtually impossible within the National Parks. If a new home is built there will be a condition attached limiting occupation to a local craft worker or local resident with housing need. Planning controls are also being used in Snowdonia, and in the Yorkshire Dales where the Park Authority’s plans went to a planning inspector 39 Hansard Written Answer by Yvette Cooper MP, June 29th 2006 (this equates to 1.1% of stock); Survey of English Housing (London, Department of Communities and Local Government, 2006) Table S353 (425K, 76% owned). 40 Independent on Sunday April 11th 2004. 41 Sunday Times March 7th 2004. 42 Times November 14th 2005. 43 Sunday Times March 7th 2004. 44 Independent on Sunday April 11th 2004. 45 Independent November 19th 2005. 46 Oliver Goldsmith The Deserted Village (1770). 47 Bournemouth Echo February 4th 2003. 48 Sunday Times April 13th 2003 49 Times May 23rd 2005. 50 Guardian January 20th 2005.

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who endorsed the case for planning controls. The Dales has only 10K homes in total, with second home-ownership of 65 per cent in the dream village of Bolton Abbey.51 Definitional problems abound, such as whether locals should be able to retire back to their native area, the position of people living close to the Park boundary and home-working.52 [2.12] Protection is also needed in the Celtic fringes. Concern about English second home-owners has been central to the political debate in western parts of Wales since the 1960s, where an extremist group dubbed the ‘Sons of Glyndwr’ conducted a firebombing campaign that attacked around 170 properties during the 1980s.53 There is a general belief in the power of planning to shape housing opportunities and regulate housing pressures and the nationalist party (Plaid Cymru) has consistently argued that planning permission should be needed before a home is converted to use as a second home. Wales has around 20K second homes, judging from census and council tax returns, representing only about 1.5 per cent of stock. These are concentrated disproportionately on the west coast from the Gower, Pembroke and Cardigan Bay in the south to the Lleyn Peninsular and Anglesey in the north, all attractive, high price areas. Pembrokeshire Coast National Park proposed a ban on new holiday and retirement homes or indeed any development apart from by local owners or where there is essential need,54 and controls have been introduced in Snowdonia to limit homes to residents of ten years’ standing. A report prepared for the Welsh Assembly reached the surprising and politically unwelcome conclusion that strong constraint of the Welsh second homes market could not be supported economically.55 Many other pressures have made houses unaffordable, notably commuting, movement out of town, or retirement, but the real problem is wealthy owners in pretty areas of acute economic disadvantage, pushing out young people for social and employment reasons. Adjustment of the market cannot provide a solution, so the key is increasing elasticity in supply (ie, building more houses) using existing powers to secure affordable housing in concert with an attack on issues of economic deprivation.56 Coastal parts of Scotland and Ireland are also experiencing pressure. Aberdeenshire is a particular hot spot in Scotland — one is thinking in housing terms here — with pressured area status and a crisis in housing so acute that the 51 Guardian December 13th 2004; Independent December 11th 2004; Guardian January 20th 2005; Independent January 20th 2005. 52 C Brannigan Times October 27th 2006. 53 B Rogers The Man who Went into the West (London, Aurum, 2006, 978-1-845-13146-3) 282–283. According to G Wagner Elegy for Corsica (London, Cassell, 1966) 27 when property cases ‘don’t look like being settled until the next century or so resort is often had to fire’. The Corsican National Liberation Front targets foreigners from mainland France at a rate of 10 holiday homes a month, homes said to have been ‘plastiqué’: Guardian August 28th 2006; firebombing is associated with a ‘revolutionary tax’. 54 Times January 31st 2002. 55 N Gallent, M Tewdwr-Jones & A Mace ‘Controlling Second Homes Through Planning’ (Cardiff, Welsh Assembly, 2002) [5]. 56 Gallent (n 55 above) [4].

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right to buy properties rented from public sector landlords has been suspended. Considerable publicity was given to the sale of a former council house in Plockton, looking out from the mainland over to Skye, at a price above £300K, this tiny village consisting of one-third holiday homes, while 22 families languish on the council waiting list.57 Restrictions of new homes to locals can create problems because the potential market is so small, a particularly ludicrous requirement being to market a house in the highest council tax band to those on low incomes.58 Much of what has been said above about English National Parks applies to special areas such as the Cairngorms.59 Over in Ireland, a 60-mile stretch of Connemara coastline is subject to a ban imposed by Galway County Council on house-building by people who cannot speak Irish,60 the local issue being loss of Irish identity as much as the invasion of second home-owners. Galway is typical of many schemes in concentrating on new building. The Irish-speaking test seems to meet EU tests but it is a particularly vicious deterrent to Dubliners as well as to those from over the seas in England; around forty per cent of Irish residents self-certify themselves as Irish-speaking when the actual fluency rate is about three per cent.61 [2.13] In conclusion, Europeans are not the problem in Britain and Ireland but British and Irish buyers of second, spare, homes in areas where there is already a shortage of housing. The English land market has exploded to such an extent that it is not uncommon for people to own two homes. Since 1999 the ‘new’ Labour government has made the decidedly non-Labour pledge to take no action against second homes62 and surcharges on council tax have been ruled out.63 European rules are designed to protect cross-border buyers, a tiny percentage of the total, but if it were desired to legislate against internal second homing the internal market rules present almost insuperable problems to the successful imposition of controls.

3

The European market

[2.14] The strong and expanding market for Britons to own second homes elsewhere in Europe is described elsewhere.64 West Highland Free Press March 18th 2005. Independent June 9th 2004. 59 Times November 22nd 2005; F Becker ‘Planning, EC law and Access to the Property Market’ [2005] SLT 219–221 (good analysis of the impact of EU rules). 60 Independent December 19th 2002; contrast Bright & Bright (n 21 above) 366. 61 Guardian January 5th 2007. 62 A proposal of the Rural White Paper 2000 Our Countryside: The Future (London, Cm 4909, 2000); A Wallace et al ‘The Impact of Empty, Second and Holiday Homes on the Sustainability of Rural Community’ (York, Centre for Housing Policy, York University, 2005). 63 Housing and Planning Minister Yvette Cooper MP Financial Times July 3rd 2006; Commission for Rural Communities Report on Affordable Rural Housing (London, Department of the Environment, Farming and Rural Affairs, 2006). 64 See below [3.35ff]. 57 58

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4

Austrian alps

[2.15] Preservation of the Alpine environment is a major concern in Austria and Switzerland, the commercial pressures all too apparent. Strong controls apply almost everywhere, but do they meet European rules? First let us consider the position post-Austrian accession to the EU. Konle65 was a German national who bought a plot of land in the Tyrol at a judicial auction in 1994. As a non-Austrian, Tyrolean property legislation required him to obtain authorisation to hold on to it, and this would only be granted if he proved that he was not intending to use it as a second home. The Lienz District Court, from which Konle had bought the land, rejected his application for the requisite permission. His right to invest his capital had been restricted and in addition Konle intended to make Austria his home and to run a business from a building erected on the plot he had bought, so bringing himself within the establishment rule, though it was not ultimately necessary to consider this additional point.66 The European Court of Justice awarded damages for the withholding of authorisation.67 The ruling against Austria in Konle opened the way for a rash of schemes designed to restrict the purchase of second homes in tourist areas, an apparent paradox which is in fact easily explained: although the particular controls were discriminatory and disproportionate, the case recognised the possibility that controls on second homes could be justified.68 Legitimate legislative aims included the need to make sparing use of land in regions with limited room for habitation and the need to control price rises caused by a rash of second homes.69 This is backed up by a declaration by member states that: Community acquis shall not prevent individual member states from adopting… measures on the subject of secondary residences… provided such measures are necessary for the purposes of land management and environmental protection [and] provided that… their application does not involve direct or indirect discrimination among nationals of the Member States.70

Catches are that any restriction must be necessary, and the full extent of it must be necessary so that no lesser restriction (such as a system of declarations) would suffice, and it must be non-discriminatory.71 It is not easy to negotiate European law to come up with a scheme that survives scrutiny. [2.16] Konle considered two interrelated systems under successive version of the Tyrol GVG,72 the first enacted in 1993 and a revision in 1996.73 The 1993 65 66 67 68 69 70 71 72 73

Konle (n 38 above); A Lengauer ‘Konle case’ (2000) 37 CML Rev 181–190. See above [1.73]. Konle (n 38 above) J[3–4]. Konle (n 38 above) J[40]; C-213/04 Burtscher v Stauderer [2005] I ECR 10309 ECJ, J[44–46]. Konle (n 38 above) AG[16] Pergola. Quoted in Konle (n 38 above) AG[16] Pergola. Konle (n 38 above) J[40–49]. Grundverkehrsgesetz = Land Transfer Law. Konle (n 38 above) AG[3–5] Pergola, J[3–13].

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scheme failed for breach of the domestic right to property74 and because it discriminated between Austrians and foreigners.75 The 1996 version76 was intended to take the sting out of this ruling by removing the easier declaration scheme for Austrians, but it failed on two new grounds. A new accelerated procedure for Austrians reintroduced discrimination in another form and, more importantly, by adopting the tougher of the two 1993 regimes — prior authorisation rather than prior declaration — the 1996 version fell foul of the requirement to act proportionately, which called for the least intervention possible. What was good enough for Austrians in 1993 could and should have been applied to foreign nationals in 1996. Third time lucky. A new system has been introduced which, according to the Austrian courts,77 meets the requirements of European law, so much so that it was not even necessary to obtain a preliminary ruling. [2.17] Reisch78 concerned the use of building plots for second homes in Salzburg under the Salzburg GVG 1997.79 This required a buyer to make a declaration that the property would only be used as a principal private residence or for commercial purposes, that is, not as a secondary residence. Regional control of secondary residences in sensitive locations was legitimate, Salzburg had avoided nationality-based discrimination,80 and prior declaration was certain.81 All this passed muster, but what failed under European law was a procedure requiring prior authorisation of dubious transactions by the Land Transfer Commission; this operated on a presumption basis and left a wide discretion to the authorities, given that future use could never be proved.82 In the most recent case, Burtscher v Stauderer,83 a landlord sought to evict his tenant, Stauderer, who had failed to make the required declaration and so, it was said, had made his lease null and void. The case shows that the prohibition on use of property as a holiday home held on a lease is the same as for a house that is bought outright.84 However, the penalty for failure to make a declaration within the two-year period — automatic invalidity — was held to be unnecessary and so disproportionate.85 Problems also arise from the Austrian controls on agricultural land.86 It was not targeted at particular pressure points: Konle (n 38 above) AG[17] Pergola, J[9]. Konle (n 38 above) J[12]; see below [4.38]. 76 Konle (n 38 above) J[35ff], J[48]. 77 Oberster Gerichtshof 1 Ob 216/02 z [2003] ECLYB [322]; other domestic decisions are: Oberster Gerichtshof 1 Ob 12/00 x [2001] ECLYB [491]; Oberster Gerichtshof 5 Ob 58/04 [2005] ECLYB [273]. 78 C-515/99 Reisch v Burger Meister Der Landeshauptstadt Salzburg [2002] I ECR 2157 ECJ; C-300/01 Salzmann [2003] I ECR 4899 ECJ, J[53ff]. 79 Reisch (n 78 above) AG[2–8] Geelheed, J[5–9]. 80 Reisch (n 78 above) J[33–34]; Konle (n 38 above) J[40]. 81 Reisch (n 78 above) J[55]. 82 Reisch (n 78 above) J[37–41], AG[116ff] Geelheed; Konle (n 38 above) J[37–48]. 83 Burtscher v Stauderer (n 68 above). 84 Burtscher v Stauderer (n 68 above) J[14]. 85 Burtscher v Stauderer (n 68 above) J[51–61]. 86 C-452/01 Re Ospelt [2003] 1 ECR 9743 ECJ; see below [4.27]. 74 75

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[2.18] What of purchases before Austrian accession? Konle held that Austrian controls on incomers buying land were not saved by the terms of its accession agreement.87 A second case was Beck.88 A notarised contract made in 1983 for the sale to BL of a flat in Kitzbühel was held to be invalid under the Austrian law on second residences because, ten years afterwards, it was discovered that shares in the acquiring company had been bought by a German allegedly intending to evade Tyrolean second homes controls. A declaration of invalidity of the transaction was made by the Tyrolean courts in 1994. Austrian legislation requiring a declaration which fell foul of European law was saved for a transitional period by the terms of its accession to the EU.

5

Permanent derogations

[2.19] When the market in land was liberalised after Maastricht, Denmark, in a sure sign of things to come, insisted on the right to maintain existing controls on second homes,89 the fear being predatory German neighbours, a fear later repeated in Poland, the Czech Republic and Austria.90 [2.20] Second home-ownership is a concern across the areas of natural beauty. To take just one example, Finland adopted restrictions in 199291 targeted at non-residents, defined in terms of domicile for less than five years in Finland, and at non-Finnish companies.92 In recreation areas, permission must be obtained for purchases from the local authority,93 and the Environment Ministry can tighten the rules against foreign purchases if these increase to create particular problems. Purchases are caught but not inheritance nor transfers on matrimonial breakdown. The Åland Islands form an autonomous administrative district consisting of 6,554 islands in the Gulf of Bothnia with a population of around 23K. Concessions made on Finnish accession94 preserve the effect of existing provisions95 restricting landownership by individuals without hembygdsraettlkotiseutuoikeus (regional citizenship) in Åland; acquisition and holding of land requires permission from the competent authorities, though these restrictions must be See above [1.06]. C-355/97 Beck’s Application [1999] I ECR 4977 ECJ; Salzmann (n 78 above) J[53ff]. 89 Acquisition of Property in Denmark Treaty of EU Protocol 1 [1992] OJ C191 68. The Protocol does not save a control which applies to principal homes as well as second homes: C-370/05 Criminal Proceedings v Festersen [2007] January 25th ECJ, J[46ff]; see also T v Justitsministereit 195/2005, [2007] UfR 99H, [2007] 03 ECL [54]. 90 Guardian August 23rd 2006. 91 Finnish Law on Land Purchase by Non-residents (n 32 above). 92 Finnish Law (n 32 above) §5; for purchase in border regions see §4 and above at [4.07]. 93 Finnish Law (n 32 above) §§7–10. 94 Accession Act of Norway, Austria, Finland and Sweden, Protocol 2 (Åland islands) [1994] OJ C241 352, §1; EEA Agreement [1992] OJ L12 3 as adjusted [1994] OJ L1 572 and amended [2004] OJ L130 3, §126 . 95 Those in force on January 1st 1994. 87 88

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enforced on a non-discriminatory basis.96 Companies also require permission to buy land, and establishment and service provision in general are also controlled. [2.21] Malta joined in 2004 having negotiated a protocol97 to its accession agreement which preserves existing rules on the acquisition of secondary residences. Few dwellings are available and land available for new construction is scarcely enough to satisfy the needs of present residents and hence the case for controls which are not transitional but which may be continued indefinitely. Malta may maintain in force its rules98 on the acquisition and holding of land as secondary residences by nationals of EU states who have not been resident legally on the island for at least five years. Authorisation procedures must be published and based on objective, stable and transparent criteria, which must be applied in a non-discriminatory manner as between nationals of different EU states. Restrictions apply only to property of relatively low value with thresholds of 30K Maltese lira for apartments and 50K Maltese lira for property other than apartments and property of historical importance,99 limits which may be adjusted for property price inflation in Malta. Above those thresholds there is an open market in property for all European nationals.

6 Transition after (eastern) accession [2.22] Controls on second homes are allowed to continue in a number of accession states for a transitional period of five years, subject to review. [2.23] Cyprus is a Mediterranean island like Malta, though with slightly more property and scope for development, the rules currently only operating in the Greek-influenced southern portion.100 Existing legislation in force at the end of 2001101 can be maintained regarding the acquisition of residences for secondary use for five years from the date of accession in 2004.102 [2.24] In the central European heartlands, controls will fade out after five years, measured from mid-2004, but in the meantime the acquisition of secondary residences by non-resident EU/EEA nationals may be controlled using the existing 96 97

ie, they must apply equally to all natural and legal persons of all EU states. Accession Act of Malta, Cyprus and eight Eastern European States Protocol 6 [2003] OJ L236

947. Immovable Property (Acquisition by Non-residents) Act 1974 as amended, c 246. The limits as at August 2007 are about €70K and €117K; the exchange rate is 0.61 Lira to the £ sterling. 100 On the north, see below [4.31]. 101 Land Acquisition by Aliens Law c 109; Laws 52/1969, 55/1972 and 50/1990; Decision 50.228 of the Council of Ministers August 25th 1999; Circular of the Ministry of the Interior to District Officers September 30th 1999. 102 Accession Act of Malta, Cyprus and eight Eastern European States [2003] OJ L236 33, Annex VII [3], [2003] OJ L236 819; C Hillion ‘Long Live the EU’ (2004) 29 EL Rev 583–612. 98 99

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rules in the Czech Republic,103 Hungary104 and Poland.105 EU and EEA nationals who have been legally resident in the country where they wish to purchase for four years continuously will be free to buy in the same way as nationals. Authorisation procedures in Poland and Hungary must be based on objective, stable, transparent and public criteria applied in a non-discriminatory manner so as not to differentiate between nationals of the member states. A number of accession states allowed a free market immediately: no request for any adjustment period for the second homes market was made by the Baltic states of Estonia, Latvia and Lithuania, nor by Slovakia, so in these states capital freedom operated from the date of accession. [2.25] Slovenia106 may control the market in all land (including therefore second homes) using a safeguard for the general land market for a maximum of seven years after its accession. [2.26] Bulgaria and Romania have also negotiated substantial transition periods for the adaptation of land law but here of course the periods run from the start of 2007107; existing controls continue even against EEA nationals on the acquisition of second homes for five years until the end of 2011. Controls also apply to the acquisition of land by EEA companies neither registered nor established nor having a branch or representative in the host state.108

AG R I CULTUR A L L A N D A N D F O R ESTS

Agricultural Land and Forests 1

Agricultural consolidation

[2.27] European states may regulate farm land by increasing the size of holdings, preventing speculation, and ensuring that land belongs to those who work it. Compulsory purchase rules were upheld in Ireland when they exempted agricultural land provided that the farmer was resident on or very close to the land,

103 Accession+10 (n 102 above) Annex V [3], [2003] OJ L236 805 (review after three years); Foreign Exchange Act 219/1995 Sb, as amended. The rules also apply to a foreign company formed in another EU state without an establishment in the Czech Republic. 104 Accession+10 (n 102 above) Annex XX [3.2], [2003] OJ L236 846 (review after three years); Land (Acquisition by Foreign Nationals) Government Decree 1996 [1996] ECLYB [2042]; D Majoros Bringing Hungarian Land Ownership Legislation into Conformity with EC Law (USA, Monterey Institute of International Studies, Masters thesis, 2000). 105 Accession+10 (n 102 above) Annex XII [4.1], [2003] OJ L236 878 (no power to review); Acquisition of Land by Foreigners Law, March 24th 1920, as amended, Dz U 1996, 54, poz 245. 106 Accession+10 (n 102 above) Annex XIII [4], [2003] OJ L236 909. 107 See above [1.09]. 108 Accession Act of Bulgaria and Romania [2005] OJ L157 142, Annex VI [3.1] (Bulgaria), Annex VII [3.1] (Romania: residents may only be subject to procedures applying to nationals). Transitions are subject to review in the third year.

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rules designed to shut out outside investors.109 Denmark controls speculation by foreign buyers in parcels of less than 30 hectares.110 It is one thing to pursue a legitimate objective of protecting agricultural production, and quite another to draft controls that survive European scrutiny. Austria suffered again in Ospelt.111 A native of Liechtenstein, Ospelt, moved to live in Vorarlberg in the westernmost canton of Austria where he lived in some style in a castle surrounded by an agricultural estate. This he wanted to leave to a foundation for the benefit of his daughter. Permission was refused under the Austrian control scheme since parts were let to farmers for agricultural production and she was not herself a farmer. European law overrode this decision. It was legitimate to control the use of farmland, but unnecessary to impose controls on foreign ownership of land if it was let to and farmed by Austrians112 and quite sufficient to have obtained the donee’s assurance that she would allow the estate to continue to be used for agriculture.113 Attempts to revamp the controls have again run into problems because they differentiated nationals and nonnationals.114

2

Accession arrangements

[2.28] Recent accession states have negotiated transitional protection against outsider acquisitions of farmland and forestry. No controls were requested by Malta or Cyprus, but the accession states of Central and Eastern Europe need stability after their recent emergence from the post-socialist privatisation of agricultural land. General controls can be maintained for seven years running from mid-2004 subject to a review after three years,115 and similar transitional controls will also be allowed from the start of 2007 in Bulgaria and Romania. Poland secured a ban on foreigners buying farm land for 12 years from mid-2004 and this longer period has called for a more detailed exposition of the self-employed farmer exemption. [2.29] There are a number of seven-year states. 109 Case 182/83 Robert Fearon v Irish Land Commission [1984] ECR 3677 ECJ; on the discrimination problem see below [4.38]. 110 King v Ministeriet for Fødevarer Landburg og Fiskeri [2001] UfR 1249 [2001] ECLYB 493; King v Fødevare-Og Landbrugsministerei R–3660–97 [2000] Uf R 1276, [2000] ECLYB [466], Denmark. An important illustration, reported too late for full discussion, is Festersen (n 89 above); it is legitimate to seek to secure that farming is carried out by owner occupiers, but Danish controls were not proportionate in requiring a foreign buyer of agricultural land to maintain residence for eight years and were also improper in covering farmhouses used only for residential purposes: see at J[28], J[44]. 111 Ospelt (n 86 above). This is an EU-EEA case heard in the ECJ; see above [1.07] n 53. 112 Ospelt (n 86 above) J[50]. 113 Ospelt (n 86 above) J[55]. 114 In Ospelt (n 86 above) the requirement for agricultural use was also unconstitutional in Austria because it discriminated against non-Austrians: Verfassungsgerichtshof G 79/04 [2005] Ecolex 660, [2006] 01 ECL [48]; attempts to correct this are the Austrian Agriculture (Amendment) Law 2005, 2004/102, 2003/35. 115 Land Purchase in Accession States Proposal (Commission, IP/01/645).

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Slovenia116 may safeguard the market in land (including agricultural land and forestry) for a maximum of seven years after its accession. In other accession states the transitional protection is limited to agricultural and forest land, the seven-year transition being subject to review after three years when restrictions may be curtailed or extended for up to three years if there is a threat of serious disturbances in the agricultural land market.117 Controls — such as those in the Czech Republic,118 Slovakia119 and Hungary120 — may be continued on the ownership of land and other agricultural property, and the acquisition of agricultural land and forests after privatisation. Nationals of EU states and foreign companies121 would otherwise have the right to free capital investment, but controls can be maintained on EU nationals, no worse than at the time of accession and no worse than for nationals of any third country. Self-employed farmers are able to exercise the European right to establish in and to reside in a host state, following only the procedures applied to host state nationals, but in the Baltic statelets and most of the central Europe heartlands establishment is limited to residents and farmers of three years’ standing.122 [2.30] Similar transition periods are allowed to Bulgaria and Romania from the accessions at the start of 2007, during which time existing controls can be maintained against EU and EEA citizens on acquisition of agricultural lands, forests and forestry,123 the seven-year adaptation period expiring at the end of 2013.124 Existing legislative controls in both countries can be maintained against nationals and companies, though EU and EEA buyers are entitled to treatment at least as good as that of the nationals of any third country.125 Self-employed farmers from the EU (but notice the omission here of reference to the EEA) may establish themselves and reside in the host state in the same way as home state nationals. [2.31] Poland126 follows the general pattern, but with a longer transition period of 12 years from July 2004127 and with more explication of the three-year Accession+10 (n 102 above) §37 and Annex XIII [5] [2003] OJ L236 906. Accession+10 (n 102 above) [2003] OJ L236 803ff (capital provisions by country, with (annex)): Czech Republic (V), Estonia (VI), Latvia (VIII), Lithuania (IX), Hungary (X) and Slovakia (XIV). 118 Foreign Exchange Act 219/1995 Sb as amended, Act 229/1991 Sb; Act 95/1999 Sb. 119 Foreign Exchange Act 202/1995 Coli; Act 229/1991 Coli on Ownership of Land and Agricultural Property, as amended. 120 Land (Acquisition by Foreign Nationals) Government Decree 1996 [1996] ECLYB [2042]; Majoros (n 104 above). As recently as 2000 foreigners were barred from ownership of Hungarian agricultural land and lagged far behind EU rules. 121 Formed in other EU states without any establishment in the host state. 122 Estonia, Latvia and Lithuania; also Hungary and Slovakia; there is no residence requirement in the Czech Republic. 123 Bulgaria Forests (Amendment) Act 2005 [2005] 11 ECL [51]; A Ekroos ‘Forests and EU’ (2005) 14 East European Law Review 44–57. 124 See below [4.26]. 125 Accession Act of Bulgaria and Romania (n 108 above) Annex VI [3.2] (Bulgaria), Annex VII [3.2] (Romania); transition is subject to review in the third year. 126 Accession+10 (n 102 above) Annex XII [4.2] [2003] OJ L236 878. 127 A review after three years may curtail the transitional period. 116 117

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establishment rule. Existing Polish rules remain in force128 to restrict the acquisition of agricultural land and forests. Authorisation procedures must be laid down by law and based on transparent, objective and public criteria, and these must be applied in a non-discriminatory manner between EU nationals residing in Poland. Self-employed persons129 from EU or EEA states130 may establish without authorisation after being legally resident and leasing land in Poland as an individual or company for three continuous years, subject only to procedures affecting Poles. Explication is provided of the three-year lease test. In some provinces a lease prior to a purchase is included though not before the certified date of the original lease and transfer is allowed between individuals and corporate vehicles. Lease agreements by natural persons can be provided with a certified date retroactively and the entire lease period of the certified contracts will be counted. Self-employed farmers may transform their current lease contracts into contracts as natural persons or into written contracts with a certified date under a procedure that should be transparent and operated so as not to form a new obstacle.

DI R ECT A N D I N DI R ECT CO N TR O LS

Direct and Indirect Controls 1

Transactions affected

[2.32] Express controls in pre-EC days invariably prescribed invalidity as the sanction for failure to observe domestic controls.131 All states controlled a straightforward purchase. Practice varied between states about what other transactions were affected, most states allowing short-term rental leases and successions, at least to a near relative132 and most also a mortgage133 which cedes to the lender the power to foreclose or to sell in default; if the creation of a mortgage escaped control then logically it was also necessary to exempt the sale made to enforce the mortgage on a default.

130 Law of March 24th 1920 on the Acquisition of Land by Foreigners as amended, Dz U 1996 54, poz 245; these restrictions must not be stiffened further. 129 Not farmers, as in all the other annexes, but this is implicit in the reference which follows to agricultural land. 130 The inclusion of EEA states is wider than the other accession annexes. 131 Sweden, Norway, Switzerland, Austria; Weisman (n 3 above) 65ff. 132 Respectively Sweden and Denmark, and Ireland and Switzerland. 133 C-484/93 Svensson [1995] I ECR 3955 ECJ, AG[8–10] Elmer; C-439/97 Sandoz v Finanzlanderdirecktion für Wien [1999] I ECR 7041 ECJ, AG[41–42] Léger; E-1/00 Icelandic State Debt Management Agency v Islandsbanki [2000] July 14th EFTA Ct.

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2

Registration requirement

[2.33] Registration requirements often conceal obstacles to pan-European purchases. The best illustration, Trümmer’s Application,134 as already discussed, rejected a requirement to register a mortgage of land in Austria in Austrian schillings since this prejudiced the security of a loan offered by two Germans, Trümmer and Meyer, denominated in German marks, in a manner that was unjustified.135 RP v Registrar of Torrevieja136 illustrates once more how land registration requirements can act as an indirect disincentive to foreign nationals. When a Spanish married couple bought land, it was necessary to lodge with the local Land Registry details of the matrimonial regime applying between them so that the registry could determine the specific share being acquired by each of the spouses. Spanish law formerly required the same evidence when a foreign couple bought land in Spain, but amendments to the regulations137 were made at the time of Spanish accession to secure a free capital market and these permit the register to state that a matrimonial regime applies to the land without specifying what that regime might be.

3

Exchange controls

[2.34] Exchange controls were limits on the movement of funds across borders, and in our particular context they limited the amount of money that could be removed from the United Kingdom to fund an acquisition of a house overseas. British exchange controls were introduced as a temporary measure to protect the economy after the Second World War,138 and limited British tourists to a maximum of £50 in sterling spending money, an allowance which made the purchase of land abroad impossible. In Webb v Webb139 a father had to buy a flat in Antibes in the name of his son to satisfy exchange control rules, a fact important in determining whether or not a gift by way of advancement had occurred.140 Exchange controls posed severe problems for the aristocratic rump left on the Mediterranean after the war ended.141 Apparently John Lennon and George Harrison were suspected of technical breaches when shifting cash in and out of England to their tax exile in France in 1973, though the matters were too minor to make prosecution appropriate.142 Controls called into question by 134 C-222/97 Trümmer’s Application [1999] ECR 1661 ECJ; A Landsmeer ‘Capital Movement’ [2000] Legal Issues of Economic Integration 195–200. 135 EC §56 ex §73b. 136 RP v Registrar of Torrevieja [2003] RJ 2199, [2004] ECLYB [1709] DGR Spain. 137 Reglamento Hipotecario §92 as amended in 1982. 138 Exchange Control Act 1947. 139 C-294/92 Webb v Webb [1994] I ECR 1717 ECJ; 140 See below [11.47ff]. 141 D Phelps A House in Sicily (London, Virago, 1999, 1-86049-680-6) 13–14. 142 Guardian November 9th 2006.

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European rules are much broader than foreign exchange restrictions in this technical sense.143

4

Controls on investments

[2.35] Capital movement is impeded when direct controls are imposed on the acquisition of capital investments, for example rules preventing Belgians buying Eurobonds144 to ensure that withholding tax (taxation at source) was applied.145 Just as much of an impediment is an authorisation procedure such as that used by the Prime Minister of France to block investment by the Scientology church,146 and attempts to retain control when utilities are privatised through the retention of a Golden Share.147

5

Indirect controls

[2.36] Any measure liable to dissuade or to reduce the attractiveness of an investment is a control on the free movement of capital,148 even if the effect is minor or trivial.149 Examples are differential deduction rules for national insurance contributions150 or differential taxation,151 or the requirement for French co-owners to employ a managing agent with an address in France.152

J USTI F I CATI O N O F CO N TR O LS

Justification of Controls 1

Controls

[2.37] All rules limiting the movement of capital have to be tested for

C-157/85 Brugna [1986] ECR 2013 ECJ, J[22]. C-478/98 Commission EC v Belgium (Eurobonds) [2000] I ECR 7587 ECJ, AG[41ff] Jacobs, J[40–47], J[60]. 145 The aim of preventing tax evasion was legitimate but an outright ban was not proportionate. 146 C-54/99 Association Église de Scientologie de Paris v French Prime Minister [2000] I ECR 1335 ECJ, J[5–15], AG[11] Saggio; C-163/94 Sanz de Lera v Spain [1995] I ECR 4821 ECJ, J[24–25]; Case 203/80 Casati [1981] ECR 2595 ECJ, J[9–10]. 147 C-463/00 Commission EC v Spain (Golden Share) [2003] I ECR 4581 ECJ, J[44–47]. 148 Brugna (n 143 above) J[22]; Svensson (n 133 above) AG[8–10] Elmer; Sandoz (n 133 above) AG[41–42] & AG[48–49] Léger; Eurobonds (n 144 above) J[18–19]; Sanz de Lera (n 146 above) AG[18] Tesauro. 149 Sandoz (n 133 above) AG[45] Léger. 150 C-204/90 Bachmann v Belgium [1992] I ECR 249 ECJ; Sandoz (n 133 above) AG[57] Léger. 151 Sandoz (n 133 above) AG[99] Léger. 152 The Commission is asking for amendment of this law: IP/06/441. 143 144

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justification,153 both on technical grounds such as discrimination and on the basis of a purpose-based test applying proportionality.

2

Discrimination

[2.38] Discrimination on the grounds of nationality154 is prohibited when applying the European capital freedom,155 though it is allowed outside the scope of the internal market.156 Below is a brief and random selection of illustrations: 앫 restriction of cheap loans for the self employed to nationals,157 앫 differential compensation for English tourists and French victims injured in Paris,158 앫 unequal access to tendering for Italian state contracts,159 and 앫 registration of a company refused because of the existence of a subsidiary registered in another EU state.160 No discrimination occurs where nationals and non-nationals are treated alike.161 Land law rules fail for EU-specific discrimination when a state imposes controls on the purchase of land by nationals of other states. Any control must as a minimum be general in application and must not allow host state nationals more favourable treatment. Similarly clear as a discrimination was a differentiation by Islandsbanki of the fees charged for a state guarantee of a loan, more being charged for foreign loans than for Icelandic ones.162 Controls in border regions or areas of military importance did just that and so they were invalid in Greece163 and on the islands in the Bay of Naples.164 This last case makes clear that a condition involving nationality-based discrimination can be justified in the 153 JA Usher The Law of Money and FS in the EC (Oxford, OUP, 2nd edn, 2000, 978-0-829877-9), 27–38; JH Dalhuisen ‘Financial Liberalisation and Reregulation’ (2001) 11 European Business Law Review 373–380; A Landsmeer ‘Movement of Capital and Other Freedoms’ (2001) 28 Legal Issues of European Integration 57–69; S Mohamed ‘Recent Case-law in the Field of Free Movement of Capital’ (2001) 12 European Business Law Review 263–271; L Flynn ‘Coming of Age’ (2002) 39 CML Rev 773–865, 778ff; P Oliver & W-H Roth ‘The Internal Market and the Four Freedoms’ (2004) 41 CML Rev 407–441, 434ff. 154 EC §12 ex §6; G Davies Nationality Discrimination in the European Internal Market (The Hague, Kluwer, 2003, 9041119981); Oliver & Roth (n 153 above) 411ff. Discrimination by sex, race, religion, etc is covered by EC §13 ex §6a. 155 EC §58[3] ex §73d[3]; C-55/94 Gebhard v Avocati di Milano [1995] I ECR 4165 ECJ; Flynn (n 153 above) 783. 156 C-386/02 Baldinger v Pensionsversicherungsanstalt der Arbeiter [2004] I ECR 8411 ECJ. 157 Case 63/86 Commission EC v Italy (Housing Aid) [1988] ECR 29 ECJ [16–17]. 158 Case 186/87 Cowan v Trésor Public [1989] ECR 195 ECJ. 159 Case 3/88 Commission EC v Italy (Public Contracts) [1989] ECR 4035 ECJ. 160 C-212/97 Centros v Erhvervs -og Selskabsityrelsen [1999] I ECR 1459 ECJ; C-200/98 X & Y v Riksskatteverket [1999] I ECR 8261 ECJ. 161 R(JR) Professional Contractors Group v Inland Revenue Commissioners [2001] Times April 5th Burton J (taxation of nationals and non-nationals at source). 162 Islandsbanki (n 133 above); Flynn (n 153 above) 780–783. 163 Greek Border Regions (n 21 above) Report [11–I4], AG[1–3] Jacobs, J[20–23]; see above [2.05ff]. 164 Albore (n 25 above).


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public interest, but it would need to be an extreme case and a discriminatory control will be much more difficult to justify than one which is neutral as between EU nationals.165 [2.39] ‘Foreignness’ could be defined in various ways, without mention of nationality, and in particular taking account of residence. Controls couched in this way are not inherently improper but they require justification166 and will often fail for want of a policy justification; for example, there was no reason to prevent a Polish woman from acting as a window prostitute in Amsterdam,167 and no reason why Austrian tour guides should need a permanent residence in Austria,168 and problems associated with security for costs by non-resident litigants.169 Nevertheless, residence may be a legitimate basis of distinction.170 In Robert Fearon171 Irish rural land was subject to compulsory acquisition by public bodies unless the farmer was resident on or near the land — a control based on residence rather than nationality and using the sound underlying policy of ensuring that people owning farming land were closely linked to the land. [2.40] Discriminatory taxation is a difficult subject attracting a mass of case law. Free movement of capital may be subjected to two forms of restriction.172 States can impose taxes and in doing so may continue to distinguish between taxpayers according to their place of residence or the place where capital is invested, though not their nationality and though exemption of tax provisions is limited to those existing at the end of 1993.173 National laws may also impose controls on the evasion of taxation, to secure prudent supervision of financial institutions or to provide administrative checks on movements of capital, as well as measures required by public policy or public security.174 Tax rules must be

165 Albore (n 25 above) J[17]; Eurobonds case (n 144 above) AG[49] Jacobs; C-250/95 Futura Participations v Administration des Contributions [1997] I ECR 2471 ECJ; Église de Scientologie (n 146 above) AG [22] Saggio; Flynn (n 153 above) 800 (point open). 166 Residence in two states creates a cross border element: EC §56 ex §73b; Eurobonds (n 144 above) J[18]; Reisch (n 78 above) AG[44] Geelheed; see above [1.22]. 167 C-268/99 Jany v Staatssecrtaris van Justitie [2003] I ECR 8615 ECJ, AG[116] Léger. 168 Verwaltungsgerichtshof 2002/04/0066 [2003] ECLYB [288]. 169 Ngyuyen v Searchnet Associates [1999] 3 CMLR 413 Scottish CS, [19] Sheriff Principal Nicholson; Fitzgerald v Williams [1996] QB 657 CA, 671ff Bingham MR; C-412/97 ED v Italo Fenocchio [1999] I ECR 3845 ECJ, J[17]; E-10/04 Piazza v Schurte [2005] July 1st EFTA Ct, J[36], J[49]. 170 Flynn (n 153 above) 793ff. 171 Robert Fearon (n 109 above) AG[6–10] Darmon; King v Fødevare-Og Landbrugsministerei (n 110 above); King v Ministeriet for Fødevaner (n 110 above). 172 EC §58 ex §73d; C Proctor ‘Taxation, Investments and Free Movement of Capital’ (2001) 16 Butterworths Journal of International Business and Finance Law 363–371. 173 EC §58[1](a) ex §73d[1](a); Declaration on §73d [1992] OJ C192 99; 11992M/AF1/DCL/07. 174 EC §58[1](b) ex §73d[1](b); Eurobonds (n 144 above) J[38] (justification claim failed), AG[42] Jacobs; C-358/93 etc Ministerio Fiscal v Bordessa [1995] I ECR 361 ECJ; Sanz de Lera (n 146 above).

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consistent with the economic freedoms which underpin the Economic Community,175 and must not discriminate on grounds of nationality.176 [2.41] Residence-based controls are allowed in taxation but are subject to technical rules. Taxation is left to EU states and the exercise of fiscal sovereignty by two countries in parallel situations may create friction but there is no duty to avoid double taxation.177 States must ensure that their rules are not discriminatory in operation between different EU nationals. The situation of a taxpayer who is resident is different from one who is not resident178 and it follows that tax rules may differentiate according to residence, as in Barbier’s Heirs,179 but here justification was required and on the particular facts —inheritance tax payable by a non-resident when it would not be payable by a Dutch resident — failed to find adequate justification.180 The dose was repeated in Heirs of van der Heijden181 in connection with the Dutch presumption that a national who dies within ten years of moving to reside elsewhere is still treated as resident at the time of death for the purpose of administering inheritance taxation.182 When stamp duty is imposed on conveyancing documents a discrimination may arise if the rules favour nationals over non-nationals. Sandoz v Finanzlanderdirecktion für Wien183 concerned a company called Sandoz in Vienna which borrowed ATS 200 million from a related Sandoz company in Brussels. Austrian stamp duty was imposed at the rate of 0.8 per cent of the value of the loan. A loan between two Austrian companies which was recorded in a written instrument would also attract stamp duty, but an Austrian company had the 175 Sandoz (n 146 above) AG[68] Léger. This has cast doubt on the differential scheme for stamp duty exemptions in disadvantaged areas: R Forsdyke & C Golfinopoulos ‘Stamp Duty Exemption’ [2002] 93 Property Law Journal 2–4. 176 C-268/03 De Baeck v Belgium [2004] I ECR 5961 ECJ; C-315/02 Lenz v Tirol [2004] I ECR 7063 ECJ, J[49]; see above [2.08]. 177 C-513/04 Kerckhaert-Morres v Belgium [2006] STI 2508 ECJ. 178 C-234/01 Gerritse v Finanzamt Neuköln-Nord [2004] I ECR 5933 ECJ, J[42]; C-376/03 D v Inspecteur van de Belastingdienst [2005] I ECR 5821 ECJ. 179 C-364/01 Barbier’s Heirs v Inspecteur van de Belastingdienst [2003] I ECR 15013 ECJ; C-512/03 Blanckaert v Inspecteur van de Belastingdienst [2005] I ECR 7685 ECJ; Bachmann (n 150 above). 180 Also unjustified: C-319/02 Manninen [2004] I ECR 7477 ECJ; C-334/02 Commission EC v France (Income Tax on Investments) [2004] I ECR 2229 ECJ. 181 C-513/03 Heirs of van der Heijden v Inspecteur van de Belastingdienst [2006] STI 535 ECJ, J[43–50]; C-152/03 Ritter-Coulais v Finanzamt Germersheim [2006] I ECR 17111 ECJ, J[18] (rental income losses; less favourable treatment of non-residents); C-265/04 Bouanich v Skatteverket [2006] I ECR 923 ECJ, J[43]; C-446/03 Marks and Spencers v Halsey [2005] I ECR 6443 ECJ; Autologic [2005] UKHL 54, [2006] 1 AC 118 (Marks and Spencer setting off losses on EU subsidiaries); C-446/04 FII Group Litigation v Commissioners of Inland Revenue [2006] STI 2750 ECJ (BAT litigation about taxation of dividends paid by foreign subsidiaries to UK parents when UK-to-UK payments exempt). 182 Case law is developing too fast to be adequately handled at the proofing stage of this book; vital authorities are: C-386/04 Centro di Musicologia Walter Stauffer v Finanzamt München für Karperscahften [2006] I ECR 8203 ECJ; C-445/04 FII Group Litigation v Commissioners of Inland Revenue [2006] I ECR 11753 ECJ; C-157/05 Holbock v Finanzamt Salzburg-Land [2007] May 24th ECJ; C-451/05 Européenne et Luxembourgoise d’Investissements v Directeur General des Impots (ELISA) [2007] April 26th, AG Mazak (land tax from which French residents exempt). 183 Sandoz (n 133 above); C-1/93 Halliburton Services [1994] I ECR 1137 ECJ; Eurobonds (n 144 above) AG[23] Jacobs.


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option of leaving the loan arrangement unfinalised, without a written document, and in this way was able to escape liability to stamp duty. A loan by a non-resident company was charged to duty even if it was not committed to writing. Although these rules were intended to facilitate proof of the existence of the loan, they operated in fact as an obstacle to the free movement of capital. Stamp duty rules had to apply to all, irrespective of nationality and residence.184

3

Lawfulness and certainty

[2.42] Technical requirements apply to any control on the use of property. These were developed by ECJ case law and have formed part of the Community acquis, the jurisprudence, so they can be found reproduced in transitional arrangements made on accession: authorisation procedures for foreigners buying second homes must be based on criteria that are objective, stable, transparent and public, while universality is another requirement. Lawfulness is essential. Rules controlling the sale of property must, as a matter of internal constitutionality,185 be properly incorporated into domestic law. Laws in disuse remain in breach of EU law until repealed.186 Certainty is a second requirement. Weisman187 found that pre-Community controls generally gave states an element of discretion, but European testing looks for national law to be stated precisely and to make clear what is and is not allowed. French legislation allowing the Prime Minister to block a direct foreign investment fell because the categories were not stated with specificity and left too much open to doubt.188 French legislative drafting took a second mauling in connection with the golden share in ELF Aquitaine,189 since the French Republic could oppose any transfer of assets or any use of assets as security, without any published criteria. A priori certainty is more likely to be accepted than a retrospective invalidation of a completed transaction.

4

Purpose-based justification

[2.43] Once technical rules are satisfied, justification of restrictions is based on

Sandoz (n 133 above) J[26], J[31–38]. An issue unnecessary to decide in Konle despite the rule relied on having been struck down by the Austrian constitutional court; Konle (n 38 above) J[30]; Flynn (n 153 above) 792; see above [2.16]. 186 Trümmer’s Application (n 134 above) J[33]; C-367/98 Commission EC v Portugal (Golden Share) [2002] I ECR 4731 ECJ, J[4]. 187 Weisman (n 3 above) 57 (eg, Sweden, Switzerland, Denmark). 188 Église de Scientologie (n 146 above) J[19–23], AG[20] Saggio; Sanz de Lera (n 146 above) J[25]; Flynn (n 153 above) 802. 189 C-483/99 Commission EC v France (Golden Share) [2004] I ECR 4781 ECJ. Lack of clarity was conceded in C-174/04 Commission EC v Italy (Golden Share) [2005] I ECR 4933 ECJ, J[40]. 184 185

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the need to show that the restriction pursues an objective of public importance,190 with three subsidiary requirements191 that 앫 there is an overriding reason of general interest, 앫 a restriction is adopted suited to the attainment of that objective,192 and 앫 the means adopted must be tested against other possible approaches so that the least intrusive is adopted. The last stated test for proportionality is the toughest and few states have succeeded in upholding their controls. [2.44] A control on capital movement is allowed in order to defend a national interest,193 provided it is genuine, actual, and sufficiently serious to threaten a fundamental interest of society.194 Financial or economic interests do not count.195 Some reasons are noted in the EC Treaty as widened at Maastricht, but others are additions to the Treaty196 which must pursue an overriding requirement of general interest, applicable to all persons and undertakings engaged in an activity in the territory of the host state.197 Specific examples are taxation, and the prudential supervision of financial institutions to prevent money laundering, drug trafficking and terrorism.198 Some cross-fertilisation is possible from the fields of movement of workers and goods, but public policy is narrower in relation to capital.199 The rules for establishment are more restrictive.200 [2.45] Once a legitimate public purpose has been identified, perhaps controlling second home-ownership, it is also necessary to demonstrate a logical link between the control adopted and the purpose to be achieved such that the controls are suitable to attainment of their objective. Then comes the toughest rule, proportionality,201 which requires that a scheme of controls applied must be strictly necessary to attainment of the objective sought, that the objective could not be achieved in some less intrusive way.202 A state wishing to control land Reisch (n 78 above) J[33], AG[125–127] Geelheed; Flynn (n 153 above) 798ff. C-463/00 Commission EC v UK (Golden Share) [2003] I ECR 4641 ECJ, J[49]; Greek Border Regions (n 21 above) J[11]. 192 Konle (n 38 above) J[43–44]. 193 Église de Scientologie (n 146 above) AG[14] Saggio. 194 C-503/99 Commission EC v Belgium (Golden Share) [2002] I ECR 4809 ECJ, J[38]. 195 Case 136/75 Rutili v French Minister of Interior [1975] ECR 1219 ECJ, J[30]; C-120/95 Decker v Caisse de Maladie des Employ [1998] I ECR 1831 ECJ; C-35/98 Staatssecretaris van Financien v Verkooijen [2000] I ECR 4071 ECJ; Portuguese Golden Share (n 186 above). 196 Case 120/78 Cassis de Dijon [1976] ECR 181 ECJ; Case 60/84 etc Cinéthèque [1985] ECR 2065 ECJ. 197 Belgian Golden Share (n 194 above). 198 EC §58[1](b) ex §73a[1](b); Bordessa (n 174 above) J[2]; Sanz de Lera (n 146 above) J[22]; Flynn (n 153 above) 793ff. 199 Église de Scientologie (n 146 above) AG[18] Saggio; Albore (n 25 above) J[18]. 200 See above [3.15]. 201 T Tridimas General Principles of EU Law (Oxford, OUP, 2000, 978-0-19-829932-5) chs 3–4. 202 French Golden Share (n 189 above); Trümmer’s Application (n 134 above) AG[16–17] Pergola; Rutili (n 195 above) J[26–27]; Église de Scientologie (n 146 above) J[18]; Sanz de Lera (n 146 above) J[23]. 190 191

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purchase has three levels of control available, in descending order of intrusiveness: prior authorisation, advance declaration or retrospective declaration. Authorisation procedures failed to pass muster in a series of cases precisely because a declaration procedure was a feasible alternative.

5

Fundamental freedom

[2.46] The right of property would now be recognised via the Nice Charter203: Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions.

It is curious that national restrictions on landownership have rarely infringed the European Convention on Human Rights. A complaint204 that a national of Liechtenstein could not acquire land in Austria was ruled inadmissible at the earliest stage. National rules that land acquired without a licence should be sold were examined in Håkansson v Sweden.205 Agricultural land sold by a police officer to a farmer at auction and bought for 240K Skr had to be resold at a loss, the resale yielding only 172K Skr, because the permission needed for its retention was not forthcoming given that the land was earmarked for the consolidation of holdings, but a complaint based on expropriation contrary to the right to property206 was rejected. The purchaser was aware of the law and had brought matters on himself. Happily, the buyer recouped some of his losses through an award for damages of 60K Skr for the state’s failure to provide a proper civil review, and indeed the procedural and peripheral right to a fair trial is the only one in play. In Austria a licence was required from the Real Property Transaction Authority207 and the procedure could fail procedural tests, as for example a case concerning an American’s holiday home at Hopfgarten in the Tyrol,208 whose appeal was held in camera before junior officials and whose further appeal to the Constitutional Court was rejected without a hearing. This infringed his right to a fair trial but no issue arose on his right to property. AUTHO R I SATI O N A N D DECLA R ATI O N SCHEMES

Authorisation and Declaration Schemes 1

Prior authorisation

[2.47] Prior authorisation schemes were first rejected in relation to 203 204 205 206 207 208

EU Charter of Fundamental Rights, [2000] OJ C364 1, §17[1]. HR 19441/92 Ohg v Austria (1994) 18 EHRR CD107 E Comm HR. HR 11855/85 Håkansson v Sweden (1991) 13 EHRR 1 E Ct HR. E Conv HR Protocol 1 §1. Tyrol GVG (n 72 above) 1970 §3. HR 8790/79 Sramek v Austria (1985) 7 EHRR 351 E Ct HR.

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cross-border exports of currency in Bordessa,209 because, if it is possible to have a system of declaration which meets the policy objectives, it is unnecessary and disproportionate to insist on prior approval. The most extreme control so far litigated was the requirement in France that the Prime Minister should give prior authorisation for direct foreign investment, a control enforced against the Scientology church,210 but invalid despite the rule that a permission sought and not decided for one month was deemed to be granted.211 Prior authorisation could be justified if the threat was genuine and serious, for example where they could not be traced in retrospect so action had to be taken in advance.212 In summary: prior authorisation bad, prior declaration good.213 A number of Golden Share cases demonstrate the dubiety of schemes of administrative approval outside the land context, for example the activities of a Spanish utility company,214 the activities of the company running British airports,215 the oil infrastructure run by Elf Aquitaine216 and Belgium217 when it privatised companies, since the intention behind the retention by the Belgian government of Golden Shares was to secure advance notice of any changes affecting the distribution infrastructure for domestic gas. It was prudent to safeguard energy supplies but Government powers were mainly opposition rights with intervention restricted to cases where energy policy was compromised. [2.48] It follows from what has just been said that a requirement for prior authorisation of land acquisition is generally disproportionate. The Tyrol GVG required a non-Austrian to obtain administrative authorisation for the purchase of land in the Tyrol. Authorisation requirements are not justified if there are other less restrictive methods of achieving the aims of the legislation, and a post-completion declaration of the intended use of the land would be just as good.218 Konle was a German national who was refused authorisation to hold land in Austria, even though he was intending to make it his home and to establish a business there, but the rules restricting his purchase were struck down.219 The objectives to maintain a permanent population and to stabilise a non-tourist economy were legitimate but measures had to be no more restrictive than

209 Bordessa (n 174 above) J[27]; Eurobonds (n 144 above) AG[9ff] Jacobs; Case 286/82 etc Luisi v Italian Ministero del Tesoro [1984] ECR 377 ECJ; Sandoz (n 146 above) AG[39–40] & AG[54–55] Léger. 210 Église de Scientologie (n 146 above) J[5–11], AG[11] Saggio; Sanz de Lera (n 146 above) J[24–25]; Casati (n 146 above) J[9–10]. 211 Église de Scientologie (n 146 above) J[15]. 212 Église de Scientology (n 146 above) J[19–20], AG[16] Saggio; Bordessa (n 174 above); Konle (n 38 above) J[45–46]. 213 Sanz de Lera (n 146 above) J[10], J[26–29]. 214 Spanish Golden Share (n 147 above) J[69–78]. 215 UK Golden Share (n 191 above) J[44–47]. 216 French Golden Share (n 189 above); Portuguese Golden Share (n 186 above). 217 Belgian Golden Share (n 194 above). 218 GVG (n 72 above); Konle (n 38 above) J[44–48]; Reisch (n 78 above) J[35]. 219 Konle (n 38 above) J[3–4].

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necessary. On this the Austrian authorities failed to convince.220 They had access to considerable information and too much discretion about how to use it,221 and non-Austrians were disadvantaged by closer checks than Austrians and by being denied access to the accelerated procedure available to internal purchasers. Salzmann confirms this: a requirement for an owner to prove his future use inevitable creates a discretion and the possibility of discriminatory applications.222 Prior authorisation usually fails the test of strict necessity, as does the suspensive effect of Austrian legislation.223 After Konle a new system has been introduced which, according to the Austrian courts,224 meets the requirements of European law, so much so that it was not even necessary to refer cases to the ECJ for a ruling. Third time lucky.

2

Prior declaration

[2.49] Trouble subsequently flared up in Salzburg, but Reisch v Burger Meister Der Landeshauptstadt Salzburg225 confirms that a system of prior declaration can be made to work within European controls. Use of building plots for second homes in Salzburg226 was controlled by a system of compulsory declarations which had to be made upon any transfer of a building plot and any application for the grant of a right to build, the party acquiring the title being required to state that the property would only be used as a principal private residence or for commercial purposes. Prior notification was required within a stipulated time period, with a criminal sanction in default. Dubious cases could be referred to the Land Transfer Commission, which would impose conditions to ensure that the land was used for the declared purpose. A series of appeals227 arose from prior notifications, authorisations, and fines imposed for failing to make timely declarations, all raising the question whether these procedures were compatible with EU law. Control of secondary residences in certain geographic areas was a legitimate public interest, controls were applied in Salzburg to Austrians and non-nationals alike, and the procedure was declaratory.228 This was not necessarily worse than insisting on a notarial act and registration.229 Notification of dubious cases by the land agent allowed legal certainty for other transactions. However, dubious cases were referred to the Land Transfer Commission and required prior Konle (n 38 above) J[42]. Konle (n 38 above) J[40–41]. 222 Salzmann (n 78 above) J[46–47]. 223 Salzmann (n 78 above) J[51]. 224 Oberster Gerichtshof 1 Ob 216/02 z (n 77 above). 225 Reisch (n 78 above). 226 Reisch (n 78 above) J[5–9], AG[2–8] Geelheed. 227 Reisch did not apply for permission; Lassacher and the others applied but were refused permission: Reisch (n 78 above) AG[12–13] Geelheed. 228 Reisch (n 78 above) AG[32–34] Geelheed, following Konle (n 38 above). 229 Reisch (n 78 above) AG[128] Geelheed. 220 221

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authorisation230 with an adverse presumption, criminal sanctions and the possibility of annulment and this aspect of the overall procedure was unnecessary and incompatible with EC law.231 In short: prior authorisation bad, prior declaration good. In Ospelt232 a procedure for refusing permission for the sale of Austrian agricultural land failed because it was wholly unnecessary to do other than rely on an assurance in relation to land let to and farmed by other parties.233

3

Subsequent declaration

[2.50] The modern tendency is to rely on a subsequent declaration procedure. In Burtscher v Stauderer234 the question was the proportionality of the penalties for failing to make a declaration. A dwelling in Sonntag was let to Stauderer for use as a holiday home after renovation, the intention being that he should buy it if this was lawful. In fact, the prohibition on use as a holiday home was the same on a lease as on a sale.235 A declaration as to use was required and since no declaration had been made within the two-year time limit, the landlord argued that the lease was null and void and so the tenant should be required to vacate. Earlier cases suggested that the declaration procedure was compliant,236 the objective of regulating the second homes market being legitimate and the declaration procedure being a proportionate response237 which was implemented without nationality-based discrimination.238 A penalty of automatic invalidity for a declaration made late is not proportionate,239 and disproportion is a theme taken up in several recent tax cases.240 SWI SS CO N TR O LS

Swiss Controls 1

Lex Koller

[2.51] A strong sentiment in favour of a Swiss Switzerland found its expression historically in restrictions on alien ownership irrespective of any economic 230 Reisch (n 78 above) AG[119] Geelheed, contrasted the prior authorisation scheme in Konle (n 38 above). 231 Reisch (n 78 above) AG[130] Geelheed, J[37–40]; Konle (n 38 above) J[44–48] 232 Ospelt (n 86 above). 233 Ospelt (n 86 above) J[50], J[55]. 234 Burtscher v Stauderer (n 68 above). 235 Burtscher v Stauderer (n 68 above) J[11–14]. 236 Burtscher v Stauderer (n 68 above) J[23]. 237 Burtscher v Stauderer (n 68 above) J[44–46]; Konle (n 38 above) J[40]; Reisch (n 78 above) J[33–34]; Salzmann (n 78 above) J[42–44]. 238 Burtscher v Stauderer (n 68 above) J[48]. 239 Burtscher v Stauderer (n 68 above) J[51]. 240 See n 182 above.

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justification for a purchase.241 Like many repressive rules this provoked artificial avoidance, in this case using corporate land-owning vehicles.242 Nevertheless, Swiss banking laws attracted too much cheap money during the 1970s and 1980s and this spilled over into the land market, creating a false escalation of prices fuelled by too many wealthy foreign investors. The initial legislative response was the Lex Friedrich, named after the Minister who proposed it,243 which smothered the foreign market in land. Swiss voters refused to forgo these controls in order to attain membership of the EEA but the price of that obstinate attempt to buck the internal market was that obstacles to foreign investment precipitated a period of economic stagnation. Reform has proceeded grudgingly, the minimum necessary to secure limited participation in the internal market.244 What emerged in 1997 was a modified and looser restriction on the acquisition of land by non-resident foreigners, called the Lex Koller after the new incumbent.245 Nationals of an EEA-30 state are allowed freer access to the land market once they are resident in Switzerland, but strict controls remain against non-resident Europeans, non-resident Swiss and foreign second homes, and non-Europeans face an impenetrable barrier. The Koller regime has been further liberalised by the subsequent adoption of the full EEA freedom of movement, described below,246 which benefits establishers, workers and the self-sufficient. [2.52] Repeal of the Lex Koller was proposed by the Swiss Federal Council in 2005 and is now grinding slowly though the legislative machinery, with restrictions on the acquisition of land by persons abroad to be repealed subject to continuing protection for tourist areas.247 This should benefit non-resident Swiss, Europeans who will no longer have to establish residence, and non-Europeans.

2

Main residence

[2.53] Acquisition of residential land is controlled by the Lex Koller when the person making the acquisition is a foreign resident, whether his nationality is Swiss or of an EEA state. Residence is assessed according to the category of Acquisition of Land by Foreign Residents 1961 §7; Weisman (n 3 above) 50. M v Statthalteramt Des Bezirkes Zurich [1997] BGE IV 167, [1998] ECLYB [2345] Swiss Kassationshof. 243 Federal Law 1988, FL SR 211.412.41; Ordinance 1984 OFL SR 211.412.411; R Mercon & R Fletcher ‘Acquisition of Real Estate by Foreigners in Switzerland’ (1989) 11 Comparative Law Yearbook of International Business 39–54. 244 L Goetschel ‘Change Through Distance’ (2003) 8 European Affairs Review 313–330. 245 Lex Koller, Federal Law on Acquisition of Real Estate by Foreigners, in force October 1st 1997; H Gautier & M Nussbaumer ‘Easing of Swiss Rule on Acquisition of Real Estate by Foreigners’ [1998] ILP 74–78; Acquisition of Real Estate by Persons Abroad (Berne, Federal Office of Justice, , 2005). Guidance in English has recently been removed from the website. 246 See below [2.54]. 247 See below [2.56]. There appears to be a backlash summed up in the headline of the Swiss newspaper Blick ‘How Many Germans Can Switzerland Stand?’ cited in the Independent March 10th 2007. 241 242

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permit held. Non-nationals (even from outside Europe) were able under the Lex Friedrich to buy a home in Switzerland if they held a C permit allowing permanent settlement but the Lex Koller has greatly widened the freedom by allowing house purchase by EEA-30 nationals holding a yearly residence permit or a B permit allowing residence for half of each year.248 Restrictions remain on plot size and floor areas, but each limit is more liberal under Koller than Friedrich.249

3

Free movement of persons

[2.54] Switzerland’s adoption of EEA rights of free movement of persons is best described as tentative. Rejection of EEA membership has been followed by a decision to proceed sector by sector with bilateral agreements between Switzerland and the EU, the most notable example being free movement of persons which entered into force in 2002 after a referendum.250 Swiss are free to move to the EEA-30 when within the European free movement categories — workers and self-supporters.251 Full freedom of movement in the reverse direction will be phased in. In the interim period, there is freedom to enter for up to four months but quotas apply to longer stays, of between four and twelve months and over twelve months (A and B permits now with simplified procedures), and permanent settlement under a C permit will be available after an EEA national has been resident for ten years. The whole scheme is a trial which may be aborted after seven years. Easing of the rules for permits makes it easier for an EEA national to qualify to buy a main residence without permission and, having done so, he will not be obliged to sell up when leaving Switzerland. Business rights with Switzerland arise under the bilateral agreement. Those intending to engage in economic activity may enter Switzerland and establish and or set up in service provision, subject to quotas during a six-year transition.252 Permanent residence can be retained after the end of economic activity.253 Land can be acquired if linked to the economic activity. No authorisation is required under the amended Lex Koller for the acquisition of a permanent establishment, whether bought outright or rented, and the need for personal management of land-holding companies is removed. Investment in commercial companies is free, unless the main business is buying or trading in dwellings. Establishers are 248 Continued use of the property is dependent on renewal of residence rights, but if the permit is withdrawn it is not necessary to sell the dwelling already acquired. 249 Up to 3K sq m plot size without consent (previously 1K sq m land and 200 sq m floor area); a special permit is needed to buy larger plots. 250 EU-Switzerland Bilateral Agreement on Free Movement [2002] OJ L114 7 as from June 1st 2002; this has been adapted by a Supplementary Protocol for eastwards expansion of the EU. UK rules treat Switzerland as part of the EEA: Immigration (EEA) Regs 2006 SI 2006/1003 reg 2; special rules are retained for workers posted from Switzerland who do not need a work permit for stays of up to 90 days. 251 See above [1.75ff], [1.88ff]. 252 Bilateral Agreement (n 250 above) §§1, 4, 7 (family members), 10 (quotas), Annex I §1. 253 Bilateral Agreement (n 250 above) §7; Annex I §4. .

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free to buy a principal residence and have the same rights as Swiss nationals to acquire a secondary residence or holiday home.254 Workers will be able to use the bilateral agreement to enter Switzerland and live there while working and remain resident at the end of economic activity.255 Switzerland is allowed to apply quotas for five years to work that is more than very temporary.256 Job-seekers are allowed six months to find employment.257 Workers, etc can buy land, particularly a primary house, but also land for a secondary residence or holiday accommodation on the same terms as a national, and frontier workers may also buy a Swiss bolt-hole,258 though not a holiday home. [2.55] Self-supporters, as usual, are treated liberally by free movement rules. A person ‘not pursuing an economic activity’ needs sufficient means not to need to apply for social security during their stay — the measure of sufficiency being the minimum state pension level — and must carry all-risks sickness insurance cover.259

4

Holiday homes

[2.56] Controls limit the acquisition of holiday homes by non-resident buyers.260 Quotas are allocated by Canton covering, for example, mountain areas and the rules vary from region to region.261 Acquisitions are limited by land area (1K sq m), floor area (100 sq m), and family (one each). Exemption from these rules has to be proved to the land registry or otherwise the case goes to the Cantonal authority. When and if the proposed repeal of the Lex Koller is completed, controls will be preserved in tourist areas to prevent a building boom, zoning being a Cantonal responsibility, the process to be completed by 2008. It is reported that a moratorium has been imposed for the whole of the year 2007 in seven communes containing the best ski resorts because of the backlog of cases, and the future is unclear.262

Bilateral Agreement (n 250 above) Annex I §25. Bilateral Agreement (n 250 above) §§1, 4, 7, Annex I; Council Decision 12582/04 (workers from eastern accession states). A special permit is available to a frontier worker. 256 Bilateral Agreement (n 250 above) §10 (15K permanent and 115K part year). 257 Bilateral Agreement (n 250 above) §2[1]. He can also stay if economic activity ceases and he is self-sufficient: §4, but unemployment benefits can be counted for one year: Annex I §24[3]. 258 Bilateral Agreement (n 250 above) Annex I §25. 259 Bilateral Agreement (n 250 above) §§1[c], 6, Annex I §24. 260 Bilateral Agreement (n 250 above) as adjusted for eastwards accessions; Council Decision 12582/04; EC Protocols on Secondary Residences in Denmark and the Åland Islands apply. 261 Independent Property July 26th 2006. 262 Observer January 7th 2007; Independent January 20th 2007. 254 255

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5

Enforcement of Koller controls

[2.57] Lex Koller bites when a buyer from abroad buys land, entry on the land register being refused until the purchase is shown to be within a permitted category. This sanction is applied to any transaction giving control of land, including outright acquisition of title, disguised purchase through a long-term rental, acquisition of shares in a landowning company, transfer abroad of the headquarters of a property-owning company, participation in a partnership, or investment in a real estate investment fund as well as contracts, options and pre-emptions. Successions and gifts by will to the legal heirs are exempt,263 and other minor exemptions are for transactions confirming existing titles and minor readjustments within condominiums. Secured lenders are free to sell after a default, pension schemes and charitable foundations may buy, and controls are released if property is otherwise unsaleable. Beyond those cases there is a procedure for Cantonal adjudication of doubtful transactions.

263

Non-family members who benefit under a will must sell within two years.

TOWA R DS A EUR O PEA N LA N D LAW?

3 Towards a European Land Law? National and European Laws. Immovables. The Site. Selection of Land Law. Property of the European Institutions. Respect for Territoriality. Subsidiarity. Fundamental Rights in the EU. Specific Fundamentals. Convergence. A Substantive Miscellany. Value Added Tax. Single Farm Payment. Special Agricultural Regimes. Dairy. Towards What?

N ATI O N A L A N D EUR O PEA N LAWS

National and European Laws [3.01] No one could doubt the popularity of magazines devoted to the British experience of buying second homes all over Europe. Diana Wallis MEP1 read in one of them: a reader’s letter… asking why was it so complicated to buy abroad with different laws. Why, she asked can’t we all use the same law? I have no doubt that she had in mind everyone using English law! Yet of course she had a point.

It requires a leap of the imagination to be able to envisage a world in which Europe might adopt English land law so that the beautiful simplicity of propriété was replaced by the calculus of estates. Nothing short of an English Napoleon could achieve that. Even English lawyers would be hard-pressed to put a case for our archaic and over-complex system, though no doubt no one would choose any continental conveyancing system ahead of the English, nor a foreign register over a British one, and no English lawyer would want to dismiss the trust. In Utopia a foreign property code would be linked to an English conveyancing process and a workable trust vehicle, but not in the real Europe. Instead, this chapter explores the possible emergence of a European land law using four main themes. At present Europe is a continent with a multiplicity of land laws, at least one for each of the members of EEA-30 and even more because of the multiplicity of property systems within several of the European states. Territoriality is a basic human imperative2 and territorial control of the land 1 D Wallis MEP (speech at the Centre for European Private Law, Munster, July 6th 2006, ). 2 R Ardley The Territorial Imperative (London, Collins, 1967); RD Sack Human Territoriality: Its Theory and History (Cambridge, CUP, 1986, 0-521-26614-9).

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within a state’s borders is as much a reflex instinct of any government as is taxation of things within the state’s reach.3 Brussels has not so far attempted to wrest control of property systems from the government of member states. A workable internal market is most easily achieved by a clear conflicts regime which makes clear which national law is to apply to a particular parcel of land or right in land. The European conflicts regime in fact largely sidesteps land, the conflicts club rules confining themselves to the imposition of site-based forums for land, as the next chapter describes.4 The regime directs a dispute about land to the local courts which are then free to apply their own rules of private international law to ascertain which law applies to the land, but a universal and obvious principle applies, site-based law. The correct sectoral description is immovable property, which means the same as land.5 Sectoral allocation is generally easy, land being as easy to identify as an elephant. Land allocates itself to a particular state, though rights in land are potentially more mobile and therefore need to be grounded in a particular state, as will be described. National courts are then left to apply their own rules to any conflict. More detailed schemes are worked out for personal obligations affecting land, such as contracts and trusts.6 The basic theme of the later parts of this chapter is the prospect for a harmonisation of national land laws. It is commonly believed that EU competence is limited by article 295 of the EC Treaty but it will be demonstrated that there is in fact no shield7 where there is some other reason for Community competence such as to secure an internal market or to enforce European competition rules.8 Other potential bars are the principle of subsidiarity (that decisions should be taken at the lowest feasible tier of government), the lack of competence for pure harmonisation, the need to respect the fundamental rights of property-owners,9 and the limited practical effects of convergence; so despite the potentialities the present scale of the substantive land law of the European Union is very small.10 European law, having filled the creeks and estuaries,11 has so far stopped short of swamping the land itself but our defences are breached and the eventual Europeanisation of property law seems as inevitable as global warming. 3 RT Ford ‘Law’s Territory (A History of Jurisdiction)’ (1999) 97 Michigan Law Review 843–930, 843. The basic territoriality of tax legislation was confirmed in Agassi v Robinson [2006] UKHL 23, [2006] 1 WLR 1380, though the majority led by Lord Scott at [56] felt that the presumption was disapplied on the facts, Lord Walker dissenting at [20–21]. 4 Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (EC) 44/2001, [2001] OJ L12 1; see below [4.12ff]. 5 Continentals often use the term real property as an English translation but this (technically confined to freehold land) is not a precise equivalent. 6 See below [ch 8], [11.34ff]. 7 EC §295 ex §222; this is generally referred to in this chapter as the property shield or property exclusion: see below [3.18ff]. 8 C Bright & S Bright ‘Europe, the Nation State and Land’ ch 14 in S Bright & J Dewar Modern Studies in Property Law (Oxford, OUP, 1998, 0-19-876455-3) 362. 9 Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 1950, CETS 5), incorporated by case law; EU Charter of Fundamental Rights [2000] OJ C364 1. 10 See below [3.48ff], [ch 11]. 11 HP Bulmer v J Bollinger (No 2) [1974] Ch 401, 418 Lord Denning MR.

Immovables

97 I MMO VA B L ES

Immovables 1

Why distinguish?

[3.02] Private international law begins by characterising an issue12 in order to determine which sectoral rule should be applied, that first step at least being relatively straightforward in the context of this book; the sector is immovable property, or, for English readers, land.13 Several important conflicts are determined once particular property has been characterised as either immovable or movable,14 including forum and land law. This classification also determines the proprietary effect of a transaction, its validity against a third-party purchaser, and its priority.15 Immovable property of a deceased landowner must be segregated from his movable things since the law to be applied to an international succession differentiates these two types, with the land governed by the law of the site.16 The European rule book17 and its domestic implementation18 are largely silent when it comes to land and this rule is left to the private international law of each state; fortunately these rules generally coincide.

2

Immovable things and rights

[3.03] Civilian systems refer to immovable property rather than land, their term embracing outright ownership (freeholds), leases (leasehold land), rights in land, and things affixed to land. Although there is a common understanding across Europe about the basic outline of the concept there are many minute differences of detail. Land is clear-cut but differences can occur with things annexed to land, intangibles and mortgages. Soil and buildings are true land, truly immovable. It is thought by the law to 12 Macmillan v Bishopsgate Investment Trust (No 3) [1996] 1 WLR 387 CA, 391–392 Staughton LJ, 407 Auld LJ; Raiffeisen Zentralbank Osterreich v Five Star General Trading [2001] EWCA Civ 68, [2001] QB 825, 840 Mance LJ. 13 Dicey & Morris The Conflict of Laws (London, Sweet & Maxwell, 14th edn by L Collins, 978-0-421-88360-4) II [22]; J Westlake A Treatise on Private International Law (London, Sweet & Maxwell, 7th edn by N Bentwich, 1925) 216ff (good on older cases); JD Falconbridge Essays on the Conflict of Laws (Toronto, Canada Law Books, 2nd edn, 1954) 118ff, 506ff; JM Carruthers Transfer of Property in the Conflict of Laws (Oxford, OUP, 2005, 978-0-19-927147-4) [1.01ff]. 14 This is the general spelling without a middle ‘e’, though judicial support can be found for ‘immoveable’ eg Macdonald v Macdonald (1932) SC HL 79, 84 Lord Tomlin. 15 JA Clarence Smith ‘Classification by the Site in the Conflict of Laws’ (1963) 26 MLR 16–33. 16 Dicey & Morris (n 13 above) [32–33] (at least where the death occurs in a common law state); see below [11.26]. 17 Rome Convention [1980] OJ L266 1 (original), [2005] OJ C334 1 (consolidated); Giuliano Lagarde Report [1980] OJ C282 1; Rome I Green Paper COM (2002) 654 final; Rome I Proposal 2005/0261 (COD). 18 Contracts (Applicable Law) Act 1990, c 36.

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be so, although buildings eventually fall down and in the interim can be knocked down, and the soil of the earth could be dug out to create a vast void. Soil and buildings at least feel permanent and the law, concerned only with practicalities, adopts the self-evident classification for the soil of the earth, houses and other buildings erected on it. The only truly immutable thing to medieval lawyers was the empty space above the face of the earth, but then we discovered that even this moved as the world spins on its axis,19 but it is still placed irrevocably at one particular point on the earth’s surface in relation to its neighbours, subject only to cataclysmic unnatural events such as earthquakes.20 Izmit in Turkey lies on the junction of two plates of the earth’s crust and there a massive earthquake moved one side of a petrol filling station while leaving the other side untouched, so that two rows of pumps which once stood opposite each other are now out of alignment by almost five metres. A wholly natural event like an alteration in the redirection of a watercourse may alter our topography: a well-known example occurred when the River Coesnon dividing Brittany from Normandy altered course and by a whim handed Mont St Michel to Normandy. In our settled landscape these events are sufficiently peripheral to enable property law to function perfectly well without considering them. In theory, perhaps, the law of a site could declare that land was movable, but Story considered that physical land and houses were inherently and necessarily immovable,21 and dicta in Macdonald also, on balance, cast doubt on the international recognition of such a domestic fiction.22 International law treats physical land as immovable. Categorisation is left to the law of the site, because that is the forum used to resolve the issue and the selection of land law is one of the tasks facing the courts of the forum: English courts use common law principles to identify land,23 and the corresponding domestic focus to this question would exist in the courts of virtually every other state. It remains to be seen whether the European Court of Justice will be prepared, in a suitable case, to create its own autonomous definition and, if so, how that definition might look. The search, at any rate, is for immovable property rather than the more restricted category of immovable things. [3.04] Rules for fixtures vary. An old custom in Artois (the area around Arras) provides a favourite example, for the regularity with which the area was invaded by enemy armies was so great that houses there were treated as movable because Clarence Smith (n 15 above) 27. National Carriers v Panalpina (Northern) [1981] AC 675 HL, 691 Lord Hailsham LC, 714D Lord Roskill; Cricklewood Property & Investment Trust v Leighton’s Investment Trust [1945] AC 221 HL, 229 Viscount Simon LC. 21 J Story Commentaries on the Conflict of Laws (Boston, Little Brown, 8th edn, 1883) [447]. 22 Macdonald (n 14 above) 84 Lord Tomlin, 89 Lord Thankerton. 23 G White ‘Civil Jurisdiction and Judgments Act 1982’ Part I [1983] Conveyancer 180–193, Part II [1983] Conveyancer 306–314, 306; Carruthers Transfer of Property (n 13 above) [1.15ff]; A Briggs Conflict of Laws (Oxford, Clarendon, 2002, 0-19-876333-6) ch 8. 19 20

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of the likelihood that they would soon be knocked down.24 Let us hope that this is no longer the cockpit of Europe. Wales is generally more settled and so a shack resting on its own weight on the soil and gradually sinking into the Gower Peninsula but otherwise unattached was held to be a fixture in the leading common law case.25 Legal systems may vary at the margins over the precise definition of annexation.26 Rights are often treated as immovables. Clarence Smith’s exhaustive investigation led him to a definition of immovable rights comprehending any right of ownership, occupation or drawing profits from any site, the site being taken as one with all things regarded by the law of that site as annexed to it for the purpose in hand, and probably means also any right which is the creature of positive law and is so classified by its creator.27

Clearly this includes things like easements which must be enjoyed with land,28 but all rights outside this definition are movable (not-land). The sifting process is the prerogative of the law of the site irrespective of the forum.29 As Story said, each nation may impress on property a character and no other state may impugn it.30 Differences are likely at the margins, for example with the odd and inexcusable English principle that peerages are treated as hereditaments to be bought and sold, the treatment of abstract and abstruse entities such as manors, and particularly the treatment of intangibles like rent charges. It is open to a state to adopt one characterisation for international purposes and then, when a particular item is treated as immovable and so assigned to the land grouping, then to recategorise it as not-land for domestic purposes. Double classification of things in the grey area between the two extremes produces odd results, one of which particularly tickled the fancy of Clarence Smith: a share of a rent charge was allocated internationally to England by the immovable rule of the site but then reclassified internally by English law as personalty, the reclassification just happening to make it taxable — how to explain this to the non-expectant taxpayer as he left court!31 Common lawyers often made the innate and quite incorrect assumption that civilian law generally agreed with the common law about the movable/immovable divide. Is a claim for restitution of land a real claim affecting the land or a matter of personal obligation? A definitive answer can be provided for one sort of claim, the claim to recover property seized from Jews in pre-War Germany. After the Clarence Smith (n 15 above) 22. Elitestone v Morris [1997] 1 WLR 687 HL; Case of Admiral Palliser discussed in Mostyn v Fabrigas (1774) 1 Cowper 161, 180 Lord Mansfield MR, 98 ER 1021 (fishing huts immovables); S Lee ‘Title to Foreign Real Property in Transnational Money Claims’ (1995) 32 Columbia Journal of Transnational Law 607–672, 654 n 281 (US cases where shacks or barns treated as movables). 26 In England see P Sparkes A New Land Law (Oxford, Hart, 2nd edn, 2003, 1-84113-380-9) [2.01ff]. 27 Clarence Smith (n 15 above) 33. 28 Clarence Smith (n 15 above) 26. 29 Re Berchtold [1923] 1 Ch 192 Ch D. 30 Duncan v Lawson (1889) 41 Ch D 394 Kay J. 31 Chatfield v Berchtoldt (1871) LR 7 Ch App 192 CA in Chancery; Clarence Smith (n 15 above) 22. 24 25

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Unification of Germany surviving relatives were able to claim back the land. If the claim qualified as an immovable, German law applied and the children of the current claimant had a vested share in the land. But it was held that this claim was a matter of obligation which could be pursued by the daughter-in-law of the original owner without her handing any of the proceeds over to her children. A claim for restitution was not a matter of property, even though it was a claim that substituted for the previous ownership right, since the claim was made against the State, and could be converted to a right to compensation if purchasers had bought the land or built on it in good faith. The law of the place (German law) determined whether this claim was land or personal property.32

3

Leases and other special cases

[3.05] Leaseholds33 require special treatment because of the bizarre rule of the English common law that these are to be treated as personal property.34 When an international element is introduced because, for example, the land is located in Canada,35 leases have to be treated as land36 with English and Scots37 law speaking as one. Selection of law follows according to its geographical location within the territory of a particular state. Conflicts rules vary about how to treat a mortgage. Being intangible mortgages are not immovable in the literal sense but they are closely linked to the asset forming the security, the land mortgaged, which is immovable, and with remedies which include the right to sell the land. Partly a mortgage is also a personal obligation for payment of a debt. Characterisation involves finding a balance between these two aspects and where the scales come to rest varies from state to state and between types of security. English law sees its form of legal mortgage as immovable,38 and the same is true of Scots heritable bonds,39 and internal allocation rules treat a secured debt as located at the site of the immovable property forming the security.40 Lesser securities such as equitable Bundesgerichtshof IV ZR 171/99, [2000] N Jus 546, [2000] ECLYB [2239]. Freke v (Lord) Carbery (1873) LR 16 Eq 461 Lord Selborne; Duncan v Lawson (n 30 above); Re Caithness (1891) 7 TLR 354 Chitty J; Pepin v Bruyère [1902] 1 Ch 24 CA; Macdonald (n 14 above) obiter. 34 Re Hoyles [1910] 2 Ch 333, [1911] 1 Ch 179 CA. 35 Macdonald (n 14 above) (extensive land-holdings in British Columbia, Manitoba, Saskatchewan, and a mortgage of Canadian land); Coppin v Coppin (1725) 2 Peere Williams 291, 24 ER 735; Clarence Smith (n 15 above) 26ff. 36 The value of the Canadian lease was excluded from the daughter’s legitim, her entitlement in Scots law to succeed to a share of her father’s movable estate. 37 Downie v Downie’s Trustee (1866) 4 Macpherson (Session Cases) 1067. 38 Re Hoyles (n 34 above); Adams v National Bank of Greece [1961] AC 255 HL. 39 Jerningham v Herbert (1828) 4 Russ 388, 38 ER 851. The decision in Macdonald (n 14 above) depends on an admission that the particular mortgage was movable before the case reached the Lords: Clarence Smith (n 15 above) 26 40 Civil Jurisdiction and Judgments Act 1982, c 27, sch 4 para 3(h)(i); Dicey & Morris (n 13 above) [11-268], [23-063] (this is not in the European Regulation). 32 33

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mortgages and charges on English land may be movable,41 and that is how all mortgages are seen in Australia,42 France and Germany.43 [3.06] Categorisation of equitable interests presents massive problems because equitable actions are in personam and not directed straight at the land which forms the trust asset. Further, if a trust is established it gives a proprietary right enforceable against almost all the world, but it is less than a fully in rem right because of the possibility of its being destroyed by a purchaser without notice. Trusts were treated as immovable property in traditional public international law but are treated as matters of personal obligation by the European conflicts club. Complex issues are involved here and in order to avoid interruption of the narrative flow, discussion of these issues is postponed to a more convenient place where trusts can be considered as a whole.44

THE SI TE

The Site 1

Land

[3.07] Land has geographical limits and is fixed on the earth’s surface, so that it has a set relationship to the spatial and territorial limits of one particular system of law,45 and this made it easy to allocate the site of particular land to a particular state.46 This derives from the judgment of Justice Story in Swift v Tyson47 where, in the context of the tug between federal and state jurisdiction,48 he identified the category of 41 Price v Dewhurst (1839) 8 Simon 617, 59 ER 244 Shadwell VC (mortgage of land in St Croix); Clarence Smith (n 15 above) 31. 42 Macdonald (n 14 above) 88 Lord Thankerton; Att-Gen v (Lord) Sudeley [1897] AC 11 HL, 15 Lord Halsbury LC (New Zealand). 43 Clarence Smith (n 15 above) 18. 44 See below [11.34ff]. 45 FC von Savigny Treatise on the Conflicts of Law (New Jersey, Rothman Reprints, 2nd edn, 1972) 47–48; Cookney v Anderson (1863) 1 De Gex Jones & Smith 365, 379 Lord Westbury LC, 46 ER 146. 46 The site rule also applies, with odd results, to movables such as aircraft: Kuwait Airways v Iraqi Airways [2002] 3 All ER 209 HL; Mazur Media v Mazur Media [2004] EWHC 1566, [2004] 1 WLR 2966 Lawrence Collins J; Peer International Corp v Termidor Music Publishers (No 1) [2003] EWCA Civ 1156, [2004] Ch 212; see also below [3.13] nn 95–96. 47 Swift v Tyson (1842) 41 US 1 Supreme Court, 19, Justice Story; PM Hay ‘The Situs Rule in European and American Conflicts Law’ in PM Hay & MH Höflich Essays in Honor of JE Cribbet (Illinois, University of Illinois Press, 1988, 0-252-01593-2) 109; D Caruso ‘Private Law and Public Stakes in European Integration: the Case of Property’ (2004) 10 ELJ 751–765, 756; Carruthers Transfer of Property (n 13 above) [2.07]. Falconbridge Essays (n 13 above) 596 thinks English adoption of the site rule extreme (he has a good discussion of renvoi and situs at 217); Westlake A Treatise on Private International Law (n 13 above) 9 attributes this to its matching the national temper. 48 The decision in favour of state exclusivity over land was overturned in Erie RR v Tompkins (1938) 304 US 64 Supreme Court.

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things having permanent locality such as rights and titles to real estate and other matters immovable and intra-territorial in their nature and character.

From that it is a short and obvious step to select49 a court system to decide a dispute and from that to select a property law to apply.50 If the parties in dispute are also all connected to that same state there is no conflict and the case falls fairly and squarely within the competency of a single legal system: two French citizens arguing about a letting of a flat in Paris must take their dispute to a French court and satisfy themselves with the modern version of the Napoleonic Code. Courts in London or Moscow should never become involved but if they are dragged in to a dispute peripherally they will have to accept whatever the French court decides about the land. [3.08] Land cannot be abducted and shepherded across a state line, but owners are more difficult to pin down and it is perfectly possible for a claimant to land to move himself. Rights are also potentially mobile.51 Fluidity of movement increases in an internal market and with it the volume of cross-border commerce and the number of disputes.52 A conflict arises when a claimant in one state takes action about land in another. Suppose, for example, that a French woman lets a house in Edinburgh to an Italian, or, a different issue, the transaction involved is a Franco-Italian sale. Any dispute connected to two states inevitably involves a conflict since all property law systems diverge and problems multiply as more states pile in. ‘Conflict’ might suggest a Hobbesian and brutish state of nature between legal systems slugging it out like rival soccer gangs, when in fact they have learnt to coexist and so it may be better to submit to civilian usage and talk about ‘private international law’ as a better encapsulation of the decorum and mutual accommodation generally achieved today.53 The truth is sophistication, not thuggery. Geoffrey Cheshire was already master of the 1925 property legislation when, turning to private international law ten years later, he found a perfect antithesis to ‘real property’, fluid not static, elusive rather than obvious, repelling any tendency to dogmatise by reason of the numerous possible permutations.54 Readers have fair warning that Cheshire was challenged by what lies ahead. 49 This book departs from normal practice in using ‘choice’ for a forum or law nominated by the parties, a consensual forum or law, and ‘selection’ for a forum or law nominated by European conflicts rules because of the existence of a connecting factor; on choice see below [10.34ff]. 50 Carruthers Transfer of Property (n 13 above) [8] argues for a more flexible rule in relation to the transfer of land, and favours meeting the legitimate interests of buyers and sellers (see [8.14ff]) with a more sensitive rule that would retain a rebuttable presumption in favour of site (see [9.47]) whilst allowing a closer connection to be established by connection to the parties, their relationship, their course of dealing or contractual rights; Draft Convention §§6, 7A. Transfer is discussed below at [10.04] but it would never be possible to displace the basic proprietary framework of the site, such matters as whether land is alienable and what rights in it can be created. 51 Caruso (n 47 above) 756–757. 52 Rome I Green Paper (n 17 above) [1.1]; Giuliano Lagarde Report (n 17 above) Introduction [1]. 53 Cookney v Anderson (n 45 above) 379–380 Lord Westbury LC. 54 G Cheshire Private International Law (London, Butterworths, 1st edn, 1935) preface; currently Cheshire & North Public International Law (London, Butterworths, 13th edn by P North & JJ Fawcett, 1999).

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[3.09] Conflicts may arise in connection with two distinct but interrelated issues arising under private international law: 앫 forum — which court has jurisdictional competence to hear the dispute; and 앫 law — which system of law should be applied. It is desirable for forum and law to march in step; so that, for example, French courts apply French rules to French land. This is based on the site of the land or, in old money, the forum and the law ‘rei sitae’. Legal jurisdiction flows naturally from the immovability of land. It would not be sensible to determine a dispute about a Spanish island inhabited and grazed by Moroccan sheep55 in the Royal Courts of Justice, nor would a Southampton landlord wish to travel to the Cour de Grande Instance in Paris to litigate his claim to repossession against his tenant. European rules lay down a rule for forum and allows law to follow, though a subsequent chapter considers many cases where forum and law diverge.56 Indeed the European conflicts rules are so poor that the United Kingdom should withdraw from them.

2

Site and non-site bases and site coincidences

[3.10] A forum or law is described in this book as site-based if it is necessarily chosen because of the location of the land in issue. Others for contracts and trusts are non-site. In many cases a law or forum may be chosen or selected which happens to correspond to the site of the land but where the selection is made from the existence of some non-site connection. For example, a contract to sell a house in Galway to an English purchaser long settled in Dublin can be enforced against the purchaser if she proves recalcitrant in Ireland; to do so because the house is in Galway is site-based, but to do so because of her domicile in Dublin is a coincidence because she might just as easily be domiciled in Belfast or Liverpool or Paris or Istanbul. This book makes non-site assumptions where facts are purely contingent.

3

Cross-border and trans-national holdings

[3.11] A lease may include land in two or more European states and in such a case Scherrens v Maenhout57 is authority for distinguishing two situations. More common is a lease demising two distinct parcels of land by a single document, each discrete and lying wholly within a particular European state, Scherrens itself involving five hectares of Belgium and a non-contiguous parcel of twelve hectares 55 Parsley Island (Isla del Perejil) is a Spanish enclave on the Moroccan coast seized by Moroccan soldiers in two dinghies in 2002; G Tremlett Guardian July 13th 2002. 56 See below [10.17]. 57 Case 158/87 Scherrens v Maenhout [1988] ECR 3791 ECJ; TC Hartley ‘§16: Land in Two Contracting States’ (1989) 14 EL Rev 57–58.

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of the Netherlands. This lease was severed into its constituent parts, allowing Belgium and the Netherlands to assume jurisdiction over their respective parts.58 Less commonly, the special characteristics of a lease might dictate a need for one court to decide where the property demised is a single farm or business unit with almost all the land in one state but overlapping the state border, and perhaps whenever a single geographical holding on a state border forms a single economic unit.59 One problem not yet faced is what happens if state A provides that a particular piece of land physically sited within the territory of state B is deemed by its private international law to fall within the territory of state A. One can imagine problems, absurdity even, arising from enclaves and exclaves or from disputed territory such as Gibraltar and northern Cyprus.60 English law probably precludes notional relocation of land which is physical in character, but rules could easily differ about how to ground intangibles such as a rent charge.61 It seems that a contract will also be severable on a site basis.62

SELECTI O N O F LA N D LAW

Selection of Land Law 1

The Rome I club and its limits

[3.12] Contract laws vary across Europe. Relatively few cases have an international element,63 but those with elements linked to several countries need clear rules for selecting one legal system, uniform rules lubricating the workings of the common market.64 The Rome Convention65 — or ‘Rome I’66 — aims to establish certain and uniform rules concerning the choice and selection of law applicable to contractual obligations.67 It offers freedom of choice apart from the case of consumer contracts, but where no choice is made a law is selected for the parties by identifying a close connection to the contract,68 perhaps helping to reduce the

Scherrens (n 57 above) J[13–15]. Left open in Scherrens (n 57 above) J[13–15], though AG[3] Mancini was against. 60 See below [4.31ff]. 61 Dicey & Morris (n 13 above) II [22.011–22.012]. 62 Rome Convention (n 17 above) §4[1]; Giuliano Lagarde Report (n 17 above) §4, [8]; Dicey & Morris (n 13 above) II [33–230]; R Plender & M Wilderspin The European Contracts Convention (London, Sweet & Maxwell, 2nd edn, 2001, 0-421-73860-X) [6.22]; see below [10.09]. 63 Rome I Green Paper (n 17 above) [1.6]; Giuliano Lagarde Report (n 17 above) Introduction [1]. 64 It is nevertheless currently a poor tool of legal integration: O Lando ‘Optional or Mandatory Europeanisation of Contract Law’ (2000) 8 ERPL 59–69, 62. 65 Rome Convention (n 17 above); Giuliano Lagarde Report (n 17 above). 66 Dicey & Morris (n 13 above) II [32]; Plender & Wilderspin (n 62 above); J Hill ‘Rome Convention: the Approach of the UK Courts’ (2004) 53 ICLQ 325–350. 67 Giuliano Lagarde Report (n 17 above) Introduction [1] and §1, [1]. 68 Rome I Green Paper (n 17 above) [1.5]. 58 59

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attractions of forum shopping.69 As usual, the European rules are crude as compared to the preceding common law. After an extended pause the United Kingdom incorporated Rome I into domestic law by the Contracts (Applicable Law) Act 1990.70 The process of unification of conflicts rules can be traced in the Giuliano Lagarde Report.71 Proposals have been made to bring the selection of contract law more formally within the EU conflicts club by a Regulation72 but Denmark, the United Kingdom and Ireland will not participate.73 The Rome Convention selects the law to be applied to contractual obligations in civil and commercial matters,74 but this Convention never impinges on pure property law, exclusions being corporeal and incorporeal property, security interests, and formality provisions, indeed all aspects of property which had been the subject of an explicit exclusion in a preliminary text which was, however, removed from the final version for obviousness and superfluity.75 French land sold by a German contract has an underlying structure of property law which is French, but any personal aspects of the contract may be covered by German law. So the conflicts club has a void for land. All states insist upon applying their own law to their own land, including issues of saleability, formalities, the proprietary effect and priority of a transfer and relationships with neighbours and how it may be offered as a security.76 Site-based law is imposed not under explicit European legislation but as part of a continent-wide ius commune. Closer to the line and requiring express exclusions from the Rome scope are: 앫 common law77 trusts, their constitution and the relations between the settlor, trustees and beneficiaries,78 questions of the status and capacity of individuals,79 and 앫 wills, succession, matrimonial and family property, and all related contracts.80 앫

69 Rome I Green Paper (n 17 above) [1.3], [3.1.2]; C-381/98 Ingmar GB v Eaton Leonard Technologies [2000] I ECR 9305 ECJ. 70 Contracts (Applicable Law) Act 1990, c 36, s 2(1); but only in force as from 1994; for this, the several amendments, the geographical reach, UK derogations and ECJ interpretation, see below [4.09ff], [10] passim. 71 Giuliano Lagarde Report (n 17 above) Introduction [2] and §4, [1]. 72 Rome I Green Paper (n 17 above) [3]; AML Rodríguez ‘The Rome Convention and its Revision’ (2004) 12 ERPL 167–191. 73 Denmark will be out whereas the UK and Ireland are yet to decide: Rome I Proposal (n 17 above) R[18–19]. 74 Rome Convention (n 17 above) §1[1]. 75 Giuliano Lagarde Report (n 17 above) Introduction [3] and §1, [2–3]. 76 The property exception covers the grant of limited rights but not a contract for a grant: Dicey & Morris (n 13 above) II [33–226]. 77 Civilian-type trusts are contractual in origin and within Rome, but judges should nevertheless be free to exclude them where they display the same characteristics as common law trusts: Giuliano Lagarde Report (n 17 above) §1, [8]. 78 Hague Convention XXX §2, Recognition of Trusts Act 1987, c 14, s 1(1); see below [11.59]. 79 Rome Convention (n 17 above) §1[2]; but including of course capacity to contract: §11. 80 Giuliano Lagarde Report (n 17 above) §1, [3]. However, gifts arising from contract are covered.

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Any conversion of the Rome Convention into EU legislation will carry forward similar exclusions.81

2

Domestic public international law

[3.13] Selection of a forum according to the site of land in dispute will also select the law to be applied. True enough, technically speaking, the matter is left to be decided by local law,82 but the reality is that courts will always apply their own local law to their own land, the law of the site (lex situs). This rule is universal in the literal sense.83 A legal system would have to be abnormally unjingoistic to do anything else and one can scarcely imagine the French courts abandoning the simplicity of propriété in favour of the conceptual beauty of the common law doctrine of estates. Spanish law is proper to determine a dispute about ownership in Spain84 and Italian law proper for a letting of a holiday villa in Italy even as between a landlord and a tenant who were both Germans.85 This is true so long as the issue is an ownership dispute but the court of the site may be required to apply a foreign law chosen by the parties when the issue affects a transaction with land.86 At common law and in equity: the incidents to real estate, the right of alienating or limiting it and the course of succession to it depend entirely on the law of the country where the estate is situated.87

An owner of property cannot modify his estate or increase the dispositive powers associated with it,88 but rather his ownership depends upon the general law of the land so that, for example, if the state converts from feudalism to a modern commercial basis individual ownerships follow. Tax follows the same pattern with obligations in rem over property left to the state in which the property was situated, whereas personal obligations based on a duty to transfer title were for the state of residence to take into account.89 Other matters left to the law of the site are formalities,90 the method of selling land in Sardinia,91 questions of capacity to deal with immovables, capacity to make an English mortgage of land in Johannesburg which is governed by the law of the Transvaal,92 and Rome I Proposal (n 17 above) §1[2]. Jenard Report [1979] OJ C59 1, 34. 83 Cookney v Anderson (n 45 above) 380 Lord Westbury LC. 84 Re Hayward [1997] Ch 45, 56G–57B, 59B Rattee J. 85 C-241/83 Rösler v Rottwinkel [1985] ECR 99 ECJ; but on holiday lettings see below [4.40ff]. 86 Rösler (n 85 above) 118 AG Slynn. 87 Nelson v Bridport (1846) 8 Beaven 547, headnote at 547, 50 ER 215. 88 Nelson (n 87 above) 571. 89 C-364/01 Barbier’s Heirs v Inspecteur Van de Belastingdienst Particulieren [2003] I ECR 15013 ECJ (Dutch inheritance tax). 90 Adams v Clutterbuck (1883) 10 QBD 403 QBD (seal not required on English lease of Scottish sporting rights). 91 Re Piercy [1895] 1 Ch 83, 88 North J; F Pollock (1895) 11 LQR 105–107. 92 Bank of Africa v Cohen [1909] 2 Ch 129 CA, 146 Kennedy LJ; Anon (1909) 25 LQR 342; also Duncan v Lawson (n 30 above); Re Cartney (1840) Montagu & Chitty 239. 81 82

Selection of Land Law

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wills.93 Problems are perhaps greatest with business tenancies.94 Formalities for transfer95 and gift96 of personalty also follow the location of the thing at the time the transaction or disposition is made.

3

No choice of land law

[3.14] Parties are not allowed to choose the law that is to apply to their land.97 The parties to the lease of property in Spain stated an express choice of German law to apply to their agreement but freedom of contract was subject to overriding principles of public order which chose Spanish law and a Spanish forum: rules which had to be applied to a lease of property in Spain fell directly under such provisions.98 It would be interesting to open up the European market to a bare-knuckle fight between English property law and civilian principles by allowing an open choice of land law. An optimal market is achieved by peopling it by individuals with a free choice and leaving it to them to pursue their own interests. Would we see a European flag of convenience to match that which sees 40 per cent of all companies traded on the New York stock market opting to incorporate in Delaware?99 Reality precludes any land law of convenience. Transactional aspects of land transactions may be open to choice, but land law is quasi-public fixing a scheme for real enforceability against third-party purchasers and also fixing relationships with neighbours; it would not be feasible to subject No 13 Nelson Mandela Way to German law when No 15 has voted French. Land law is not a bespoke service. In fact, a state will apply to its own land many mandatory provisions and these will have an overriding character against any other law chosen or selected for the contract.100 Other difficulties standing in the way of a free choice are lack of information, language problems, limits to the expertise of lawyers and transaction costs.101 Legal diversity adds to transaction costs, especially for small business,102

See below [11.17]. C Romney ‘Peace with Mainland’ [1999] 43 EG 145–147 (comparative table of terms of commercial leases in main continental jurisdictions). 95 Gammell v Sewell (1860) 5 Hemmings & Miller 728, 157 ER 1371; A v N [1998] BGE III 103, [1999] ECLYB [2314] I Zivilabteilung; CW Fassberg ‘On Time and Place in Choice of Law for Property’ (2002) 51 ICLQ 385–400. 96 Le Meilleur v Trehout [2001] II JCP 10620, [2002] ECLYB [1188]; Air Foyle v Center Capital [2002] EWHC 2535, [2003] 2 Lloyd’s Rep 753 Gross J; D Osborne ‘Lex Situs and Aircraft’ (2004) 3 LMCLQ 303–312. 97 On ‘choice’ and ‘selection’ see (n 49 above). 98 B v XX [2002] J Aran 3107, [2002] ECLYB [1227] Tribunal Supremo; Spanish Law on Judicial Power §22[1] following the European forum rules. 99 G Wagner ‘The Economics of Harmonisation: the Case of Contract Law’ (2002) 39 CML Rev 995–1023, 1001–1003, 1005. 100 See below [10.07]. 101 Wagner (n 99 above) 1006–1013. 102 Wagner (n 99 above) 1014. 93 94

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but so would harmonisation and it makes business sense to rely on conflict resolution.103

4

Recognition of judgments

[3.15] Foreign land law may be imported to another European country because of the requirement to recognise judgments given on the basis of mutual trust.104

5

Site-based selection of contract law

[3.16] Contract law is selected under the Rome Convention, in the absence of a choice, by seeking out the country with which a contract is most closely connected, after it has been severed if a single contract is used to sell land in several EU states. Land is subject to a special rule for applicable law so notably absent for forum which governs, more precisely, any contract whose subject matter is a right in immovable property or a right to use immovable property, including a contract to grant a lease or a right of way or a mortgage, and presumably also a contract to sell an existing estate or ownership right in land. It creates a presumption that the contract is most closely connected with ‘the country where the immovable property is situated’.105 The site rule also applies to a consumer contract where the service is to be provided completely in a country different from that of the consumer’s habitual residence.106 If the Rome I Proposal comes to fruition, the site rule will be solidified as a starting point for land contracts and the fit between the forum rules for short leases will be improved.107

PR O PERTY O F THE EUR O PEA N I N STI TUTI O N S

Property of the European Institutions [3.17] The European Commission has capacity to acquire or dispose of movable and immovable property and to be a party to legal proceedings.108 This 103 Wagner (n 99 above) 1013–1018; M Solimine ‘Economic and Empirical Analysis of Choice of Law’ (1989) 24 Georgia Law Rev 49–94; U Mattei Comparative Law and Economics (Michigan, University of Michigan Press, 1997, 0-472-06649-8); JL Dunoff & JP Tractman ‘Economic Analysis of International Law’ (1999) 24 Yale Law Journal of International Law 1–60. 104 See below [4.32ff], [9.75ff]. 105 Rome Convention (n 17 above) §4[3]; Rome I Green Paper (n 17 above) [3.2.6.1]; see below [10.33]. 106 Rome Convention (n 17 above) §5[4–5]; Giuliano Lagarde Report (n 17 above) §5, [5]; Dicey & Morris (n 13 above) II [33–004]; Rome I Proposal (n 17 above) §§5[1], 6[2]; see below [10.33]. 107 Existing limitations on the scope of the selection of law rules will be repeated and amplified: Rome I Proposal (n 17 above) R[14], §§1[2]; 18. 108 EC §282 ex §211.

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takes place under domestic law and does not involve the creation of a distinct substantive law along the line of the employment regime for EC officials.

R ESPECT F O R TER R I TO R I A LI TY

Respect for Territoriality 1

Property exclusion

[3.18] According to article 295, the consolidated Treaty of Rome: shall in no way prejudice the rules in Member States governing the system of property-ownership.109

The same self-denying ordinance found its way into the draft Constitution110 and also into the Agreement for the EEA.111 The precise meaning of these provisions has not been settled,112 they are by no means straightforward,113 and their complexities are little explored114 outside the field of industrial (or, in common law parlance, intellectual) property rights.115 The practical effect of article 295 is limited since arguments based on it have been rejected in every reported case.116 Property is a strange thing to be singled out by the Treaty,117 given how property is an inseparable part of the process of economic integration, and necessarily fair game for community legislators.118 Article 295 has an important effect in keeping the EU out of pure domestic property law, but it has not been a serious impediment to the development of an autonomous European land law. [3.19] It, article 295, can be read at face value, to some extent at least, when it states that entry into the Treaty ‘shall in no way prejudice’ national property rules. Basics of national systems should remain free from European interference or at the very least any European intrusion will require strong justification where these are called into question.119 Formal expression is given by the article to the EC §295 ex §222. Draft European Constitution [2004] OJ C310 1, §III–331. 111 EEA Agreement [1992] OJ L12 13 as adjusted [1994] OJ L1 572 and amended [2004] OJ L130 3, §125; S Norberg, K Hökborg, M Johansson, D Eliasson & L Dedichen A Commentary on the EEA Agreement (Stockholm Fritzes, Kluwer, 1993, 9-138-92200-2) 302–303; T Blanchet, R Piippona & M Westman-Cléments The Agreement on the EEA (Oxford, OUP, 1994, 0-19-825884-4) 105ff. 112 C-30/90 Commission EC v UK (Patent Licensing) [1992] I ECR 829 ECJ, 840. 113 P Oliver Free Movement of Goods in the EU (London, Sweet & Maxwell, 4th edn by P Oliver & M Jarvis, 2002, 978-0-421-74020-4) [9.30]. 114 But see: F Campbell-White ‘Property Rights a Forgotten Issue under the Union’ in NA Neuwahl & A Rosas The EU and Human Rights (The Hague, Martinus Nijhoff, 1995, 9-041-10124-1), 249–263; Caruso (n 47 above); B Bogusz ‘Modernising English Property Law: The Influence of Internal Market Principles’ (2006) European Business Law Review 1395–1419, 1407–1411 115 Case 24/67 Parke Davis v Probel [1968] ECR 55 ECJ, 59; see below [3.27]. 116 See below [3.22ff]. 117 Caruso (n 47 above) 752. 118 Caruso (n 47 above) 753. 119 A Campbell Common Market Law (London, Longmans, 1969) vol 2 [2266]. 109 110

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territoriality of property rights, for example in the independence of national systems of patent law,120 perhaps creating a presumption that property rights recognised nationally will be upheld in European contexts.121 As Advocate General Römer said of article 295 in Consten: its object is solely to guarantee in a general manner the freedom of the Member States to organize their own systems of property.122

No European element enters into pure property law such as conveyancing systems, succession on death, and family law.123 Property lawyers have a licence to be dry.124 There is a provisional protection for national legislation, and the starting gate has been moved,125 but no outright shield. Membership of the Economic Community does not affect the structure of the property legislation of member states, any more than it affects parent-child law or inheritance provision or the grounds for nullity of a marriage. Full integration of private law is not the aim but merely to secure the decisive influence in economic activity.126

2

Neutrality between forms of industrial ownership

[3.20] Teleological interpretation derived from the history of the article must first be cleared from the field as a distraction. A corresponding provision was included in the Treaty establishing the European Coal and Steel Community but that does not determine the scope of its modern derivative. Property lawyers all celebrate May 9th, Europe Day, as the day on which, when Robert Schumann made his proposal for the establishment of an authority to establish a common market in coal and steel, he made the exception that: L’institution de la Haut Authorité ne préjuge en rien du régime de propriété des entreprises.127

In some states coal and steel production was organised through private undertakings but other states nationalised the producers of coal and steel so these Parke Davis (n 115 above) 77 AG Römer. Parke Davis (n 115 above) 64 ECJ. 122 Case 56/64 etc Consten v Commission EC [1966] ECR 299 ECJ, 366 AG Römer; C-350/92 Spain v Commission EC (Medicinal Products) [1995] I ECR 1985 ECJ, AG[14] Jacobs. 123 H Smit & P Herzog The Law of the EC: a Commentary (New York, Matthew Bender, 1997) vol 5 [6–216.58]. 124 The reference is to Mrs Thatcher’s division of her cabinet into ‘wet’ (pro-European) and ‘dry’ (Eurosceptic). 125 UK Patent Licensing (n 112 above) Report [31]; it cites: Case 144/81 Keurkoop v Nancy Kean Gifts [1972] ECR 2853 ECJ; Case 35/87 Thetford v Fiamma [1988] ECR 3585 ECJ; Case 341/87 EMI Electrola v Patricia Im- und Export [1989] ECR 79 ECJ, J[1]. 126 C-367/98 Commission EC v Portugal (Golden Share) [2002] I ECR 4731 ECJ, AG[63], AG[65] Colomer. 127 Schumann Declaration May 9th 1950 (); ‘The institution of the High Authority will in no way prejudge the methods of ownership of enterprises’; European Coal and Steel Community Treaty §83 followed in very similar terms. 120 121


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products were marketed by state-owned corporations. Different forms of ownership of the enterprises engaged in coal and steel production were to be respected, a point even more explicit in the earlier drafts which had referred to the ‘propriété de moyens de production’ — that is, ownership of means of production.128 Neutrality was to be maintained between steel producers with private shareholders and state-controlled vehicles and that ‘agnosticism’129 as between privatised and collectivised organisation of markets has, at least in theory, been carried through into the internal market in general.130 A programme of nationalisation can be implemented within the EC131 and Italy has collectivised its electricity supply,132 and more generally states are free to decide for themselves about public ownership133 and whether to nationalise or denationalise.134 Neutrality is also maintained between the private and public sectors when competition issues such as state aid135 are under discussion, though this is of limited value since the article 295 shield is not valid against competition issues136 or state aid rules.137 In practice the public option is severely constrained.138 [3.21] Between the extremes of private and public lie heterogeneous mixtures of the two,139 examples being considered in the various Golden Share cases. Several states privatised nationalised utilities on terms reserving to the relevant state authority some degree of control over the business conduct of the utility by means of the designation of a share (the Golden Share) with enhanced voting rights and an effective veto over company policy. An EU that was truly neutral as between private and public ownership would surely accept the half-way house of private investors subject to a degree of state planning of infrastructure? Given the 128 S Neri & H Sperl Traité Instituant la CEE, Travaux Préparatoires (Luxembourg, ECJ, 1960) 410; Portuguese Golden Share (n 126 above) AG[50–51] Colomer. 129 P Craig & G de Búrca EU Law Text Cases & Materials (Oxford, OUP, 3rd edn, 2003, 0-19-876273-9) 1123; Bright & Bright (n 8 above) 358ff. 130 EC §86 ex §90. 131 Written Q 346/80 [1980] OJ C213 16 (Roy Jenkins). 132 Case 6/64 Costa v Ente Nazionale per l’Energia Elettrica [1964] ECR 585 ECJ. 133 Case 32/65 Italy v Council EC (Competition Agreements) [1966] ECR 389 ECJ, 422 AG Römer; Parke Davis (n 115 above) 63; Case 44/79 Hauer v Rheinland-Phalz [1979] ECR 3727 ECJ, AG[7] Capotorti; Case 188/80 etc France v Commission EC (State Aids) [1982] ECR 2545 ECJ, 2556 AG Reischl; C-202/88 France v Commission EC (Telecommunications Terminals) [1991] I ECR 1223 ECJ, 1239 AG Tesauro; Spanish Medicinal Products (n 122 above) AG[29] Jacobs, J[29ff]. 134 DC Goyder EC Competition Law (Oxford, OUP, 4th edn, 2003, 0-19-925788-4) 249 fn 9; J Mégret Le Droit de la CEE (Brussels, Université de Bruxelles, 1987) vol 15 42; H von der Gröben, H von Böchl & J Thiesing Kommentar zum EWG-Vertrag (Baden Baden, Nomos Verlagsgesellschaft, 1974) vol 2 557–558. 135 Aid by Charleroi Airport to Ryanair Commission Decision 2004/393/EC [2004] OJ L137 1, [18], [45], [68]; also numerous other decisions on state aid. 136 Charleroi Airport (n 135 above) [158]; Commission Decision 2005/842/EC (Public Service Compensation) [2005] OJ L312 67, [119], [138], [146]. 137 Case T–116/01 P&O European Ferries (Vizcaya) v Commission EC [2003] II ECR 2957 CFI, J[148–153]; the point is not mentioned on appeal: C-442/03P P&O European Ferries (Vizcaya) v Commission EC [2006] All ER (D) 06 (June) ECJ (tickets for Bilbao–Portsmouth ferry). 138 Caruso (n 47 above) 755–756. 139 Portuguese Golden Share (n 126 above) AG[52–55] Colomer.

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long and fascinating analysis of ontological and historical factors by Advocate-General Colomer,140 the judgments must be said to be disappointingly brief. The European Court of Justice stated in the Belgian case141 that retention of public influence on the privatisation of undertakings could not be justified simply by pleading that it was part of the national system of ownership of shares, since article 295 did not exempt rules of property from the fundamental rules of the EC Treaty. This mantra was repeated in the subsequent cases,142 so that by the time that Spain got to court it was clear that article 295 had no practical effect in such cases, not even to raise a presumption in favour of national property law.143

3

Internal market

[3.22] Ownership is necessarily fettered to the extent needed to achieve the overall objectives of the Community.144 Intervention in property rights is legitimate whenever a matter falls within an area of European competence, most commonly because of internal market rules, and is in fact a commonplace. National property systems yield ground to all of the general economic freedoms,145 most notably the freedom to move capital. Absolute respect for property rights: would result finally in the paralysis of the powers of the Community.146

Indolence on the part of the Community ends when faced with discriminatory provisions.147 Even if no unequal treatment may dissuade from exercise or render right illusory.148 Reliance on article 295 in such contexts is ‘spurious’.149 [3.23] This is shown in several rulings of the European Court of Justice governing immovable property (land). Access to the ownership of immovable property is implicit in the freedoms guaranteed by the Treaty.150 Property is left to member states151 but can be overridden in the Community interest to secure 140 Portuguese Golden Share (n 126 above) AG[41ff] Colomer; he concluded at AG[54] that §295 does not refer to civil property. 141 C-503/99 Commission EC v Belgium (Golden Share) [2002] I ECR 4809 ECJ, J[44]; C-302/97 Konle v Austria [1999] I ECR 3099 ECJ, J[38]. 142 C-483/99 Commission EC v France (Golden Share) [2002] I ECR 4781 ECJ, J[44]; Portuguese Golden Share (n 126 above) J[48]. 143 C-463/00 Commission EC v Spain (Golden Share) [2003] I ECR 4641 ECJ, J[67]; contrast AG[54–58] Colomer. 144 Case 4/73 Nold (No 1) [1974] ECR 491 ECJ, J[14]. 145 Parke Davis (n 115 above) 63. 146 Consten (n 122 above) 366 AG Römer; Spanish Medicinal Products (n 122 above) J[14]. 147 C-30/90 Commission EC v UK (State Aids) [1992] I ECR 829 ECJ, J[17]; C-92/92 etc Phil Collins v Imtrat [1993] I ECR 5145 ECJ, J[27–28] (protection for Germans against pirated copying of concerts greater than for other EU nationals); Portuguese Golden Share (n 126 above) AG[67–71] Colomer; Belgian Golden Share (n 141 above) AG[73ff], AG[82] Colomer. 148 C-163/94 Sanz de Lera v Spain [1995] I ECR 4821 ECJ, J[25]; Konle (n 141 above) J[44]. 149 Portuguese Golden Share (n 126 above) AG[78] Colomer. 150 Konle (n 141 above) AG[14] Pergola. 151 Konle (n 141 above) J[38].


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an internal market in land by, for example, ensuring that there is freedom to establish a business elsewhere in the EEA-30 and to move capital to pay for land elsewhere.152 Article 295 may raise the threshold before Community interference can be justified but once over that EC article 295 does not protect national property laws from being examined for compatibility with the fundamental rules of the Treaty. In Robert Fearon v Irish Land Commission153 a system of compulsory acquisition of Irish farmland proved to be non-discriminatory but the fact that scrutiny of the legislation took place at all shows that EU law was potentially in play. The non-discrimination principle was a central part of the right of establishment. [3.24] Several sound bases exist for Community involvement in land law. One such is competition since article 295 does not protect against competition rules; thus in Masterfoods154 an agreement forcing a retailer to display HB’s ice cream in HB’s cabinets had to be tested for compliance with the competition rules and it was not germane to attempt to plead the property exclusion as a shield.155 Any licence to nationalise is necessarily circumscribed by the need to ensure that public dominance does not displace free competition.156 Another legal base for land law is consumer protection.157 It is interesting that when controls on the marketing of timeshares were introduced in the Timeshare Directive158 it was thought necessary to justify intervention because timeshare contracts could be thought to be property interests; the Directive states that timeshare contracts are in fact unlike tenancy agreements and are in many ways more like the contractual transactions used for hotels, residential hotels and similar tourist premises, a reasoning which suggests a nervousness about trampling on vested property. Some aspects of consumer protection legislation go well beyond regulating marketing into substantive law, a notable example in our field being the unfair contract terms regime.159 Environmental protection is another important European issue, though on a grand regional scale rather than the micro-level germane to individual plots of land; thus in Annibaldi v Sindaco del Gamme d Guidonia refusal to allow a three-hectare orchard in a protected archaeological area within a regional park160 could be justified on environmental grounds and could not be attacked using the property exclusion. [3.25] European law has no impact on the internal affairs of a member state, including the rules laid down by member states for property-ownership by its Konle (n 141 above) J[36–38]; C-355/97 Beck’s Application [1999] I ECR 4977 ECJ. Case 182/83 Robert Fearon v Irish Land Commission [1984] ECR 3677 ECJ, J[10–11]; Bright & Bright (n 8 above) 361; see above [1.26]. 154 C-344/98 Masterfoods v HB Ice Cream [2000] I ECR 11369 ECJ, AG[103ff] Cosmas; but decided on other grounds at J[61]. 155 EC §§81–82 ex §§85–86 156 Craig & de Búrca (n 129 above) 1123. 157 See below [ch 5]. 158 Timeshare Directive 94/47/EC, [1994] OJ L280 83, R[5–6]; Caruso (n 47 above) 757. 159 Unfair Terms in Consumer Contracts Regs 1999, SI 1999/2083; see below [8.24ff]. 160 C-309/96 Annibaldi v Sindaco del Gamme di Guidonia [1997] I ECR 7493 ECJ, J[23]. 152 153

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own nationals,161 but only has an impact on cross-border issues.162 Europeanisation of property law is in one sense peripheral and tangential, yet nonetheless important for that where it does occur. In practice this limitation is of little moment since domestic systems rarely extend a right to EU citizens or EEA nationals without ensuring that their own nationals enjoy the same right, and it is often politically impossible not to make the same extension, and if not it is necessary to make sure that other possible cross-border elements such as divergent residence are covered.163 Once it is established that Community law might in principle make an inroad into national sovereignty over property systems, an issue of justification arises164 and it is only when legislation is tested to establish that it follows a legitimate purpose and is proportionate to that end, by being as unobtrusive as possible, that the potential incursion becomes an actuality. National law remains in play to the extent that there is no harmonisation.165 [3.26] The language of article 295 is inapt166 to guarantee property in the same way as the European Convention and national constitutions.167

4

Industrial property

[3.27] Europeans refer to industrial property168 as the means of protecting the fruits of intellectual labour through patents, copyrights, trademarks and design rights and enabling the operation of a sophisticated market in goods.169 Rights conferred at national level170 are proprietary in character and therefore attract the article 295 shield against European interference, but the shield is wafer thin. Recognition of a French copyright necessarily distorts the market when the goods affected are circulated in the British and German markets. Community-based rules must be powerful enough to override nationally recognised intellectual property in order to ensure that, ultimately, it is possible to have a market in goods between European states.171 Early commentators on the Treaty

Phull v Secretary of State for Home Department [1996] Imm AR 72 CA, 75–77 Leggatt LJ. EC §65 ex §73m. 163 See above [1.20]. 164 French Telecoms (n 133 above) 1247 AG Tesauro; Case 59/75 Pubblico Ministero v Manghera [1976] ECR 91 ECJ. 165 Spanish Medicinal Products (n 122 above) J[17]. 166 Despite C-19/89 Cnl-Sucal v HAG II [1990] I ECR 3711 ECJ, AG[14] Jacobs; this has been cited in several cases from 2007, but still seems inapposite. 167 See below [3.33ff]. 168 The common law equivalent is intellectual property. 169 FA Mann ‘Industrial Property and the EEC Treaty’ (1975) 24 ICLQ 31–43, 34. 170 EMI Electrola v Patricia (n 125 above) J[11]; Phil Collins (n 147 above) J[18]. 171 Consten (n 122 above) 366 AG Römer; Italian Competition Agreements (n 133 above) 422 AG Römer; Parke Davis (n 115 above) 72; Phil Collins (n 147 above) J[22]; Spanish Medicinal Products (n 122 above) AG[18] Jacobs; Craig & de Búrca (n 129 above) 1123. 161 162


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contended for the inviolability of property rights but it has proved to be untenable and national laws in the field of industrial property can be harmonised uncramped by article 295.172 Europe can extend the duration of patent protection for pharmaceutical drugs where the initial authorisation for marketing has been delayed by granting European supplementary protection certificates and in doing so this affects materially the substance of the right granted.173 Unfettered freedom to organise property rights locally would end up in the paralysis of the power of the Community. Lessons from the field of industrial property are not easily transposed to land law because of the special Treaty provisions which inhabit the lesser field and which ensure that article 295 is never considered in an unadulterated form. A free market is one without quotas (‘quantitative restrictions’) as between states but controls on exports and imports are allowed in the interests of ‘the protection of industrial and commercial property’.174 Europe intervenes here to ensure that nationally recognised industrial property rights are aligned, and this aligns with the article 295 prohibition on overriding national property rights.175 The two Treaty provisions swing together in the same direction. The existence/exercise dichotomy considered below is anchored firmly in these special considerations.176 [3.28] In other cases specific Treaty provisions tug against the exclusivity of national property rights, the exemplar being the articles attacking anti-competitive practices such as cartels177 or the abuse of dominant position.178 Free movement of goods is secured despite industrial property rights that might otherwise be used to control the market.179 Competition principles override property rights. European measures might have a variety of effects with an increasing impact on national property rights, which might involve: 앫 restraints on the exercise of rights, 앫 affecting the existence of such rights,

172 KPE Lasok Law and Institutions of the EU (London, Butterworths, 7th edn, 2001, 0-40-690186-4) 721; G Tritton Intellectual Property in Europe (London, Sweet & Maxwell, 2nd edn, 2002, 987-0-421-90850-5) [1.037]. 173 UK Patent Licensing (n 112 above) J[18], AG[8–9] Van Gerven; Spanish Medicinal Products (n 122 above) AG[26–28] Jacobs. 174 EC §30 ex §36; HAG II (n 166 above) AG[14] Jacobs; Campbell-White (n 114 above); Goyder (n 134 above) 250–251; P Koutrakos ‘Common Vocabulary of Free Movement of Goods’ (2003) 28 EL Rev 53–69, 53. 175 Oliver & Jarvis (n 113 above) [9.30]. 176 HAG II (n 166 above) AG[14] Jacobs. 177 EC §81 ex §85. 178 EC §82 ex §86; Case 78/70 Deutsche Grammophon v Metro [1971] ECR 487 ECJ, J[1] (rental agreements causing a distortion of trade). 179 EC §30 ex §36; Spanish Medicinal Products (n 122 above) AG[22] Jacobs; Case 35/76 Simmenthal v Italian Minister of Finance [1976] ECR 1871 ECJ, [14]; Case 5/77 Tedeschi v Denhasit [1977] ECR 1555 ECJ J[34]; Case 153/78 Commission EC v Germany (Imported Meat) [1979] ECR 2555 ECJ, J[5]; C-9/93 IHT v Ideal Standard [1994] I ECR 2789 ECJ, J[58].

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앫 affecting the core or substance of such rights, and 앫 negating the right. Despite the apparent protection of article 295 case law allows all four of these effects, but the European interference becomes progressively more difficult to justify as one descends towards the foot of this list. Free competition and the operation of the free market are principles which may require limits to be imposed on the exercise of industrial property rights.180 Consten181 provides an example, tempting and dangerous in equal measure because the facts fit so neatly into a clean distinction between the existence and exercise of rights. Consten’s sole dealership for Grundig products in France was supported by a grant of exclusive rights to use the ‘GINT’ trademark which guaranteed the authenticity of Grundig products, this grant being an attempt to preclude parallel imports from other EEC countries below list price. An injunction prevented the use of the trademark for this anti-competitive purpose,182 a European remedy which called into question the way the French industrial property right was being used.183 National law inevitably restricts the exercise of rights184 so this is no great novelty. EU legislation is more likely to be justified if it confines itself to limiting the exercise of rights of property.185 This has not proved a stable line. Every property right is a bundle of rights, and any control imposed on it will impinge on its existence to some degree, a line of reasoning propounded by Beier186 which has been influential on judicial thinking.187 It is better to identify a specific subject matter consisting of a number of core rights under national law which define the essence of the property right.188 This ‘core’ may be rendered into French as the objet specifique and into German as der spezifische Gegenstand.189 This essential core necessarily varies between each of the various industrial property rights — design rights,190 trademarks,191 180 Italian Competition Agreements (n 133 above) 422 AG Römer; Parke Davis (n 115 above) 63 ECJ, 77 AG Römer; Deutsche Grammophon (n 178 above) J[11–13]; Case 15/74 Centrafarm v Sterling Drug [1974] ECR 1147 ECJ, J[7]; Nold (n 144 above); Case 119/75 Terrapin (Overseas) v Terranova Industrie [1976] ECR 1039 ECJ, J[6]; UK Patent Licensing (n 112 above) 844; Spanish Medicinal Products (n 122 above) AG[10–11] Jacobs. 181 Consten (n 122 above); Goyder (n 134 above) 42–44. 182 Grundig-Consten iv/a–004–03344 [1964] OJ 2545. 183 Consten (n 122 above) 396; Parke Davis (n 115 above) 63. 184 Nold (n 144 above) 515 AG Trabucchi. 185 Case 5/88 Wachauf v Germany [1989] ECR 2609 ECJ. 186 FK Beier ‘Industrial Property and the Internal Market’ [1990] 2 International Review of Intellectual Property & Competition Law 131, 145; Craig & de Búrca (n 129 above) 1088–1089 (existence test ‘unreal and questionable’); Goyder (n 134 above) 249ff. 187 C-267/95 Merck v Primedean [1996] I ECR 6285 ECJ, AG[93ff] Fennelly; C-241/91P RTE v Commission EC [1995] I ECR 743 ECJ, AG[31] Gulmann. 188 Case 238/87 Volvo v Erik Veng [1988] ECR 6211 ECJ; RTE (n 187 above) AG[28–31] Gulmann; Merck (n 187 above) AG[93] Fennelly; HAG II (n 166 above) J[14]; IHT v Ideal Standard (n 179 above) J[58]; C-414/99 Zino Davidoff v A&G Imports [2001] I ECR 8691 ECJ. 189 CW Bellamy & GD Child EC Law of Competition (London, Sweet & Maxwell, 5th edn by PM Roth, 2001, 978-0-421-56440-4) vol 1 [8.007]. 190 Keurkoop (n 125 above). 191 Consten (n 122 above); Terrapin (n 180 above).


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copyrights192 and patents.193 The substance is exhausted by exposure of the thing to the market, after which the thing must be free to circulate but the industrial property right cannot be exhausted in advance of first circulation.194 This special meaning of ‘specific subject matter’ in relation to the first circulation of goods protected by industrial property rights cannot be transposed directly into other contexts such as rights in land. [3.29] Even this line has not held. Community action may add to or deduct from the substance of a property right, with no protected zone for rights recognised nationally,195 though European legislation becomes more difficult to justify the further it invades the sanctity of property rights.196 European provisions may unquestionably extend the national duration of a right, though this is unexceptionable since prolongation of a right can scarcely be seen as a ‘prejudice’197 to it.198 Conditions that are clearly prejudicial are also allowed, even to the point of negating the very existence of the grant.199 British American Tobacco200 challenged domestic implementation of the tobacco marketing regime by which the health warnings on packs of cigarettes were made even more prominent to the point where too little space was left on the pack to fit in some existing brand names. This highly desirable health-based warning was allowed to override completely the trade mark201 and other trade marks faced a total prohibition, notably ‘Mild Seven’ which misleadingly suggested a low nicotine content. Direct negation of the right recognised nationally was accepted.202 The article 295 bar on interferences with property is clearly not absolute: All of these formulae have been used, in various fashions, to give the impression of firm competence boundaries and to reinforce the legitimacy of the 192 RTE (n 187 above); Phil Collins (n 147 above); B Pasa & GA Benacchio The Harmonisation of Civil and Commercial Law in Europe (Budapest, Central European University Press 2005, 963-7326-35-9) 449ff. 193 Parke Davis (n 115 above) 71; Centrafarm v Sterling Drug (n 180 above) J[9]; UK Patent Licensing (n 112 above) J[21]. 194 Phil Collins (n 147 above) AG[18–20] Jacobs; Parke Davis (n 115 above) 61; Thetford v Fiamma (n 125 above); C-479/04 Laserdisken v Kulturministeriet [2006] I ECR 187 ECJ, J[21]; Bright & Bright (n 8 above) 254–255. Sadly there is nothing to prevent Danish copies of Cliff Richard records circulating in Germany: EMI Electrola v Patricia (n 125 above). 195 Italian Competition Agreements (n 133 above) 408–409; Robert Fearon (n 153 above); Konle (n 141 above) J[37–38]. 196 Wachauf (n 185 above). 197 EC §295 ex §222. 198 Nold (n 144 above) AG[31] Capotorti, J[14]; Spanish Medicinal Products (n 122 above) AG[15] Jacobs; Centrafarm (n 180 above) J[11]. It is the same where a European measure is intended to protect the subject matter of nationally recognised industrial property: C-23/99 Commission EC v France (Goods in Transit) [2001] I ECR 7653 ECJ, AG[65] Mischko. 199 Phil Collins (n 147 above) J[18]; UK Patent Licensing (n 112 above) J[18], AG[8–9] Van Gerven. 200 C-491/01 R(JR) British American Tobacco (Investments) v Secretary of State for Health [2002] I ECR 11453 ECJ. 201 British American Tobacco (n 200 above) question 1(d), J[142ff], AG[253–278] Geelhoed. 202 This must be said to affect the substance of the mark despite British American Tobacco (n 200 above) J[153], AG[267–271] Geelhoed.

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Europeanising project. All are controversial, subject to continuous evasion and prone to obsolescence.203

SUB SI DI A R I TY

Subsidiarity 1

Subsidiarity

[3.30] Subsidiarity204 is a vital component of any federal structure and in its pure form can only exist within a formal constitutional structure.205 Some aspects of decision-making must be allocated to the federal legislature and some to the exclusive competence of the component parts, but in between lies an area of concurrent competencies where either federal or local legislature might enact law.206 Federal power is enhanced by the principle that what touches all should be approved by all.207 Subsidiarity provides a counterweight since it enshrines the principle that decisions should be made as close as possible to the citizen affected. This checks the Federal Government in Germany208 and within the United Kingdom ensures that policy on Scottish road-building will be decided in Edinburgh even if the odd Berwick-toEdinburgh commuter is disenfranchised.209 One source of subsidiarity is the doctrine of the Roman Catholic Church pre-shadowed in an encyclical Rerum Novarum by Pope Leo XIII210 and articulated more explicitly forty years on by Pope Pius XI in Quadragesima Anno,211 a social doctrine designed to limit the competence of sovereign states to legislate on social matters of concern to Catholicism. Earlier traces of the doctrine are to be found in the teachings of Aristotle and St Thomas Aquinas and the liberalism of John Stuart Mill.212 A commonality of origin conceals wide-ranging differences,213 not least because the European principle allocates cases between two layers of democratic bodies rather than being designed to secure democratic decision-making as against autocracy.

Caruso (n 47 above) 764. A Estella The EU Principle of Subsidiarity and its Critique (Oxford, OUP, 2002, 0-19-924242-9); JW Montgomery ‘Subsidiarity as a Jurisprudential and Canonical Theory’ (2002) 148 Law & Justice 46–53. 205 G Davies ‘Subsidiarity: The Wrong Idea, In the Wrong Place, At the Wrong Time’ (2006) 43 CML Rev 63–84. 206 Estella (n 204 above) 82; but areas of competence within Europe are often fuzzy: at 90. 207 NW Barber ‘The Limited Modesty of Subsidiarity’ (2005) 11 ELJ 308–325, 316. 208 Estella (n 204 above) 81. 209 Barber (n 207 above) 319. 210 Rerum Novarum May 15th 1891. 211 Quadragesima Anno May 15th 1931; Montgomery (n 204 above). 212 Estella (n 204 above) 76. 213 Barber (n 207 above) 309ff. 203 204

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EU competence extends to all aspects of the common market,214 including the free movement of capital to pay for land. National and community spheres overlap.215 Where the EU has chosen to act, its legislation overrides national law,216 flooding into every nook and cranny of our property law, as it does into other parts of the legal coastline.217 But national property laws can counter-attack because land law falls into that category where European and national laws overlap and where subsidiarity forms a counterweight to Brussels power218 with as much as possible left to the governments of member states. Regimes of landownership are an important aspect of national identity. There is a corresponding principle in human rights law.219 [3.31] A continent-wide private law would involve dilution of the concept of sovereignty,220 but sovereignty is greatly buttressed by the principle of subsidiarity, gradually spelt out by the European institutions221 but brought on to the centre of the stage and reinforced at Maastricht.222 It is presumed that one can better satisfy the preferences of the inhabitants the closer a decision is taken to them, though a cost/benefit analysis might rebut this presumption.223 Article 1 of the Treaty on European Union contains a declaration of a vision of Europe224 but it has not proved to be legally enforceable and its practical effects are slight.225 It is interpreted to mean that the EU must not tamper with national property laws.226 Aspects of the national culture such as family law and succession rules are outside the European ambit. According to taste this is a pathological sign of a contribution to fragmentation or reinforces the beneficial plurijuralism.227 [3.32] Extended judicial discussion has led to few direct pronouncements228 214 EC §5 ex §3b. Treaty objectives can be stretched where needed to secure a common market: EC §308 ex §235; P Legrand ‘Localness in EU Law’ (2002) 10 ERPL 61–76. 215 J Snell ‘Who’s got the Power? Free Movement and Allocation of Competencies in EC Law’ (2003) 22 Yearbook of European Law 323–351. Subsidiary has no role when the EC has exclusive competence: T-362/04 Minin v Commission EC [2007] January 31st ECJ, J[86]. 216 A principle too basic to require authority. 217 HP Bulmer v J Bollinger (No 2) [1974] Ch 401 CA, 418 Lord Denning MR. 218 EC §5 ex §3b; Treaty on EU §2 ex §B. 219 PG Carozza ‘Subsidiarity as a Structural Principle of International HR Law’ (2003) 97 American Journal of International Law 38–79. 220 H Rosler ‘Eliminating Borders of National Private Law — Potential Analysis of EU Private Law, the CIGS and the Principles’ (2003) 4 European Legal Forum 205–211. 221 Estella (n 204 above) 85–86 (origins mid-1970s). 222 Treaty on EU §1 ex §A; Draft European Constitution (n 110 above) §9; EC Protocol 30 [1992] OJ C342 105; Estella (n 204 above) 100ff. 223 H Collins ‘Good Faith in European Contract Law’ (1994) 14 OJLS 229–254. 224 Barber (n 207 above) 312. 225 Barber (n 207 above) 308. 226 J Rogers Prosser ‘Property Abroad’ [1989] 39 LSG 12–14. 227 S Weatherill ‘On the Depth and Breadth of European Integration’ (1997) 17 OJLS 537–550; P Legrand ‘Against a European Code’ (1997) 60 MLR 44–63, 44. 228 Estella (n 204 above) 140; citing: C-84/94 UK v Council EU (Working Time Directive) [1996] I ECR 5755 ECJ; C-376/98 Germany v European Parliament (Tobacco Advertising) [2000] I ECR 8419 ECJ; British American Tobacco (n 200 above).

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and it seems that the European Court of Justice will accept the judgment of the Community institutions of the need for Community action,229 seeing subsidiarity as a negative feature contrary to the Court’s political agenda of fostering integration and fearful of its disintegrative potential.230 There is an important distinction between material and procedural subsidiarity, the latter more fully recognised, the former much the more potent,231 and courts of the Community have been reluctant to implement material subsidiarity.232

F UN DAMEN TA L R I G HTS I N THE EU

Fundamental Rights in the EU 1

Guarantees of fundamental rights

[3.33] According to the Treaty on European Union233: The Union is founded on principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law.

So is the EEA.234 Respect for human rights is a condition of Union membership235 and human rights conditionality is an aspect of candidacy and external relations.236 A Charter of Fundamental Rights for the EU was declared at Nice in 2000,237 and now applies across the enlarged Union.238 An attempt to incorporate this into the constitutional structure of the Union fell with the rejection of the draft Constitution by the French and Dutch voters.239 What a waste this was for the contestants on the Spanish version of the reality TV show Big Brother who spent five days memorising the contents of the EU constitution in order to explain it to a Pole who did not speak Spanish.240 And what a peculiar position this leaves! C-233/94 Germany v Council EU (Deposit Guarantee Directive) [1997] 1 ECR 2405 ECJ. Estella (n 204 above) 148ff, 168–172; Barber (n 207 above) 324–325. 231 Estella (n 204 above) 106–114. 232 Estella (n 204 above) 174. 233 Treaty on EU §6 ex §F; C-154/04 etc R(JR) Alliance for Natural Health v Secretary of State for Health (Food Supplements) [2005] I ECR 6451 ECJ, J[122]. 234 E-2/03 Akaeruvaldid v Ásgeivsson [2003] December 12th EFTA Ct; E-8/97 JV 1000 Sverige v Norway [1998] June 12th EFTA Ct, J[26]; E-2/02 Technologien Bauschaftsberatung v EFTA [2003] June 19th EFTA CT, J[37]. 235 Treaty on EU §6 ex §F. 236 L Bartels HRs Conditionality in the EU’s International Agreements (Oxford, OUP, 2005, 0-19-927719-2). 237 EU Charter FR (n 9 above); S Peers & A Ward EU Charter of Fundamental Rights (Oxford, Hart, 2004, 1-84113-449-X). There are scarcely enough trees in the world to provide the paper needed to list all the articles written on the subject. 238 R Harmsen ‘The European Convention on Human Rights after Enlargement’ (2001) 5 International Journal of Human Rights 18–43. 239 Draft Constitution (n 110 above). 240 Observer November 28th 2004. 229 230

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Constitutional entrenchment was needed, and now that the Constitution has foundered some other way must be found quickly to secure a formal legal status.241 The current lack of justiciability242 means that Charter rights cannot be pleaded directly in domestic courts in civil disputes243 and nor is it of any more use in the European Court of Justice than a copy of the Beano.244 Human rights enshrined in the Charter were already part of community law via case law, and the Charter is a convenient way of discovering just what are the fundamental principles recognised. At first Community rights were drawn from the constitutional traditions of member states and indeed they were incorporated to ensure that Community law was constitutional in Germany.245 Variable national standards are not realistic so a common European level was decided upon in Hauer,246 though some flexibility may occur to accommodate a particular national guarantee at a higher level.247 Charter rights also recognise the importance of state constitutions.248 The major source for EU human rights is the European Convention249 but direct accession is unlawful250 so the Convention case law has to be sifted before being applied by the European Court of Justice.251 The European Convention on Human Rights provides an important inspiration for the list of rights secured by the Nice Charter252 and thus the Charter picks up the source for the Community right of property stated in the seminal case of Hauer.253 Also adopted are Convention principles on procedural matters such as locus standi254 and remediation. [3.34] No new powers or tasks are created255 so the basic function of human 241 Communication on the Legal Nature of the EU Charter of FR in the EU COM (2000) 644 final; Future Status of the EU Charter (HL Paper 48, Session 2002–2003); A Arnull ‘From Charter to Constitution and Beyond’ [2003] PL 774–793; AL Young ‘The Charter, The Constitution and HR’ (2005) 11 European Public Law 219–240. 242 FG Jacobs ‘HRs in the EU: the Role of the ECJ’ (2001) 26 EL Rev 331–341; A Knook ‘The Court, the Charter and the Vertical Division of Powers in the EU’ (2005) 42 CML Rev 367–398. 243 R(JR) Mohtasham v Visitor of Kings College London [2003] EWHC 2372, [2004] ELR 29 Richards J. 244 Jacobs (n 242 above) 340. 245 Case 29/69 Strauder v Ülm [1969] ECR 419 ECJ; Case 11/70 Internationale Handelsgesellschaft [1970] ECR 1125 ECJ; Nold (n 144 above) J[14]. 246 Hauer v Rheinland-Pfalz (n 133 above) J[14]; Internationale Handelsgesellschaft (n 245 above) J[3–4]. 247 Case 234/95 Bosphorus v Irish Ministry of Transport [1996] I ECR 3953 ECJ, J[68]; International Handelsgesellschaft (n 245 above) J[3–4]; Wachauf (n 185 above) J[17]. 248 EU Charter FR (n 9 above) §53. 249 E Conv HR (n 9 above); see above [1.19]; Laserdisken (n 194 above) J[61]; C-112/00 Schmidberger [2003] I ECR 5659 ECJ, J[71]. 250 Opinion 2/94 Accession to the European Convention [1996] I ECR 1759 ECJ; L Neville Brown & J McBride ‘Observations on the Proposed Accession of the EC to the ECHR’ (1981) 29 American Journal of Comparative Law 691–705. 251 British American Tobacco (n 200 above) AG[259] Geelhoed. 252 EU Charter FR (n 9 above) §52[3]. 253 Hauer v Rheinland-Pfalz (n 133 above) J[13–15]; Internationale Handelsgesellschaft (n 245 above); Nold (n 144 above) J[13]. 254 C-321/95 Greenpeace v Spain (1998) 19 HRLJ 376 ECJ. 255 EU Charter FR (n 9 above) §51[1].

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rights is to constrain the power of the Community to act. Thus a person who owns property which the Community threatens to take away or of which the Community wishes to control the use, human rights are in play, and so they are if another person uses Community legislation to affect the property, or domestic legislation which is implementing Community legislation or where a domestic decision-maker makes a decision governed by Community law.256 Hence the basic function is as a brake on institutional competence.257 Human rights are most powerful when used horizontally between one private litigant and another, though of course most cases are vertical (EU citizens exploiting the rights against the EU).258 Justification on policy grounds of actions that would otherwise infringe human rights helps to restore Community powers. At first the European Court of Justice was reluctant to apply human rights jurisprudence to control EC actions259 but it is now applied officiously whilst very rarely finding that any breach has occurred. One of the most blatant examples is the Family Reunification Directive260 which provided that a sponsor from outside the EU could be joined by his family only after two years, a philanderer’s charter and seemingly inconsistent with respect for the family, but held by the European Court of Justice to be valid because the legislature had considered and set the balance.261 Hence there is a serious risk that human rights will go unprotected because the justification balance is slanted towards the EU and is not impartial as in Strasbourg, to which competence needs to be transferred as a matter of urgency.262 [3.35] When the Treaty speaks of fundamental freedoms, it is talking about the economic freedoms guaranteeing the right to free movement of capital and persons, goods and services. In the perverse logic of the internal market, no irony is perceived in attaching the label ‘fundamental’ to an economic right such as the freedom to move capital even though it is clearly on a lower plane than, say, the right to life or the right not to be tortured. Charter rights are described as fundamental rights and are applied in EU contexts without distinction between individual citizens and corporate citizens of the Union.263 Almost all the cases involve commercial rights and particularly the Convention right to property.264 256 Case 41/74 Van Duyn v UK [1974] ECR 1337 ECJ; Wachauf (n 185 above); Case 260/89 ERT case [1991] I ECR 2925 ECJ, J[42], J[50]; C-159/90 SPUC Ireland v Grogan [1991] I ECR 4685 ECJ, AG[31] Van Gerven; Case 60/84 etc Cinéthèque case [1985] ECR 2605 ECJ; Case 12/86 Demirel’s case [1987] I ECR 3719 ECJ; domestically: C-20/00 Booker Aquaculture v Secretary of State for Scotland [2003] I ECR 7411 ECJ (fish); R(JR) Eastside Cheese Co v Secretary of State for Health [1999] 3 CMLR 123 CA (cheese, no violation). 257 Bright & Bright (n 8 above) 363. 258 C Hilson ‘What’s in a Right?’ (2004) 29 EL Rev 636–651, 645; O Cherednychenko ‘EU FRs, EC Fundamental Freedoms and Private Law’ (2006) 14 ERPL 23–61. 259 J Coppell and A O’Neill ‘The ECJ — Taking Rights Seriously’ (1992) 29 CML Rev 669–692. 260 C-540/03 European Parliament v Council EU (Family Reunification) [2006] I ECR 5769 ECJ. 261 Family Reunification (n 260 above) J[52]. 262 See above (n 250 above). 263 T-306/01 Yusuf v Council EU [2005] II ECR 3533 CFI, J[289]. 264 E Conv HR Protocol 1 (Paris, 1952, CETS 9) §1.

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This can cause rights that are essentially similar, and subject to cross-fertilisation in interpretation,265 to diverge significantly when applied in the two courts in Luxembourg and Strasbourg.266 Fundamental (human) rights often conflict with fundamental (internal market) freedoms, neither set of constructs being absolute but both qualified and capable of restriction. Thus an individual’s right of property may work along with the freedom to move capital, or it may be that one person’s freedom to move capital works against rights of property already owned by another.267 Thus in Schmidberger268 environmental protests blocked the Bremer motorway thus injuring the business of a timber transport company; this derogation from free movement of goods was held to be justified in the interests of securing the freedom of expression of the protesters.269 The reverse accommodation, the fundamental right of contracting to allow the market freedom to flourish was applied in the case of agricultural blockades by French farmers.270 The following section now identifies some areas where fundamental rights are an integral part of Community law,271 without making any attempt to be comprehensive.272

SPECI F I C F UN DA MEN TA LS

Specific Fundamentals 1

Property

[3.36] Property-ownership is a fundamental human right. It includes the right to own and dispose of property and also protection against deprivation of possession. As expressed in the Charter of Fundamental Rights: Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.273

EU Charter FR (n 9 above) §52 [3]. Compare Case 46/87 etc Höchst v Commission [1989] ECR 2859 ECJ; HR 13710/88 Niemitz v Germany (1993) 16 EHRR 97 E Ct HR; K Lenaerts ‘FRs in the EU’ (2000) 25 EL Rev 575–600, 581. 267 J Morijn ‘Balancing Fundamental Rights and the Common Market Freedoms in EU Law’ (2006) 12 ELJ 15–40. 268 Schmidberger (n 249 above); A Biondi ‘Free Trade, A Mountain Road, The Right to Protest’ [2004] EHRL Rev 51–61. 269 Schmidberger (n 249 above) J[74]. 270 C-265/95 Commission EC v France (Agricultural Blockades) [1997] I ECR 6959 ECJ; L Jaeckel ‘The Duty to Protect FRs in the EC’ (2003) 28 EL Rev 508–527. 271 International Handelsgesellschaft (n 245 above) J[4]. 272 P Alston The EU and Human Rights (Oxford, OUP, 1999, 978-0-19-829806-9). 273 EU Charter HR (n 9 above) §17[1]; §17[2] protects intellectual property. 265 266

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This formulation looks very similar to the three prongs274 of article 1 of Protocol 1 to the European Convention on Human Rights,275 and is applicable in the EU only indirectly through adoption by the ECJ. These cover, in order of practical application, guarantees against: 앫 deprivation of assets without justification and without full compensation,276 앫 controls on the use of property without justification, and 앫 interference with the quiet enjoyment of property. It is also useful to link property rights to discrimination in the technical Strasbourg sense of the word when wishing to attack rules of property law which appear to work arbitrarily.277 [3.37] In Strasbourg jurisprudence these guarantees apply to ‘possession’, which includes land, leases,278 rights in land and much else besides, and a similar autonomous definition applies in the EU.279 Property includes rights such as milk quotas280 but not mere rights to a profitable share of a market in a particular product.281 Hauer282 is concerned with a regulation restricting the planting of vines on some land at Bad Dürkheim owned by Liselotte Hauer. The German authorities ruled that the land was subject to a Community regulation which prevented new grants of permission to convert land to vines.283 Although the human right was engaged, it was found, as in most cases, that the community action was justified. The EC had too much wine. A fundamental right to property is the ground norm most often in issue in EU cases.284 Fundamental rights were recognised as a counterweight to Community competition law285 and to Community competition law when applied in the English courts.286

274 HR 10522/83 Mellacher v Austria (1990) 12 EHRR 391, E Ct HR, 408. Cases repeat this so often that it has become a Strasbourg cliché; Sparkes (n 26 above) [5.13ff]; but human rights jurisprudence is moving fast. 275 See above (nn 249–250). 276 Robert Fearon (n 153 above). 277 In the more usual sense of, eg, sexual discrimination see C-249/96 Grant v South West Trains [1998] I ECR 621 ECJ. 278 Bosphorus (n 247 above). 279 C-347/03 Friuli-Venezia Giulia (ERSA) v Ministero delle Politiche Agricole e Forestale [2005] I ECR 3785 ECJ, AG[96] Jacobs. 280 Wachauf (n 185 above) J[18]; see below [3.84]. 281 Case 280/93 Germany v Council EU (Bananas) [1994] I ECR 4973 ECJ, J[73]. 282 Hauer v Rheinland-Pfalz (n 133 above). 283 Regulation (EEC) 1162/76. 284 Internationale Handelsgesellschaft (n 245 above); Nold (n 144 above); C-42/95 Siemens v Nold [1996] I ECR 6017 ECJ; Hauer v Rheinland-Pfalz (n 133 above); Wachauf (n 185 above) J[17]; Höchst (n 266 above) J[13]. 285 Case 1/58 Stork v ECSC [1959] ECR 17 ECJ; Case 36/59 etc Geitlung Case [1960] ECR 423 ECJ; Case 40/64 Sgarlata v Commission [1965] ECR 215 ECJ; Case 149/77 Defrene v Sabena [1978] ECR 1365 ECJ; Strauder v Ülm (n 245 above) (butter coupons). 286 Allgemeine case [1980] QB 390 CA, [12] Donaldson J (gold bars); Kaur v Lord Advocate [1980] 3 CMLR 79 CS OH (deportation of immigrants).

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[3.38] A Community right of property was stated in the seminal case of Hauer v Rheinland-Pfalz287 and after a long, slow burn cases have now increased beyond counting. It is a staple of pleading to include an allegation that property rights have been infringed. Very many cases engage human rights arguments because very many Community actions will in some sense impact upon the rights of owners of property, but it is not so easy to find cases where the deployment of human rights arguments has meant overall success. In most cases when human rights principles are engaged the Community action will be justified because it will only meet Community principles of justification if it pursues a legitimate purpose and is proportionate to the achievement of that aim, and the justification principle for human rights288 is similar in its conceptual structure. Restrictions must be intended to achieve a proper objective and if so it is difficult to establish an infringement, though there is some scope for play in the principle against an intolerable interference.289 All this shows why most arguments about human rights applied to property are such time wasters.

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[3.39] Roquette Frères290 shows, as one of many examples, how a national court deciding to allow a search under EU investigative powers must ensure that the decision to order the search was proportionate, so that the investigators respect the human rights of the owners of the business. Another illustration is Höchst v Commission291 where an investigation into an alleged cartel in PVC involved the search292 of a factory at Frankfurt am Main and to justify this there had to be a legal basis in community law and respect for the right of defence. Inviolability of the home was not in issue since the search affected business premises. EU institutions will enjoy a residual margin of appreciation,293 that is, judicial respect for the decision of the decision-maker. Thus in Höchst the particular search was justifiable to secure the important Community objective of an open market in PVC. 287 Hauer v Rheinland-Pfalz (n 133 above) J[13–15]; Internationale Handelsgesellscahft (n 245 above); Nold (n 144 above) J[13]. 288 C-306/93 Wizersekt [1994] I ECR 5555 ECJ, J[22]; C-37/02 etc Di Lenardo [2004] I ECR 6911 ECJ, J[82]; ERSA (n 276 above) J[119]; C-210/03 R(JR) Swedish Match v Secretary of State for Health [2004] I ECR 11893 ECJ, J[72]; Food Supplements (n 233 above) J[126]. 289 Wachauf (n 185 above) J[18]; T Tridimas General Principles of EU Law (Oxford, OUP, 2000, 978-0-19-829932-5) 215; Hauer v Rheinland-Pfalz (n 133 above) J[32]; Case 265/87 Schräder [1989] ECR 2237 ECJ, J[15]; Di Lenardo (n 288 above) J[82]; C-295/03 Alessandrini v Commission EC [2005] I ECR 5673 ECJ, J[86]; C-453/03 Abna v Secretary of State for Health [2005] I ECR 10423 ECJ, J[87]; and many other cases. 290 C-94/00 Roquette Frères v Directeur Général de la Concurrence de la Consummation et de la Répression des Frauds [2002] I ECR 888 ECJ; M Lienemeyer & D Waelbroek ‘Case Comment’ (2003) 40 CML Rev 1481–1497. 291 Höchst (n 266 above). 292 Case 5–11 etc San Michele v European Coal and Steel Community [1962] ECR 449 ECJ. 293 Demirel’s case (n 256 above).

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Domestic and family rights

[3.40] European formulations of human rights doctrine include domestic rights like respect for the home,294 and human rights is an important factor in the development of the new European family law; also respect for private and family life and to marry and found a family.295

4

Trial rights

[3.41] Procedural rights apply in EU law296 to ensure the right to a fair trial,297 and specifically during European Commission investigations298 and include the right of access to a court whenever rights are being determined.299 States are also legitimately exonerated from responsibility for the interminable delays when references are made to the European Court of Justice.300 Administrative rights may be developing.301

CO N VER G EN CE

Convergence [3.42] A smart ship and its sinister mate — a great alien Shape of Ice, seemed for a time far and dissociate, Till the Spinner of the Years Said ‘Now!’ And each one hears, And consummation comes, and jars two hemispheres. This ‘Convergence of the Twain’302 was what sank the Titanic. The question must be asked whether, if the ‘two hemispheres’ of common law and civil law succumb to an ‘intimate welding’ in the European Union, a convergence of law will be brought about and if so will it be quite so catastrophic? And will it cause the EU Charter FR (n 9 above) §§7, 9; Case 31/59 Acciaeria di Breschia [1960] ECR 71 ECJ. E Conv HR §8; EU Charter FR (n 9 above) §§7, 9; Family Reunification (n 260 above); C-122/99P D v Council EU [2001] I ECR 4319 ECJ; C-117/01 KB v NHS Pensions Agency [2004] I ECR 541 ECJ; C-465/00 Osterreichischer Rundfunk [2003] I ECR 4989 ECJ; and many other cases, see below [11.01]. 296 E Conv HR §6[1]; EU Charter of FR (n 9 above) §§20–23, 47. 297 Yusuf (n 260 above) J[325]; C-32/95 Commission EC v Lisrestal [1996] I ECR 5373 ECJ, J[21] C-462/98 Mediocurso v Commission EC [2000] I ECR 783 ECJ, J[36]; C-135/92 Fiskano v Commission EC [1994] I ECR 2885 ECJ, J[39–40]. 298 T-112/98 Mannermannrohren-Werke v Commission EC [2001] II ECR 729 CFI; on appeal C-190/01 [2001] July 28th ECJ. 299 Yusuf (n 263 above) J[332–343]. 300 C-185/95 Baustahlgewebe v Commission EC [1998] I ECR 8417 ECJ. 301 K Kanska ‘Towards Administrative Human Rights in the EU’ (2004) 10 ELJ 296–326. 302 Thomas Hardy ‘The Convergence of the Twain’ (London, Macmillan, 1912) XI. 294 295

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common law to sink to the ocean depths for those ‘moon-eyed fishes’, the comparative lawyers, to query ‘What does this vaingloriousness down here?’303

1

Juxtaposition

[3.43] First, it may be doubted whether it is correct to see a single common law as one side of the common/civilian divide.304 Judge Forwood of the Court of First Instance has been quoted as identifying enormous potential for incompatibilities within the common law systems. For him, the laws of England (including Wales), Northern Ireland and the Republic of Ireland differ widely enough to create problems of assimilation without taking into account the civilian systems and civilian mixes such as Scotland. And his experience involves wide divergences within the codified systems of continental Europe. Indeed, in property law there can be seen to be fundamental differences between the English and Irish systems — based on English legislation not received in Ireland. Rather ‘there are 15 systems of law and it’s a juridical zoo’305 a biodiversity since increased to 27. Despite basic similarities in the organisation of property-ownership in any capitalist society, wide disparities in detail exist between the laws of member states of the European Union. Even the most basic concepts are discrete. England, Wales and Ireland are the only common law jurisdictions. The remaining states have civilian systems derived ultimately from Roman law. Scotland has a unique fusion of civilian and feudal law, much of continental Europe takes its law from Napoleon’s Code Civil, and Germanic states follow more or less closely Das Bürgerliches Gesetzbuch.306 Great disparities also arise in conceptually less fundamental areas such as security of tenure, land use, family law and succession rights. Particularly wide variations exist in the extent to which freedom of testation is allowed or restricted. There is no question that we have primarily a clash of epistemologies,307 though legal technique is convergent to some extent. Civilians see a decisive shift to axiomatisation under the Justinian code by comparison with which the common law is thought to be trapped in an inductive stage.308 Civilians tend to march on from the assumption that their means of analysis are more sophisticated to the proposition that the civilian system itself is more sophisticated, and that therefore if a European system is to be created the common law system itself must be jettisoned. There is no doubt that, in the development of European law, English law has been marginalised.309 A European civil code would ‘Convergence’ (n 302 above) VI. G Samuel Foundations of Legal Reasoning (Antwerp, Maklu, 1995) 28. 305 J Fleming ‘Striving to Find a Common Language’ [2002] 19 LSG 23–24. 306 Germany, Austria, and Greece; also Switzerland and Turkey. 307 R Blanché, L’Epistémologies (Paris, Presses Universitaires, 3rd edn, 1985) 65. 308 G Samuel ‘The Impact of European Integration on Private Law’ (1998) 18 LS 167–176. 309 C Joerges ‘On False Dichotomies, True Conflicts, the Need for a Constitutional Perspective’ (1998) 18 LS 146–166, 152. 303 304

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excommunicate the common law community.310 This must not be thought of in terms of superiority. If the common law has had little influence on the continent it is because we were late joiners, because of our recalcitrance as Europeans, because of our retention of links across the Atlantic and with Commonwealth nations, and not because our law is inferior. In essence, common law concepts are discarded and English vocabulary is mangled because common lawyers do not contribute to the law reform process, so Europe sees French and German concepts slugging it out with Scandinavian systems also pushed to the margins despite the need for a Nordic infusion of soberness and simplicity.311 [3.44] Aspects of civilian property law are undoubtedly superior — its simplicity, the easy entry route through the concept of absolute ownership, the limited range of interests that can be created, and the absence of the legal/equitable divide for incumbrances can all be sold as advantages. But there are major downsides too. The numerus clausus keeps the range of property interests the same as when codes are first promulgated,312 whereas the open-endedness of the common law category of property enables the common law to react better to social changes. The division between law and equity is incomprehensible to a civilian and so civilian systems are condemned to the commercial disadvantage of operating without the trust, the ability to divide legal ownership from beneficial ownership — which is the key to the successful management of funds. No one who understands the two systems of succession could possibly prefer the civilian system to the neatness of the personal representative.313 In the brutal world of conflicts of property law it is the common law that is fittest to survive. So if to codify314 is to jettison the common property law it can never succeed and should never be attempted. [3.45] What is required is a synthesis, the best of each system, with the trust a key element that needs to be taken to the civilian heart, while the simplicity and order at the kernel of the continental system needs to inform the common law system. Legislation can never therefore succeed if it seeks to select between the existing systems and all that can be attempted is a super code, a functional superstructure above and beyond the two main existing systems. At that level it is believed that the main functional building blocks are universal — ownership, lease, mortgage, servitude (= the common law easement and covenant), though one needs to add the common law trust to get a fully functioning modern property law system.

P Legrand ‘Against a European Code’ (1997) 60 MLR 44–63, 51. O Lando ‘Optional or Mandatory Europeanisation of Contract Law’ (2000) 8 ERPL 59–69, 60. 312 JH Dalhuisen ‘European Private Law: Closed to Open System of Proprietary Rights’ [2001] 5 Edinburgh Law Review 273–296. 313 EC Ryder ‘The Law of Property and the Common Market’ (1963) 16 CLP 90–104; AG Chloros ‘Principle, Reason and Policy in the Development of European Law’ (1968) 17 ICLQ 849–877. 314 A Gambaro ‘Perspective on the Codification of the Law of Property’ (1997) 5 ERPL 497–504. 310 311

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[3.46] In some fields of law, such as tort and contract, there may be, as Markesinis argues, a gradual convergence in private law,315 achieved by juxtaposition within a single market, a reflection of that functionalism which suggests that all systems reach similar solutions to the same problem.316 Juxtaposition and inter-trading may eventually create some degree of integration. As I wrote in 1999: A multinational company seeking to establish a chain of supermarkets across Europe will not be satisfied with needing to master multiple systems of property law.317 They will expect a unified system of conveyancing, just as our ancestors expected a common law, so that the focus will shift to functional analysis of basic building blocks — ownership, transfer, lease, mortgage security, and rights over neighbouring land.’318

2

Legislative union

[3.47] Political union by itself will not create a common property system. Europe is not unusual in achieving political union by promising to respect existing property laws. The idealisation of known systems of property law at the moment of union rarely correlates with the truth of the existing system. Any potentially convergent effect of federation is negated by making legislative power local to a single system of property law. True convergence presupposes legislative power and legislative competence.319 These truths can be demonstrated by the fact that Louisiana retains a civilian system in the common law sea of the United States, many years after its accession to the Union in 1812, an equilibrium likely to remain undisturbed simply because of the absence of any mechanism to alter things. A European exemplar is even more apposite. Under Queen Anne, in 1707, the Crowns of England and Scotland were united but only on terms which preserved the distinctive identity of Scots law, after which there was to be ‘no alteration in the law in respect of the private right of citizens except for the evident utility of the subjects of Scotland’.320 At a stroke this neutered the potency of the union of the legislative power in the Westminster Parliament (since in any event partially reversed321). Even the recognition of a single Supreme Court — the House of Lords — has done nothing to fuse English and Scots land law because of the federal structure in which Scotland is a unit of property law within a larger political entity of the United Kingdom, mirroring the position of Louisiana in the United States. Scots B Markesinis The Gradual Convergence (Oxford, Clarendon, 1994, 0-198-25828-3) 30. K Zwiegert & H Kotz An Introduction to Comparative Law (Oxford, OUP, 3rd edn, 1998, 978-0-198-26859-8) 34ff. 317 S Bright & G Gilbert Landlord and Tenant Law: The Nature of Tenancies (Oxford, Clarendon, 1995, 0-198-76349-2) 67. 318 P Sparkes A New Land Law (Oxford, Hart, 1st edn, 1999, 1-84113-013-3) 35. 319 FH Lawson ‘Private Law Aspects of Western Union’ [1949] 2 CLP 226–244, 233. 320 Treaty of Union 1707 §XVIII. 321 Scotland Act 1998 c 46. 315 316

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property remains incomprehensible to an English lawyer, and vice versa, though it is true that differences of terminology are not necessarily incompatible with similarity in substance.322 Analysis suggests that the two systems remain as far apart as ever. In Scotland a life interest is a mere incumbrance, a lease is a personal servitude, joint tenancy with survival exists only between trustees, and indeed the basic division between legal and equitable rights is unrecognised. Curiously there is little similarity in modern legislative schemes, such as the one for limitation, though the registration scheme shows a family resemblance. The differences are so deeply entrenched as to be almost proof against legislative change and certainly proof against case-based assimilation or convergence of practice.323 Ryder concluded that approximation of laws across Europe is unlikely in the property field, a judgment made in 1963324 and holding good forty years later. The EU remains a union of states with discrete systems of property law.325 Convergence of substantive systems of property law is unlikely to arise from membership of that union on its own.

A SUB STA N TI VE MI SCELLA N Y

A Substantive Miscellany 1

European land law

[3.48] We cannot speak of European land law in the same sense as of a European contract law, a labour law or a competition law, but the land law which the European Union does possess is very concrete, if small in content. Randomness is the consequence of the intrusion into land being coincidental, an outcrop of a substantive subject affecting another, a form of growth that can never fuse to form a coherent pattern. Reverend Sabine Baring-Gould compared his glimpses of the Cevennes to a farmer opening his hand to display a sample of his grain as a symbol to represent the complete stack,326 so here we offer a Miscellany as a homage to the greatest writer on English land law, now sadly an authority, Sir Robert Megarry.327

Ryder (n 313 above); Lando (n 311 above) 68. Ryder (n 313 above) 104. 324 Ryder (n 313 above) 104. 325 BA Hurndall Property in Europe (London, Butterworths, 1998, 0-406-01309-8). 326 S Baring-Gould A Book of the Cevennes (London, John Lane, 1907) 61. 327 RE Megarry A Second Miscellany at Law (Oxford, Hart, 2nd edn by BA Garner, 2005, 978-1-841-13554-0). 322 323

A Substantive Miscellany

2

131

Environment

[3.49] Environmental concerns328 need to be addressed on a global and continental scale and so environment is a major area of EC competence both in the EU329 and the EEA.330 It is mainly concerned on a macro-scale so that there is little direct impact on individual landowners. For example, an environmental impact assessment is required to form part of the planning process for major developments and infrastructure projects. Occasionally they may, like any rules, affect individual properties, for example the Single European Sky may affect properties close to airfields.331 Community competence is directed towards four main policy goals: 앫 앫 앫 앫

to devise tools for Environment Impact Assessment, to improve information flow between policy-makers and citizens, to develop and implement a European urban environment strategy, and to improve the management of coastal zones.

Policy concerns include pollution, air, chemicals, accidents, industry, soil, waste and water, and also nature and biodiversity, and sustainable development.

3

Energy performance of buildings

[3.50] Reduction of greenhouse gases is vital to our survival and the residential sector involves 40 per cent of energy consumption. Accordingly, the EU has legislated on the energy performance of buildings,332 to improve this matter so vital to our future.333 A methodology is provided for calculations to take account of thermal characteristics, heating and hot water, ventilation, lighting, position and orientation, solar systems, categories, houses, etc, with set energy performance levels required.334 The benchmarks apply to new buildings, and to a major renovation or improvement of existing buildings.335 Energy certification is required where a building is constructed, sold or rented out, and it has to be renewed every ten years and the current version displayed visibly if the building is large.336 Certification is implemented into English law as part of the Home Information Pack: all home owners in England and Wales will need to prepare a Home

328 C Kiss & D Shelton Manual of EU Environmental Law (Cambridge, CUP, 2nd edn, 1977, 0-521-59122-8). 329 EC §6 ex §3c; also §§174–176 ex §§130r–130t. 330 EEA Agreement as amended and adjusted (n 111 above) §73 Annex XX. 331 C-466/98 etc Commission EC v UK (Open Skies) [2002] I ECR 9427 ECJ. 332 Energy Performance of Buildings Directive 2002/91/EC [2002] OJ L1 65; B Anderson ‘Energy Performance of Buildings Directive’ (2006) 159 Environment Information Bulletin 12–14. 333 Energy Performance Directive (n 332 above) §1; buildings are defined in §2. 334 Energy Performance Directive (n 332 above) §§3, 4, Annex I. 335 Energy Performance Directive (n 332 above) §§5–6. 336 Energy Performance Directive (n 332 above) §7; §8 requires regular inspection of boilers.

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Information Pack before putting their home up for sale337 and an Energy Performance Certificate will be a mandatory component from that date.338 Certificates will rate the energy efficiency of a home on a scale from A to G. Homes account for 27 per cent of the UK’s carbon emissions and this is intended to help homeowners to reduce the environmental impact of their homes, possibly saving an average of £300 a year.

4

Anti-competitive agreements and abuse of market dominance

[3.51] A market should guarantee excellence of quality at the lowest possible prices, and this requires a market populated by independent suppliers each subject to competitive pressure exerted by the others. Competition law is designed to secure such a market, or at least a workable imitation,339 in the EEA-30. It goes without saying that the competitive ideal does not extend to agricultural produce.340 There are three main constraints relevant to land law,341 and indeed any existing contractual rights and property342 covering respectively agreements restricting competition, abuse of a dominant position, and state aids. The Treaty343 prohibits agreements having as their object the prevention, restriction or distortion of competition within the common market; the same applies to concerted practices with the same effect. Activities called into question are fixing of prices, directly or indirectly, controls on production, controls on market investment, sharing of markets, imposition of differential trading conditions or the imposition of supplementary obligations.344 However, the bar is not absolute. Some agreements that would ordinarily fall foul of the prohibition may be allowed by the Commission because the effect is to improve production or distribution or to support technical advances to enhance economic progress and because consumers secure a fair share of the benefits; such an agreement must be no more than is needed to achieve the desirable objective and must not eliminate competition from substantial parts of the market.345 These two principles collided in Crehan, as described below.346 337 Home Information Pack (No 2) Regulations 2007, SI 2007/1667; the scheme was implemented in July 2007 for four-bedroom houses and from September 2007 for three-bedroom houses, with the remaining 40% of the market to follow; Bogusz (n 114 above) 1404. 338 Energy Inspectors will have to be members of an approved certification scheme. 339 Goyder (n 134 above) 4. 340 Trade in Agricultural Products Regulation (EC) 1184/2006 [2006] OJ L214 7. 341 Bright & Bright (n 8 above) 367ff. 342 Goyder (n 134 above) 8. 343 EC §81 ex §85; EEA Agreement as amended and adjusted (n 111 above) §53ff; Goyder (n 134 above) chs 6–7. 344 Goyder (n 134 above) ch 7. 345 EC §81[3] ex §85[3]; Goyder (n 134 above) ch 8; Guidelines [2004] OJ C101 8; a market share is not substantial if below 5%, and is substantial if it is over 15%, and between it will depend upon circumstances. Before market opening Whitbread, Bass and Scottish & Newcastle collectively held 30% of the UK market in beer. 346 See below [3.53].


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[3.52] European competition law may interact with land law in the same way that English competition law has always done. It is not uncommon for commercial leases to contain clauses restricting market activities. The leading English case concerns ‘solus’ agreements — in this case, a clause in a mortgage of a petrol filling station that all the petrol sold on the forecourt would be of a particular brand.347 It is not the mortgage itself which may infringe competition rules but the ‘tie’ with it. Most European cases concern tied house clauses, that is, leases of a public house tied to a particular brewery348 and the EU is to be commended for reducing fizz and intruding a choice of real ales, a policy worth the contribution to the EU on its own. Superficially the penalty is voidness349 but very often an agreement may be severable so that, for example, an anti-competitive covenant is struck out of a lease but the lease of the property otherwise continues in force.350 It could also affect, for example, a coffee shop franchise where terms of the agreement are to continue after termination of the franchise.351 A lease containing the terms that beer has to be bought from the landlord obviously affects the market in beer and may be large enough to distort trade between different EEA states. The terms of leases and mortgages are overridden if they infringe principles designed to secure free competition in English law. However, a tie which is void can be resurrected by a transfer to smaller brewer.352 Domestic law has been tightened to secure redeemability of loans and to ensure that pubs are free when sold out of the brewer’s tied estate.353 [3.53] Enforcement is by the European Commission and national competition authorities, but individuals may protect their rights through the national courts.354 Damages are in principle available for anti-competitive contracts. Both parties are involved but it will usually be possible under national law for the weaker party who is the victim of the anti-competitive activity to complain against the stronger party who is the instigator.355 However, the problem is complicated because of the two conflicting principles in EC article 81, one of which bars anti-competitive agreements whilst the other allows Commission clearance of some agreements intended to pursue legitimate objects despite their anti-competitive tendency. Crehan is a case in which the two principles collided.

Goyder (n 134 above) 189; Sparkes (n 26 above) [29.14]. Goyder (n 134 above) 136. 349 EC §81[2] ex §85[2]. 350 Inntrepreneur v Boyes (1994) 68 P & CR 77 CA; Inntrepreneur v Mason (1994) 68 P & CR 53 QBD. 351 Monomeles Protodikeio 8181/2002, [2002] 8 DEE 493, [2002] ECLYB [419]. 352 Passmore v Morland [1999] 1 CMLR 1129 CA. 353 Supply of Beer (Loan Ties) Order 1989, SI 1989/2258. 354 EC §§84–85 ex §§88–89. 355 C-453/99 Courage v Crehan [2001] I ECR 6297 ECJ; H Schepel ‘The Enforcement of EC Law in Contractual Relations’ [2004] 12 ERPL 661–673; Inntrepreneur Pub Co (CPC) v Sweeney [2002] EWHC 1060; T-25/99 Roberts v Commission EC [2001] II ECR 1581 CFI; T-231/99 Joynson v Commission EC [2002] II ECR 2085 CFI; Goyder (n 134 above) 468ff. 347 348

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Crehan356 took over the Cock Inn at Staines in 1991 as a tenant tied to Courage and by the time a surrender was negotiated in 1993 he had lost a significant amount of money. Most of the beer sold had to be taken from the brewer at list price, when the same beer was sold more cheaply to free houses. His landlord became Inntrepreneur, a company formed by the amalgamation of Courage and Grand Metropolitan and initially holding a tied estate of over 7K pubs tied to Courage for 20 years. This dominance in the market infringed European trading laws but a deal was struck with the European Commission357 to reduce their estate to around 4K and to release the ties by 1998. Crehan’s action concerned a period before this reduction occurred. [3.54] In order to succeed in a claim for damages he needed to establish two cumulative conditions that358: 앫 Delimitis 1: it was difficult for competitors to enter the market; and 앫 Delimitis 2: the agreement in question made a significant contribution to the sealing-off effect. The first failed though the second seemed to be satisfied.359 Park J held on the evidence before him that it was not difficult to get access to the on-the-premises beer market in 1991 even though the Commission reached the other conclusion in cases concerning Bass and Whitbread,360 which were held to be sufficiently different to raise a new issue.361 It is perhaps less likely that abuse of dominant position will intrude into land law. A particular trader may assume a dominant position in the common market or a substantial part of it, and will be prohibited from any abuse of such a position distorting fair competition,362 for example unfair purchase prices or trading conditions, or limits on production, markets, or the use of technical developments to the prejudice of customers, inequitable transactions, or the imposition of supplementary obligations unconnected to the contract. It may apply to, say, a significant economic activity, for example, an airport and access must then be non-discriminatory.363 Here there is no question of voidness.364

356 Inntrepreneur Pub Co v Crehan [2006] UKHL 36, [2006] 3 WLR 148; this reverses [2004] EWCA Civ 637, [2004] 3 EGLR 128, but restores [2003] EWHC 1510 (Ch) Park J. 357 EC §81[3] ex §85[3]; Crehan (n 356 above) [30] Lord Hoffmann. 358 C-234/89 Delimitis v Henninger Brau [1991] I ECR 935 ECJ, J[27]; Crehan at [26] Lord Hoffmann. 359 Crehan (n 356 above) [73] Lord Hoffmann expressed no opinion. 360 Crehan (n 356 above) [34] Lord Hoffmann; O Odurdu & J Edelman ‘Compensatory Damages for Breach of §81’ (2002) 27 EL Rev 327–339. 361 Crehan (n 356 above) [71] Lord Hoffmann. 362 EC §82 ex §86; EEA Agreement as amended and adjusted (n 111 above) §54; Goyder (n 134 above) 324–327; R O’Donoghue & JA Padilla Law and Economics of EC §82 (Oxford, Hart, 2006, ISBN 184113502 X). 363 Euro Port v Denmark Commission Decision 94/119/EC [1994] OJ L55 52 [12ff]. 364 Goyder (n 134 above) 324–325.


5

135

State aid

[3.55] State aid for particular players in a market disrupts competitive pressures and is inconsistent with free competition and so is prohibited.365 This may well affect land. For example, if the state sells a factory site to a company in an attempt to induce it to move its business the effect is the same as paying aid direct to the company. Such a company can produce goods more cheaply than one which receives no aid. The bar extends to direct aid, state gains, interest relief, tax relief, state guarantees and the provision of goods or services on preferential terms. Some aid is innocuous, for example: when it is for social aid; the relief of natural disasters; aid to underdeveloped regions; projects of common European interest; serious economic disturbance and aid to facilitate development and the promotion of culture, heritage or conservation. There is also a de minimis block exemption.366 Adjudication on exemptions is a matter for the European Commission, which can ignore the wishes of the Council.367 [3.56] One major concern is sale of land368 out of the public sector at an undervalue. A Communication from the Commission369 sets out general guidance to states to avoid problems of state aid when public authorities sell land and buildings. If followed it automatically precludes a complaint about state aid. Procedures vary according to whether an offer is unconditional or conditional. Sales must follow a well-publicised, open and unconditional bidding procedure, comparable to an auction, designed to secure the market value. The previous book value is irrelevant. Repeated advertisement is required over at least two months, addressing a broad range of potential buyers. High value properties or those especially attractive to European investors should be announced internationally and Europe-wide. The price must take account of the burden of care and maintenance of the land and buildings, other than obligations of ownership and property taxes. Buyers should be free to use a property bought from the public for any purpose, subject to planning controls and to others restrictions imposed for the prevention of public nuisance or for reasons of environmental protection, and the authorities may impose conditions to preclude purely speculative bids. Conditions of sale imposing special obligations on future owners must apply to all potential buyers. These special obligations must be evaluated separately. If an unconditional bidding procedure is not adopted, an independent evaluation is required by one or more independent valuers prior to negotiations so that a market value (as defined 370) can be established using generally accepted EC §87 ex §92; EC §88 ex §93; EEA Agreement as amended and adjusted (n 111 above) §61ff. De Minimis Aid under EC §§87–88 Regulation (EC) 1998/2006, [2006] OJ L379 5. 367 C-110/02 Commission EC v Council EU (Aid to Pig Farmers) [2004] I ECR 6333 ECJ. 368 P&O European Ferries CFI (n 137 above); T-274/01 Valmont Nederland v Commission EC [2005] II ECR 3145 CFI; T-148/99 Diputación Floral de Álavar v Commission EC [2002] II ECR 1275 ECJ. 369 Commission Communication on State Aid Elements in Sales of Land and Buildings by Public Authorities [1997] OJ C209 3; this also applies to EEA-3. 370 Insurance Companies Directive 91/674/EEC [1991] OJ L374 7, §49[2]. 365 366

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valuation standards. Any departure from market price must fall within a 5 per cent cushion or otherwise it is as if state aid has been granted.371 Market value should not be set below the acquisition cost during the first three years of ownership unless a general decline in market prices is certified independently. Member states must notify the Commission of any non-compliant sale, where the divergence from these standards is more than minimal, that is, any sale concluded after neither an open and unconditional bidding procedure nor an independent valuation.372 These procedures affect only outright sales and not acquisitions (which are within the public procurement rules immediately below) nor the letting or leasing of land and buildings by public authorities for which equivalent ideas have to be applied without specific guidance. States are allowed to provide aid to promote the quality of and access to private housing.

6

Public procurement

[3.57] Public procurement rules have recently been consolidated.373 They apply to all large public contracts including the acquisition of land and matters such as tendering for public sector construction projects, and also, for example, property maintenance of office blocks owned by a town council but leased out to a company.374 Brussels and Whitehall engaged in a confrontation about the status of registered social landlords — housing associations which provide residential accommodation — and whether they were public bodies for procurement purposes375 but eventually the EU prevailed and public procurement proceures do now apply in the social housing sector.376 Contracting authorities must treat economic operators equally and in a non-discriminatory andtransparent way.377 Rules kick in when public contracts exceed certain thresholds378 including contracts subsidised by more than 50 per cent.379 There is a detailed pre-tender procedure,380 involving rules for advertising,381 and a [1996] 48 EG 36. [1996] OJ C68 9. 373 Public Procurement Directive 2004/18/EC [2004] OJ L134 114, as from February 2006; Utilities Procurement Directive 2004/17/EC, [2004] OJ L134 1; S Silberg ‘New European Directive’ (2004) 5 European Legal Forum 304–308. 374 C-18/01 Arkkitehtuuritoimisto [2003] I ECR 5321 ECJ. 375 N Madge & J Luba ‘Recent Developments in Housing Law’ [2004] 10 Legal Action 25–27; A Woolich & A Marriott ‘Registered Social Landlords and EC Procurement’ (2003) 6 Journal of Housing Law 45–49; A Woolwich and A Marriott ‘Registered Social Landlords and EC Procurement Rules’ (2003) 10 Housing Law Monthly Supplement iv–viii; R Rees ‘Social Landlords caught in the Public Procurement Net’ (2004) 15 Construction Law 26–28. 376 John Prescott MP (Office of Deputy Prime Minister, September 13th 2004). 377 Public Procurement Directive (n 373 above) §2 as defined in §1[2]. 378 Public Procurement Directive (n 373 above) §7. 379 These vary according to the type of contract. 380 Public Procurement Directive (n 373 above) §§23–34. 381 Public Procurement Directive (n 373 above) §35ff. 371 372

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detailed tendering process382 for which there must be an appeal.383 Special rules apply to public works concessions384 and even more complex rules apply to construction and site preparation, property management and legal services.385 The basic objective is to secure the most economically advantageous offer for contracting authorities.386

7 Late payment [3.58] The Late Payment Directive387 applies to all payments made as remuneration for commercial transactions388 including business-to-business and business-to-government transactions for the delivery of goods or provision of services389 but not contracts on the business-to-consumer pattern.390 Interest accrues from the date fixed for payment or otherwise 30 days from an invoice or receipt of the goods or services.391 Interest is calculated as a rate seven percentage points above the main refinancing rate of the European Central Bank, in default of other contractual agreement. Outside the Eurozone an equivalent rate is set by the national central bank.

VA LUE A DDED TA X

Value Added Tax 1

Taxation

[3.59] Taxation lies beyond the scope of this book. It is a matter largely left to national law but is subject to EC intervention to prevent discriminatory rules between member states. Tax rules may not differentiate according to nationality, though they may differentiate between residents and non-residents.392 Property of the Communities is exempt from national taxation.393

Public Procurement Directive (n 373 above) §38. C-81/98 Alcatel Austria [2006] I ECR 7671 ECJ; A Brown ‘Alcatel’ (2006) 6 Public Procurement Law Review 332–337. 384 Public Procurement Directive (n 373 above) §56ff. 385 Public Procurement Directive (n 373 above) Annexes I, IIA, IIB 386 C Bovis ‘New Public Procurement Regime’ (2006) 12 European Public Law 73–109, 88. 387 Late Payments Directive 2000/35/EC [2000] OJ L200 35; R Shulte-Barucks & S Ongena ‘The Late Payment Directive — a Step Towards an Emerging European Private Law’ (2003) 11 ERPL 519–544. 388 Late Payments Directive (n 387 above) §1. 389 Late Payments Directive (n 387 above) §2. 390 Schulte-Brauchs & Onego (n 387 above) 528. 391 Late Payments Directive (n 387 above) §3; by §3[2] national law may make it 60 days for some cases. 392 See above [2.41]. 393 Protocol on Privileges and Immunities of the ECs [1967] OJ 152 13, §3. 382 383

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2


Value added tax

[3.60] Nor is it intended to say anything substantial about the vital question of VAT,394 a subject on which Jordan provides a thorough grounding.395 A charge to VAT arises when a trader registered for the tax makes a taxable supply. Thus a shopkeeper selling a bar of chocolate makes a taxable supply and adds 17.5 per cent to the price when selling it to a customer. The standard rate will vary slightly elsewhere in Europe. A site-based rule is applied to determine the place of a supply396 which selects the national tax scheme to apply. Timing is also important.397 Many commercial transactions with land need careful consideration. The object of the brief exposition that follows is not a sound basis on which to take practical decisions but is merely intended to introduce concepts which may be transferable to other contexts of European land law.

3

Domestic transactions

[3.61] VAT applies to a supply made by a trader, so there is no question of taxing a sale by one private individual to another. Issues may arise when private premises are switched to business use or for property with mixed use.398

4

Standard-rated

[3.62] Standard rate transactions are relatively straightforward. The price to the ultimate consumer is increased by the tax at 17.5 per cent, but the trader who sells land will be able to recover the VAT paid by him, for example the purchase cost, so from the point of view of a trader in land it is largely neutral. Transactions by which income is derived from land are often standard-rated, examples being charges for fishing rights, sleeping accommodation (hotels), holiday accommodation, pitch fees in caravan parks, mooring charges, parking charges and entrance fees to sports grounds. These are by way of exception399 to the normal exemption for land,400 the double negative ensuring that the standard charge applies. Options are also chargeable. Another crucial case for standard 394 The main authorities are Sixth VAT Directive 77/388/EC [1977] OJ L145 1, as amended; Value Added Tax Act 1994, c 23 (‘VATA 1994’), sch 89 group 1. 395 D Jordan Understanding VAT on Property (London, Law Society, 2nd edn, 2006, 978-1-85328-994-1); appendix A has a good summary. 396 Jordan (n 395 above) [1.4.13]; VAT (Place of Supply of Services) Order 1992, SI 1992/3121, para 5. Beneficial ownership is taken if this is separated from the legal. 397 Jordan (n 395 above) [1.5]. On the timing of internet contracts see Robertson’s Electrical v Customs & Excise Commissioners [2007] STC 612. 398 C-434/03 Charles v Staatssecretarias von Financien [2005] I ECR 7037 ECJ (allocation of capital goods between business and non-business parts). 399 VATA 1994 (n 394 above) sch 9 group 1. 400 VATA 1994 (n 394 above) sch 10.

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rating is the sale of new commercial property, new here meaning within three years from the time of the certificate of practical completion (bare land following).401 Because land is treated differently there is an important land/not-land divide, and ‘fixtures’-type points can arise. Thus a letting of a prefabricated building which can be dismantled and reassembled may be treated as immovable despite the possibility of moving it, in one case temporary housing for asylum seekers for five years.402 In this and other contexts there is an important distinction between major and minor interests, major interests comprehending the freehold and any lease over 21 years, shorter leases being minor interests.403 A grant of lease in a commercial building is exempt from VAT irrespective of the age of the building and the length of the lease, subject to an election to waive exemption.404 A letting is an assignment to a tenant in return for rent and the grant of the right to exclude all others for that period.405 Conversion of business premises to private use is not equivalent to a letting.406 There is also a considerable case-law about licences,407 the lease/licence distinction being autonomous408 and by no means as that established in England by Street v Mountford.409

5

Exempt transactions

[3.63] In essence there is an exemption410 for all grants of interests in, rights over411 or licences to occupy land, including transactions such as assignments, surrenders, and reverse surrenders, though in some cases a standard or zero rate is applied.412 The topsy-turvy world of VAT is at once revealed because an exemption, which sounds a fine thing, can actually be disadvantageous. Although VAT does not have to be added to the price of the land sold, a good thing, the tax paid by the developer to acquire and improve the land (the input tax) is not VATA 1994 (n 394 above) sch 9 group 1 Item 1(a), Note 4. C-315/00 Maierhofer [2003] I ECR 563 ECJ. 403 VATA 1994 (n 394 above) s 96; in Scotland it was the dominium utile and now the non-feudal equivalent. 404 VATA 1994 (n 394 above) sch 10; C-409/98 Mirror Group v Commissioners of Customs and Excise [2001] I ECR 7175 ECJ; Maierhofer (n 402 above); C-275/01 Sinclair Collins [2003] I ECR 5965 ECJ; C-108/99 Commission EC v Cantor Fitzgerald International [2001] I ECR 7257 ECJ. 405 Mirror Group (n 404 above) J[31]; Cantor Fitzgerald (n 404 above) J[21]; C-358/97 Commission EC v Ireland (VAT on Road Tolls) [2000] I ECR 6301 ECJ J[52–57]; C-326/99 Stichting ‘Goed Wonen’ v SS for Finance [2001] I ECR 6831 ECJ, J[55]. 406 C-269/00 Seeling v Fin Starnberg [2004] 2 CMLR 32 @ 757 ECJ. 407 VATA 1994 (n 394 above) sch 9 group 1, item 1; VAT Notice 742 Land and Property [2.5–2.7]; C-284/03 Belgium v Temco Europe [2004] I ECR 11237 ECJ; ‘Goed Wonen’ (n 405 above) J[55]; C-346/95 Blasi v Finanzamt München [1998] I ECR 481 ECJ, J[26]. 408 Temco Europe (n 407 above) J[12]; ‘Goed Wonen’ (n 405 above) J[47]. 409 Street v Mountford [1985] AC 809 HL; Sparkes (n 26 above) [25.73]. 410 Sixth VAT Directive (n 394 above) §13B; VATA 1994 (n 394 above) sch 89 group 1; Jordan (n 395 above) [1.1.2]. 411 ‘Goed Wonen’ (n 405 above) (usufruct). 412 See above [3.62], below [3.66]. 401 402

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recoverable, a consideration which normally predominates with developers. The basic rules applying an ‘exemption’ to commercial property were laid down in 1989.413 Residential property is also almost always exempt from charge.414

6

Option to tax

[3.64] A commercial developer or landlord may opt to apply taxation at the standard rate to a development, ensuring that any sale or lease of the property is then a taxable supply and standard rate VAT has to be paid, so that future rent and service charges will cost 17.5 per cent more. In this way input tax can be recovered that would otherwise be irrecoverable, for example, the acquisition and construction costs of the building. This possibility was introduced in 1989415 for commercial property though it does not apply in the domestic and residential sectors.416 A procedure is laid down.417 The claim needs to be planned well in advance and it may be essential to register in advance of construction work to preserve recovery rights for input tax.418 Any retroactivity is limited to six months at most and is controlled nationally419; the developer may need to give advance notice and to get permission from the Revenue authorities. The option to tax is open to abuse and there is a considerable amount of anti-avoidance legislation.420

7

Reduced rate

[3.65] A reduced rate of 5 per cent applies to dwellings, including construction work, conversion and renovation, and more generally to many energy-saving works.421

8

Zero-rating

[3.66] Zero-rating is the most favourable tax position because no tax has to be charged to the ultimate consumer but the trader is allowed to deduct his input tax. So the acquisition and conversion costs he incurs will be reduced by the Sixth VAT Directive (n 394 above) as amended in 1989. VATA 1994 (n 394 above) sch 9 group 1 item 1 [3]; for a zero-rated exception see below [3.66]. 415 Sixth Directive VAT (n 394 above) §13C; VATA 1994 (n 394 above) sch 10 para 2; VAT Notice 742A Option to Tax Land and Buildings. It was introduced in August 1989 but could in some circumstances apply as from April 1989. 416 eg, dwellings, residential caravans, moorings, housing association, and DIY builders. 417 Jordan (n 395 above) [2.7.9]. 418 Jordan (n 395 above) [1.4]. 419 C-269/03 Luxembourg v Kirckberg [2004] I ECR 8067 ECJ; C-136/97 Norbury v Customs & Excise Commissioners [1999] I ECR 2491 ECJ. 420 Jordan (n 395 above) [2.7]. 421 VATA 1994 (n 394 above) sch 7A Group 2. 413 414

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amount of the VAT. It is applied to residential property,422 that is, new or newly converted dwellings where the property has not been used as a dwelling for at least 10 years. Zero-rating is applied to the first grant of major interest, but a shorter lease, up to 21 years, is exempt with no recovery of input tax allowed. It is also in some other cases chosen for social reasons such as work on listed and protected properties and non-business charitable properties.423

SI N G LE FA R M PAYMEN T

Single Farm Payment 1

Farmers, holdings and farms

[3.67] Ownership of farmland is left to national law, and in particular issues such as title, mortgaging and succession, as are the regulation of agricultural tenancies424 and questions such as the termination of a lease.425 This is the focus of agricultural law in most countries.426 However, no farmer can ignore the monster that is the Common Agricultural Policy; by far the most important and immediate issue is the Single Farm Payment.427 [3.68] A farmer is a person who exercises an agricultural activity on a holding situated within the territory of the Community, whether an individual, a company or a group of persons, whatever their legal status under national law.428 A farmer’s ‘holding’ is the collection of all production units managed by a farmer within a single EU state and within Community territory,429 a concept which can include parts used for non-agricultural purposes.430

422 VATA 1994 (n 394 above) sch 9 group 1 item 1. [3]; VATA 1994 sch 8 group 5 note 2; Jordan (n 395 above) [3.2.1]. 423 VATA 1994 (n 394 above) sch 8 groups 5–6; these cover new properties, renting, conversions, residential property, charitable property and property held for social purposes; Jordan (n 395 above) [5]–[6]. Provision of social housing is a business: Riverside Housing Association v Revenue & Customs Commissioners [2006] EWHC 2838, [2006] STC 2072 Lawrence Collins J. 424 N Ravenscroft, R Gibbard, S Markwell & J Reeves ‘Private Sector Tenancy Arrangements: The European Experience’ in P Jackson & DC Wilde Contemporary Property Law (Aldershot, Dartmouth, 1999, 1-84014-747-4). 425 C-2/92 R(JR) Bostock v Ministry of Agriculture Food & Regional Affairs [1994] I ECR 955 ECJ. 426 JA McMahon ‘Common Agricultural Policy’ (2002) 53 NILQ 9–27. 427 Direct Support Schemes under the Common Agricultural Policy Regulation (‘Single Payment Regulation’) (EC) 1782/2003 [2003] OJ L270 1. A second wave and some detailed amendments are introduced by (EC) 319/2006 [2006] OJ L58 32. 428 Single Payment Regulation (n 427 above) §2[a]; G Whittaker ‘Life on the Farm’ [2005] 05 LSG 32–33 (unchanged from earlier schemes); C-403/98 Aziende Agricola Monte Arcosu v Sardegna [2001] I ECR 103 ECJ (companies could not register in Sardinia; Regulation had no direct effect); many aspects of the CAP do have direct effect: see, eg, C-253/00 Muñoz v Frumar [2002] I ECR 2289 ECJ. 429 Single Payment Regulation (n 427 above) §2[a–b]; G Whittaker (n 428 above) 32–33 (also unchanged). 430 Case 152/79 Lee v Minister of Agriculture [1980] ECR 1495 ECJ.

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[3.69] Agricultural activity, the key concept, involves the production, rearing or growing of agricultural products,431 including harvesting, milking, breeding animals or keeping animals for farming. Agricultural land is mainly used for livestock, arable, vegetables and soft fruit, but even grazing horses might now be seen as agricultural.432 Another activity, increasingly emphasised, is maintaining land in good agricultural and environmental condition.433 Bodiguel and Cardwell have demonstrated,434 using the specific examples of the United Kingdom and France, how domestic definitions of ‘agriculture’ — aimed at defining the scope of security of tenure for agricultural tenants — continue to be linked to productive farming even while the EU is shifting its definition to reflect the decoupling of aid and production; whilst it is true that there is no imperative for domestic legislation to redelineate the agricultural field, one can only imagine that the process of change will prove to be inexorable. [3.70] Aid will mainly take the form of a single payment established at farm level, the amount being linked to areas of land within a holding put to particular uses, so specific parcels need to be identified and linked to relevant uses. Parcels should be identified on maps, land registry documents, or a specialised cadastre, with a computerised index and able to discriminate each parcel or production block, to a scale of 1:10K or better and with a unique reference. Holdings should then be cross-referenced to a record of payment entitlements, aid applications, and the identity of each farmer seeking aid.435 The Rural Payments Agency maintains a Rural Land Register in England and Wales derived from 1:5K scale Ordnance Survey sheets, on old-fashioned A3 sheets even though the administration in each state is supposed to be computerised436; the crucial identifiers are plot IDs and the agricultural holding number, and these are the key to unlock access to the system. The register should also record the holder, the value and type of aid awarded, and details of the source of the claim, whether deriving from personal claims or from the national reserve, purchase, lease, or inheritance. A detailed administrative structure is laid down.437 A farmer applying the single farm payment submits a single application each year before the national closing date, using pre-printed forms,438 which merely have to be checked and amended as necessary. Detailed rules are laid down for making 431 EC Annex 1 ‘Agricultural Products’; Single Payment Regulation (n 427 above) §2[f]; fishing is excluded. 432 . 433 Single Payment Regulation (n 427 above) §§2[c], 5. 434 L Bodiguel & M Cardwell ‘Evolving Definitions of “Agriculture” for an Evolving Agriculture?’ [2005] Conveyancer 419–446. 435 Single Payment Regulation (n 427 above) §§17–27; Implementation of Cross-Compliance etc Regulation (EC) 796/2004 [2004] OJ L141 18, §6[1]. 436 Single Payment Regulation (n 427 above) §17; Direct Support Schemes Regulation (EC) 1259/1999 [1999] OJ L160 113, §2a. 437 Single Payment Regulation (n 427 above); Single Payment Implementation Regulation (EC) 795/2004 [2004] OJ L141 1, §12ff; CAP Single Payment and Support Schemes (Integrated Administration and Control System) Regs 2005, SI 2005/218, as amended. 438 Implementation of Cross Compliance etc Regulation (n 435 above) §18[1].

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payments.439 The United Kingdom paid out £1.5 billion to a claimant population of 117K in 2005, but the volume of claims created administrative problems in the Rural Payments Agency, which the government has pledged to iron out.

2

Single Farm Payment

[3.71] Aid under the Common Agricultural Policy is now mainly based on the Single Farm Payment, a scheme for income support for individual farmers based on productive area and ‘decoupled’ from production.440 Decoupling occurred between 2005 and 2006441 for most agricultural products, and 90 per cent of all payments are production-neutral.442 Farmers will be free to respond to demand in the market place when choosing what to produce, with increased ‘market orientation’ and a genuine choice of farming strategy.443 The Single Farm Payment scheme will cover all arable crops as well as grain, legumes, seeds, beef and sheep, and the milk sector from 2007. Britain is fully decoupled with one tiny exception,444 which is why the focus of the discussion here is on the Single Farm Payment. A second wave of reform will bring in Mediterranean crops such as tobacco, cotton and olive oil as well as hops.445 A few specific crops continue to attract production-linked aid, notably the cereal sector in France446 and livestock across the continent,447 though these should be phased out by 2012. [3.72] Income is not calculated per farm but broken down into ‘payment entitlements’, which is easier when part of a farm is sold.448 Payment entitlements are derived in most of Western Europe449 from an historic yield method determining the income yield from the particular farm during a reference period in the years 2000–2002. Other states use a flat rate per hectare for all land within a state, or at least within a region, and the method may either be a static mix of the two,450 or a dynamic mix moving gradually to a flat rate basis.451 Single Payment Regulation (n 427 above) §36. Single Payment Regulation (n 427 above) §33ff. 441 Single Payment Regulation (n 427 above) §71; Finland, France, Greece, the Netherlands and Spain; Malta and Slovenia applied the Single Farm Payment in 2007. 442 M Cardwell ‘Current Developments in Agriculture’ (2006) 55 ICLQ 467–475, 470. 443 Single Payment Regulation (n 427 above) R[28]; Cardwell (n 442 above) 468. 444 See below [3.82] n 504. 445 Common Organisation of Market in Cotton etc Proposal, COM (2003) 698 final; Overview of Implementation of Direct Payment under the CAP in Member States (DG for Agriculture and Rural Development, February 2007); this can be found at . 446 Overview of Implementation of CAP Reform (n 445 above) set at 25% of aid; Cardwell (n 442 above) 470 also adds Spain. 447 See below [3.82]. 448 See below [3.82]. 449 Austria, Belgium, France, Greece, Ireland, Italy, the Netherlands, Portugal and Spain; also Scotland and Wales. 450 Luxembourg, Sweden and Northern Ireland, 451 Finland, Germany and England; England is regionalised into a normal area, moorlands (hill farming) and other special areas. 439 440

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[3.73] One problem with aid that is based on area is that it gives more to those who already have most. The general perception is that the CAP provides a mechanism for redistributing wealth from British and German families (at a rate of £660 per family) to small-scale French farmers. French farmers receive €89 billion in contrast to the €46 billion paid to British farmers, while other large beneficiaries in EU-15 include Ireland, Portugal, Greece and Spain. However, a system designed to protect small farmers has ended benefiting the rich most, because area support schemes mean that the greater the landowner the greater the grant, reportedly £1.1 million a year for the Sutton Estates, and it is no surprise to find that the Duke of Westminster, the Queen and the Prince of Wales are major landowners, but even Prince Albert of Monaco apparently receives £200K from the British fund.452 A simple money cap is imposed on the total amount of support which works down into ceilings at Community, national and regional levels, excess claims being scaled down proportionately to fit the money cap.453 [3.74] EU states could decide to apply the single payment scheme at regional level, the national ceiling being divided, and this will also regionalise set-aside entitlements.454 This option has been taken up more than expected.455 The effect is to reduce European homogeneity and effect a renationalisation of agricultural policy.456 The result can be messy and is particularly so in the United Kingdom where there are no fewer than six local systems across the four jurisdictions457; Scotland and Wales have adopted the historical model,458 England has a dynamic hybrid moving to a flat rate model at the end of a transition period,459 but with separate schemes for the bulk of England, for moorland and other special development areas, and Northern Ireland has adopted a static hybrid. The special regime for hill farming is the major innovation attributable to British entry into Europe.460 Other ‘less-favoured areas’ are allowed up to 10 per cent of the land area, and in England are South Yorkshire, Merseyside and Cornwall and in Wales the West and the Valleys.461 Special schemes apply to some marginal regions such 452 These figures are according to newspaper reports: Guardian March 23rd 2005; Independent November 7th 2005. 453 Single Payment Regulation (n 427 above) §11. 454 Single Payment Regulation (n 427 above) §§58, 63; Single Payment Implementation Regulation (n 437 above) §26. 455 Cardwell (n 442 above) 470. Regionalised states overseas are Belgium, Finland Germany (13 regions) and Sweden. 456 ‘Renationalisation of the CAP?’ (2005) 112 Farm Law 7; B Jack ‘Implementing EU Agricultural Law in Northern Ireland and Republic of Ireland (2003) 54 NILQ 377–441, 403; Cardwell (n 442 above) 470–471 (a compromise). 457 Common Agricultural Policy Single Payment and Support Schemes Regs 2005, SI 2005/219, reg 3. 458 This is also true of most of Western Europe. 459 Also in Germany and Finland. 460 Single Payment Regulation (n 427 above) §58; Common Agricultural Policy Single Payment and Support Schemes (Amendment) Regs 2006, SI 2006/239 reg 3; JA Usher EC Agricultural Law (Oxford, OUP, 2nd edn, 2002, 978-0-19-826882-6) 162; formerly Mountain and Hill Farming Directive 75/268/EEC [1975] OJ L128 1; Hill Farm Allowance Regulations 2005, SI 2005/154. 461 Whittaker (n 428 above).

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as Finland and Sweden north of the 62nd parallel,462 and there are also ‘outermost regions’ in places such as the Aegean islands.463 [3.75] Ten new member states entering in May 2004 increased the number of EU farmers to 11 million and the cultivated area by around 30 per cent, figures since further increased by the accession of Bulgaria and Romania.464 Pre-accession payments under the Single Area Payment Scheme (SAPS) in the east are gradually switching over to the Single Farm Payment on a flat rate basis, so that they increase gradually to a full envelope in 2013.465

3

Calculation of the Single Farm Payment

[3.76] Holdings must exceed 0.3 hectares unless a lower size is set nationally.466 For at least 75 per cent of the reference parcels in an aid application, at least 90 per cent of the respective area must be eligible under the Single Farm Payment Scheme.467 Payment entitlements are matched to the area of the farmer’s holding, called an eligible hectare,468 the matching being the process by which a cash entitlement is created. Eligibility of hectarage derives from the use of land for agricultural activity, excluding vineyards, land producing fruit and vegetables, and land planted with potatoes for eating and permanent crops.469 Farmers may use the parcels declared for any agricultural activity covered by the Single Farm Payment Scheme. Modulation is reducing overall payments by five per cent, thus redirecting funds to rural development.470 If the farmed area has remained the same, the Single Farm Payment is derived from the aid paid under the previous scheme. An average is taken over the three reference years of the total amount of payments which a farmer was granted under the earlier support schemes.471 Adjustments are made for farmers starting Single Payment Regulation (n 427 above) §98. Single Payment Regulation (n 427 above) §70. 464 Accession of Bulgaria and Romania Protocol Annex III [2], [2005] OJ L157 58; at present only trade: Regulation (EC) 1683/2006 [2006] OJ L314 18. 465 Council Decision 2004/368/EC [2004] OJ L130 1; Single Area Payment Scheme Envelopes Regulation (EC) 864/2004 [2004] OJ L161 48, Annexes VIII–VIIIA, as amended by Regulation (EC) 118/2005 [2005] OJ L24 15, especially Annex VI; Single Payment Regulation (n 427 above) §71aff inserted by Regulation (EC) 583/2004 §1[5ff]; C Daugbjerg & A Swinbank ‘CAP and EU Enlargement’ (2004) 42 JCMS 99–119; K Inglis ‘Implications of Enlargement for EC Agri-food Law’ (2004) 10 ELJ 595–612; K Kosior ‘New Stakeholders in CAP’ (2005) 11 ELJ 566–585. Malta and Slovenia have already switched. 466 Implementation of Cross-Compliance Regulation (n 435 above) §14; a lower size may be set nationally but the European minimum applies under Single Payment and Support Schemes Regs 2005 (n 457 above) reg 5 and Single Payment Scheme (Amendment) Regs 2006 (n 460 above) reg 5. 467 Implementation of Cross-Compliance Regulation (n 435 above) §6[2]. 468 Single Payment Regulation (n 427 above) §36. 469 Single Payment Regulation (n 427 above) §108 is replaced by Regulation (EC) 583/2004 §1[17]. 470 Single Payment Scheme (Amendment) Regs 2006 (n 460 above) reg 11. 471 Single Payment Regulation (n 427 above) §§37–39, Annexes VI–VII. 462 463

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up and also for exceptional circumstances causing hardship472 such as long-term professional incapacity, natural disasters, or destruction of livestock. Payments are scaled down to fit national ceilings.473 Continuance of a farmer’s income is dependent upon maintaining the same area of land available for agricultural activity if grant is to continue, since income generally reflects the farmer’s three-year average number of hectares.474 The payment entitlement (based on the historical area of the farm) must be matched with an eligible hectare (on the farm as it stands today); a hectare is eligible if available to the farmer for at least 10 months each year, an agricultural area of the holding taken up by arable land and permanent pasture excluding areas under permanent crops, forests or used for non-agricultural activities.475 There are specialised rules, both European and national.

4

Transfer of Single Farm Payments

[3.77] Eligibility for a Single Farm Payment may derive not from the receipt of grants in earlier years by the farmer himself, but from the qualification of a predecessor who has received the holding or part of it by way of inheritance from a qualified farmer, a transfer in anticipation of inheritance, when a change of legal status such as incorporation occurs or any merger or scission of holdings. Income rights can be acquired along with agricultural land, though care is needed to ensure that the purchaser is not prejudiced by his vendor’s sins476 and indeed a farmer generally wishes to buy payment entitlement and land together.477 Payment entitlements may only be transferred once definitively established478 and then only to another farmer479 established within the same state and region.480 Land can also be leased with payment entitlements.481 A transfer in gross (without land) is possible if the farmer has used at least 80 per cent of his payment entitlements during at least one calendar year but otherwise Single Payment Regulation (n 427 above) §§37ff. It may be necessary to take some other base. Single Payment Regulation (n 427 above) §41, Annex VIII. 474 Single Payment Regulation (n 427 above) §43. Matching is done by the farmer. 475 Single Payment Regulation (n 427 above) §44; the precise 10 month period is determined nationally; Single Payment Scheme (Amendment) Regs 2006 (n 460 above) regs 6, 9; the default date adopted in the UK is February 1st. 476 Single Payment Regulation (n 427 above) §33; Single Payment Scheme Handbook and Guidance 2007 (Rural Payments Agency, 2007); this can be found at under Tabs ‘Single Payment Scheme, ‘Forms and Guidance’ and ‘2007 Forms and Guidance’; Whittaker (n 428 above). Notification must be given 6 weeks before a transfer, thus advancing the deadline by 6 weeks: Single Payment Scheme Regs 2005 (n 457 above) reg 10; Single Payment Scheme (Amendment) Regs 2006 (n 460 above) reg 10. 477 Single Payment Regulation (n 427 above) §44; Single Payment Implementation Regulation (n 437 above) §74. 478 Otherwise there should be an agreement to transfer immediately after this condition is satisfied. 479 There are problems if the seller has ceased farming before making a transfer. 480 There may be problems with an heir elsewhere in Europe. 481 Single Payment Regulation (n 427 above) §46; in the east see §71k inserted by (EC) 583/2004 §1[5]. 472 473

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there may be a siphon to the national reserve. State schemes may siphon-off part of the payment entitlements on a sale, with or without land, for the national reserve, and the same applies to a letting for six years or more and any dealing with part.482

SPECI A L AG R I CULTUR A L R EG I MES

Special Agricultural Regimes 1

Set-aside

[3.78] Arable crops represent 40 per cent of the area of agricultural land and 21 per cent of agricultural income. They comprise cereals such as wheat, sweetcorn, oilseeds, protein crops, and so on and arable land also includes set-aside and formerly arable land subsequently maintained in good agricultural and environmental condition as well as land under greenhouses or under fixed or mobile cover.483 Farmers are bound to take a percentage of this land out of cultivation, as under earlier aid schemes,484 the basic rate for compulsory set-aside continuing at 10 per cent with even more allowed on a voluntary basis.485 Cash payments are generated when a set-aside entitlement, carried forward from the previous regime, is accompanied by a hectare eligible for set-aside.486 It must be taken out of production and the land has two main uses: (1) biomass for fuel production, or (2) land subject to environmental measures, meaning unploughed strips in fields of crops.487

482 Single Payment Regulation (n 427 above) §46. This may be used for assisting new farmers. Allocation from the national reserve cannot be traded for five years. No siphon is applied in the UK at present. The possibility of transfer in gross has led to ‘entitlement trading’ in which entitlements are sold to lifestyle farmers since even a paddock can qualify for support; the market is both ‘ferocious’ and ‘ludicrous’: Sunday Times July 29th 2007. 483 Single Payment Regulation (n 427 above) §§5, 66, Annex IX; Single Payment Implementation Regulation (n 437 above) §2[1]. 484 Exceptions include organic production, materials not intended for human or animal consumption, small producers, permanent pasture, permanent cropping land, forest, and non-agricultural land: Single Payment Regulation (n 427 above) §§54–55; C-372/98 R(JR) JH Cooke & Sons v Ministry of Agriculture Fisheries & Food [2000] I ECR 8683 ECJ. 485 Single Payment Regulation (n 427 above) §107; Single Payment Implementation Regulation (n 437 above) §32ff; CAP Single Payment Scheme (Set-aside)(England) Regs 2004, SI 2004/3385 as amended by SI 2007/633; Set-aside Handbook & Guidance for England 2007 which can be found at under Tabs ‘Single Payment Scheme, ‘Forms and Guidance’ and ‘2007 Forms and Guidance’. In the east, Single Payment Regulation §71j inserted by Regulation (EC) 583/2004 §1[5]. 486 Land ineligible for payments was used in 2003 as permanent pasture, for permanent crops, trees, or for non-agricultural purposes. 487 Single Payment Regulation (n 427 above) §§54–56, 88–91; Single Payment Scheme (Amendment) Regs 2006 (n 460 above) regs 12–13; as to transfers see Single Payment Regulation (n 427 above) §54[7]; Regulation (EC) 1973/2004 [2004] OJ L345 1.

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2


Organic produce

[3.79] A whole list of organic products488 and foodstuffs are identified for CAP purposes, produced according to organic principles — using permitted pest controls, fertilisers and soil conditioners, and without food irradiation or the use of genetically modified organisms — and these qualify to be marketed as organic and for the proposed Community organic logo. Extra income is paid to organic farmers according to area and support is also paid to farmers signing up for quality schemes on the protection of geographical indications and designations of origin.489

3

Cross compliance

[3.80] Protection of the environment has developed as a concern since 1992 into a positive obligation to qualify for the Single Farm Payment. Direct aid payments are linked to basic standards for the environment, food safety, animal health and welfare and good agricultural and environmental conditions.490 There are three main aspects. Environmentally friendly management is required, under a strict timetable, such as conservation of wild birds, wild flora and fauna, and natural habitats, and protection of groundwater against pollution, especially from nitrates, and the soil against sewage sludge. Less fertiliser should be used on grass; margins maintained in fields for ground nesting; and stubble left until late winter, with hedges cut less frequently. Most British farmers will qualify for basic aid under the Environmental Stewardship Scheme but this is increased greatly in sensitive areas such as a Site of Special Scientific Interest. Good agricultural condition must be maintained for land taken out of production, using European, national and regional criteria, covering matters such as the prevention of soil erosion, organic content of soil, maintenance of soil structure, and minimal stocking to protect permanent pasture. Animal health and welfare requirements must be observed, notably in relation to the notification of contagious diseases.

488 Regulation (EEC) 2092/91 Annexes I, II; Regulation (EC) 1804/1999; N Lampkin & M Stolzer ‘European Action Plan for Organic Food and Farming’ (2006) 3 Law, Science & Policy 59–73. 489 C-135/03 Commission EC v Spain (Use of ‘Bio’) [2005] I ECR 6909 ECJ; C-107/04 Comite Andaluz [2005] I ECR 7137 ECJ. 490 Single Payment Regulation (n 427 above) §§3ff, Annex III as amended; Implementation of Cross Compliance etc Regulation (n 435 above) §§41ff; CAP Single Payment Scheme (Cross Compliance) (England) Regs 2004, SI 2004/3196, amended by SI 2005/918; Cross Compliance Handbook for England 2006 (Rural Payments Agency, 2007); this can be found at under Tabs ‘Single Payment Scheme, ‘Forms and Guidance’ and ‘2006 Forms and Guidance’; A Woods ‘Cross Compliance’ (2005) 05 Rights of Way Law Review 57–70. This system is unpopular with farmers and there is a raft of measures to improve it, including power to ignore trivial breaches.

Special Agricultural Regimes

4

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Rural development

[3.81] Countryside accounts for 80 per cent of the area of Europe and the policy of rural development which provides €4.3 billion annually for restructuring to make agriculture more competitive whilst conserving the rural heritage, has developed into a second pillar of the CAP.491 A major theme is diversification of agricultural holdings beyond agriculture and the promotion of tourist use; other aspects are early retirement and setting-up of young farmers, modernisation of production methods, structural reorganisation of farms, and the protection of the heritage.492 Farmers in pre-accession states receive grants to help bring them up to European standards. Modulation aims to reduce direct payments (including the Single Farm Payment) to sustain agriculture by between 3 and 5 per cent annually, over the years 2005 to 2012, the sums saved being ploughed back into rural development measures.493

5 Coupled sectors [3.82] In Britain and Ireland the position is straightforward. Decoupling from production was undertaken in 2005 with one very trivial exception.494 Elsewhere the position is much more complex, but a convenient summary is available on the internet of the progress of decoupling under the CAP reform.495 This leaves some areas where aid496 is still linked with production, though these will gradually disappear. Extra aids are provided for durum wheat, protein-rich crops such as peas and beans, rice, potato starch,497 and also nuts.498 A second wave of reform is decoupling most of the market in tobacco, cotton, olive oil and hops, and also the sugar sector.499 Attention is now turning to the wine sector500 and to a new Common Organisation of Market (CMO) for fruit and vegetables which contributes 17 per There are innumerable regulations on the subject. A Ekroos ‘Forests and the Environment — Legislation and Policy of the EU’ (2005) 14 European Environmental Law Review 44–57. 493 Single Payment Regulation (n 427 above) §§10, 12; Annex II as amended (national limits); Implementation of Cross Compliance etc Regulation (n 435 above) §77 (applied to gross payments). 494 Scotland applies a 10 per cent ceiling under §69 in the bovine sector; this makes available about €30 million of aid: Regulation (EC) 118/2005 Annex II. 495 Overview of Implementation of CAP Reform (n 445 above). 496 In almost cases there is a fixed aid or premium and an additional allowance to mop up additional allocations; in this book the latter is not mentioned separately. 497 Single Payment Regulation (n 427 above) §§72–93; some amendments for eastern states are made by Regulation (EC) 583/2004 §§1[6ff], 1[16]. 498 Single Payment Regulation (n 427 above) §§83–87. 499 Sugar restructuring took place in July 2006 and the sector is entering the Single Payment Scheme in 2007: Regulation (EC) 319/2006 [2006] OJ L158 32; Overview of Implementation of CAP Reform (n 445 above). 500 Towards a Sustainable European Wine Sector SEC (2006) 770. The ‘wine lake’ amounts to more than an entire year’s production: Independent July 5th 2007. 491 492

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cent to total agricultural production,501 and there is a more general initiative for a simplification of all the CMOs.502 France stands alone in being partially (that is, to the extent of 25 per cent) coupled in the cereal sector, though several states still pay for seeds — other than Cannabis — by volume. There are also considerable parts of Europe where some aspects of the meat sector remain coupled. Dairy sector payments were decoupled everywhere in the years from 2005 to 2007, but there are production controls (quotas) and extra payments.503 In many European states like Britain the Single Farm Payment Scheme will include beef and sheep, decoupling aid and production, though with small national supplements in some states,504 but many continental states have opted for a more gradual transition to the Single Farm Payment and retain some of the old aids for meat transitionally505 or make additional payments by headage or area stocked with livestock.506 Farmers in partial implementation states will receive a percentage of the single payment and a percentage based on meat production507 in relation to sheep and goat meat (ovines)508 and beef and veal (bovines).509 Those schemes have detailed transfer rules.510

DA I RY

Dairy 1

Dairy activity

[3.83] Dairy is a special case, the most important agricultural activity in most of Europe. It accounts for three-quarters of agricultural activity in Germany, France and the United Kingdom, though dairy is very limited down south.511 The regime is divided between a wholesale market in which 40 dairies buy 65 per cent of all milk and a smaller market for direct sales.512 Production was jeopardising Common Organisation of Market in Fruit and Vegetable Proposal COM (2007) 17 final. Common Organisation of Agricultural Markets Proposal COM (2006) 822 final. 503 See below [3.83]. 504 Single Payment Regulation (n 427 above) §69 (Greece 10% beef, and 5% sheep and goats; Italy 7% beef and 5% sheep and goats; Scotland 10% bovine sector). 505 Single Payment Regulation (n 427 above) §47. 506 Single Payment Regulation (n 427 above) §§71, 133–136; ceilings are provided in partial implementation states by Annexes I–V amended by Regulation (EC) 118/2005. 507 Single Payment Regulation (n 427 above) §66. 508 Single Payment Regulation (n 427 above) §§111ff. 509 Single Payment Regulation (n 427 above) §§121ff. 510 Single Payment Regulation (n 427 above) §§117ff, 127–128. 511 Commission Report on Milk Quotas SEC (2002) 789, [2.1]. Traditional production is threatened in areas of the accession states such as in Transylvania where some milk remains unsterilised: Observer June 24th 2007. 512 Milk Quotas Report (n 511 above) [3.3]; Common Organisation of the Market in Milk Proposal February 15th 2007. 501 502

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the future of the CAP and so quotas were introduced in 1984513 in order to limit the amount of milk produced.514 Recently the price has fallen and production is being edged up slightly.515 Much of the money paid in the milk sector is integrated into the Single Farm Payment scheme as from 2007 (or 2005 in the United Kingdom), but there will be a Dairy Premium to supplement the basic level of support.516 Farmers have quotas which they are allowed to produce and there is a scheme of financial penalties for over-production called a ‘levy’.517 We must immediately tackle this matter of terminology. The European Commission studiously avoids the use of the word quota in favour of ‘reference quantities’. In the bogs of Connemara they talk of little else. One is strongly reminded of Henry Reed’s fond reminiscence of army training in Judging Distances in which grazing sheep are reported to army command as a ‘dozen of what appear to be animals’.518 Readers will be able to supply the punchline for themselves. This book joins the farming community in calling a quota a quota. The scheme is continued from 2004 for eleven years, its effect being to impose a financial penalty on a farmer responsible for excess production.

2

Proprietary character of milk quotas

[3.84] Wachauf,519 the leading case, follows the European line that a quota is not strictly an asset, but has a quasi-proprietary character.520 The question was whether a tenant who had built up a quota entitlement should be compensated for the fruits of his labour when he surrendered the tenancy. Compensation had been refused in the German courts, but the European Court of Justice thought that there was enough leeway allowed to the national authorities to ensure that the domestic right to property was respected. This quasi-proprietary status has also been adopted in the Irish Supreme Milk Quotas Report (n 511 above) [2.3.4]. Milk Quotas Report (n 511 above) [3.4.1]. 515 Milk Quotas Report (n 511 above) [4.2.]. Quotas have increased by 0.5% over five years. 516 Single Payment Regulation (n 427 above) §§95–97; Single Payment Scheme Regs 2005 (n 457 above) reg 7; Single Payment Scheme (Amendment) Regs 2006 (n 460 above) reg 7; Usher (n 460 above) 91–92. The premium increased threefold from 2005 to 2007 during the transition. In the east: Single Payment Regulation §71i inserted by Regulation (EC) 583/2004. Payment dates are amended by Regulation (EC) 1540/2004. 517 Milk Levy Regulation (EC) 1788/2003 [2004] OJ L375 1, as amended by (EC) 1406/2006 [2006] OJ L265 8; Single Payment Implementation Regulation (EC) 595/2004, §6ff. In England: Dairy Produce Quotas Regulations 2005 SI 2005/465, as amended by SIs 2006/120 and 2007/106; there are similar schemes in Wales, Northern Ireland and Scotland; Dairy Produce Quotas (General Provisions) Regs 2002 SI 2002/458, as amended by SI 2005/466; C-230/01 Intervention Board v Penycoed Farming Partnership [2004] I ECR 937 ECJ; Agea v Malzani [2002] Foro it No 5 I col 1335, It Cass [2002] ECLYB [386]; Usher (n 460 above) 92. 518 H Reed ‘Lessons of War II, Judging Distances’ in A Map of Verona (London, Jonathan Cape, 1946) 24. 519 Wachauf (n 185 above). 520 M Cardwell ‘Milk and Livestock Quotas as Property’ (2000) 4 Edinburgh Law Review 168–190, 184, 189. 513 514

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Court.521 The issue in Community litigation is often the liability to producers from whom quota has been improperly withheld. A large number of cases concern so-called ‘Slom’ quotas, the name deriving from an acronym in Dutch. When quotas were first introduced, many producers had already accepted payments under another scheme to withdraw from production for a fixed period of time, and these people had no production and so no quota was allocated to them in the initial allocations. This was so unfair and illegal that Slom quotas were provided to such producers,522 if able afterwards to resume production, and this scheme then had to be extended to successions523 and comparable transactions.524 Milk quotas are also of economic value in litigation about their loss through professional negligence.525 National law in member states often does award proprietary status, the position in Germany526 and also in Britain, where this has important effects. Swift v Dairywise Farms527 establishes that a quota can be held in trust, and the unforeseen effect is to make it possible to use the quota as security for a loan, and to create a security of sufficient solidity to be kept out of the hands of a liquidator on the insolvency of the farming company. Thus the combination of a quota and equity is to create an asset with a commercial value which is thus mortgageable.

3

Transfer

[3.85] The Commission wanted to avoid a financial market in quotas528 but that is effectively what there is. Entitlements once definitively established but only between farmers, quotas can be transferred between producers under national law.529 On a sale of dairy land, the quota will usually go with it,530 using detailed rules set by national law. A compulsory purchase or sale for non-agricultural purposes will not transfer the quota. The same applies to gifts and to inheritance and other transmissions, which are subject to the usage rule. If all agree a producer can take the quota to a new farm, either permanently or by lease, C-340/2000 Maher v Ministry of Agriculture F&RD [2000] 2 CLMR 48 Irish Supreme Ct. Case 120/86 Mulder [1988] ECR 2321 ECJ; C-104/89 Mulder v Council EC [1992] I ECR 3061 ECJ. There are also many human rights cases. 523 C-314/89 Ruah [1991] I ECR 1647 ECJ; T–199/94 Gosch v Commission EC [2002] II ECR 391 CFI; T-187/94 Rudolph v Council EU [2002] II ECR 391 CFI. 524 Equivalence exists when the intention is to favour a potential beneficiary without the intention being to release market value: C-384/00 Bredemeier v Landwirtschaftskammer Hannover [2002] I ECR 4517 ECJ, J[10]; C-44/89 Van Deetzen II [1991] I ECR 5119 ECJ; C-159/89 Spagl [1990] I ECR 4539 ECJ. 525 Parry v Edward Geldard (No 2) [2001] PNLR 44 Jacob J. 526 Bundesvervaltungsgericht 3C 35/03 [2005] 06 ECL 43. 527 Swift v Dairywise Farms (No 2) [2001] EWCA Civ 145, [2003] 1 WLR 1606n; on appeal from [2000] 1 WLR 1177 Jacob J; Harries v Barclays Bank [1977] 2 EGLR 15 CA, 18 Morritt LJ. 528 C-401/99 Thomsen v Amt für landlichte Ramme Husum [2002] I ECR 5775 ECJ, J[39]; Cardwell ‘Milk Quotas as Property’ (n 520 above). 529 Dairy Produce Quotas Regs 2005 (n 517 above) reg 9ff. 530 Guide to Milk Quotas 2005 (Rural Payments Agency, 2007) [8]. 521 522

Towards What?

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though national law generally restricts leases to producers.531 Problems arise on the surrender of a lease to a landlord; if the tenant continues to produce on the rest of the holding the quota stays, but otherwise it can transfer to the landlord who in this exceptional case can hold it temporarily.532 An apportionment is made on a sale of part, either as agreed or as determined using a disputes procedure.533 There is a procedure called a ‘siphon’534 in which part of the quota transferred is put into the national reserve, a reserve which also includes quotas released by inactive producers.535

TOWA R DS WHAT?

Towards What? This chapter has identified a significant number of areas where EU rules directed to other ends have a significant and substantive effect on property law. Collectively their bulk is significant. Nevertheless, they have not coalesced into any coherent form and, it has been suggested, are unlikely to do so, and neither are national property systems likely to converge. The driving force behind the emergence of a European Land Law will be a cross-border transactional law as discussed in the subsequent chapters.536

Bundesvervaltungsgericht 3C 35/03 (n 526 above). Dairy Produce Quotas Regs 2005 (n 517 above) regs 14–17; Thomsen (n 528 above) J[32], J[39]. 533 Dairy Produce Quotas Regs 2005 (n 517 above) regs 10–11. 534 C-313/99 Mulligan v Minister for Agriculture & Food [2002] I ECR 5719 ECJ, J[26]; C-98/91 Herbrink [1994] I ECR 223 ECJ, J[11]; C-189/92 Le Nan [1994] I ECR 261 ECJ, J[12]; C-463/93 St Martinus Elten [1997] I ECR 255 ECJ, J[24]; C-15/95 EARL de Kerlast [1997] 1 ECR 1961 ECJ, J[17–18]. 535 Inactive for a 12-month period and failing to resume production in the subsequent 12 months, or marketing less than 70% of their quota as to unused parts. 536 See below [ch 5]–[ch 10]. 531 532

ACTI O N S A F F ECTI N G LA N D

4 Actions Affecting Land Europeanisation of Actions. European Conflicts Club. Provisional Measures. Exclusive Forum over Land. Trespass used to Assert Title. Public Registers. Tenancies, Holiday Lets and Timeshares. Personal Actions.

EUR O PEA N I SATI O N O F ACTI O N S

Europeanisation of Actions [4.01] Land is immovable and irrevocably sited in one of the European states so it might seem that disputes about land are parochial matters, confined to the courts of the state where the land is sited. So, in general, they are, but cross-border issues arise with increasing frequency as Europeans move across national boundaries to buy or rent land, making use of their free movement rights. An internal market entails Germans selling goods to Swedes in Paris, and so on, and to ensure its smooth operation co-operation is required in civil matters and mutual recognition of judgments.1 Civil law is not codified across Europe, so the market depends upon multiple national codes which need clear rules to work together without conflicts.2 Predictability in the conduct of private affairs and in litigation is achieved by clear and simple rules, but the problem is the injustice that simplicity brings with it.3 [4.02] European law intervenes in four main ways. Rules are provided to determine which law to apply to a dispute, though as the previous chapter demonstrated4 states are left to their own devices in the land sector5 and all states in fact apply a site-based principle. Complementary to rules for selection6 of law 1 EC §65 ex §73m. This is unsuitable as a means of securing true uniformity: O Remien ‘European Private International Law, the EC and its Emerging Area of Freedom, Security and Justice’ (2001) 38 CML Rev 53–86, 75–77. 2 Jenard Report [1979] OJ C59 1, 11. 3 Dicey & Morris The Conflict of Laws (London, Sweet & Maxwell, 14th edn by L Collins 978-0-421-88360-4) I [1-008ff ]; C-125/92 Mulox IBC v Hendrick Geels [1993] I ECR 4075 ECJ, J[11]. 4 See above [3.12]. 5 The main convention in the area applies to contractual obligations but excludes pure land law issues; see below [4.09]. 6 This book departs from general practice to use the word ‘selection’ to describe a case where a law or forum is chosen by the legal system and confines ‘choice’ to a case where the parties make the

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are rules to select a forum in which a dispute is to be fought out, the courts of which country are entitled to try a case. That is the subject of this chapter, which opens with an examination of the conflicts club, broadly EU-27 though with variations from sector to sector and a parallel scheme applying to EEA states.7 Selection in relation to pure land issues is site-based, but within the general ambit of land law many actions will be seen as personal in character where the forum is not necessarily site-based. These aspects are considered in turn. Procedural law is increasingly regulated in its cross-border aspects, and in particular the service of proceedings.8 These moves towards a common European procedure must be noticed, even in an academic assessment such as this, because the service of proceedings may be important in determining the priority between two sets of proceedings started on opposite sides of the continent.9 [4.03] Finally, aspects of procedure such as delay and judicial fairness and fairness in administrative decision-making raise issues of human rights10 which lie beyond the scope of this book. Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented.11

Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice.

EUR O PEA N CO N F LI CTS CLUB

European Conflicts Club 1

Forum rules for land in the EU (Brussels I)

[4.04] Property-owners must know to which jurisdiction their land is amenable.12 In order to achieve this a members’ club has been set up with its own rules of private international law for the member states of the EU, the primary focus of which is to select a forum to determine a land dispute. As already described, this in practice also selects the land law since states apply their own site-based rules to select their own land law.13 The main rule book for selection; the distinction is fundamental in our context because in pure land issues selection operates and a choice is not possible. 7 See below [4.04ff]. 8 Service Regulation (EC) 1348/2000 [2000] OJ L160 37. 9 See below [10.57]. 10 European Convention of HR (Rome, 1950, CETS 5) §8; JJ Fawcett ‘The Impact of ECHR §6[1] on Private International Law’ (2007) 56 ICLQ 1–48; see above [3.33ff]. 11 EU Charter of FRs [2000] OJ C364 1, §47. 12 Mostyn v Fortingas (1774) 1 Cowp 161, 165 Lord Mansfield CJ, 98 ER 1021. 13 See above [3.12] and below [4.02].

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the forum club is the Council Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters or, more briefly, the Regulation Civil Jurisdiction.14 Civil and commercial matters are defined autonomously, that is independently of national systems.15 This determines forum directly16 between EU-27 states including the accession states17 with Denmark the lone party-pooper until July 2007.18 Even the United Kingdom has signed up.19 British reluctance was understandable because as this chapter unfolds it will appear that the effect has been to dismantle the common law rules for the conflicts of laws, subtle and supple as well-worn leather, only for them to be replaced with a crude and blunt instrument which puts certainty and clarity ahead of sensible practical results. In our particular context, land, the Regulation does not sufficiently abide by the site rule and all too often it creates a disastrous situation in which the selection of forum diverges from the selection of law, so that a court foreign to the land ends up applying law foreign to itself. Our domestic service rules are aligned to ensure that service abroad can only occur without permission when our courts are the proper forum under European club rules,20 and so that permission has to be obtained before service overseas in any case where forum might be an issue and needs to be fought out first.21 Current rules represent a gentle evolution22 from earlier Conventions.23 Their object is to allocate any case in which the parties and property are spread out internationally across one or more EU states24 ideally to the courts best 14 Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (EC) 44/2001 [2001] OJ L12 1, as from March 1st 2002 and due for review in 2007. Other nicknames are the ‘Judgments Regulation’ and the ‘Brussels I Regulation’. 15 C-343/04 Land Oberosterreich v EZ [2006] I ECR 4557 ECJ, J[22]. 16 Regulation on Civil Jurisdiction (n 14 above) §76; domestic implementations are listed in Annexes I–IV, as amended by Regulations (EC) 1496/2002 [2002] OJ L225 13, and (EC) 1937/2004 [2004] OJ L334 3. 17 H Heiss & A Supron-Heidel ‘EU Enlargement — Aspects of (International) Procedural Law’ (2002) 4 European Journal of Law Reform 147–164. 18 See below [4.06] n 37. 19 Regulation on Civil Jurisdiction (n 14 above) R[10]; Civil Jurisdiction and Judgments Act 1982 (‘CJJA’), c 27, sch 1 as amended by Civil Jurisdiction and Judgments Order 2001 SI 2001/3929. The British Government is considering relinquishing its veto in the field of judicial co-operation: Times September 21st 2006. 20 Civil Procedure Rules, SI 1998/3132 as amended on 42 occasions, 6.19. 21 Civil Procedure Rules (n 20 above) 6.20. 22 AJ Riley ‘Reforming the Brussels Convention’ [1998] ECLYB xxxiv–xxxvi; J Basedown ‘The Communitarisation of the Conflict of Laws’ (2000) 37 CML Rev 687–708; J Harris ‘The Brussels Regulation’ (2001) 20 CJQ 215–224 (‘little change’); W Kennett ‘The Brussels I Regulation’ (2001) 50 ICLQ 725–737; P North ‘Private International Law Change or Decay’ (2001) 50 ICLQ 477–508; BJ Rodger ‘The Communitarisation of International Private Law’ (2001) Juridical Review 69–80; P North ‘Rethinking Jurisdiction’ [2002] 55 CLP 395–426; C MacLachlan ‘International Litigation and the Reworking of Conflicts of Laws’ (2004) 120 LQR 580–616; A Stadler ‘From the Brussels Convention to Regulation 44/2001’ [2005] 42 CMLR 1637–1661; H Muir Watt ‘European Integration, Legal Diversity and Conflicts of Laws’ (2005) 9 Edinburgh Law Review 6–31; TM Yeo ‘Civil Jurisdiction and Brussels’ (2001) 117 LQR 560–585 23 See below [4.06]. 24 G White ‘Civil Jurisdiction and Judgments Act 1982’ Part I [1983] Conveyancer 180–193, Part II [1983] Conveyancer 306–314, 182.

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placed to determine it.25 Land disputes are generally directed exclusively to a single state — the country where the land is sited — thus eliminating multiplicity of litigation. [4.05] A crucial element is the conformity of jurisprudence secured by the machinery for referring dubious points to the European Court of Justice.26 Any matter of uncertainty27 in the existing jurisprudence should be referred by the national court of last resort for a preliminary ruling on the interpretation of the conflict rules. Rulings are binding on the UK courts28 and those of other EU countries,29 statute law can be kept up to speed by subordinate legislation,30 and there is continuity in the jurisprudence between the Brussels Convention and the Brussels Regulation.31

2

Forum: other European cases

[4.06] Cases may still need to be treated under the earlier Conventions which the Regulation replaces and to which it displays a ‘great similarity’.32 Two cases fall within the Brussels Convention33 first adopted in 1968, but later amended on several occasions as new EU members acceded most notably at San Sebastian34 when Spain acceded. Brussels was implemented into UK law by the Civil Jurisdiction and Judgments Act 1982.35 Denmark did not sign up to the new Regulation, so the amended Brussels Convention continues to apply in a dispute between a Dane and a Brit until July 2007,36 though protracted negotiations have now

25 Case 38/81 Effer v Kantner [1982] ECR 825 ECJ, J[6]; C-68/93 Shevill v Presse Alliance [1995] I ECR 415 ECJ. 26 The Regulation is a piece of Community legislation but previously references took place under a Protocol on Interpretation. Uncertain points of forum must be referred, whereas referrals in relation to law are more discretionary. 27 Jarrett v Barclays Bank [1999] QB 1 CA, 17F–G Morritt LJ; see also: R(JR) Else (1982) v International Stock Exchange of UK and Republic of Ireland [1993] QB 534 CA, 545D–F Bingham MR; Pearce v Ove Arup [2000] Ch 403 CA, 445C-F Roch LJ; Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1 HL, 15H Lord Hoffmann. 28 CJJA 1982 (n 19 above) ss 2–3. 29 C-38/98 Usines Renault v Maxicar [2000] I ECR 2973 ECJ (forged Renault parts). 30 CJJA 1982 (n 19 above) s 14. 31 Regulation on Civil Jurisdiction (n 14 above) R[19]; the earlier position is discussed immediately below. 32 Regulation on Civil Jurisdiction Explanatory Memorandum COM (1999) 348 final [4.5]; Borras Report [1998] OJ C221 27. 33 Brussels Convention [1978] OJ L304 36; this is often referred to as ‘Brussels I’ to distinguish it from the Brussels II rules on matrimonial conflicts: see below [11.02]. Subsequent versions are [1978] OJ L304 1, [1982] OJ L388 1, [1997] OJ C15 1, and [1998] OJ C27 1 (final version). 34 San Sebastian Convention [1989] OJ L285 1; this amended §16 relating to land; Cruz, Real & Jenard Report [1990] OJ C189 35; CJJA 1982 (Amendment) Order 1990, SI 1990/2591; see below [4.41]. 35 CJJA 1982 (n 19 above) sch 1 (as amended); White ‘CJJA 1982 I & II’ (n 24 above). 36 Regulation on Civil Jurisdiction (n 14 above) R[9], R[22–23], §§1[3], 68.


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brought home the bacon.37 Brussels may also continue to apply to some EU disputes raising Proustian facts about time passed: the new Regulation is restricted in its application to legal process, subsequent instruments and documents, and subsequent registrations, so Brussels may apply to facts before the Regulation entered into force in a particular state.38 [4.07] A third variant, the Lugano Convention, is accepted by EEA states — or more properly EFTA state since Switzerland is on board — so it applies to an EU-EFTA conflict or an EFTA-non-EU conflict.39 Just to complicate matters, Belgium and Germany40 never acceded to Lugano and continue to rely on reciprocity in bilateral conventions with EEA states. Lugano rules were loosely modelled on the Brussels Convention but they were never updated to match the changes made when the EU created its Regulation. Again, summer 2007 is seeing a long overdue change.41 Current member states are Switzerland, Norway and Iceland — so Lugano applies in disputes between a Swiss and a Brit42 — but Lugano may also be in play when a case involves an accession state and the facts arise before the state joined the EU, for example before the eastwards expansion in 2004.43 Where one of the states involved is outside the EU, there is no power of referral to the European Court of Justice; so interpretation of Lugano is left to the national courts to guess as best they can, making use of the EU jurisprudence.44

3

Forum: land within the United Kingdom

[4.08] Cases need to be allocated between parts of the United Kingdom since 37 Council EU Decision (EC-Denmark) 2005/790/EC [2005] OJ L299 61; COM (2005) 145-2, 2005/0055/CNS. This agreement entered into force on July 1st 2007, [2007] OJ L94 70. Brussels applied until that date: Frederiksvaerk Kommune v Sorensen B-4022-05, [2006] UfR 27940, [2006] 12 ECL [113] (Dane-Swede). One fly in the ointment is that any future amendments to the Regulation on Civil Jurisdiction (n 14 above) by the rest of the EU will have to be agreed by Denmark on a piecemeal basis. 38 Regulation on Civil Jurisdiction (n 14 above) §66[1]; ex Brussels Convention (n 33 above) §54[1]; Land Oberosterreich v EZ (n 15 above) J[21] (pre-accession case involving Austria). 39 Lugano Convention [1988] OJ L319 9; Jenard–Möller Report [1990] OJ C189 57; Speed Investments v Formula One Holdings (No 2) [2004] EWCA Civ 152, [2005] 1 WLR 1936. It will not apply in an EU-EU conflict: Lugano Convention §54B; nor is Liechtenstein a party. 40 As to Germany see [2002] BGBL (D) I 564, [2002] ECLYB [552]. 41 The text of a revised Lugano Convention (‘New Lugano’) has been agreed and will be signed at Lugano over the summer of 2007 to come into force in 2009. The substantive provisions follow the wording and the numbering of the Regulation on Civil Jurisdiction (n 14 above); see Lugano Convention Agreed Final Text March 28th 2007 (Brussels); Opinion 1/03 Competence of the EC to Conclude a New Lugano Convention [2006] I ECR 1145 ECJ; Council Decision July 6th 2007 COM (2007) 387; the text of the New Lugano appears as an Annex. 42 Lugano (n 39 above) was implemented in the UK by CJJA 1991, c 12, inserting CJJA 1982 (n 19 above) sch 3C. 43 Or earlier facts affecting Austria, Finland or Sweden. 44 Lugano Convention (n 39 above) Protocol 2 §1; CJJA 1982 (n 19 above) s 3B inserted in 1991 (n 42 above); Stolzenberg (2) (n 27 above) 15F–G Lord Hoffmann; Agnew v Länsforsäkringsbolangens [2001] 1 AC 223 HL, 234 Lord Woolf MR, 251 Lord Cooke; J Newton Uniform Interpretation of the Brussels and Lugano Conventions (Oxford, Hart, 2002, 1-84113-323-X).

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the Regulation on Civil Jurisdiction fails once it has allocated a case to a member state of the EU,45 assuming we are all Brits together. This is to pay no heed to the mixed emotions a Glaswegian encounters when watching England fall to a penalty shoot-out at the quarter final stage of a World Cup or, more hypothetically, a Londoner experiences watching Scotland falling just short of qualification for the final stages. Football may be right in recognising four home countries, but the law sees three distinct land laws, England and Wales (as one entity), Scotland, and Northern Ireland.46 A conflict arises when a Scotsman sells to an Ulsterwoman a house in Cornwall. Allocation occurs under a domestic statute which implements a distinctive form of the European scheme, at first following the Brussels Convention and then updated to reflect changes made by the EU Regulation.47 At least for true land disputes the rule is simple enough, cases being allocated exclusively to that part of the United Kingdom in which the land is sited, so Scottish courts cannot rule on the ownership of land in Sussex and the High Court in London cannot adjudicate on title to a house in Belfast.48 Internal cases lie outside the competence of the European Court of Justice, leaving domestic courts to guess, badly,49 about how to apply European jurisprudence. European rules miss the Isle of Man, the Channel Islands, Gibraltar and the Cyprus Base Areas,50 which are even outside the Lugano club which does not, for example, operate in Jersey.51 Particular sensitivities surround Gibraltar because the Spanish courts do not accept British territorial claims and judgments given there are not enforced on Spanish soil,52 and an attempt at unilateral extension by our Government in 1998 was opposed by Spain which argues for a multilateral basis for territorial extensions.

4

Contract law (Rome I)

[4.09] Contract laws vary across Europe. Relatively few cases have an international element,53 but those with elements linked to several countries need clear rules for selecting one legal system, uniform rules lubricating the workings of the

45 More recent conflicts regimes (eg, Brussels II for family disputes: see below [11.02]) do cover internal allocation, and all to the good. 46 EU conflicts principles are in play as between Northern Ireland and the Republic of Ireland. Similar issues in other states are determined by internal rules for private sub-international law. 47 CJJA 1982, c 27, sch 4 as amended by CJJA 1982 (Amendment) Order 2000, SI 2000/1824; CJJA 1982 s 20 and sch 8 apply in Scotland. 48 CJJA 1982 sch 4 (n 47 above) para 11(a). 49 C-346/93 Kleinwort Benson v Glasgow CC [1995] I ECR 615 ECJ; [1999] 1 AC 153 HL. 50 CJJA 1982 (n 19 above) s 52; Regulation on Civil Jurisdiction (n 14 above) §68. 51 Formula One Holdings (No 2) (n 41 above). 52 U v XX [2001] J Aran 3968, [2002] ECLYB [398] Spanish Tribunal Supremo; ‘Brussels I in Gibraltar’ [2001] RCL 179, [2001] ECLYB 552; Bols Distilleries v Superior Yacht Services [2005] UKPC 45, [2007] 1 WLR 12. 53 Rome I Green Paper, COM (2002) 654 final, [1.6]; Giuliano Lagarde Report [1980] OJ C282 1, Introduction [1].


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common market.54 The Rome Convention55 (commonly known as ‘Rome I’) aims to establish certain and uniform rules for the choice and selection of law applicable to contractual obligations.56 However, as the previous chapter has demonstrated,57 the Rome Convention is silent on the selection of pure land law so it falls within the scope of this book only when a contract relating to land is under consideration. Rome I offers freedom of choice apart from the case of consumer contracts, but where no choice is made a law is selected58 for the parties by identifying a close connection to the contract,59 perhaps helping to reduce the attractions of forum shopping.60 It has attracted a considerable basic literature.61 It should complement the regime for Civil Jurisdiction with rules which settle the law which is to be applied.62 The United Kingdom signed up soon enough, but there was an extended pause before it was brought into force and incorporated into domestic law by the Contracts (Applicable Law) Act 1990,63 an Act which also resolves internal conflicts between the constituent parts of the United Kingdom64 and the geographical reach can be extended by Order in Council to the Isle of Man, the Channel Islands, Gibraltar, and the Sovereign Base Areas of Cyprus.65 Domestic law can be kept up to speed with European developments by statutory instruments.66 As compared to the ludicrous European forum rules the selection of law rule-book sits relatively comfortably with the common law, but the change is nevertheless considerable.67 English law generally chose the system with the closest and most real connection, what reasonable parties would have adopted had they thought of it,68 but pre-Rome rules were not uniform across Europe,69 and the process of unification of conflicts rules can be traced in 54 It is nevertheless currently a poor tool of legal integration: O Lando ‘Optional or Mandatory Europeanisation of Contract Law’ (2000) 8 ERPL 59–69, 62. 55 Rome Convention on the Law Applicable to Contractual Obligations [1980] OJ L266 1 (original), [2005] OJ C334 1 (consolidated); Giuliano Lagarde Report (n 53 above). 56 Giuliano Lagarde Report (n 53 above) Introduction [1], and §1, [1]; Dicey & Morris (n 3 above) II [32–009]. 57 See above [3.12]. 58 See above [4.02] n 6. 59 Rome I Green Paper (n 53 above) [1.5]. 60 Rome I Green Paper (n 53 above) [1.3], [3.1.2]; C-381/98 Ingmar GB v Eaton Leonard Technologies [2000] I ECR 9305 ECJ. 61 Dicey & Morris (n 3 above) II [32]; R Plender & M Wilderspin European Contracts Convention (London, Sweet & Maxwell, 2nd edn, 2001, 042173860X); J Hill ‘Rome Convention: the Approach of the UK courts’ (2004) 53 ICLQ 325–350. 62 Rome II Proposal (Law for Tort) COM/2003/0427 final, [1.1.4]. 63 Contracts (Applicable Law) Act 1990, c 36, s 2(1); but only as from April 1st 1994 by s 4, SI 1991/707; on the delay see Rome II Proposal (n 62 above) [1.1]. Rome Convention (n 55 above) §§7, 10[1](e) are not implemented in the UK: s 12(2)–(3). 64 Rome Convention §19; Contracts (Applicable Law) Act 1990 (n 63 above) s 2(3); Rome I Proposal 2005/0261 (COD) §21. 65 Contracts (Applicable Law) Act 1990 (n 63 above) s 8(2); Rome Convention (n 55 above) §2. 66 The 1990 Act has been amended by SIs 1994/1900, 2000/1825. 67 Caledonia Subsea v Micoperi [2002] SLT 1022 Ct of Session IH, [18] Lord Cullen LP. 68 Mount Albert BC v Australian Temperance and General Mutual life Assurance Society [1938] AC 224 PC, 240 Lord Wright; The Assunzione [1974] P 150 CA, 175, 179 Singleton LJ. 69 Giuliano Lagarde Report (n 53 above) §4, [1].

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the Giuliano Lagarde Report.70 Consistency is greatly improved by a protocol, recently in force, allowing access to the judicial structure of the EU to secure uniform interpretation,71 though referral is more discretionary than in the case of the forum rules. [4.10] Rome I remains subject to a rolling five-year renewal,72 but proposals are being considered to bring rules for the selection of law more formally within the EU conflicts club by a Regulation to match the rules on selection of forum,73 with some improvements and updating, but United Kingdom participation is uncertain.74

PR O VI SI O N A L MEA SUR ES

Provisional Measures [4.11] A court in a European club state may grant provisional measures to preserve assets and make their value available to satisfy a judgment in litigation that is to follow — in English jargon, a freezing order is made to preserve assets pending litigation elsewhere.75 When a claimant wants an injunction to freeze dealings with land pending the outcome of litigation he should obviously head to the court of the site, since no one else has the ability to enforce a prohibition on dealings. Normal forum rules do not impinge on such powers in the least. Nevertheless, when an interim remedy is sought in the United Kingdom, service always requires the prior permission of the court.76 A legitimate reason to seek an interim order would be to regulate the legal relationship between co-heirs of land held in undivided shares,77 but it would be illegitimate to conduct a fishing expedition across Europe in an attempt to garner evidence by witness hearings overseas.78

Giuliano Lagarde Report (n 53 above) Introduction [2] and §4, [1]. (Brussels) Protocol on the Interpretation of the Rome Convention by the ECJ [1998] OJ C27 52, as from August 1st 2004; Contracts (Applicable Law) Act 1990 (n 63 above) s 3(1)–(2), implemented by SI 2004/3448; Raiffeisen Zentralbank Osterreich v Five Star General Trading [2001] EWCA Civ 68, [2001] QB 825, 833 Mance LJ; Dicey & Morris (n 3 above) II [32-011ff]. 72 Rome Convention (n 55 above) §30; Giuliano Lagarde Report (n 53 above) [2.2]. 73 Rome I Green Paper (n 53 above)[3]; AML Rodríguez ‘The Rome Convention and its Revision’ (2004) 12 ERPL 167–191. 74 Denmark, the UK and Ireland have opted out of the discussion of this development. 75 Regulation on Civil Jurisdiction (n 14 above) §31; ex Brussels Convention (n 33 above) §24; Lugano Convention (n 39 above) §24; CJJA 1982 (n 19 above) ss 24–25 (interim relief), ss 27–28 (Scots protective measures); CJJA 1982 sch 4 (n 47 above) para 16; C-391/95 Van Uden v Deco Line [1998] I ECR 7091 ECJ; C-99/96 HH Mietz v Intership Yachting Sneek [1999] I ECR 2277 ECJ. 76 Civil Procedure Rules (n 20 above) 6.20.4; Dicey & Morris (n 3 above) I [8]. 77 Central Bank of Iraq v OS [2000] Pas Lux 2, [2003] ECLYB [1920] Luxembourg CA. 78 C-104/03 St Paul Dairy Industries v Unibel Exser [2005] I ECR 3481 ECJ. 70 71

Exclusive Forum over Land

163 EXCLUSI VE F O RUM O VER LA N D

Exclusive Forum over Land 1

Land conflicts

[4.12] More and more Europeans are buying and renting land outside their home state, breeding disputes which are sharpened even further by clashes of culture. Disputes about ownership or the enforcement of a lease must be brought in the courts where land is sited and using the local law. The site-based forum is exclusive. However, exclusivity is restricted to in rem actions and many other actions affecting land are not site-based, notably an action to enforce a contract to sell a house. If the house is in France it would be desirable for any contractual dispute to be referred to the French courts to use French property law, but the most that can be said is that this desirable rule is not a compulsory part of the European rule book, and nor will that be the only quirk to appear.79 [4.13] The site rule is treated in this book as fully observed if both forum and law are the same as the location of the land, and necessarily so. A conflicts rule will be non-site if a dispute is fought out in a forum foreign to the land, or if the law applicable to the personal action is foreign to the site of the land, or if the contingent facts may be arranged so it is possible for non-site facts to occur; non-site assumptions are made. It will almost always be a disaster if the forum is divorced from the applicable law because courts end up applying foreign law which they do not understand. This chapter will explore some cases in which forum or law is properly separated from the site, many egregious cases in which the separation occurs wrongly, and a few deformed and unnatural monsters in which forum, law and land are all three dispersed. European rules tend to encourage this diaspora.

2

European club rules

[4.14] Conflicts rules for land are simple. The category is immovable property (land) rather than the common law category of real property, and the connecting factor is the location of that land: the courts of the site determine cases according to their local law. A positive jurisdictional rule allocates power to hear cases to the courts of the country in which the land is situated while its negative counterpart bars foreign courts from impinging on national territory and sovereignty by entertaining an action affecting the land.80 As such it is an exclusive jurisdiction and one in which the local courts will apply local law. If the site of the land is See below [10.17ff]. Dicey & Morris (n 3 above) II [23]; C-267/95 Merck v Pridedean [1996] I ECR 6285 ECJ, AG[89] Fennelly; Cheshire & North Public International Law (London, Butterworths, 13th edn by P North & JJ Fawcett, 1999, 978-0-406-90596-3) 229–234; JM Carruthers Transfer of Property in the Conflict of Laws (Oxford, OUP, 2005, 978-0-19-927147-4) [2.15]. 79 80

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within the EU-27 (always excepting Denmark), the Regulation on Civil Jurisdiction provides for the local courts to have exclusive jurisdiction regardless of the parties’ domicile. Exclusive jurisdiction is conferred on: the courts of the Member State in which the property is situated

and it applies: in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property.81

Exclusivity applies to real actions, but not to personal actions, an uncomfortable distinction considered later.82 [4.15] All European Conventions apply an exclusive site rule to land, but the details vary in relation to short tenancies83 so it may be necessary to determine exactly which regime is to apply, using the following guidelines: EU state: Regulation on Civil Jurisdiction §22 EU state (older facts) or Denmark (before July 2007): Brussels Convention §16 Parts of the UK:

Modified form of EU Regulation §22 with a special rule for secured debt 84

Parts of other EU states: EEA/EFTA state:

Local law following EU rules Lugano Convention §16 (until New Lugano in 2009).

The basic rule for land is the same throughout all variants, that the local courts for the territory in which the land is situated form an exclusive forum. If a German lets a flat in Paris to a Swede for several years the rules allocate the case to the French courts. This is the French rule85 and also that of all other domestic systems and historical precepts, applied within the European conflicts club in an extreme version which negates all other factors.86 At least it is simple, certain and uniform and ensures comity between states.87

81 Regulation on Civil Jurisdiction (n 14 above) §22[1](a); ex Brussels Convention (n 33 above) §16[1](a); Lugano Convention (n 39 above) §16; CJJA 1982 sch 4 (n 47 above) para 11(a); Jenard-Möller Report (n 39 above). This provision derives from a Treaty to Settle Questions relating to the Saar (Luxembourg, October 27th 1956, UNTS 1053 3) Annex 12 §49; Regulation on Civil Jurisdiction (n 14 above) §34. 82 See below [4.22ff]. 83 See below [4.37ff]. 84 CJJA 1982 sch 4 (n 47 above) paras 11(a), 3(h)(i) (secured debt). Service is allowed without permission provided no other proceedings are pending: Civil Procedure Rules (n 20 above) 19.1.1, 19.1.1A. 85 French CC §§2, 7ff. 86 Schlosser Report [1979] OJ C59 71, [166]. 87 Schlosser Report (n 86 above) [22]; Kuwait Oil Tanker Co v Qabazard [2003] UKHL 31, [2004] 1 AC 300, [6] Lord Bingham.


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[4.16] A precise delineation of the scope of the exclusive area requires an assessment of the underlying reason for recognising exclusivity, which was summarised by Morritt LJ thus88: the courts of the situs should have exclusive jurisdiction in those cases in which the complexities of local law or the needs in the interests of the proper administration of justice for local knowledge or assessments so require.

Tenancies are especially difficult given the complexity of national tenancies legislation which local courts are best placed to apply,89 though this needs to be balanced against the unfairness of forcing a tenant in a comparatively weak social position to travel abroad.90 Nevertheless the match between regulation and reasoning is not a marriage of true love, one imperfection being that a contract for the sale of land has a non-exclusive forum despite the value of local know-how91 and the more general rule for all personal actions and breach of trust actions.92 Thus in Lieber v Göbel93 a transfer of an apartment in Cannes between two German nationals was annulled94 and it became necessary to assess the value of the use made before the annulment for the purposes of awarding restitution, but this compensation fell to be quantified by the German courts even though the basic reference point was the market rent; surely the local court was better placed to determine this but the European Court of Justice said that the German court could rely on valuation evidence from a local expert.95 Were the desirability of local knowledge to be truly decisive, the exclusive jurisdiction would need to be widened.96

3

Priority of an exclusive forum

[4.17] Exclusivity of the land forum is maintained by a negative rule which precludes a court other than that containing the site of the land from considering a case. This is true within the European conflicts club, and the common law,97 though this may be a change from some earlier domestic sets of private 88 Jarrett (n 27 above) 13A Morritt LJ; Jenard Report (n 2 above) 35; C-73/04 Klein v Rhodos Management [2005] I ECR 8667 ECJ, J[16]; Case 220/84 Autoteile Service v Malhé [1985] ECR 2267 ECJ, 2271 AG Lenz; C-8/98 Dansommer v Götz [2000] I ECR 393 ECJ, J[28]; J Westlake A Treatise on Private International Law (London, Sweet & Maxwell, 7th edn by N Bentwich, 1925) 215 (only the authorities on the spot can employ force to give possession or take it away). 89 C-241/83 Rösler v Rottwinkel [1985] ECR 99 ECJ, J[10]. 90 Rösler v Röttwinkel (n 89 above) J[12]; Jarrett (n 27 above) 12–13 Morritt LJ; see below [4.33]. 91 See below [10.22], [10.53]. 92 See below [4.48], [4.54]. 93 C-292/93 Lieber v Göbel [1994] I ECR 2535 ECJ. 94 Actions to establish that a transfer is void or voidable are non-exclusive: see below [10.50ff]. 95 Argument of counsel in Batthyany v Walford (1887) 36 Ch D 269 CA, 277 Cotton LJ. 96 Lee thought that the Brussels Convention (n 33 above) §16 was drawn too tightly in favour of the site: S Lee ‘Title to Foreign Real Property in Transnational Money Claims’ (1995) 32 Columbia Journal of Transnational Law 607–672, 635–636. 97 See below [4.28].

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international law.98 The consequence is to override the normal European jurisdiction over personal actions based on domicile,99 even if a domiciled defendant submits to the jurisdiction by entering a defence, and courts elsewhere must decline jurisdiction of their own motion where the principal issue is something within the exclusive purview of another European club state.100 [4.18] It appears that it is possible to torpedo litigation relating to land. Where an action is personal, the first of two courts seised of the action must be left to decide jurisdictional issues before any steps can be taken in the second action.101 A torpedo is an action commenced in a state such as Italy or Belgium, selected on account of the dilatory civil procedure, which blocks the possibility of the drama being played out on the proper stage in the state holding the site of the land until the torpedo state has ruled itself to be the wrong stage. The torpedo will commonly be for a declaration that no breach giving rise to damages has occurred. It appeared that this underhand tactic could also be used where the action related to land from a decision in relation to the exclusive forum held by the country in which a company is registered over the company’s affairs,102 the particular case concerning a battle for the control of Formula One racing.103 The English Court of Appeal ruled that a second court is not obliged to stay its proceedings if the first court is infringing the second’s exclusive domain, according to Carnwath LJ104 and powerful academic opinions.105 The European Court of Justice has made it clear in Gasser106 that the second exclusive forum must wait to assert control until the first improper forum has relinquished the case. How much better it would be if the frustrated litigant in the correct exclusive forum could obtain an anti-suit injunction as the English courts would have allowed in pre-European days. The ridiculous European rule can only be accepted if there is a means of diverting a torpedo; there ought to be a stiff penalty in costs for litigating in the wrong court and an expedited procedure in White ‘CJJA 1982 I’ (n 24 above) 190. See below [10.53ff]. 100 Regulation on Civil Jurisdiction (n 14 above) §25; ex Brussels Convention (n 33 above) §18; Lugano Convention (n 39 above) §23; CJJA 1982 sch 4 (n 47 above) para 14. Previous English law depended upon a challenge to jurisdiction by the parties. 101 See below [10.57ff]. 102 Exclusive to the state of the company’s registration: Regulation on Civil Jurisdiction (n 14 above) §25; ex Brussels Convention (n 33 above) §18; Lugano Convention (n 39 above) §16[2]; CJJA 1982 sch 4 (n 47 above) para 11(b); this includes questions of capacity to own land: Bayerisches Oberlandesgericht 2Z BR 7/02, [2003] ECLYB [1930]. 103 Formula One Holdings (No 2) (n 41 above). 104 Formula One Holdings (No 2) (n 41 above) [38] Carnwath LJ. 105 P Kaye Civil Jurisdiction and Judgments in Europe (Abingdon, Professional, 1987 879-2-06874-7) 1222; Dicey & Morris (13th edn, 2000) I [12-043] fn 77; A Briggs and P Rees Civil Jurisdiction and Judgments (London, Lloyd’s, 4th edn, 2000, 978-1-843-11425-3), [3.08]; but compare now Dicey & Morris (14th edn, 2006) (n 3 above) I [12.049]. 106 C-116/02 Erich Gasser v MISAT [2003] I ECR 14693 ECJ, J[29–54]; J Mance ‘Exclusive Jurisdiction Agreements and European Ideals’ (2004) 120 LQR 357–365. The point had been left open by C-351/89 Overseas Union Insurance v New Hampshire Insurance [1991] I ECR 3317 ECJ, J[20]. 98 99


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every European court to resolve forum issues within, say, a two-week period. Without those safeguards, the United Kingdom should withdraw from the civil jurisdiction club. In Primacom107 actions against lenders with no interest loans were taken in Germany because such loans were contrary to German public policy. A competition arose between this action and English actions to declare the loan agreement binding. An exclusive English forum arose under a jurisdiction agreement108 which also chose English law, so there was a contest between a German court first seised and an English court which was later in the field but exclusive. Where the same cause of action was in issue, as here, the matter had to be left to the first court — a court in Mainz which in fact ceded jurisdiction, but only when that was done could the action proceed.109 [4.19] A case might conceivably fall within the exclusive jurisdiction of several courts, in which case the spoils go to the court first seised and all others must decline jurisdiction.110

4

Actions within the exclusive jurisdiction

[4.20] Exclusive jurisdiction is conferred on the courts of an EU state in which land is situated by the Regulation on Civil Jurisdiction where the particular dispute centres on the ownership of land or, to be more precise, in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property.111

The key concepts here are immovable property, rights in rem, actions having as their object rights in rem, and tenancies of immovable property. All of them were concerns before Europe ever had a conflicts system,112 so securing uniformity across Europe required the development of key concepts with autonomous interpretations113 independent of national systems. A concept like ‘tenancy’ has no universal, Europe-wide, value to fit every national system nor even every civilian system, and the only possibility is autonomous definitions. Holiday lettings will call for special treatment, as will trusts.114 107 JP Morgan Europe v Primacom [2005] EWHC 508 (Comm), [2006] ILP 11 Cooke J; S Schulte-Hillen & MJ Friedl ‘PrimaCom gives Lenders Certainty on Jurisdiction’ (2006) 25 International Financial Law Review 17. 108 Regulation on Civil Jurisdiction (n 14 above) §27[1]; see below [10.35]. 109 Primacom (n 107 above) [36]; on the same cause of action point see [38–49]. 110 Regulation on Civil Jurisdiction (n 14 above) §19; ex Brussels Convention (n 33 above) §23. 111 Regulation on Civil Jurisdiction (n 14 above) §22[1](a); ex Brussels Convention (n 33 above) §16[1](a); Lugano Convention (n 39 above) §16; CJJA 1982 sch 4 (n 47 above) para 11(a). 112 Dicey & Morris (n 3 above) II [23]; Cheshire & North (n 80 above) 229–234. 113 Case 288/82 Duijnstee v Goderbauer [1983] ECR 3663 ECJ (similar issue under Brussels Convention (n 33 above) §16[4] on patents); also C-4/03 Antriebstechnik v Lamellen [2006] FSR 145 ECJ; Dicey & Morris (n 3 above) I [11R-393ff]. 114 See below [4.40ff], [11.34ff].

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[4.21] Local power over land is imposed in derogation from the home courts of the defendant (the courts of his domicile), the normal rule,115 and for this reason the European Court of Justice ruled in Sanders v Van der Putte116 that the article was to be interpreted restrictively and ‘not… any wider than is necessary to achieve its object’.117 The reasoning has turned out to be catastrophic and wrong but the thinking is easy enough to follow. The conflicts clubs rules are based on EU-domiciled defendants being sued in their home state (§2) and being sued in another EU state only by virtue of stated sections of the EU regime (§§5–24) so the exclusive jurisdiction in §22 is part of an exception to the general home state rule. It was vital that the site/non-site line should be set smoothly and consistently but the European Court of Justice has consistently made the exclusive jurisdiction much too narrow.

5

Actions for a thing in rem

[4.22] Exclusive jurisdiction is tested according to the subject matter of the action, that is ‘proceedings which have as their object rights in rem in immovable property’ etc,118 the question being the target of the action and not the proper characterisation of the action as real or personal.119 English law provides the perfect illustration in the trespass action; this is used to resolve disputes about title to land and to solve claims for damages for injury caused to the land, so the single juristic construct of trespass (a personal action) can fall into the exclusive domain if its object is to obtain an order for recovery of the land or outside it when used to seek damages for injury caused during an unauthorised excursion on to land, the last being personal in both English and European senses.120 The crux is the nature of the subject matter targeted by an action. Rights in rem are ascertained using the test in the Schlosser Report121: A right in personam can only be claimed against a particular person. Thus only the plaintiff is obliged to pay the price and only the lessor of an article is obliged to permit its use. A right in rem on the other hand is available against the whole world. The most

See below [10.53]. Case 73/77 Sanders v Van der Putte [1977] ECR 2383 ECJ, J[11–19]; TC Hartley ‘Jurisdiction over Foreign Immovables’ (1978) 3 EL Rev 164–166. 117 C-280/90 Hacker v Euro-Relais [1992] I ECR 111 ECJ, J[11]; C-294/92 Webb v Webb [1994] I ECR 1717 ECJ, J[17]; Dansommer v Götz (n 88 above); Klein (n 88 above) J[15]; Jarrett (n 27 above) 13A Morritt LJ. 118 Regulation on Civil Jurisdiction (n 14 above) §22[1]; ex Brussels Convention (n 33 above) §§16[1]; Lugano Convention (n 39 above) §16[1]; CJJA 1982 sch 4 (n 47 above) para 11(a); White ‘CJJA 1982 II’ (n 24 above). 119 But contrast the French expression of this test, ‘actions réels immobliers’: Dicey & Morris (n 3 above) II [23–010]. 120 See below [4.51ff]. 121 Schlosser Report (n 86 above) [166]; Lieber v Göbel (n 93 above) J[13]. Contrary to Schlosser at [168] the nature of a right in rem is determined autonomously. 115 116


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important legal consequence flowing from the nature of a right in rem is that its owner is entitled to demand that the thing in which it exists be given up by anyone not enjoying a prior right.

It will be obvious to any common lawyer that equitable rights are left unallocated, but the disastrous consequences of that oversight must wait.122 [4.23] A right in rem is by no means easy as a concept of English law as applied to legal rights, let alone ones that are equitable. It is clear enough for freehold ownership and for legal easements123 — though the right to enforce even these real rights could be lost by estoppel — but what of a mortgage which depends upon retention of the title deeds or a mortgage which needs to be registered as a land charge? What also of the interest of a borrower in mortgaged property (the equity of redemption) which could be overreached by a sale by the lender? Is there a fundamental difference between adverse possession of unregistered land which gives a legal estate and of a registered title which never gave more than a beneficial interest under a trust?124 Some of these rights seem every bit as precarious as a beneficial interest under a trust recognised only in equity. Case law provides some elucidation. In Ferguson v Ferguson,125 the Scottish trustee in sequestration wanted an order that the bankrupt should vest title to his land in Spain in the sequestrator. This brought into issue the right in the thing itself, a jus in re, rather than a right against the debtor in person; since the claim was real the prerogative to make this order lay with the Spanish courts and the Scottish court had to decline.126 Similarly, an action for an injunction to prevent a person occupying property in Spain has to be fought out in Spain, and cannot be conducted in Germany even if one German national sues another German.127 In substance these formulas all assert ownership, but is there any real difference between a claim for a declaration of title and the personal action (at common law) for slander of a title?128 Further, one can see a distinction between an action to assert the existence of a right in land and an action to negate the existence of a right,129 but surely that distinction is trivial since both are within the broad camp of ‘land law’ and should not be fundamental as to jurisdiction. A question of enforcement against a third-party

See below [11.45]. In Frederiksvaerk Kommune v Sorensen (n 37 above) an action by a Danish Council against purchasers of municipal housing for breach of easements was nevertheless treated as non-exclusive. 124 Land Registration Act 1925, c 21, s 75; this is for adverse possession completed before the Land Registration Act 2002, c 9, ss 96–98, sch 5. 125 Ferguson v Ferguson [1990] SLT Sh Ct 73, 75F. 126 This assumes that the matter is one of civil jurisdiction and not, say, an insolvency or matrimonial property: C-115/88 Reichert v Dresdner Bank (No 1) [1990] I ECR 27 ECJ, J[11]; for collective insolvency proceedings see below [9.56ff]. 127 Oberlandesgericht Düsseldorf [2001] RIW 380, [2002] ECLYB [1207]; Ford Soloman [1997] ILP 457 French Cour de Cassation. 128 Casey v Arnott (1876) 2 CPD 24 Denman J; Bree v Narescaux (1881) 7 QBD 434 CA. 129 For the corresponding distinction in contract law see below [10.50ff]. 122 123

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purchaser must be seen as proprietary rather than personal.130 Any question of sufficiency of notice is clearly proprietary and left to the law of the site.131 [4.24] The European Court of Justice has not provided a satisfactory delineation of the exclusive sector, starting by narrowing the exclusive jurisdiction far too much, necessarily therefore differentiating land (only real actions exclusive) from leases (where both real and personal actions are exclusive)132 and in deciding to keep out all actions for breach of trust has constricted the site rule much too tightly.133 This has led to the exclusion of all contractual actions (a complete negation of the site-based rule), doubly unfortunate because of the failure of club rules to make any adequate provision to impose site-based law and a site-based forum for land contracts.134 [4.25] Finally there are a group of personal actions which may in some loose sense be said to concern land but where the basic action is in personal obligation. One example may suffice. In Land Oberosterreich v EZ the government of an Austrian province was concerned, perhaps understandably, by the conduct of the affairs of a nuclear power station 60 km from their border run by a Czech energy supplier. An action for cessation of the nuisance allegedly caused by the power station fell outside the exclusive jurisdiction over land135 since it was not to determine the extent or content of the ownership or possession of land136 and any action to prevent a nuisance137 and perhaps any action for damages,138 were treated as personal actions. The facts were not more appropriately determined locally.139

6

Personal actions associated with real actions

[4.26] Once an action is under way in relation to real rights in land, in the courts appropriate to the situation of the land, it is possible to combine with it personal actions against the same defendant in matters relating to rights in rem in immovable property140; an action for the recovery of land may have tacked on R Griggs Group v Evans [2005] Ch 103 Ch D (movable; decision must be doubted). Exclusive forum applies in whatever form of procedures in which the validity of an intellectual property right is raised, either by action for avoidance or as a defence to infringement proceedings: Antriebstechnik v Lamellen (n 113 above) J[24–25]. 132 See below [4.38]. 133 See below [11.37ff]. 134 See below [10.17ff]. 135 Land Oberosterreich v EZ (n 15 above). 136 Land Oberosterreich v EZ (n 15 above) J[30]; Reichert v Dresdner Bank (n 126 above) J[11]. 137 Land Oberosterreich v EZ (n 15 above) J[31] Jenard Report (n 2 above) 1, 34, 35. 138 Land Oberosterreich v EZ (n 15 above) Schlosser Report (n 86 above) [163]. 139 Land Oberosterreich v EZ (n 15 above) J[38]. 140 Regulation on Civil Jurisdiction (n 14 above) §6[4]; Brussels Convention (n 33 above) §6[4] inserted by San Sebastian Convention (n 34 above) 1989; Jenard-Möller Report (n 39 above) [46–47]; Lugano Convention (n 39 above) §6[4]; CJJA 1982 sch 4 (n 47 above) para 5(d); Dicey & Morris (n 3 above) I [11R-341]. 130 131


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to it other claims which are contractual, though this is merely an addition to the home court forum.

7

Universality: land outside Europe

[4.27] Disputes about the ownership of land outside the boundaries of the EU and EEA will be determined from the site of the land, so a German can only be sued about the ownership of land in Turkey by travelling there, but why, precisely? European conflicts rules for personal actions are generally universal,141 and if this is true of the exclusive land forum, as dicta suggest, it means that land cases can be directed to a state outside the European conflicts club, when the land in issue is sited elsewhere in the world.142 But, against that, the exclusive jurisdiction over land143 is limited specifically to the territory of the EU, so that universality assumes that it is possible to read into the Regulation a derogative provision to match an explicit positive, in the same way as has been done for personal actions. Even if it was ultimately decided that the Regulation did not touch land outside EU borders, this would make little difference, since the private international law of all states reaches the same conclusion, and is in both literal and technical senses universal. Common law rules will certainly direct an action away from Britain to a venue overseas where the land is sited, and public international law rules of every other European state direct the same result.144 From that the foreign law will also be selected.145 Indian courts rule on Indian land using Indian law, and so says England, Scotland, France and everyone else. Even if the general rule is universal, the precise definition of what rights are immovable and of the types of actions affected may vary from state to state and in determining the application to personal actions it may make a difference whether the rule of public international law being applied is European or municipal.

See below [10.56]. Land Oberosterreich v EZ (n 15 above) J[21] (Brussels Convention (n 33 above) applied to land in Czech Republic before Czech accession to the EU); Arkwright Mutual Insurances v Bryanstone Insurance Co [1990] 2 QB 649 Potter J; Pearce v Ove Arup (n 27 above) 423–445 Roch LJ; L Collins ‘Forum Non Conveniens and the Brussels Convention’ (1990) 106 LQR 535–539; A Briggs ‘Spiliada and the Brussels Convention’ [1991] LMCLQ 10–15. 143 Regulation on Civil Jurisdiction (n 14 above) §22[1]; ex Brussels Convention (n 33 above) §16[1]; Lugano Convention (n 39 above) §16[1]; Dicey & Morris (n 3 above) II [23-025ff]. 144 White ‘CJJA 1982 I’ (n 24 above) 190. 145 Rome I which selects contract law is also universal: Rome Convention (n 55 above) §2; Giuliano Lagarde Report (n 53 above) Introduction [3], [9], §2; Caledonia Subsea v Micoperi (n 67 above) [14] Lord Cullen LP. The issue might be revisited when the Convention is converted into EU legislation: Proposal for a Regulation on the Law Applicable to Contractual Obligations ‘Rome I Proposal’ COM (2005) 650 final §2; Rome I Green Paper (n 53 above)[2]. 141 142

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Actions Affecting Land TR ESPA SS USED TO A SSERT TI TLE

Trespass Used to Assert Title 1

Title to land in England

[4.28] Land disputes are not greatly changed by joining the European club, since forum was already allocated to the state in which the land is sited, in both England146 and Scotland,147 and across Europe.148 Common law rules insist that English trespass is used for land here and they also prevent its use for land elsewhere. English land is within the exclusive powers of the English courts, and so as a general rule, and for good reason: actions of ejectment and of the like kind, when the land of which the property, or possession, or status is disputed is English land, should be brought in England.149

Full rein can be given to the power to sue if it is associated with a power to effect service of proceedings overseas,150 since otherwise a Scots or a French tenant might evade all action but this power of overseas service was an innovation when introduced at the time of the judicature reform in 1873.151 Until then an English tenant could put himself beyond the arm of the law by decamping to Boulogne or Avranches.152 When service rules were introduced they were at first too narrow153 but things were soon put right so that the power to effect service overseas matched the jurisdictional powers of English courts over English land,154 and today there is a wide-ranging Anglophone common service area.155

2

Title to foreign land

[4.29] Just as old is the principle that English courts could not be used to pursue land sited elsewhere. English jurisdictional conflicts are as old as the commonality of the common law, since actions had to be brought within the 146 Chatfield v Berchtold (1872) LR 7 Ch App 192; Re Anziani [1930] 1 Ch 407 Maugham J; Re Cutcliffe’s WT [1940] Ch 565 Morton J; Dicey & Morris (n 3 above) II [22]. 147 Hog v Lashley (1791) 3 Paton 247, 270 Ct of Session; Ross v Ross’s Trustee (1809) Faculty College July 4th (1815 edn) 377; Newlands v Chalmers (1832) 11 Shaw & Dunlop 65. 148 Cookney v Anderson (1863) 1 De Gex Jones & Smith 365, 380 Lord Westbury LC, 46 ER 146. 149 Agnew v Usher (1884) 14 QBD 78 QBD, 79 Coleridge CJ. 150 Ex p Rucker (1834) 3 Deacon & Chitty 704; also the Scots cases just mentioned. 151 Supreme Court of Judicature Act 1873, 36 & 37 Vict c 66, ss 23, 67–69, sch para 6. 152 Price v Dewhurst (1839) 8 Simon 617, 618 Shadwell VC, 59 ER 244. Distraint and forfeiture would be useful weapons in such a case. 153 Agnew v Usher (n 149 above) 81 AL Smith J; it may be doubted whether this correctly interpreted the then Rules: Agnew (1885) 51 LT 752 CA. 154 Rules of the Supreme Court Order 11 rule 1(g)–(h), now superseded by Civil Procedure Rules (n 20 above) 6.19ff and Practice Direction 6. 155 Including Scotland, Northern Ireland, the Channel Islands, the Isle of Man, all Commonwealth countries and UK Overseas Territories: Civil Procedure Rules (n 20 above) Practice Direction 6.3.1.

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correct shire and heard by a jury summoned from the local county set. For many centuries the common law could not at that time touch those exotics who were inhabitants of the County Palatine of Cheshire, because this was treated as a ‘foreign’ country where they did things differently. They had to sue in their own courts. Lee managed to find an impressively early example of a truly international conflict from the time that Edward I was giving the Scots a good hammering, the case being one in which Florentine merchants settled in London were debarred from litigating here for damage caused to their Tuscan land back home because English courts could not take on a foreign case.156 So it is a really old principle that land actions are a perquisite of the local courts and one that has suffused the later development of the common law and of other systems of increasing foreignness such as France, the rest of continental Europe and Scotland. That English law came to rely on a personal action in trespass to carry out the in rem function of securing the possession of land is an undoubted curiosum but trespass was the only way of proving title to land. An explanation can be found in the fact that the real procedures, which might have been expected to carry out this task, had grossly inadequate procedures featuring long delays and trial by battle until the early nineteenth century.157 Formal abolition of these long redundant actions left the field to trespass, a portmanteau embracing two quite distinct actions which need to be disentangled before getting to work on the conflicts issue. One is an action for recovery of land in which the remedy sought is the recovery of the land itself, the species of action formerly known as ejectment, whereas the second is an action by a claimant clearly acknowledged as owner who wants damages for injury caused by a physical incursion on his land. One is the action I would use to eject squatters from my holiday home in Malta and the other would be used against a pilot who has crashed his plane destroying my Maltese bolt-hole. Both these disparate functions were carried by the common law action in trespass, one site-based and nearly real and the other personal in character and at best contingently related to the location of the land.158 It is the action for possession which requires further discussion. [4.30] The Moçambique rule159 prevented trespass to foreign land being litigated in English courts, and its surviving unrepealed remnant160 continues to prevent such an action when the issue involves title or the right to possession of

156

Hugh le Pape v Florence Merchants in London (1280–1281) 8–9 Edward I; Lee (n 96 above) 613 fn

17. 157 RE Megarry & HWR Wade The Law of Real Property (London, Stevens, 6th edn by C Harpum et al, 2000, 978-0-421-47460-4) Appendix. 158 See below [4.51]. 159 British South Africa Co v Companhia de Moçambique [1893] AC 602 HL, affirming Lord Esher MR’s dissent in [1892] 2 QB 358 CA; Dicey & Morris (n 3 above) II [23-034ff]. 160 Private International Law (Miscellaneous Provisions) Act 1995, c 42, ss 9–15, in force May 1st 1996 and prospective only; see also Private International Law: Choice of Law in Tort and Delict (Law Commission 193, 1990); Dicey & Morris (n 3 above) II [23R-021].

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foreign land. Jurisdictional competence is limited accordingly.161 The ‘ejectment’ type of action is site-based. Barred were actions of ejectment, claims to possession of land overseas, and any direct adjudication of priority of claims where, as Parker J put it in Deschamps v Miller162: the whole question is whether or not according to the law of the locus the claim of title set up by one party, whether a legal or equitable claim in the sense of those words as used in English law, would be preferred to the claim of another party.163

A dispute about the effect of a French marriage settlement on the title to a house in Dresden has to be brought in the courts of Saxony,164 and dower claimed over land on the Isle of Man had to be left to the Manx courts.165 It did not follow, as Story wrongly thought, that common law courts could never decide any case involving an issue of title to foreign land166 since issues of title could legitimately arise in actions seeking a personal remedy. [4.31] Normally, no doubt, one would simply head to the foreign court to take action against the interloper, but the peculiar conditions in the northern half of Cyprus have caused this principle to be tested and its vitality reasserted. Turkey invaded the northern ‘half ’167 of Cyprus in 1974, but the regime established there is not recognised internationally by any other state. One effect of the invasion was the displacement of many Greek Cypriots, and the appropriation of their property, often later ‘sold’ to foreigners. The illegality of these acts in international law is clear, but the incursions are not actionable in the north, and the issue, therefore, is whether it is possible to litigate in the home state of a tourist or buyer of a second home. The English courts have used the site rule to support their refusal to intervene. In Hesperides Hotels v Aegean Turkish Holidays168 Greek Cypriot owners of two hotels in Kyrenia had lost the use of their hotels following the Turkish invasion of the north of the island in 1974 and sought to bring to account an English travel agency which booked holiday-makers on package tours into the hotels. The House of Lords were unanimous in the view that it was not permissible for an English court to hear this action for trespass to land169 since the aim was to 161 162

CJJA 1982 (n 19 above) s 30; White ‘CJJA 1982 I’ (n 24 above) 189–190; Lee (n 96 above) 650. Deschamps v Miller [1908] 1 Ch 856, 864 Parker J; this is not the same as the modern European

test. 163 An English court did adjudicate on the validity of a foreign intellectual property right against a third-party purchaser in R Griggs Group v Evans (n 130 above); this case is dubious. 164 Re Hawthorne (1883) 23 Ch D 743 Kay J; Re Hernando (1884) 27 Ch D 284 Pearson J (English woman marrying Spanish man; land in England). 165 Countess Derby’s case (c1502) Keilwey 202, 72 ER 381; cited in Mostyn v Fortingas (n 12 above) 165. 166 See also below [4.52]. 167 Strictly 37% of the land area. 168 Hesperides Hotels v Aegean Turkish Holidays [1979] AC 508 HL; A Briggs Conflict of Laws (Oxford, Clarendon, 2002, 0-19-876333-6) 206. 169 Hesperides (n 168 above) 534 Lord Wilberforce, 540–541 Viscount Dilhorne, 546 Lord Fraser (who explains the non-application to trespass). Lord Wilberforce noted (at 536F–H) the use of the same rule in other jurisdictions.

Trespass Used to Assert Title

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recover possession or to secure a declaration of title, though this was no bar to hearing a claim for trespass to the chattel contents of the hotels. Polly Peck International was an English company with close connection to northern Cyprus. After its collapse an action was brought in Polly Peck (No 2)170 to recover various properties in the north including the Constantia Hotel in Famagusta which had been acquired by the company. The former owners were unable to assert their real title in the English courts directly but they tried instead to secure a preference over the generality of unsecured creditors by seeking the imposition of a remedial constructive trust over the property which would effectively claw the assets back from the insolvency pot. Their claim to a constructive trust was unknown to English law and an attempt to reframe their case in the tort of conspiracy was an inappropriate manipulation of the cause of action, both Rattee J and Mummery LJ holding to the Moçambique rule as restated in Hesperides. A claim to assert the older true title to land against an illegal newer title issued by an unrecognised government could not be reformulated in the tort of conspiracy merely to overcome the procedural bar to the action. Greek Cypriots have found a way out of their impasse by asserting their human right to their property.171

3

Recognition of foreign judgments affecting foreign land

[4.32] Judgments affecting land directly should be made in the courts local to the land; the site of the land points to the correct forum, selects the law to be applied to a land dispute, and determines the enforcement procedures available. Every state asserts territoriality over its own land. There will generally, therefore, be little call for cross-border element in an action for the recovery of land. Unusual facts such as those in Apostolidis v Oram172 suggest one possible reason for seeking enforcement in another territory. It is another case derived from the illegal and internationally unrecognised Turkish-backed occupation of the northern part of Cyprus. The Orams are two of the 6K Britons who have acquired holiday homes in the northern part of Cyprus. The Orams’ plot cost £50K and they spent £160K on building a holiday villa on it,173 not realising that it had been appropriated from one of the Greek Cypriots displaced174 and forced to take refuge in the south by the Turkish invasion. The owner of this particular building plot was a Greek architect, Meletis Apostolidis, who obtained a judgment in (southern) Cyprus to demolish the Orams’ home in northern Cyprus and for damages. This judgment Re Polly Peck International (No 2) [1998] 3 All ER 812 CA. HR 15318/89 Loizidou v Turkey (1997) 23 EHRR 513 E Ct HR; and innumerable subsequent cases. 172 Orams v Apostolides [2006] EWHC 2226, [2007] 1 WLR 241 Jack J. 173 Orams v Apostolides (n 172 above) [3] Jack J. 174 Figures vary but around 160K Greeks and 50K Turks were displaced: Independent July 19th 2006; Independent August 16th 2006. 170 171

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could not be enforced against the land in an area controlled by the Turkish government in the north, but when (southern) Cyprus became an EU member the claimant sought to register his judgment in the United Kingdom and enforce it against the assets of the Orams in England. Cherie Booth QC demonstrated her independence as a woman and as a member of the Bar by arguing the case for the Orams, no doubt to the discomfiture of our Government. In normal circumstances there would be no doubting the duty of mutual recognition of judgments given anywhere within the EU-27. However, the Orams were saved — for the time being — by the terms of the accession to the EU of Cyprus (that is, the southern half of the island) since a protocol175 provides for the application of the acquis (that is, of European law) to be suspended where the government of the Republic of Cyprus does not exercise effective control. The northern part of the island is therefore a haven of cheap land and an undeveloped charm reminiscent of the days of Lawrence Durrell176 free from the dictats of Brussels. Mutual recognition does not apply where the judgment relates to the northern occupied part of Cyprus.177 [4.33] Cyprus is an island on which everyone has a grievance about land. UN Secretary-General Kofi Annan developed a plan between 2002 and 2004 based on an earlier European framework to provide for the establishment of a United Cyprus Republic within the EU with Greek and Turkish constituent Cantons on the Swiss model with an alternating Presidency,178 a crucial element of the settlement being cash to solve the property disputes. Northern Cyprus accepted the terms but they were rejected by the Greek half of the island which subsequently secured membership of the EU in 2004. An initiative by the Turkish-dominated Republic of Northern Cyprus aims to provide monetary compensation for displaced owners or an equivalent property in the south or immediate restitution of land not currently used by someone else. Among the first cases to settle was one claim for compensation amounting to £550K. There is said to be a ‘state guarantee’ of title to British buyers but the only titles which are safe pre-date the 1974 invasion.179 [4.34] Outside the context of Cyprus, it would be positively wrong for foreign recognition to be given to a judgment affecting land in state A given by the courts of state B. After transfer of such a judgment to state C for enforcement, recognition would have to be refused. English courts cannot allow German courts to rule on French land. Assumption of jurisdiction in breach of the exclusive right to try land disputes given to the courts of the site is a ground to refuse recognition to a

Accession Act of Malta, Cyprus and 8 Eastern European States Protocol 10, [2003] OJ L236 955. Independent August 16th 2006. 177 Orams v Apostolides (n 172 above) J[30] Jack J. 178 K Annan Comprehensive Settlement of the Cyprus Problem (UN, November 21st 2002); N Tocc ‘EU Intervention in Ethnopolitical Conflicts: Cyprus’ (2004) 9 European Foreign Affairs Review 551–573. 179 Observer Property July 9th 2006, 20. 175 176

Public Registers

177

foreign judgment under European rules180 and the same bar is imposed by English law when considering a non-European judgment, and presumably by all other legal systems.181

PUB LI C R EG I STER S

Public Registers [4.35] Local courts also have exclusive powers over proceedings which have as their object the validity of entries in public registers,182 domicile again being displaced. Most of the litigation has concerned registers maintained by companies of their members.183 The action may be to enforce a registration or to rectify a register but either way it must be brought in the courts of the country in which the register is kept. Re Hayward184 provides a good illustration. Indivisible halves in a Minorcan villa were registered in the names of Hayward (who had died) and Hulse. An action was brought by the administrator of Hayward’s insolvent estate for a declaration of his entitlement to the bankrupt’s half-share,185 an entitlement cast into doubt by a purported transfer of that share to his co-owner. This action was held to fall within the exclusive jurisdiction of the Spanish courts, because a major issue was the validity of entries in the Spanish land register.186 Similarly in Ferguson v Ferguson,187 a Scottish trustee in sequestration of a bankrupt’s estate sought an interdict (an injunction) to prevent the bankrupt from selling land in Spain and to vest it in the trustee, a case which turned on the correct registration in Spain and which therefore fell exclusively to the Spanish courts. [4.36] It would not, despite first appearances, be correct to deduce that all actions over land are directed to the local court on account of the need for a local register entry, since a restrictive policy is pursued by the European Court of Justice.188 A personal action to enforce a contract to sell land does not fall exclusively to the courts of the country in which the land is situated,189 even though a decision to validate a sale contract would make it necessary to amend the land register to reflect the change in ownership and, similarly, an English resulting See below [9.79]. Foreign Judgments (Reciprocal Enforcement) Act 1933, c 13, s 4(3). 182 Regulation on Civil Jurisdiction (n 14 above) §22[3]; ex Brussels Convention (n 33 above) §16[3]; Lugano Convention (n 39 above) §16[3]; CJJA 1982 sch 4 (n 47 above) para 11(c); Plender Contracts Convention (n 61 above) [6.27]. 183 Re Fagins Bookshop [1992] BCLC 118 Harman J; Formula One Holdings (No 2) (n 41 above) (membership of board of company controlling Formula One racing); also presumably registers of flat management companies. 184 Re Hayward [1997] Ch 45 Ch D, 56–57 Rattee J. 185 Hayward (n 184 above) 56G–57B Rattee J. 186 Hayward (n 184 above) 57D Rattee J. 187 Ferguson (n 125 above) 75F. 188 Reichert v Dresdner Bank (n 126 above) J[13]. 189 See below [10.25]. 180 181

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trust can be enforced, even though the land affected by the trust is in France and the French land registers will require alteration if the trust is found to exist.190 Procedural economy would be generated by leaving the whole case to the French courts, but that was not a sufficient reason to remove the trust action from the English courts. The ambit of the registration jurisdiction may, to some extent, depend upon local law, since many states will require the perfection of a transfer of land by a corresponding change in the register. A transfer occurring by way of succession after a death may only be recognised if the transfer is founded on a judgment by one of their national authorities.191 States with this form of legislation can tangentially and coincidentally expand the jurisdiction of their courts.192 It might be thought that the progression from paper-based transfer to electronic conveyancing to compulsory electronic conveyancing193 may somewhere along the line have just that effect on English jurisdiction.

TEN A N CI ES, HO LI DAY LETS A N D TI MESHA R ES

Tenancies, Holiday Lets and Timeshares 1

Tenancies

[4.37] Exclusive jurisdiction is conferred on the local courts in relation to tenancies,194 since local courts can make on-the-spot inquiries and inspections, and are best placed to manoeuvre through the minefield provided by national legislation on tenancies.195 But against this tenants are often in a comparatively weak social position and it is not right to compel them, when they need to sue a landlord, to travel to trial far from home.196 The general rule has proved so draconian in relation to holiday accommodation that it has been necessary to water it down. An autonomous definition of tenancies has been adopted for European purposes, disregarding local categorisation in favour of one that is continent-wide, drawing on the whole corpus of property law across the continent, but also reflecting the restrictive view given that exclusive jurisdictions are out of the ordinary run and should be narrowed. In Sanders v Van der Putte197 a florist’s shop in Wuppertal-Elberfeld, Germany, was leased by a landlord to Van der Putte. Webb v Webb (n 117 above); see below [11.39ff]. Green Paper on Succession and Wills SEC (2005) 270 [1]. 192 There are other examples of exclusive jurisdictions, eg over patents: Duijnstee v Goderbauer (n 113 above); Case 25/79 Sanicentral v Collin [1979] ECR 3423 ECJ. 193 Land Registration Act 2002 (n 124 above) ss 91–95, sch 6. 194 Regulation on Civil Jurisdiction (n 14 above) §22[1] ex Brussels Convention (n 33 above) §16[1]; Lugano Convention (n 39 above) §16[1]; CJJA 1982 sch 4 (n 47 above) para 11. 195 Rösler v Rottwinkel (n 89 above) J[10]; Lieber v Göbel (n 93 above) J[16]. 196 Rösler v Rottwinkel (n 89 above) J[12]; Jarrett (n 27 above) 13 Morritt LJ. 197 Sanders v Van der Putte (n 116 above); Hartley (n 116 above); White ‘CJJA 1982 II’ (n 24 above) 308–310. 190 191

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He alleged that he in his turn had entered into an agreement to ‘sub-let’ it to Sanders, and a Dutch court sitting in Arnhem found that an agreement of some sort did indeed exist. Buyer and seller were both Dutch, but the buyer sought to switch playing fields to the German courts. Exclusive jurisdiction over leases was granted to the courts of the locus of the land (Germany) but limited to claims between landlord (rendered by a roast beef translator as ‘lessor’198) and tenant acting as such. The court decided that Sanders’ agreement was a licence or franchise to share in the operation of the florist’s business and was not a true sub-letting,199 putting the case outside the exclusive sphere of the German courts and leaving the Dutch court in Arnhem free to take it. Further guidance about the nature of leases can be found from the discussion of timeshare agreements below.200 In essence, a tenancy is the same as a lease, a grant of the land for a specified time in return for a rent, indicative features being terms about entry into possession, use, maintenance, giving up possession, rent, and incidental charges.201 [4.38] When a case falls within the autonomous definition of ‘tenancy’ both real and personal actions are exclusive to the site. Disputes about any obligation of the landlord or tenant under the terms of the tenancy fall within the exclusive, local, jurisdiction. This includes real actions (as with land) and personal actions (unlike other land). In Rösler v Rottwinkel202 this was held to include any dispute about the existence of the tenancy, concerning the interpretation of its terms, its duration or repossession at its expiration and the repair of damage, thus far confirming the view expressed in the Jenard Report,203 but also including an action for the recovery of rent204 or of incidental charges for services such as water, gas, or electricity,205 on these points the decision differing from the Jenard Report. Although the common law was not consistent it was certainly possible to see a rent action as real so that, for example, Irish rent had to be sued for in Ireland206; repair obligations are also real.207 So, whether the action is real or personal, if it relates to a tenancy it is within the exclusive jurisdiction, whereas if Sanders v Van der Putte (n 116 above) J[15]. Jarrett (n 27 above) 13B Morritt LJ. Non-application to sale contracts was envisaged by the Schlosser Report (n 86 above) [169–171]; the same is true of English law even though equitable title passes under the contract: Schlosser at [172]. 200 White ‘CJJA 1982 II’ (n 24 above) 307. 201 Klein (n 88 above) AG[28] Geelhoed. 202 Rösler v Rottwinkel (n 89 above) J[29]. 203 Jenard Report (n 2 above) 35; Schlosser Report (n 86 above) [164]; White ‘CJJA 1982 I’ (n 24 above) 191. 204 A McClellan ‘Brussels Convention Case-law’ (1978) 15 CML Rev 228–243, 237 (Tribunal d’Instance, Aix-la-Chapelle, October 24th 1975); White ‘CJJA 1982 II’ (n 24 above) 307–309, 310 fn 79; Agnew v Usher (n 149 above); Ashurst v Pollard [2000] 2 All ER 772 Ch D, [21] Jacob J (rent after the tenant becomes bankrupt); on appeal [2001] Ch 595 CA; Carruthers Transfer of Property (n 80 above) [2.39]. 205 Rösler v Röttwinkel (n 89 above) J[26]. 206 Holding v Haling (1685) 3 Keble 150, 84 ER 646 Hales CJ; Lee (n 96 above) 622 fn 77; the same rule was adopted for overseas service at common law. 207 Tassell v Hallen [1892] 1 QB 321 Coleridge LCJ. 198 199

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it relates to other rights in land only real actions are exclusive to the courts of the site.208 [4.39] Money claims only indirectly connected with the tenancy are not directed exclusively to the courts where the land is sited, for example if the action is for loss of holiday enjoyment or for travel expenses. As Sanders v Van der Putte209 was decided it was a case concerning a licence to share the running of a florist’s business in rented property — a kind of franchise — and did not turn on the existence of a sub-tenancy. Exclusive jurisdiction was limited to claims between landlord and tenant acting as such.210 This dispute was not site-based and was therefore left to the Dutch court in Arnhem, with its personal powers over Dutch-domiciled defendants. In the same spirit the non-site Scottish courts accepted the task of adjudicating in Barratt International Resorts v Martin211 on the sacking of the manager of a timeshare development in Spain, since his probationary contract was made under Scottish law and his appointment as manager of the complex did not raise any land law issue, even if sacking him would lead inevitably to his eviction from his home in the development. So actions very peripherally connected to a tenancy are not exclusive to the courts of the site of the land.

2

Holiday lettings — forum

[4.40] Many holidays are taken in self-catering accommodation, a gîte, a Tuscan villa, or a beach-side apartment on the Costa del Sol, and the same rule should apply anywhere in Europe whenever a holiday-maker has exclusive use of non-serviced accommodation for a short period. Despite its short duration, the latter type of arrangement is seen as a ‘letting’ for the European forum rules and therein lies all manner of inconvenience. The equivalence of holiday lets and normal residential leases was settled under the original form of the Brussels Convention,212 despite the obvious conflict with the underlying policy of the Convention,213 so exclusive jurisdiction was ceded to the courts for the place where the holiday took place. Under the amended rules this remains a possible forum though it is now usually the more inconvenient of two alternatives.214

208 Rösler v Röttwinkel (n 89 above) J[26]; Lieber v Göbel (n 93 above) J[13]; Dansommer (n 88 above) J[23]. 209 Sanders v Van der Putte (n 116 above). 210 Jarrett (n 27 above) 13A Morritt LJ. 211 Barratt International Resorts v Martin [1994] SLT 434 Court of Session OH, 437J–K Lord Sutherland. 212 Rösler v Rottwinkel (n 89 above) J[21–25]; Jarrett (n 27 above) 12–13 Morritt LJ; Schlosser Report (n 86 above) [166]. 213 TC Hartley ‘Jurisdiction over Holiday Lets’ (1985) 10 EL Rev 361–363, 361. 214 See below [4.41].


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Rösler v Rottwinkel215 demonstrates the site-based starting point. Four Germans rented a holiday villa in Italy from its German owner, and, at least according to the landlord who was living in the adjoining property at the time, it was an archetypal German holiday involving unbearable noise, uninvited guests and an overflowing cesspool. Exclusive jurisdiction under the as-yet unamended Brussels Convention lay with the Italian courts, an extravagant and unacceptable result.216 It is bad enough to have to travel to your holiday destination to litigate but when it is to return to the Italian courts the result is quite intolerable. Powers of the local courts were reasserted in Dansommer.217 A German called Götz rented a house in Denmark owned by a Danish individual for a two-week holiday spanning late July and early August 1995. Dansommer, the tour operator, organised the letting and insurance and provided a guarantee against its own insolvency, but included no other services. The owner of the house claimed that Götz had not cleaned it and had damaged carpets and the safety mechanism on the oven. Dansommer, the agent, settled the owner’s claim and then (subrogated to him218) sought to pass on the cost to the holiday-maker. Götz ultimately won his appeal on the merits but not before getting tangled up in the preliminary question of jurisdiction. On this the European Court of Justice decided against the German court. An action for damage allegedly caused to holiday accommodation was an action relating to Danish land and having as its object Danish land, over which, at the time, only the Danish courts could give a ruling.

3

Holiday lettings — forum at the home of the holidaymaker

[4.41] A better alternative is to recognise the home of the holiday-maker as a legitimate forum. Instinct suggests that if a German owner lets his villa to German holiday-makers any dispute should be heard in the German courts, wherever they take their holiday. Disputes are essentially contractual, in which local knowledge and customs are insignificant factors.219 The overkill by which, until 1989, disputes about holiday lettings were directed automatically to the courts of the country in which the holiday took place has been ameliorated. Changes made in that year make available as an alternative forum the domicile of the holiday-maker. Three rules apply which are similar but with subtle differences. The Brussels Convention applied to Denmark until July 2007220 and the

Rösler v Rottwinkel (n 89 above) J[21–25]; Jarrett (n 27 above) 12–13 Morritt LJ. FA Mann ‘Exclusive Exotic Jurisdiction’ (1985) 101 LQR 329–330, 330. 217 Dansommer v Götz (n 88 above); Hjertviksten v Dansommer B-1500-00, [2001] UfR 2556, [2002] ECLYB [1228] (Norwegian summerhouse let to Dane; Lugano Convention (n 39 above) §16 applied). 218 Subrogation did not affect the issue, jurisdiction being determined as if the case was brought by the landlord direct against the tenant. 219 Rösler v Röttwinkel (n 89 above) 102–103 AG Slynn. 220 Brussels Convention (n 34 above) §16[1](b), as inserted by San Sebastian Convention (n 33 above) §6. 215 216

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Brussels I Regulation applies to the other EU-27 states221 and also as between parts of the United Kingdom.222 The third rule in Lugano applies to the EEA and EFTA states223; but it must be remembered that three EU states remain outside the Lugano Convention — Germany and Belgium generally and France in relation to this particular paragraph. The basic exemption (quoted from the EU Regulation) is for proceedings which have as their object: tenancies of immovable property concluded for temporary private use for a maximum period of six consecutive months.

An action is allowed in the home state of the tenant, but details vary about whether this must also be the home state of the landlord and whether or not the concession is withdrawn if the landlord is corporate. Basically, however, if a German takes a holiday in Spain, the concession is to allow the German courts as a possible venue as an alternative to the Spanish. [4.42] Some rules are common to all the Conventions. The basic target (according to the EU Regulation) is proceedings which have as their object: tenancies of immovable property concluded for temporary private use for a maximum period of six consecutive months.

All European variants direct a case to the courts of the state in which the defendant is domiciled as an alternative jurisdiction to the longer-established locus rule. If a German takes a holiday in Spain, the concession is to allow the German courts as a possible venue. [4.43] Other rules vary between the Conventions. The first is the detail of joint domicile. A precondition of joint domicile was imposed at San Sebastian for Brussels Convention cases seeking to use the alternative holiday forum and is retained for EU cases under the current Regulation, though the Lugano rule for EEA states is different, as will be explained. Within that scope it is a requirement (again quoting from the EU Regulation) that: the landlord and the tenant… are domiciled in the same… State.

Several cases have failed this test. In Dansommer224 a German called Götz rented a house in Denmark from its Danish owner so the parties lacked a joint domicile and the case had to be heard in Denmark, the locus of the holiday. A more relaxed view is taken in the EEA states, or at least most of them.225 Here all that is required to make available as an alternative forum the tenant’s domicile is that neither party, neither landlord nor tenant, is domiciled in the state where the 221 Regulation on Civil Jurisdiction (n 14 above) §22[1] rider; a compromise between Brussels and Lugano: W Kennett ‘The Brussels I Regulation’ (2001) 50 ICLQ 725–737, 730. 222 CJJA 1982 sch 4 (n 47 above) para 11(1)(b). 223 Lugano Convention (n 39 above) §16[1](b). From 2009 New Lugano (n 41 above) §22 will be identical to the Regulation on Civil Jurisdiction (n 144 above) §22. 224 Dansommer (n 88 above). Denmark is subject to the normal EU rule since July 2007. 225 See above [4.07].


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holiday is taken, the site of the land. Thus a Dutch landlord can sue an Austrian tenant about a holiday taken in Switzerland in the Austrian courts. Coincident domicile is not essential.226 [4.44] Another variation occurs in relation to corporate landlords, a matter of importance since many landlords letting holiday accommodation are companies. This is no problem if the case falls under the Regulation on Civil Jurisdiction,227 nor indeed under the Lugano Convention where an EEA state is one of the players,228 since in those states it is only necessary that the tenant should be a natural person. Personal jurisdiction is generally founded on the home (domicile) of the defendant, so this more relaxed view of holiday lettings seems consistent. Problems arise in Brussels Convention cases — older EU facts or Denmark facts before July 2007 — which allow the alternative forum of joint domicile only where ‘the landlord and the tenant are natural persons’, a point on which San Sebastian provided no flexibility. A tenant within that rule book who happens to rent from a corporate landlord will have to travel to the country where he took his holiday to defend an action, one example of such an unfortunate being Jarrett, whose timeshare was in a block with a corporate owner.229

4

Holiday lets: selection of law

[4.45] The previous passage has explained the forum selection rules for holiday lettings. Similar rules are needed for the selection of law. The present position is unsatisfactory. Contracts for very short-term holiday accommodation are subject to the law of the locus of the accommodation. A German landlord who owns a house in the south of Spain which he rents to German individuals should sue for rent, or be sued for a rent deduction on account of the state of the house, under Spanish law.230 The law of the site often looks wrong when the point of contention is a short-term holiday letting. In the example just given the closest connection is with the country where both parties reside (Germany) rather than the location of the holiday (Spain).231 It is open to domestic courts to reach just this result, treating the case as an exceptional one in which the holiday-maker’s residence establishes the closest connection, as the German

Dicey & Morris (n 3 above) II [23–029]. Regulation on Civil Jurisdiction (n 14 above) §22; Explanatory Memorandum to §22 (n 32 above); O Parker ‘Developments in Judicial Co-operation in Civil Matters in the EU’ [2002] NLJ 227–229. 228 Lugano Convention (n 39 above) §16[1](b). Belgium and Germany do not subscribe and France has derogated from this particular provision. New Lugano (n 41 above) §22 will follow the modern EU rule as from 2009. 229 Jarrett (n 27 above) 13G–14A, Morritt LJ. 230 Rome Convention (n 55 above) §4[3]; consumer protection will not apply even if the landlord is trading since §5[4] does not apply to a contract for services ‘to be supplied to the consumer exclusively in a country other than that in which he has his habitual residence’. 231 Giuliano Lagarde Report (n 53 above) §4, [4]. 226 227

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courts have done.232 Selection of law needs to run alongside forum, and to achieve this the Rome Convention would need a specific rule to match the forum rule for private tenancies to a six-month maximum.233 The proposal for the Rome I Regulation would provide precisely this; the law of joint domicile would apply to: contracts which have as their object tenancies of immovable property concluded for a temporary private use for a maximum period of six consecutive months… provided that the tenant is a natural person and that the landlord and the tenant are domiciled in the same country.234

This selection would be presumptive only, giving the possibility of a closer connection with some other law.

5

Package tours

[4.46] Holidays taken in a hotel room are organised under contractual arrangements235 and any disputes are personal matters. Disputes arising from a holiday package including a bundle of travel and holiday accommodation organised by a tour agent are also contractual even if exclusive rights are given to the accommodation.236 This appears from Hacker.237 The claimant was one of a group of German tourists for whom a German travel agent organised accommodation for two weeks in August 1989 spent in Ameland, a part of the Netherlands, under a package by which several services were bundled up with a holiday let.238 Jurisdiction over the entire German contract could not sensibly belong to the Dutch courts, and the European Court of Justice took outside the exclusive jurisdiction the instant case and the judgment excludes any contract whereby a travel business in one EU state undertakes to procure for a client domiciled in the same state the use for several weeks of holiday accommodation not owned by it in another contracting state and to book the travel arrangements. Exclusive jurisdiction will vest in the state of the holiday destination for a bundle of insurance on top of accommodation,239 but not where several services are bundled up together. 232 Bundesgerichtshof October 12th 1989 [1990] IPRAX 318 (German travel agency supplying local customers with holiday houses in France). 233 Regulation on Civil Jurisdiction (n 14 above) §22; see above [4.41]. 234 Rome I Green Paper (n 53 above) [3.2.6]. 235 Royal Classic Rumaensk Vinimport v Sörensen B-57-04 [2004] VfR 1404, [2004] ECLYB [218]. 236 C Guyot & H Dyson ‘EU Case-law in the Field of Tourism’ (2004) 4 International Travel Law Journal 199–209; see below [6.18] n 118. 237 Hacker v Euro-Relais (n 117 above); Jarrett (n 27 above) 11 Morritt LJ; A Briggs ‘The Brussels Convention’ (1992) 12 Yearbook of European Law 657–674, 657–660; R Plender ‘Tenancies of Immovable Property’ (1992) 63 British Yearbook of International Law 607–608. Note also, slightly off point, Carter v Lotus Leisure Group [2002] 2 P & CR 2 @ 26 CA (agreement tour operator not to rent chalets other than from a middleman called Carter at Courcheval in the French Alps in 1995). 238 Hacker v Euro Relais (n 117 above) AG[33] Darmon. 239 Dansommer (n 88 above).


6

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Timeshare forum

[4.47] Timeshares are considered in detail in a later chapter.240 Timesharing agreements were bound to give rise to problems,241 but the guidance about forum given in Klein v Rhodos Management242 could not be more unhelpful. The European Court of Justice declined to lay down any generic rule for timeshare forum, fearful of being over- or under-inclusive.243 A wide variety of legal vehicles continue to be used for timesharing despite harmonisation of other aspects244 and this is reflected in a variety of possible conflicts solutions. There is no simple, single European forum for resolving disputes, but rather a host of specific cases.245 Klein was a German who bought a week at the Sun Beach Holiday Club in Greece over a period of 40 years from an Isle of Man company at a capital price of €6.7K with an additional €175 for three years’ membership of an exchange club and an ongoing annual maintenance charge of €160.246 The scheme was set up as a club so that the Kleins did not acquire rights in a specific apartment but merely the right to a holiday in one apartment at the club’s resort of a specified type for one week each year over nearly 40 years,247 the proprietary aspects thus being subjugated to the rights of club membership.248 This was not a part ownership or tenancy but a complex personal contract involving club membership and outside the exclusive jurisdiction.249 Perhaps the Advocate-General’s opinion was more convincing when he argued that in applying the exclusive jurisdiction one should search for the substance of the transaction and that, when the veil was lifted, a true timeshare could be discerned lurking beneath the club format.250 Timeshare cases often need to be resolved by a court with geographical proximity to the seat of the dispute,251 but interval owners will be better placed litigating at home as consumers. Many timeshare disputes are treated as contractual and for those it will be possible to impose a choice of forum or a choice of law, an operator’s flag of convenience, a timesharers’ flag of inconvenience. However, any choice of law is limited because domestic law may not allow a choice which has the effect of causing the loss of European rights guaranteed by the Timeshare Directive.252 See below [ch 6]; conflicts are considered at [6.62ff]. White ‘CJJA 1982 II’ (n 24 above) 307; Dicey & Morris (n 3 above) II [33-233]; Plender Contracts Convention (n 61 above) [6.27]. 242 Klein (n 88 above). 243 Klein (n 88 above) AG[20–22] Geelhoed. 244 Timeshare Directive 94/47/EC, [1994] OJ L280 83, R[3]; Klein (n 88 above) AG[21] Geelhoed; see below [6.40ff]. 245 Klein (n 88 above) AG[23] Geelhoed. 246 This was not therefore a case like C-423/97 Travel Vac v Sanchis [1999] I ECR 2195 ECJ, in which the value of services predominated; see Klein (n 88 above) J[21–22]. 247 Klein (n 88 above) J[19]. 248 Klein (n 88 above) J[20]. 249 Klein (n 88 above) J[26–29]. 250 Klein (n 88 above) AG[24–27] Geelhoed. 251 Klein (n 88 above) AG[30]. 252 Timeshare Directive (n 244 above) §9; Remien (n 1 above) 54. 240 241

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A timeshare dispute will qualify for the exclusive forum rules where its format is to create part-ownership or a tenancy, where a timeshare interval is given in a specific apartment. Real character was so clear of the timeshare on the Algarve considered in Jarrett v Barclays Bank253 that no European reference was required. An autonomous definition overrode the Portuguese law of the site254 in the interest of uniformity across the continent of Europe,255 and was satisfied by the Jarretts’ exclusive occupation of land,256 albeit for a limited period each year and even though it was to last in perpetuity.257 Despite all this the Jarretts were allowed to pursue their case in the Ipswich County Court because their particular claims fell outside the exclusive zone allocated to the Portuguese courts given that they were claiming against the timeshare sellers for misrepresentation and against the bank as creditor under a three-party consumer credit agreement. These personal actions could proceed in England, but any proprietary aspect of the ownership of the timeshare interval would have to be tested in Portugal.

PER SO N A L ACTI O N S

Personal Actions 1

Personal actions affecting land

[4.48] Common law actions of trespass which do not equate to the old ejectment are not restricted to land in England and there is no bar on action in relation to land out of the jurisdiction if framed as personal actions in trover, slander of title, account, debt, covenant, or assumpsit,258 or as equitable claims which seek personal orders against English trustees.259 The dividing line seems to have been the type of remedy which is sought. A case came nearest to the line when the action was to enforce a personal obligation but as a peripheral issue it became necessary to adjudicate on a foreign title. Story, the American jurist, stated a bar in such a case in the first edition of his book on Conflicts,260 but in 253 Jarrett (n 27 above); A Briggs ‘Exclusive Jurisdiction’ (1996) 67 British Yearbook of International Law 577–578 (‘easy illustration’); Re A Claim for Payment for a Timeshare [1997] ILP 524 District Court Damstadt. 254 Arguably Morritt LJ was running ahead of European developments, since his opinion was contrary to the travaux preparatoires: Jenard Report (n 2 above) 35; Schlosser Report (n 86 above) [168]. 255 Reichert v Dresdner Bank (n 126 above); Hacker v Euro Relais (n 117 above). 256 Barratt International Resorts v Martin (n 211 above) 437J–K Lord Sutherland (dispute about sacking a manager of a timeshare development did not involve rights in rem). 257 Jarrett (n 27 above) 11F–G, Morritt LJ. The last point is a divergence from the common law, which does not allow a perpetual lease. 258 Rogers v Dove (1652) Style 331, 82 ER 752; Holman v Johnson (1775) 1 Cowper 41, 98 ER 1120. 259 Lee (n 96 above) 624–625; particularly on the proscribed list were writs of possession, or a writ of partition or a sequestration, at 626 fnn 101–104; Arglasse v Muschamp (1682) 1 Vern 75, 23 ER 322; Re Earl of Derby (1611) 12 Coke’s Report 114, 77 ER 1390. 260 J Story Commentaries on the Conflict of Laws (Edinburgh, Thomas Clark, 1st edn, 1835), 21–22; Lee (n 96 above) 629.

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fact this was a solecism, the title bar a myth perpetrated by Story, and courts may often need to determine a foreign title in order to award an in personam remedy here.261

2

Contract

[4.49] It will be demonstrated below that both European rules and the earlier common law did allow personal actions over foreign land, for example where the object was to enforce a contract, but the issues here are of sufficient complexity as to merit a separate chapter.262

3

Trusts

[4.50] If this chapter deals with real actions and a future chapter deals with personal claims, equity lawyers will be looking here for a discussion of the enforcement of trusts of foreign land. In fact, however, the treatment will have to be deferred because the European Court of Justice considers the enforcement of trusts to be a matter of personal obligation and not a matter of proprietary obligation. The issue under discussion is the controversial ruling of the European Court of Justice in Webb v Webb263 in which an action to enforce a trust of land in France was held to be a personal action by the beneficiary against the trustee, and so within the jurisdiction of the English courts since the defendant trustee was domiciled in England. This is fair enough for civilian-type trusts, which are indeed essentially contractual,264 but it defies all logic for trusts recognised in equity, is the opposite to the basis on which the European conflicts club rules were negotiated, 265 and is so counter-intuitive that it will require detailed discussion below. As a result it is convenient also to defer discussion of the law applicable to cross-border trust issues.266

4

Damage to foreign land

[4.51] Actions for damage to land aimed at securing damages for injury caused to the land will generally be site-based on account of the connected forum, though the home court of the defendant is an alternative.267 Identification of the Lee (n 96 above) 609, 624 fn 90; Dicey & Morris (n 3 above) II [23R–021]. See below [ch 10]. 263 Webb v Webb (n 117 above); Prazic v Prazic [2006] EWCA Civ 497, [2007] ILP 31. 264 See below [11.39]. 265 Schlosser Report (n 86 above) [105–108]; V Latham ‘Creation and Administration of a Trust in the Conflict of Laws’ (1953) 6 CLP 176–195; White ‘CJJA 1982 I’ (n 24 above) 191; Dicey & Morris (n 3 above) II [29]. 266 See below [11.36]. 267 See below [10.53]. 261 262

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connected forum proceeds from two alternatives — the place where a harmful event occurred and the place where a loss is sustained268 — but each of these will generally coincide at the site of the land, as will threatened damage. Environmental claimants are allowed non-site claims in neighbouring states, and indeed all tort actions have a non-site permissible alternative. [4.52] Tort law lacks a European rule book. It is possible for English courts, as the home court of a defendant, to rule on a tort to land elsewhere in Europe, and selection is currently made on the basis of domestic legislation passed in 1995.269 The forum will characterise the issue as one of tort.270 Applicable law is determined from the country in which the events constituting the tort occur, and since physical land can only be damaged at its site, the most significant connection is with the location of the property.271 Determination of whether the conduct which has occurred is an actionable wrong is carried out using the applicable law,272 and it is no longer necessary to establish double actionability, that the wrong would also be a tort at home.273 European rules are proposed under the moniker ‘Rome II’ for the selection of law to apply to tortious obligations,274 but the intended uniformity will be thwarted by an opt-out by the United Kingdom, Ireland and Denmark. The site rule is not sufficiently firmly grounded in this proposal.

5

Mortgage actions

[4.53] Mortgages are problematic because of their dual character, part personal obligation in debt and part charge on land. English courts have been prepared, historically, to enforce mortgages of foreign land, assuming a personal jurisdiction over the debtor. In this way they gave judgments affecting land that lay beyond their legitimate jurisdiction. An English judgment may thus be decisive of the title to the foreign land, at least between borrower and lender.275 Foreclosure was a case in point, since the effect of the order absolute was to bar the

268 Regulation on Civil Jurisdiction (n 14 above) §5[3]; ex Brussels Convention (n 33 above) §5[3]; Lugano Convention (n 39 above) §5[3]; CJJA 1982 sch 4 (n 47 above) para 3(c); Civil Procedure Rules (n 20 above) 6.20.8; Case 21/76 Mines de Potasse d’Alsace [1976] ECR 1735 ECJ, J[15]; TC Hartley ‘The Place of Commission of a Tort’ [1977] EL Rev 143–145; see below [10.45]. 269 PIL (MP) Act 1995 (n 160 above) ss 9–15. 270 PIL (MP) Act 1995 (n 160 above) s 9(2). 271 PIL (MP) Act 1995 (n 160 above) 1995 s 11; this to be displaced under s 12 in favour of another law which is substantially more appropriate. Displacement to a non-site law may be easier when a thing is immovable in law but movable in its physical nature and also when it is intangible. 272 PIL (MP) Act 1995 (n 160 above) s 9(4). 273 PIL (MP) A 1995 (n 160 above) s 10. English law would differentiate trespass (direct damage), nuisance (indirect), negligence and the escape of dangerous things, but the crucial thing is the foreign delict. 274 Proposal for a Regulation on the Law Applicable to Non-contractual Obligations (‘Rome II’) COM/2003/0427 final. 275 Paget v Ede (1874) LR 18 Eq 118, 126 Bacon VC.

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borrower’s title to his land. Toller v Carteret276 is a most dramatic illustration in which the English Court of Chancery foreclosed a mortgage secured on the island of Sarke, as it was then called, even though the Channel Islands were part of the Ducky of Normandy and so subject to the courts in Guernsey. Foreclosure switched ownership of the island from borrower to lender.277 The security itself is subject to the site rule, both for immovable security and movables, for example a retention of title affecting goods until they are paid for,278 and the enforcement of a debt in rem by a third party debt order (formerly called a garnishee) against an asset belonging to the debtor such as a bank account which earmarks the property for payment of the judgment debt. In rem enforcement is governed by the law of the site of the property being subjected to the debt order.279

6

A taster of personal conflicts to come

[4.54] The rules for personal actions are considered in the context of contracts.280 To anticipate: 1. Jurisdiction in personal actions is non-exclusive. 2. Parties may choose a forum and, separately, a law to be applied. 3. Otherwise the law will generally select several alternative forums. One forum will be connected. For example, in the case of a contract it will be related to the performance of the contract or in the case of a tort where the damage occurs, but where the thing affected is land it will generally be site-based. 4. An alternative forum is always available in the home court of the defendant, determined by domicile or, in other words, semi-permanent residence. A consumer may be able to insist upon being sued in his home court. 5. As between alternative forums there is a strict regime for priority of actions on a first sued basis. 6. Law will generally be selected on a connected basis similar but not identical to the connection used to determine forum and where the subject matter of the dispute is land the law will generally be site-based. So it will be possible to take a connected action in a site-based forum using site-based law, but also possible to sue in the home court of the defendant, when the home court may be required to apply a foreign, site-based, law.

276 Toller v Carteret (1705) 1 Salkend 404, 91 ER 351 Wright LK; Baciocchi v Banque Cantonale de Geneve [2000] II JCP 10248, [2000] ECLYB [1074] (Swiss loan secured on land in France governed by Swiss law). JD Falconbridge Essays on the Conflict of Laws (Toronto, Canada Law Books, 2nd edn, 1954) 618 says that this is not easy to justify. 277 Powers to make a charging order were site-based: Mority v Stephan (1885) 58 LT 850 North J; Kolchmann v Meurice [1903] 1 KB 534 CA. 278 Hoge Raad Netherlands [2001] NJ 375, [2001] ECLYB [1029]. 279 Société Eram Shipping Co v Companie Internationale de Navigation [2003] UKHL 30, [2004] 1 AC 260; Kuwait Oil Tanker Co (n 87 above) [16] Lord Hoffmann. 280 See below [ch 10].

MA R KETI N G LA N D

5 Marketing Land Pointillism. Consumption of Land. Unfair Commercial Practices Affecting Land. Doorstep Selling of Land. Distance Rentals. Unfair Marketing Practices. Unfair Advertising and Statements. Internet Advertising (E-commerce). Information in an Invitation to Purchase. Information about Distance Contractors. Withdrawal Rights. Credit Cancellation. Remediation and Reform.

PO I N TI LLI SM

Pointillism 1

Land law and consumer law

[5.01] Consumer protection1 principles apply across a Europe consisting of the EEA-30.2 History can safely be left to others.3 Transactions with land always involve internal market principles but they may also be governed by consumer protection rules in order to correct the imbalance of transactional power where one contracting party is in a weaker position.4 In such cases the two conceptual structures overlap. That they are distinct is no doubt an accidental result of the division of responsibilities between two Directorates. Parties involved in transactions with land generally have little to gain from consumer protection because: 앫 marketing controls are confined to transactions of the business-to-consumer pattern, 앫 few buyers of land are consumers, and 앫 land is rarely seen as a product in consumer transactions. 1 S Weatherill EU Consumer Law & Policy (Cheltenham, Edward Elgar, 2005, 1843769638); P Nebbia & J Askham EC Consumer Law (Richmond, Richmond Law, 2004, 1904501214); H Schulte-Nolke A Casebook on European Consumer Law (Oxford, Hart, 2002, 1-841-13227-6). 2 EEA Agreement [1992] OJ L12 13 as adjusted [1994] OJ L1 572 and amended [2004] OJ L130 3, §72 and Annex XIX; the latter adopts all the CP Directives discussed in this book. 3 Nebbia & Askham (n 1 above) 5–10; Weatherill (n 1 above) ch 1; B Pasa & GA Benacchio The Harmonisation of Civil and Commercial Law in Europe (Budapest, Central European University Press, 2005, 963-7326-35-9) 8–17. 4 Case 150/77 Betrand v Paul Ott [1977] ECR 1437 ECJ, J[21].

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[5.02] When all these hurdles are surmounted, a certain amount of clear running can be discerned, concrete situations where marketing controls apply to land. These are as follows: 앫 unfair commercial practices with land,5 앫 doorstep selling of finance for land, that is either during unsolicited visits to the home of a consumer or sales conducted during an organised outing away from the business premises of the seller; however, the protection in this case is largely illusory, though much ink will be spilled in this chapter to establish that,6 앫 distance rentals, where a rental is agreed over the internet or by some other means of distance communication,7 and 앫 advertising is controlled if it is misleading or comparative.8 Controls on unfair contract terms9 are by far the most important contribution to a substantive European land law and are treated separately, as are consumer credit agreements10 and timeshares.11 [5.03] European law lacks a coherent rationalisation of the circumstances in which a consumer is awarded transactional protection. A substantial body of law has been built up from an accumulation of individual Directives but each has a discrete area of protection, and whilst these overlap large gaps are left uncovered between them. Kötz12 called this ‘pointillism’ in reference to Seurat’s artistic technique, thinking of the discrete points which make up the picture. This does some disservice to the neo-impressionist theory of optical mixtures

5 Unfair Commercial Practices Directive 2005/29/EC [2005] OJ L149 22; Explanatory Memorandum COM (2003) 356 final; Consultation on Implementing the EU Directive on Unfair Commercial Practices (DTI, December 2005, URN 05/1815); Government Response to the Consultation Paper on Implementing the Unfair Practices Directive (URN 06/2121, 2006); Draft Consumer Protection from Unfair Trading Regulations 2007 in Consultation on Draft Consumer Protection from Unfair Trading Regulations 2007 (London, DTI, 2007, URN 07/1047). 6 Directive on Contracts Negotiated Away from Business Premises (‘Doorstep Selling Directive’) 85/577/EEC, [1985] OJ L372 31; Consumer Protection (Cancellation of Contracts Concluded Away from Business Premises) Regulations 1987, SI 1987/2117. 7 Distance Selling Directive 97/7/EC [1997] OJ L144 19; Consumer Protection (Distance Selling) Regulations 2000, SI 2000/2334; Distance Marketing of Financial Services Directive 2002/65/EC [2002] OJ L271 16; Financial Services (Distance Marketing) Regulations 2004, SI 2004/2095. 8 Misleading and Comparative Advertising Directive 84/450/EEC [1984] OJ L250 17, as amended by 97/55/EC [1997] OJ L290 18; Misleading and Comparative Advertising Proposal COM (2006) 222 final (business-to-business parts to be consolidated); Control of Misleading Advertisements Regs 1988, SI 1988/915 as amended by SI 2000/914; Draft Business Protection from Misleading Marketing Regs 2007 in Consultation on 2007 Draft Regs (n 5 above). 9 Unfair Terms in Consumer Contracts Directive 93/13/EEC [1993] OJ L95 29 in force July 1st 1995; Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083, as amended by SI 2001/1186. 10 Consumer Credit Directive 87/102/EC [1987] OJ L42 48, as amended; see below [9.02]. 11 Timeshare Directive 94/47/EC [1994] OJ L280 83, in force April 30th 1997; for UK domestic legislation see below [6.08]. 12 H Kötz ‘Gemeineuropäisches Privatrecht’ in H Kötz Festscrift für Konrad Zweigert (Tübinger, Mohr, 1981) 487; CU Schmid ‘The Emergence of Transnational Legal Science in European Private Law’ (1999) 19 OJLS 673–689, 673.

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that a truer colour was created when individual points of pure colour were viewed from a distance, the points mixing to form a coherent picture in the spectator’s eyes. Kötz was thinking of the dottiness of European rules not their fusion. Blobs of primary colour that may be relevant in land law have already been identified.

2

The lowest common denominator

[5.04] Protection for European consumers overrides domestic systems but most regimes — certainly those applying to land — call for a minimalist harmonisation, which creates a European base line from the lowest common denominator.13 That minimum is protected and guaranteed against waiver of the rights granted14 and also against any attempt by the trader to choose a flag of convenience outside Europe since choice of law is restricted to states which themselves meet the European minimum,15 or a forum from hell.16 The flip side of national freedom is a maddening lack of consistency with most consumers stuck near the base line, but a few consumers benefited from the bar set much higher in their state. In no sense can this create an internal market within which competition is on even terms. Consumers then have to be protected against the provision of a written contract in Bulgarian.17 State frontiers can be widened by asserting extra-territorial effect for national consumer protection laws, so that, for example, United Kingdom legislation affecting timeshares often applies to an apartment physically located in Spain.18 Several national regimes may overlap in their application to a single transaction. Marketing a land product across Europe remains a nightmare.

13 Unfair Terms Directive (n 9 above) §8; Consumer Credit Directive (n 10 above) §15; Timeshare Directive (n 11 above) §11; Misleading and Comparative Advertising Proposal (n 8 above) §8; Unfair Practices Directive (n 5 above); see below [5.11]. 14 Doorstep Selling Directive (n 6 above) §6; Contracts Away from Business Premises Regs 1987 (n 6 above) reg 10; Distance Selling Directive (n 7 above) §12[1]; Distance Selling Regs 2000 (n 7 above) reg 25; Distance Marketing of FS Directive (n 7 above) §12[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 16. 15 Distance Selling Directive (n 7 above) R[23], §12[2]; Distance Selling Regs 2000 (n 7 above) reg 25(5) (all EEA states in UK law); Distance Marketing of FS Directive (n 7 above) R[8], §12[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 16(3); A Bigos ‘Jurisdiction over Cross-border Wrongs on the Internet’ (2005) 54 ICLQ 585–620. 16 See below [10.31]. 17 Often left to national law: Distance Selling Directive (n 7 above) R[8]; Distance Marketing of FS Directive (n 7 above) R[31]. 18 See below [6.63ff].

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Consumption of Land 1

Buyers of land as consumers: the B2C pattern

[5.05] Even the hipsters at the Law Commission have picked up the B2C (business-to-consumer) jargon of modern consumer law,19 and if land lawyers are to avoid lagging behind they too must divide their contracting parties in line with commercial law, B designating businesses and C for consumers. Obviously enough contracts attracting standard consumer protection are made by a business to a consumer (B2C) and equally obviously most sales of land do not fit this pattern. However, those that do may receive consumer protection. European legislation has arrived at a more or less standardised reach, even if the exact formulation continues to vary from area to area. This applies to the marketing of land,20 consumer credit21 and timeshares.22 The ultimate flowering of this small jurisprudential plant being found in the Directive against unfair business-to-consumer commercial practices, where, trader means any natural or legal person who, in commercial practices covered by this Directive, is acting for purposes relating to his trade, craft, business or profession and anyone acting in the name of or on behalf of a trader.23

This encapsulates three definitional elements on the B side.24 The business is represented by a ‘trader’ or ‘supplier’, whether an individual or a company, but a trader is only caught when acting within the scope of the legislation in question, and there is a separate requirement that he should also be acting in a commercial or professional capacity — the precise purpose being variously described as business, trade, a profession or commerce.25 A common theme also lies behind the various definitions of the C side, the consumer26; the basic elements are (1) the H Beale and T Goriely ‘An Unfairly Complex Law’ [2005] NLJ 318–319. Distance Selling Directive (n 7 above) §2[1]; Distance Selling Regs 2000 (n 7 above) reg 3; Distance Marketing of FS Directive (n 7 above) §2[a]; FS Distance Marketing Regs 2004 (n 7 above) reg 2; Doorstep Selling Directive (n 6 above) §1[1]; Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(1). The Electronic Commerce Directive 2000/31/EC, [2000] OJ L178 1, applies to both B2B and B2C contracts, but not C2C; see below [5.60], [7.66], [8.20]. 21 Consumer Credit Directive (n 10 above) §1[2](a), (e), and references to ‘consumer’ passim. 22 Timeshare Directive (n 11 above) §2 (purchaser outwith profession); the domestic position is complex, see below [6.17]. 23 Unfair Practices Directive (n 5 above) §2[A-d]; EM (n 5 above) [34]; Misleading and Comparative Advertising Directive (n 8 above) §2 as amended by Unfair Practices Directive §14. 24 Doorstep Selling Directive (n 6 above) §2; Distance Selling Directive (n 7 above) §2[3]; Distance Marketing of FS Directive (n 7 above) §2[c]; Misleading and Comparative Advertising Directive (n 8 above) §2[3] as substituted by Unfair Practices Directive (n 5 above) §9[2]; also UK SIs transposing these Directives. 25 P Hellwege ‘Consumer Protection in Britain in Need of Reform’ [2004] CLJ 712–742, 738; UK Consultation (n 5 above) [11] (regular use of e-Bay to sell goods). 26 Doorstep Selling Directive (n 6 above) §2; Distance Selling Directive (n 7 above) §2[2]; Distance Marketing of FS Directive (n 7 above) §2[d]; P Rees ‘B2C marketing of FS’ (2003) 5 European Business Law 8–9; Unfair Practices Directive (n 5 above) §2[a]; also UK SIs transposing these Directives. 19 20

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restriction to a natural person, (2) a focus on transactions falling within the scope of the particular regime in issue, and (3) the requirement to act outwith any trade or profession.27 The definition is autonomous.28 A person who buys a brand-new flat from the developer is a consumer but a person buying a private house from a seller, even one who happens to be a professional, falls into the unprotected C2C pattern. So the growth of land law is constrained but not totally curtailed by the need to fit the B2C pattern. For example, very many residential tenants will attract B2C protection. [5.06] Unfair contract terms are only affected when the contract fits the B2C pattern, both the European Directive and its domestic transposition.29 The latter applies to unfair terms in any contract concluded between a ‘seller or supplier’ on the one hand and, on the other, a ‘consumer’.30 A consumer must be a natural person — so a company cannot claim European protection31 — and acting otherwise than for his trade, business or profession. A ‘seller or supplier’ is any natural or legal person who enters into a contract for purposes relating to trade, business, or profession (which may be public or private).32 In this type of contract one party will be in a weaker position than the other when negotiating the terms of the contract. [5.07] A qualification is needed. Consumers will generally be the weaker party but it is possible for contracts on a lavish scale to fail for unfairness, since the quality of the contract determines whether the recipient is to be classed as a consumer, according to which of the various decisions in Standard Bank London v Apostolakis is taken.33 A Greek couple, both professionals but acting outside their respective professions, invested 57 million drachma (€1.1 million) in precious metals margin trading, a deal which turned sour when the drachma devalued. Although neither spoke any English the bank sought to enforce a term directing disputes arising from foreign exchange agreements to the English courts. This outrageous provision was struck down by the English courts: the forum clause was found to be unfair under the European unfair 27 The Consumer Guarantee Directive 99/44/EC [1999] OJ L171 12 does not apply if neither guarantor nor borrower is acting in course of trade or profession: C-208/98 Berliner Kindl Brauerei v Seipert [2000] I ECR 1741 ECJ, J[22] (guarantee to brewery for opening restaurant; debt not in course of business); European Parliament Resolution [1997] OJ C115 27, [16]. German domestic protection is better than under the Directive: Bundesgerichtshof XI ZR 169/05 [2006] 06 ECL [7]. 28 C-269/95 Benincasa v Dentalkit [1997] I ECR 3767 ECJ; Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1 HL, 15H Lord Hoffmann. 29 Unfair Terms Directive (n 9 above) §2(b), (c); see below [5.12]. 30 Unfair Terms Regs 1999 (n 9 above) reg 4(1). 31 C-541/99 etc Cape SNC v Idealservice [2001] I ECR 9049, ECJ. 32 Unfair Terms Directive (n 9 above) §2; Unfair Terms Regs 1999 (n 9 above) reg 3(1); cf Unfair Terms in Consumer Contract Regs 1994, SI 1994/3159, reg 2(1). These affect a ‘seller’ of goods or a ‘supplier’ of services, who must be acting for purposes relating to his business (as defined). 33 Standard Bank v Apostolakis (No 1) [2000] ILP 766 Longmore J; (No 2) [2001] Lloyd’s Rep Bank 240 Steel J; Benincasa (n 28 above) was distinguished. Thus a loan secured on commercial property may be a consumer credit agreement: Evans v Cherry Tree Finance [2007] April 13th, [2007] WL 2186988 Ch D.

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terms regime,34 a decision that Apostolakis and his wife were indeed consumers. They returned to Greece to litigate, but the Greek courts ruled35 that the transactions for the purchase and resale of assets intended to be realised at a profit were commercial in character, and that consumer transactions were limited to the satisfaction of an individual’s own needs in relation to private consumption.36 Investors in derivatives were outside this paradigm. Hence the admittedly unequal jurisdiction clause was valid and the English decision had been manifestly incorrect. The Apostolakises may still be in the Limbo thus created for unwanted litigants! [5.08] Domestic law is of nightmarish complexity37 because domestic law under the Unfair Contract Terms Act 1977 had a wider remit than the European regime and the two do not mesh well together. Fortunately, this book can ignore the 1977 Act since it does not apply to land,38 but in non-land contracts it can protect B2B contracts which lie unprotected at European level. The Law Commission is in the process of trying to introduce some coherence,39 with businesses segregated according to the size of the workforce. All businesses will be protected domestically against standard terms and micro-businesses (of up to nine employees) will also receive domestic protection against non-negotiated terms.40 [5.09] Permutation of the B and C parties creates three further patterns of contract (apart, that is, from B2C contracts), each of them lacking European consumer protection though with varying degrees of need for protection. All is fair in B2B trading; just as you may hurt your enemy or, more likely, your lover, you may try out your dubious commercial tactics on your competitors and business customers.41 No tenderness is shown towards businesses when pressured into agreeing unfair terms, not even a small trader buying from a multi-national. Our domestic Regulations which copy out the Directive into British law do not offer any protection to an accountant guaranteeing the debts of his partnership,42 34 Unfair Terms Regs 1999 (n 9 above) reg 3; Regulation on Civil Jurisdiction (‘Brussels I’) (EC) 44/2001 [2001] OJ L12 1, §§15–17. 35 Greek decision 8032/2001 [2003] ILP 29 Polimeles Protodikeio Athens. 36 Benincasa (n 28 above) was followed. 37 FMB Reynolds ‘Unfair Contract Terms’ (1994) 111 LQR 1–3. 38 Unfair Contract Terms Act 1977, c 50; see below [5.12]. 39 Unfair Terms in Contracts and Unfair Contract Terms Draft Bill (Law Commission 292, 2005); H Beale & T Goriely ‘An Unfairly Complex Law’ [2005] NLJ 318–319; A Wood ‘Unfair Contract Terms: First Reactions’ (2005) 26 Business Law Review 110–112; E Macdonald ‘Unifying Unfair Terms Legislation’ (2004) 67 MLR 69–93, 72–74. 40 Draft Bill (n 39 above) cl 22, sch 3. 41 Legislation to protect against unfair competition may follow: Unfair Practices Directive (n 5 above) R[8]. 42 Unfair Terms Directive (n 9 above) §1[1]; Unfair Terms Regs 1999 (n 9 above) reg 3(1); Williamson v Bank of Scotland [2006] EWHC 1289 (Ch), [2006] BPIR 1085, [45–46] Judge George Bompas; Allen Wilson Shopfitters v Buckingham [2005] EWHC 1165 (QB); E MacDonald ‘Mapping the Unfair Contract Terms Act 1977 and the Directive on Unfair Terms’ (1994) JBL 441–462, 457–458.

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and the European regime offered no protection to two Italian companies which installed vending machines for the exclusive use of their employees against an exclusive jurisdiction clause diverting any dispute to the Viadana Magistrate.43 Enterprises should be protected44 as they are by the domestic regimes of Germany, the Netherlands, Portugal and Spain,45 and to some extent under United Kingdom law relating to unfair terms46 and misrepresentations,47 and European protection does extend to misleading and comparative advertising.48 Another type of contract crying out for protection is a private contract between two non-business individuals (C2C) but European law does not see the recipient as a consumer in need of protection. The cassation in UFC v Papeterie Tissot49 concerned a contract for the sale of a French house between two private individuals, a vendor and purchaser on an equal footing and so outside the unfair terms regime. The purchaser complained about the terms of a standard contract, and sought to draw into the litigation the publisher of the precedent book from which the contract had been taken, but the publisher was not in any way a party to the contract in issue and a consumers’ association was unable to join in the fun since there was no consumer contract. Distance buying from the owner in person over the internet attracts no protection. European law is also deaf to complaints from a business when buying from a private individual (C2B). Transactional contract law is a national concern.

2

Land as a consumer product

[5.10] Land is generally not considered to be a consumer product, for example in the context of doorstep and distance selling, though very strong controls apply in the niche market for timeshares. Earlier UK legislation tended to bend to the interests of the consumer solely in the case of goods,50 content perhaps to accept that a house buyer is generally advised by a professional conveyancer. European law often restricts its consumer protection to buyers of goods in the narrowest sense, for example, in relation to product liability 51 and consumer sales and Cape v Idealservice (n 31 above) J[16]. O Lando ‘Liberal Social and Ethical Justice in European Contract Law’ (2006) 43 CML Rev 817–833, 829. 45 Law Com (n 39 above) [IV](a). 46 Unfair Contract Terms Act 1977 (n 38 above) s 3; this is of limited value in the context of this book because sch 1 para 1 provides that s 3 does not apply to land. 47 Trade Descriptions Act 1968, c 29, s 1(1); UK Consultation (n 5 above) [46]. 48 Misleading and Comparative Advertising Proposal (n 8 above) (B2C parts are transferred to the Unfair Practices Directive (n 5 above) and the remainder B2B will be consolidated; §1 will protect traders as defined in §2[d]; Draft Business Protection Regs 2007 (n 8 above). 49 UFC v Papeterie Tissot [1999] II JCP 10205, [2000] ECLYB [2216] French Cassation 1e ch civ. 50 Unfair Contract Terms Act 1977 (n 38 above) sch 1 para 1 restricting the scope of s 3; see below [5.12]. 51 Product Liability Directive 85/374/EEC [1985] OJ L210 29 only applies when defective components are incorporated into a building. It is perhaps open to question whether land is covered by the Indication of Prices of Products offered to Consumers Directive 98/6/EC [1998] OJ L80 27. 43 44

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guarantees.52 National law may apply the European legislation in order to keep domestic law applying to land and movables in step, as Germany did with the consumer sales legislation which provides a default system for sales of land and construction contracts.53 In other cases such as doorstep and distance selling a wide potential ambit is curtailed by exclusions for land, though not always watertight.54 European law has intervened to protect purchasers of timeshare units which may or may not be interests in land,55 and borrowers offering their land as security for consumer credit transactions occupy an intermediate position.56 So in general the protection of land-buyers as consumers is limited and patchy, but there are major exceptions calling for further discussion, that is unfair commercial practices, unfair contract terms and electronic commerce.

(1)

Unfair commercial practices

[5.11] Controls on unfair commercial practices treat land (immovable property) as a product in the same way as movable goods and services, the Directive affecting any conceivable thing that might be bought.57 Goods and non-financial services are subject to a maximal harmonisation, so that the same standard of unfairness of commercial practice has be applied in every EU-27 state once tougher national laws have been phased out over a transitional period due to end, unless extended, in 2013.58 Domestic law may not set the bar higher or lower, though British law apparently requires relatively little tinkering.59 Be that as it may, land, our primary concern, is treated quite differently, since domestic law may continue to impose ‘requirements which are more restrictive or prescriptive’, the more familiar minimal alignment.60 It is unnecessary to change legislation solely concerned with land.61 Marketing rules for land are bound to reach the European base line but are not bound to stop at that point. Legislation which embraces land and goods will either need to be changed or to be split into 52 Consumer Guarantees Directive (n 27 above) §1[1–2]; C Twigg-Flesner ‘Consumer Goods Directive’ (1999) 7 Consumer Law Journal 177–192; CU Schmid ‘European Influences on Real Property Law’ (Lund, EULIS, 2003) 10; C Bright & S Bright ‘Europe, the Nation State and Land’ ch 14 in S Bright & J Dewar Modern Studies in Property Law (Oxford, OUP, 1998, 0-19-876455-3) 373. 53 Bürgerliches Gesetzbuch (German Civil Code) §§631ff; Schmid (n 52 above) 10. 54 See below [5.19ff], [5.33ff]. 55 Timeshare Directive (n 11 above); see below [6.13ff]. 56 Consumer Credit Directive (n 10 above) §2[1](a), 2[3]; UK Consultation (n 5 above) 68; see below [9.02ff]. 57 Unfair Practices Directive (n 5 above) §2[c]. 58 Unfair Practices Directive (n 5 above) §3[5]–[6]; Doorstep Selling and Cold Calling (DTI 2004/1331) [11.4]; J Stuyck, E Terryn & J Van Dyck ‘Confidence Through Fairness’ (2006) 43 CML Rev 107–152, 115, 123. 59 UK Consultation (n 5 above) [42]. 60 Unfair Practices Directive (n 5 above) §3[9]; UK Consultation (n 5 above) [47]; Stuyck, Terryn & Van Dyck (n 58 above) 123; for financial services see below [5.34ff]. However, the Draft Unfair Trading Regs 2007 (n 5 above) refer throughout to a ‘product’ including land so all the substantive provisions will apply immediately to land. 61 eg Accommodation Agencies Act 1953, c 23; Estate Agents Act 1979, c 38 (as amended in 2007); Property Misdescriptions Act 1991, c 29; UK Consultation (n 5 above) 92, 95.

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parallel regimes.62 Land transactions are complex and involve major risks, as do financial services, so it is appropriate to impose positive disclosure requirements.63 That land is treated as a product when unfair commercial practices are deployed ends the old tendency to fight shy of property law. Implementation of the Directive at the end of 2007 (or in April 2008 in the case of the United Kingdom) will have a massive impact on the marketing of land since its basic tenets are that intervention is justified not when conduct is unconscionable but when there is bad faith, a widening of protection which is revolutionary and welcome. English traditions of marketing land will have to change, and change for the better.

(2)

Unfair land contracts

[5.12] Schmid says that: the Unfair Terms Directive does not contain an exception for contracts dealing with real property or contracts concerning other rights relating to real property. Therefore, standard clauses used in such contracts are subject to the terms of the directive.64

This was not true of pre-European domestic British law,65 but where protection is European the unfair terms legislation applies to land contracts as it does to goods. This was unclear in the 1994 version of the implementing Regulations which referred to goods,66 though what was intended67 was the French word ‘biens’ denoting ‘property’ in general, so that a ‘vendeur des biens’ could be selling movable property or land. Any possible doubt is removed by the 1999 rewrite of the Regulations68 which copy out the wording of the Directive more precisely and omit the earlier misleading reference to goods. Land contracts are protected against unfair terms.69

(3)

E-commerce

[5.13] The Directive regulating e-commerce applies to all forms of contract.70

62 The Mock Auctions Act 1961, c 47, and the Tourism (Sleeping Accommodation Price Display) Order 1977, SI 1977/1877, will be revoked: Draft Unfair Trading Regs 2007 (n 5 above) sch 4. 63 Unfair Practices Directive (n 5 above) R[9] §3[9] (there is a longer-term possibility of full harmonisation). 64 Schmid (n 52 above). 65 Unfair Contract Terms Act 1977 (n 38 above) sch 1 para 1; see below [8.30] n 164. 66 Unfair Terms Regs 1994 (n 32 above) regs 3(1), 3(2)(b) and passim (references to seller); Bright (n 52 above) 339. 67 M Allen ‘Teleological Interpretation in Land Law’ (1995) 58 MLR 696–701. 68 Unfair Terms Regs 1999 (n 9 above). 69 Newham LBC v Khatun [2004] EWCA Civ 55, [2005] QB 37; the case law is discussed below at [8.27ff]. 70 E-Commerce Directive (n 20 above) §2. However, its practical application is limited since states are allowed by §9 to limit e-contracting for land; see below [8.11].

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Unfair Commercial Practices Affecting Land 1

Unfair commercial practices

[5.14] Commercial practices affecting consumers when buying land will be regulated by the Unfair Commercial Practices Directive.71 This legislation has evolved significantly since the original proposal72 and has already generated a considerable literature.73 It has attracted enthusiastic support from the United Kingdom government, along with a little uncertainty about how to go about implementation.74 A framework is laid down for fairness of commercial practice, including misleading B2C advertising and inertia selling in distance contracts,75 whilst respecting existing sectoral rules.76 The Directive bites on marketing techniques affecting land as it does for all other forms of property, though harmonisation is minimal for land and financial services.77 Unfair commercial practice must be banned by the end of 2007, though the United Kingdom is running late and will have its Regulations in force on April 6th 2008.78 United Kingdom transposition should be relatively painless; we can expect a single piece of legislation looking more or less like the Directive and minor reform of overlapping legislation to incorporate the transactional decision test and pre-contract information requirements.79 Detailed changes will be made to existing consumer legislation,80 but there may be little substantive change for most honest traders.81

2

Contract

[5.15]

There are a number of vital limitations on the scope of the new European

Unfair Practices Directive (n 5 above). Unfair Practices Proposal 2003/0134 (COD), EM COM (2003) 356 final, Common Position 2003/0134 (COD), Parliamentary Amendments TA-PROV (2005) 0048. 73 H Collins The Forthcoming EU Directive on Unfair Commercial Practices (The Hague, Kluwer, 2004, 9-041-12224-9); G Black ‘Unfair CP Directive’ (2005) 33 Scottish Law Times 183–187; C Handig ‘A Milestone’ (2005) 16 European Business Law Rev 1117–1132; G Howells ‘Unfair Practices Directive’ [2003] ECLYB lxx–lxxiv; C Twigg-Flesner ‘Deep Impact?’ (2005) 121 LQR 386–389. 74 UK Consultation (n 5 above) 7. 75 See below [5.40ff]. 76 Unfair Practices Directive (n 5 above) R[10], §3[4]; EM (n 5 above) [44–45]; Draft Unfair Trading Regs 2007 (n 5 above) reg 2. 77 See above [5.11]. 78 The transposition deadline under §19 is December 12th 2007 but legislation has to be in place six months earlier. 79 UK Consultation (n 5 above) [198ff]; Draft Unfair Trading Regs 2007 (n 5 above) regs 2–7, sch 1. 80 Draft Unfair Trading Regs 2007 (n 5 above) schs 2–4; UK Consultation (n 5 above) ch 12; Government Response (n 5 above) 9ff; Consultation on 2007 Draft Regs (n 5 above) [3.61ff]. 81 Black (n 73 above). 71 72

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legislation. Facilitative contract law remains national,82 in particular domestic rules about the validity, formation and effect of contracts. The UK government is unlikely to change the rules of contractual validity, so contracts will not be voidable on proof of undue influence in the European sense.83 Unfair commercial practices must be proscribed in the sense that there will be powers to stop any such practice by injunction, but enforcement will be left primarily to civil law.84 It will be up to national governments to decide whether to impose criminal sanctions. The United Kingdom offence of unfair trading will require mens rea wheras the specific matters — unfair actions, omissions and blacklisted practices — will attract strict liability subject to defences of due diligence and innocent publication.85 The interesting question is the extent to which an individual consumer aggrieved by a trader’s conduct will be allowed to take action on his own account. There is no obligation under the Directive to allow such an action.86 If a European unfair commercial practice is proved it will not affect a transaction unless it is an invalidating factor under pre-existing domestic law, but the real issue is whether it should sound in damages. This is easily achieved by the imposition of a statutory duty,87 for which there are plenty of precedents in European transpositions, and one might anticipate that this will be the eventual outcome.88 Indeed, the proposal is that every substantive article should form a separate statutory duty. Legal action would be rare on account of costs and the civil reach of the common law will not be greatly extended given the wide range of trading activities which already sound in damages, but implementation of a right of civil action would increase transparency, improve compliance, and assist consumers to resolve problems.89 So the decision to treat land as a product, in relation to which unfair commercial practices will be outlawed, ends the old tendency to fight shy of property law. Implementation of the Directive in two years time will have a massive impact on the marketing of land, not least because its basic tenets are so widely divorced from common law traditions. Undue influence, European style, is not conceptualised in equitable terms as pressure equivalent to that needed to divest a 82 Unfair Practices Directive (n 5 above) §3[2]; N Reich ‘A European Constitution for Citizens: Reflections on the Rethinking of Union and Community Law’ (1997) 3 ELJ 131–164, 142ff; Schmid (n 12 above) 675–677; JK Winn & J Haubold ‘Electronic Promises: Contract Law Reform and E-Commerce in a Comparative Perspective’ (2002) 27 EL Rev 576–588, 572–573. 83 The common law standard for undue influence and duress is much higher: Twigg-Flesner (n 73 above) 386. 84 UK Consultation (n 5 above) [116ff]; Government Response (n 5 above) 5–7 (private action for all breaches too wide, so the issue is being referred to the Law Commission); see below [5.89]. 85 Draft Unfair Trading Regs 2007 (n 5 above) regs 8-19; UK Consultation (n 5 above) [6]; Consultation on 2007 Draft Regs (n 5 above) [3.21ff]. 86 Unfair Practices Directive (n 5 above) R[9]. 87 UK Consultation (n 5 above) [176ff]; Draft Unfair Terms Regs 2007 (n 5 above), regs 8, 9–12. 88 UK Consultation (n 5 above) [180–192]. 89 Draft Unfair Trading Regs 2007 (n 5 above) reg 27 inserting Enterprise Act 2002, c 40, sch 13 para 9C; ss 8–19; Draft Unfair Trading Regs 2007 (n 5 above) sch 2 para 86 amending Enterprise Act 2002 (Part 8 Community Infringements of Specified UK Laws) Order 2003, SI 2003/1374; Consultation on 2007 Draft Regs (n 5 above) [3.51ff].

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religious acolyte of her entire fortune,90 but merely as conduct strong enough to change the transactional decisions of an average consumer91; indeed, the whole shift from unconscionability as the threshold to bad faith is a lowering of the bar which is revolutionary and welcome. Equally revolutionary is the concept of unreasonable omission of information — the failure to disclose — which sits even more uncomfortably with English traditions. It remains to be seen to what extent property law will change, but the changes to marketing land will be real indeed.

DO O R STEP SELLI N G O F LA N D

Doorstep Selling of Land 1

Day tripping

[5.16] Contracts made away from the trader’s business premises are curbed by a Directive which creates a regime colloquially and inaccurately described as the Doorstep Selling Directive. It bites if a trader makes an arrangement to supply goods or services to a consumer during an excursion organised by the trader away from his business premises.92 This has attracted a fair share of commentary93 but scarcely enough to cope with all the complexities. What happens on that excursion may be the conclusion of a contract, or the making of a binding offer by the buyer, or the making of an offer for subsequent acceptance by the trader.94 The classic example of an excursion to buy land is Travel Vac v Sanchis.95 Sanchis was a Valencian who bought week 19 in a timeshare apartment at the Parque Denia residential development from a Valencian company under an arrangement signed at the timeshare complex in Denia, to which Sanchis had gone at the invitation of the seller.96 The offer was made at the apartment complex in the town of Denia (Spain) when the premises of Travel Vac were located at 5-60 Calle Profesor Beltran Baguena in the city of Valencia, so the contract was clearly negotiated away from the vendor’s normal business premises,97 the sales suite not being marked as premises where sales are made to

Allcard v Skinner (1887) 36 Ch D 145 CA. See below [5.43]. 92 Doorstep Selling Directive (n 6 above) §1[1]; C-481/99 Heininger v Bayerische Hypo- und Vereinsbank [2001] I ECR 9945 ECJ, J[3ff]; Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(1)(d). 93 Weatherill (n 1 above) 94–98; Pasa & Benacchio (n 3 above) 32–36; L Niglia ‘The Non-Europeanisation of Private Law’ (2001) 4 ERPL 575–599, 584–585. 94 Doorstep Selling Directive (n 6 above) §1[2]. 95 C-423/97 Travel Vac v Sanchis [1999] I ECR 2195 ECJ; as to why this fell outside the land exemption see below [5.19]. 96 Travel Vac (n 95 above) J[9]. 97 Travel Vac (n 95 above) J[29]. 90 91

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the public.98 Antelm Sanchis lived in Valencia, so he had to drive 70 km down the E15 to Denia, a significant journey99 which could be treated as an organised excursion given that the trader had told him on which day to travel and at what time.100 Sanchis had succumbed to letters pressing him to visit the timeshare complex, the offer of a luxury free gift, and numerous telephone calls. Once at the complex consumers were trapped for several hours while being plied with alcoholic drinks.101

2

The ‘doorstep’

[5.17] People call it the Doorstep Selling Directive102 but this is a misnomer, even for that limb which applies to visits to the consumer’s home. In fact the foot may be jammed in the door at the consumer’s place of work rather than his home, and of course many unsolicited visitors will eventually wheedle themselves inside the front door.103 No doubt the travelling chimney brush seller is kept standing outside, as is the spiv who arrives with the steaming remnants of a job lot of tarmac — ‘just the right quantity for your drive, sir’ — but the salesman of double glazing or foreign investment opportunities must eventually get inside the home. The doorstep is the first point of contact on an unsolicited visit but not necessarily the point of sale, and it goes without saying that the Directive applies to post-2001 homes104 constructed without a doorstep for ease of disabled access. A ‘visit’ is required, more than simply delivering a leaflet.105 It must be unsolicited, that is not at the express request of the consumer106 or made to a consumer who could not know that the visitor was a trader.107 Our domestic law also includes a case where the trader has telephoned the consumer out of the blue indicating that he is willing to visit the consumer and where the marketing visit is by a person related to the trader who ultimately sells a product.108 Subject to domestic rules, a visit is solicited if the consumer asks the trader to visit even if he ends up buying a different product from that in which he expressed an interest.109

Travel Vac (n 95 above) J[37]. Travel Vac (n 95 above) J[35]. 100 Travel Vac (n 95 above) J[28], J[36]. 101 Travel Vac (n 95 above) J[31]. 102 Contracts Negotiated Away from Business Premises Directive (Doorstep Selling) (n 6 above). 103 Doorstep Selling Directive (n 6 above) §1[1]. 104 Building (Amendment) Regs 2001, SI 2001/3335, Part M (disabled access). 105 Havair v Vile [2000] CLYB [848] County Ct. 106 Doorstep Selling Directive (n 6 above) §1[1]; Heininger (n 92 above) J[3ff]; Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(1). 107 Doorstep Selling Directive (n 6 above) §1[2]. 108 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(3), reg 4A added by SI 1998/3050. 109 Doorstep Selling Directive (n 6 above) §2[3]. 98 99

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[5.18] Agents in Germany seem particularly addicted to pitching dodgy investments in land on random visits to punters’ homes, as shown by the Heininger110 family of cases. The Heiningers themselves bought an apartment in East Germany, encouraged by the availability of tax concessions in the east. The deal was set up by an estate agent acting on a self-employed basis as agent for the bank, who made several unsolicited visits to their home, though they signed the Grundschuld (mortgage) at the offices of the bank to cover borrowing of €75K. The pitch for the loan made to the Heiningers in their own home had the potential to be a doorstep sale.111 Schulte112 concerned old apartment blocks, again in Germany, which were bought up, renovated, and let out, the promise being that rental yields would cover the mortgage repayments of investors funding the scheme. The Schultes agreed a deal set up in three home visits and the paperwork was signed at their home. The promised rental yields failed to materialise, leading to default on the mortgage, their problems exacerbated by over-optimistic valuations.113 Yet another case, Crailsheimer,114 concerned investments in self-catering apartments in Stuttgart let to business people on a short-term basis, a kind of self-catering hotel; in this case several visits to the borrowers at home were involved to present calculation models, and later to complete the applications and to return the signed loan agreements.115 Home visits give rise to ‘doorstep’ deals: the puzzle discussed below116 is how each case dodged the land exemption.

3

Doorstep selling of land

[5.19] Land contracts are not generally affected even if they are negotiated away from business premises because of the term which precludes the application of the doorstep selling regime to: contracts for the construction, sale and rental of immovable property or contracts concerning other rights relating to immovable property.117

That bald formulation is misleading, given the eccentric interpretations adopted by the European Court of Justice, since doorstep protection does apply to the purchase of a timeshare118 and also to a credit agreement secured on land.119 Let 110 Heininger (n 92 above). Under the Directive, and German law as amended to fit, it is not necessary for a bank to be bound for the bank to know that a doorstep selling situation has been created by an agent; a bank must enquire: Bundesgerichtshof XI ZR 255/04, [2006] 08 ECL [64]; Bundesgerichtshof II ZR 327/04, [2005] ECLYB [1573]. 111 Heininger (n 92 above) J[25]; R Jordans ‘Recent ECJ Decisions on Doorstep Cancellation Rights: a German Perspective’ (2006) 21 Butterworths Journal of International Banking & Finance Law 75–78. 112 C-350/03 Schulte [2005] I ECR 9215 ECJ. 113 Schulte (n 112 above) J[52]. 114 C-229/04 Crailsheimer [2005] I ECR 9273 ECJ. 115 Crailsheimer (n 114 above) J[21]. 116 See below [5.19ff]. 117 Doorstep Selling Directive (n 6 above) §3[2](a). 118 Travel Vac (n 95 above). 119 Heininger (n 92 above).


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us consider first the bulk of cases in which the land exclusion is applied. The Heiningers120 bought an apartment in the eastern Länder (regions) of Germany, planning to make use of tax concessions, and when it turned out to be a bad investment they could not upset the purchase of the flat, even though it had been pitched to them in their home, under disadvantageous ‘doorstep’ conditions. The same is true of the deal to renovate residential apartment blocks in Schulte121 and the scheme to set up business-orientated self-catering apartments in Crailsheimer.122 In general a deal to buy land cannot be upset because of the circumstances in which it was negotiated.123 For this reason the litigation in each of the three cases just discussed focused on the land finance deal and whether it was then possible to attack the land purchase deal as being connected to the finance deal.124 [5.20] The European Court of Justice has treated the land exemption as a derogation from the general scope of the protection of consumers in their home and by interpreting the derogation narrowly is steadily chipping away at the apparent exemption for sellers of land. What were the Court thinking of in Travel Vac v Sanchis?125 He, Sanchis, bought week 19 in a furnished time share apartment in Parque Denia on an organised buying excursion.126 His purchase in September 1996 was just too early to benefit from cancellation rights under the Timeshare Directive,127 but the European Court of Justice preemptorily dismissed the suggestion that the timeshare and doorstep protections were mutually exclusive, since there were no express exclusions and no necessity to imply an exclusion.128 Thus the real issue was whether a mixed contract for land and services fell into the doorstep selling regime or into the land exemption. The case for exclusion is simple. A contract for a true timeshare will confer rights in the timeshare apartment itself, a tiny sliver of interest amounting to a 1/51st undivided share in a furnished flat. Spanish timeshares generally do create real rights in the immovable property itself,129 and it seems that Sanchis probably had a true timeshare that was swappable. The fact is that the European Court of Justice did not find it necessary to resolve the nature of the Sanchis timeshare. Technical distinctions were not thought of the least importance, and the doorstep selling regime was applied irrespective. Heininger (n 92 above). Schulte (n 112 above). 122 Crailsheimer (n 114 above). 123 It may nevertheless be better to offer a cancellation right because if a seller misjudges the land exemption he will have failed to provide notice of the right of cancellation and the transaction will remain cancellable indefinitely, whereas if notice is given all possibility of cancellation soon elapses; see below [5.74]. 124 See below [5.80ff]. 125 Travel Vac (n 95 above). 126 Travel Vac (n 95 above) J[9]; see above [5.16]. 127 See below [6.31ff]. 128 Travel Vac (n 95 above) J[22–23]. 129 Sanchis argued, but only half-heartedly, that he had no right in any particular flat: Travel Vac (n 95 above) J[19]. 120 121

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[5.21] Let us assume, as seems probable, that Sanchis had a contract for the sale of land mixed up with a contract for associated services, by which Travel Vac were to maintain the building, manage the timeshare scheme, and lay on communal services, along with membership of the leading timeshare exchange club, Resort Condominium International.130 An overall price of 1 million pesetas was apportioned (by Travel Vac themselves and to their own disadvantage?) so that only three-tenths paid for the apartment, with the remaining seven-tenths consisting of tax, joint ownership of the furniture, services and membership of the exchange scheme.131 So it happened that the value of the services exceeded the use value of the flat.132 Surely this was a land contract, and the land component should have excluded the doorstep regime completely, or at least that part should have been severed so that the timeshare component of the contract was door-steppable (that is, free of control)? Instead the European Court of Justice took the strange decision to allocate the entire contract to one camp or the other, an allocation made not on the basis of the feeling of the contract133 but solely on economic value.134 As the Commission had argued, so the Court decided.135 This extra-legislative extrusion may be difficult to apply. We know how it works with a 3:7 split, and may presume therefore that the reverse is true if the split is 7:3, but what of 51:49 as against 49:51? The economic test applied must, it is felt, be a particular illustration of an underlying qualitative test. The decision in Sanchis is one way to make an inadequately drafted Directive work, but not the best way. On any normal reading of the land exclusion, and the United Kingdom transpositor was indeed a very normal reader, that was enough to ensure that Travel Vac were unhindered in their marketing of Sanchis’ timeshare. [5.22] Of course, if the contract is for the sale of a house or flat that is under construction the contract is outside doorstep protection because both the sale and the construction elements are separately excluded,136 so the point at which the value tips from construction-predominant to land-predominant is not the point at which protection accrues. Construction contracts must be all in or all out, and the rule is all out. All in would have been better. After all, a developer of a flat scheme could act exactly as the timeshare vendor in Denia, or worse, and there is no reason to exempt a seller who resorts to organising excursions or dropping in on potential buyers at home.

Travel Vac (n 95 above) J[10]. Travel Vac (n 95 above) J[11]. Surely the inclusion of any tax on land is very odd. 132 This is tested by reference to a single legal transaction and it is not legitimate to split the overall deal into its component parts: Schulte (n 112 above) J[78]. 133 A contract to buy a flat ‘feels’ like a land contract, even if the block of flats is in such serious disrepair that the capitalised value of the service charge exceeds the value of the flat. 134 Travel Vac (n 95 above) J[17]. 135 Travel Vac (n 95 above) J[25]. 136 Doorstep Selling Directive (n 6 above) §3[2](a). In the UK this is an ‘excepted contract’: Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2). 130 131


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Finally, one should mention the de minimis exception137 up to €60 (£35), the exclusion of insurance contracts,138 and one or two minor exceptions unlikely to affect buyers of land.139

4

Land in the United Kingdom and property repairs

[5.23] National transposition is, unsurprisingly, erroneous in several states, not least the United Kingdom. It could scarcely be otherwise given the unpredictability of the Travel Vac decision.140 Regulations made in 1987 eschew the widespread colloquialism ‘doorstep’ for Teutonic literalism in applying consumer protection to the Cancellation of Contracts Concluded Away from Business Premises. Better to be a cavalier, Wrong and Wromantic, than a roundhead, Right and Repulsive,141 but worse still to be like the transpositor, Wrepulsive and Wrong. It gives a wider exception than is justified by European case law because the inherent scope of the domestic transposition is limited to movable goods, using a domestic definition rehashed from the sale of goods legislation.142 That does not sit well with the protection of a timeshare sold on a day trip and indeed if (European) goods equated to (English) goods both the European and English exclusion of land would be superfluous. British transposition confines its scope to sales of goods and then treats as an ‘excepted contract’ ‘any contract (i) for the sale or other disposition of land, or for a lease …’,143 an exclusion which must lack all content. The European legislation must use ‘goods’ in a wider sense, rather like the ‘biens’ of the European Convention, since only then does it make some sense to exclude land.144 A further category of ‘excepted contract’ is for mixed construction and land sale contracts, as already considered.145 A contract for a new-build house or flat is located firmly in the excepted land category. [5.24] Contractors selling repairs to land might possibly be seen as land contractors and so free to doorstep, but they are brought back in to the net as traders who make ‘contracts for the supply of goods and for their incorporation 137 Doorstep Selling Directive (n 6 above) §3[1]; Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2). 138 Doorstep Selling Directive (n 6 above) §3[2](d); Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2)(d), using the Insurance Companies Act 1982 definition. 139 Supply of food or drink to a household by regular roundsmen, catalogue sales and contracts for securities. 140 See above [5.16]. 141 WC Sellars and RJ Yeatman 1066 And All That (London, Methuen, 1930) ch 35. 142 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 2(1); Sale of Goods Act 1979, c 54, s 61(1). 143 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2). ‘Land mortgage’ includes any security charged on land or a Scottish heritable security. ‘Security’ in relation to a contract means a mortgage, charge, pledge, bond, debenture, indemnity, guarantee, bill, note or other right provided by the consumer, or at his request (express or implied), to secure the carrying out of his obligations under the contract. 144 E Conv HR Protocol 1 (Paris, 1952, CETS 9) §1, generally translated as ‘possessions’. 145 See above [5.22].

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in immovable property or contracts for repairing immovable property’.146 The United Kingdom adopts an almost clean transposition, a copy out, but there is a sting in the tail in the shape of a (wrongful) exclusion of repairs financed by a secured loan, a tricky point which needs to be considered anon.147 Taken collectively, property repairs are the most important economic area affected by the doorstep selling controls. Property maintenance is high volume and high value. Home visits generate £2.4 billion a year worth of business, of which £1.6 billion is spent on double glazing, and another £250 million on conservatories. Around 4 per cent of double glazing contracts are cancelled, more than 6K a year, but many attempted cancellations fail, and there are many other abuses.148 [5.25] Investigation of a ‘supercomplaint’ about home improvements149 revealed that 94 per cent of British consumers were unaware of rights after unsolicited visits. Hence the proposed ban on cold calling.150 Around six out of ten contracts follow solicited visits, in which there is currently no cooling-off period, a lacuna that should be plugged. During the period allowed for cooling-off both the commencement of work and taking advance payments should be banned, and that period should be left for the perusal and digestion of the information provided about cancellation rights and the information provided in writing about pricing on the principle of transparency, either a price list or a detailed quotation.151 The Consumers, Estate Agents and Redress Act 2007152 extends cancellation rights to contracts made during visits that are solicited.

5

Doorstep selling of land finance

[5.26] An overwhelming case can be made for controlling sales of credit on the doorstep,153 but the European legislator seemed to eschew that area since the doorstep selling regime has a wide land exception encompassing straightforward sales and all other contracts for rights relating to land.154 A cursory reading suggests complete freedom in the marketing of secured loans, but the European Court of Justice by a strict reading of the derogation155 has succeeded in reversing the legislation and taking control of secured loan financing sold on the doorstep

Doorstep Selling Directive (n 6 above) §3[2](a). Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2); see below [5.82ff]. 148 Doorstep Selling and Cold Calling (n 58 above) [3.5], [12]. 149 Doorstep Selling and Cold Calling (n 58 above) [3.8]; ‘OFT Seeking to Close Doorstep Selling Loophole’ [2004] NLJ 757. 150 Doorstep Selling and Cold Calling (n 58 above) [8]; Property Repairs (Prohibition of Cold Calling) Bill 2004 (a Private Member’s bill which fell). 151 Doorstep Selling and Cold Calling (n 58 above) [4–10]. 152 Consumers, Estate Agents and Redress Act 2007, c 17, s 59; this is very different from the proposals of the Doorstep Selling (Property Repairs) Bill 2004. 153 Doorstep Selling Directive (n 6 above) R[4–5]; Heininger (n 92 above) J[27], J[34]. 154 Doorstep Selling Directive (n 6 above) §3[2](a); Heininger (n 92 above) J[25–26]. J[29]. 155 C-203/99 Veedfald [2001] I ECR 3569 ECJ, J[15]; Heininger (n 92 above) J[30]. 146 147


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or away from business premises. Heininger156 establishes the possibility of the cancellation of a loan secured on a flat under the Doorstep Selling Directive, after the parallel right of cancellation as a consumer credit agreement has elapsed. The consequences of withdrawal are left to national law, and the issue now up for grabs is the extent to which European law prescribes those consequences. The right may, or may not, be almost worthless. An assessment of the likely outcome can only be made after the issue has been placed in context. [5.27] Tax concessions were granted on investments in land situated in former East Germany, and these encouraged the Heiningers, Georg and Helga, to buy a flat there in 1993. In order to do so they borrowed €75K from a bank, secured by a Grundschuld, a charge on the land similar to a mortgage.157 The deal was set up by an estate agent acting on a self-employed basis as agent for the bank, who made several unsolicited visits to their home, though they signed the mortgage at the offices of the bank. The pitch for the loan made to the Heiningers in their own home had the potential to be a doorstep sale.158 It took five years, until January 1998, for it to become apparent that their eastern adventure would turn out to be a bad investment. The Heiningers then wanted to withdraw from the loan and purchase, by revoking their declaration of intent to enter into the loan agreement, claiming to use the German doorstep selling law.159 Since the door-stepping agent had not informed them of their right of cancellation and in those circumstances it was unlimited in time, the Heiningers were still in time to resile.160 [5.28] Control of the Heiningers’ agreement seemed to be precluded by the exception to the doorstep selling regime for all contracts for rights relating to land, wording surely intended to include an agreement to provide security over land?161 The European Court of Justice reached the opposite conclusion.162 An advance used to fund the acquisition of land is linked to the land by the use of a charge to secure the loan on the land, but that linkage was not enough for the entire credit agreement to become a contract concerning a right relating to the land.163 Rather, the subject matter is a grant of funds and a correlative obligation to repay what is borrowed with interest.164 This nature is determined from the limited perspective of the consumer, since the provision of security is the key so far as the lender is concerned and the reason a loan is offered at a beneficial interest rate. The Heiningers’ credit cancellation right was already time-expired165 156 157 158 159 160 161 162 163 164 165

Heininger (n 92 above). Heininger (n 92 above) J[16–17]. Heininger (n 92 above) J[25]. Gesetz über den Widerruf von Haustaugeschaften, BGBl I 122, §1. Heininger (n 92 above) J[17]. Doorstep Selling Directive (n 6 above) §3[2](a); Heininger (n 92 above) J[25–26], J[29]. Veedfald (n 155 above) J[15]; Heininger (n 92 above) J[30]. Heininger (n 92 above) J[32]. Heininger (n 92 above) J[33]. Heininger (n 92 above) J[36–39]; see below [5.82].

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so they got extra time to cancel by being placed in the doorstep selling regime. The decision not to apply the doorstep land exclusion is ludicrous, considering secured lending solely from the perspective of the borrower as primarily concerned with a loan and its repayment whilst the lender regards the security over the land as of paramount importance. Nevertheless Heininger is established as a fount of authority followed so far in two further cases, Schulte166 and Crailsheimer,167 in each of which the consumer was able to resile from loans used to finance land acquisitions. Given the artificiality of the European Court of Justice’s decisions, it is no surprise to find erroneous transposition and practical uncertainty, and particularly uncertainty on the key issue which is whether a Heininger cancellation is a protection without content, a trap even? This last issue is crucial and hangs in the balance and it turns on whether it is the finance deal or the land acquisition and finance combined for which cancellation is to be allowed, an issue considered below.168

6

Doorstep selling of land finance in the United Kingdom

[5.29] The United Kingdom transposition reveals a familiar voyage in the Parliamentary Counsels’ Office from a clear European concept written in defective English through a process of translation into precise legislative English where the end point of the journey just happens to be completely different from the destination reached by the European Court of Justice on its parallel voyage of interpretation. Regulations transposing the controls in the United Kingdom are limited to goods (English sense), leaving the domestic scope too narrow to catch those (few) cases where land is partially within the European net. Nevertheless a contract for a loan secured on land might be treated as a contract for a financial service, and so it is necessary to exclude loans where the security is land, an exclusion carried out for four categories of financing contracts: 앫 앫 앫 앫

land mortgages,169 finance for the purchase of land, bridging loans in connection with the purchase of land, or finance for goods supplied so as to be incorporated into land or for the repair or improvement of a building, where secured by a land mortgage.170

Schulte (n 112 above). Crailsheimer (n 114 above). 168 It is possible that a consumer may obtain damages for failure of advice, a useful second prize: Oberlandesregericht München 19 U 3717/04, [2006] 04 ECL [63]; see below [5.82]. 169 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2). ‘Land mortgage’ includes any security charged on land in the form, eg, of a mortgage, charge, pledge or debenture, indemnity, or guarantee, when provided by the consumer and also out of protection is a guarantee provided at the request (express or implied) of a consumer, as well as a Scottish heritable security. 170 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 3(2). 166 167

Distance Rentals

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So doorstep selling of a loan secured on land is not controlled by United Kingdom domestic law, and this does not chime with European law as expounded judicially. Mortgages should be controlled if sold on the doorstep or during an excursion. How could Parliamentary Counsel have thought otherwise! Domestic laws may go further and introduce a total or partial prohibition on the conclusion of contracts away from business premises,171 but this step has not been taken in our domestic law.

DI STA N CE R EN TA L S

Distance Rentals 1

The European regimes

[5.30] Two regimes exist, according to the nature of the thing being sold at a distance, and these operate in parallel with a common underlying structure.172 So far as land is concerned each regime includes rentals but excludes other land contracts.173 The first covers goods and non-financial services174 with a few minor exceptions175 and has been implemented in the United Kingdom176 and elsewhere in the EU.177 Financial services include banking, credits, insurance, personal pensions, investments and payments178 and at first fell into a gap.179 Marketing over the internet is increasing and hence there is more cross-border selling and a need for a high degree of consumer protection.180 Hence the adoption in 2002 of a second Directive181 relating specifically to the distance selling of financial Doorstep Selling Directive (n 6 above) R[11]. M Donnelly & F White ‘Distance Selling Directives — Time for Review’ (2005) 56 NILQ 200–236, 200. 173 Weatherill (n 1 above) 104ff; Pasa & Benacchio (n 3 above) 69ff; Guide for Businesses on Distance Selling (Office of Fair Trading, 2006); see below [5.33ff]. 174 Distance Selling Directive (n 7 above); VK Bange ‘Impact of the Distance Selling Directive’ (2000) 10 International Technology & Computer Law Journal 3–6; J Newton ‘Keeping the Customer in the Know’ (2001) 3 European Business Lawyer 16; P Meads ‘Distance Selling’ (2002) 13 International Company & Commercial Law Review 179–182. 175 Those not relevant to land are given in Distance Selling Directive (n 7 above) §3[1]. 176 Distance Selling Regs 2000 (n 7 above); ES Singleton ‘Distance Selling Regs’ (2000) 164 Justice of the Peace 98–99, 104. 177 Some random examples: Malta Distance Selling Regulations 2001 [2001] ECLYB [589]; Netherlands [2000] Stb 617, [2001] ECLYB [553]; Germany [2000] BGBL (D) I 897, [2000] ECLYB [580]; JL Achirica ‘Distance Selling in Spanish Law’ [1998] 6 Consumer Law Journal 339–358; Decree 2005-1450 [2006] JORF 18364, [2006] 01 ECL [54]. 178 Distance Marketing of FS Directive (n 7 above) §2[b]. 179 Donnelly & White (n 172 above) 207. 180 Distance Marketing of FS Directive (n 7 above) R[2–6] 181 Distance Marketing of FS Directive (n 7 above); Green Paper FS — Meeting Consumers’ Expectations COM (96) 209 final; a review has been delayed until 2008: §20; Communication from the Commission concerning Distance Marketing of FS COM (2006) 161 final. 171 172

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services182; it has, of course, been taken up in the United Kingdom183 and Europe-wide by transposition into the civil codes of continental countries184 in order to approximate laws.185 Activities are divided so as to fall into one or other Directive but not both.186

2

Means of contracting at a distance

[5.31] Distance contracts are those made over the internet or by any other means of communication at a distance when the circumstances are such that the trader and the consumer never meet face-to-face. Contracts can be concluded between parties who are not physically present simultaneously.187 A consumer who goes shopping in person can see the product on offer and pay then and there. Cheaper prices are found on the internet but without a chance to examine what one is buying and with an inherent risk of fraud when payment is made in advance.188 So the absence of face-to-face dealing calls for special controls when the case fits into the B2C pattern189 but not, for example, for an e-mail exchange between two private individuals. Marketing over the internet enables traders from elsewhere in Europe to sell in the internal market, with internal boundaries crossed unnoticed and without border checks.190 Pan-European marketing implies the need for a continental scale to consumer protection laws to a common minimum standard.191 [5.32] Distance methods of communication are included in a list which is indicative and non-exhaustive.192 Print media include general printed circulars, letters addressed to specific consumers, press advertisements with attached order 182 A Davis ‘Proposed EC Directive on Distance Selling of FS’ (2001) 9 Journal of Financial Regulation and Compliance 56–66; N Moloney ‘Distance Marketing of FS’ (2000) 21 Company Lawyer 198–206; P Reese ‘Distance Marketing of FS’ (2004) 20 Computer Law & Security Report 53–56; M Orlino ‘Cross-border On-line FS’ (2004) 15 European Business Law Review 367–379; K Felke & R Jordans ‘Implementation in the UK and Germany’ (2004) 29 Journal of International Banking Law and Regulation 188–192. 183 FS Distance Marketing Regs 2004 (n 7 above). 184 Spanish Law 47/2002 [2003] ECLYB [350]; Decree 2005-1450 (n 177 above). 185 Distance Marketing of FS Directive (n 7 above) R[13], §1[1]. 186 Distance Selling Directive (n 7 above) §3[1] amended by Distance Marketing of FS Directive (n 7 above) §18[1]; Distance Selling Directive Annex II (list of excluded FS) repealed by Distance Marketing of FS Directive §18[2]; Distance Selling Regs 2000 (n 7 above) reg 5(1)(c) as amended by FS Distance Marketing Regs 2004 (n 7 above) reg 25. 187 Distance Selling Directive (n 7 above) §2[1]; Distance Selling Regs 2000 (n 7 above) reg 3(1); Distance Marketing of FS Directive (n 7 above) R[15], §2[a]; FS Distance Marketing Regs 2004 (n 7 above) reg 3. Also where an intermediary is used. An important authority on when a distance contract is made is Robertson’s Electrical v Customs & Excise Commissioners [2007] STC 612 (VAT tax point at date of on-line payment). 188 Donnelly & White (n 172 above) 201, 202. 189 See above [5.05]. 190 Distance Selling Directive (n 7 above) R[1–3]; Donnelly & White (n 172 above) 203. 191 Distance Selling Directive (n 7 above) R[4], §1. 192 Distance Selling Directive (n 7 above) §2[4], Annex I; Distance Selling Regs 2000 (n 7 above) reg 3(1). Curiously this is taken as read in relation to financial services.

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form, and catalogues. Telephone marketing is controlled, including videophone and videotext, whether the caller is human or an automated machine, though controls remain inadequate. Broadcast media include teleshopping and radio adverts. Fax (facsimile machine) has had its day though spamming is just as irritating as cold calling.193 European commerce is now developing via electronic mail and other internet technologies. Principles are stated with sufficient flexibility to enable adaptation to new technologies as they emerge194 though this entails lack of clarity and significant problems for suppliers of financial services.195 A miscellany of other points: a consumer is entitled to change the means of distance communication used196; auction sales are excepted but the status of eBay is unclear197; and some means of distance communication may be banned as unfair practice.198

3

Land, finance for land and rentals

[5.33] Distance contracts for land are generally outside the scope of protection. All products are within the initially wide embrace but this is hacked into shape by a wide-ranging exemption for the majority of land contracts except for rental. So a business can contract to sell land to a consumer over the internet without a face-to-face meeting, without worrying about information requirements and withdrawal rights.199 The exclusion consists of any distance contracts for the construction and sale of immovable property or relating to other immovable property rights apart from rental.200 Transposition to British law201 excludes land and buildings separately, with the European exception of rental agreements repeated in both limbs, but why the transpositor thought this necessary is hard to tell given the general legislative practice of treating a building as land.202 [5.34] Land finance is an example of a financial service which, if arranged over the internet or otherwise at a distance, is subject to a separate Directive in which the land exclusion is permissive, meaning that national legislation is free to apply

See below [5.52]. Distance Selling Directive (n 7 above) R[9]; Distance Marketing of FS Directive (n 7 above) R[15]. 195 S MacKenzie ‘To Be or Not to Be a Distance Contract’ (2004) 09 Compliance Monitor 13–15. 196 Distance Marketing of FS Directive (n 7 above) §5[3]; FS Distance Marketing Regs 2004 (n 7 above) reg 8(4); unless incompatible with the contract or the nature of the FS provided. 197 Distance Selling Directive (n 7 above) §3[1]; Distance Selling Regs 2000 (n 7 above) reg 5(1)(f); Donnelly & White (n 172 above) 210. 198 See below [5.52]. 199 See below [5.64ff], [5.73ff]. 200 Distance Selling Directive (n 7 above) §3[1]. The Netherlands excluded construction of buildings but not the sale of land: Communication on Distance Contracts (n 181 above) [4]; otherwise implementation is good; Annex I of the Directive has a table of implementing measures. 201 Distance Selling Regs 2000 (n 7 above) reg 5(1). Harmonisation is minimalist, so national law could apply the European regime to land. 202 Law of Property Act 1925, c 20, s 205(1)(ix). 193 194

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the European rules to land; the scope of the permitted exception being contracts to provide credit203: 앫 intended primarily for the purpose of acquiring or retaining property rights in land or an existing or projected building or for the purpose of renovating or improving a building; or 앫 secured either by mortgage on immovable property or by a right related to immovable property.204 Where local law at the time of adoption of the Directive allowed time for reflection for credit secured on land of these types, it must still be allowed to consumers resident in that state. [5.35] The market in financial services is mutating rapidly, as can be seen from the need for revision of the regulatory ambit of the Financial Services Authority which took over control of the mortgage market at the end of October 2004.205 At first it covered any contract to provide credit under which the borrowers’ repayment obligation is secured on land, but this had to be extended to cover closely related forms of financial activity under which a financier acquires a major interest in land from the person in receipt of the finance, a major interest being a legal or equitable fee simple absolute or a term of years absolute. Newly covered, therefore, are home reversion schemes in which an elderly person sells their home to a reversion provider in return for a lump sum, income and rent-free occupation of their home for life.206 A level playing field is created for an Islamic finance product, the ijara, and for flexible tenure products which enable home-owners to increase or decrease equity ownership by transferring interests to and from a private sector finance provider. [5.36] Rental contracts by which an arrangement to take accommodation is concluded over the internet or otherwise at a distance are affected by marketing controls.207 English jargon defines a ‘rental agreement’ in terms of exemption from formality, that is the short leases and contracts for three years or less which could be made without writing.208 The more generic European wording applies to an agreement made in Britain to rent accommodation elsewhere in Europe.209 203 Distance Marketing of FS Directive (n 7 above) §6[3]. National laws are collected together by the Commission: §6[4–5]. 204 As to France and Belgium see below [9.01] n 1. 205 Financial Services and Markets Act 2000, c 8, s 22, sch 2 para 23; also sch 2 para 23A to be introduced by the Financial Services (Land Transactions) Act 2005, c 24; a very helpful Explanatory Memorandum was attached to the Bill. 206 Regulating Home Reversion Plans (HM Treasury, 2003); Defining Home Reversions (HM Treasury, 2004); Consultation Responses (HM Treasury, 2004). 207 Distance Selling Directive (n 7 above) §3[1]. 208 Distance Selling Regs 2000 (n 7 above) reg 5(2)(a); Law of Property (Miscellaneous Provisions) Act 1989, c 34, s 2(5)(a); this is more or less the same exemption as Law of Property Act 1925 (n 202 above) s 54(2); P Sparkes ‘Informal Short-term Leases’ [1992] Conveyancer 252–262, 337–342. Corresponding provisions elsewhere in the UK are Requirements of Writing (Scotland) Act 1995, c 7, s 1; Statute of Frauds (Ireland) 1695, 7 & 8 William III c 22, s 11. 209 Distance Selling Regs 2000 (n 7 above) reg 5(3).

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[5.37] Agreements to provide accommodation short of a property rental are subject to a partial exclusion for: contracts for the provision of accommodation, transport, catering or leisure services, where the supplier undertakes, when the contract is concluded, to provide these services on a specific date or within a specific period.210

Many of the sharpest-cutting provisions against distance contracts are disapplied but there are two important controls: (1) the consumer has the right to be informed if the accommodation is unavailable and to be offered a refund at the latest within 30 days, and (2) the supplier may substitute equivalent accommodation provided that the consumer has been informed of this possibility in advance in a clear and comprehensible fashion.211

4

Timeshares

[5.38] Timeshares bought at a distance may potentially attract the protection of the distance contracting regime as well as the timeshare regime: internet marketing of timeshare could be a real menace,212 there is a strong case for protection, and there is no clearly expressed legislative intention to segregate the two regimes.213 All then turns on the nature of the particular timeshare contract. If it is a land transaction no extra protection accrues because of the land exemption from the distance selling regime214; if it is a contract for accommodation the two limited controls just described will apply.215 If a timeshare is a rental the full distance selling regime applies. Transposition in the United Kingdom is erroneous because it excludes completely timeshare agreements216 and timeshare credit agreements.217 A complete exclusion as enacted assumes that a timeshare agreement is a land contract, is not a rental, and not an accommodation agreement. All three points are wrong: 1 A timeshare agreement will not be a contract for a sale of immovable property if the timeshare is points-based or where the value of services predominates over the value of the accommodation.218 The domestic definition219 relied upon should include all timeshares in the European sense as well as some Distance Selling Directive (n 7 above) §3[2]; there is a rider relating to outdoor leisure events. Distance Selling Directive (n 7 above) §7[2–3]. 212 Report March 2000 COM (2000) 127 final, [4.1]. 213 Communication on Distance Contracts (n 181 above) shows that Hungary, Denmark, Slovenia and the UK exclude distance controls of timeshare selling, but all other states allow it; see above [6.33]. 214 See above [5.33]. 215 See above [5.36]. Distance Selling Regs 2000 (n 7 above) reg 19(2)–(8) needs amendment. 216 Distance Selling Regs 2000 (n 7 above) reg 6(1) disapplying regs 7–20. 217 Distance Marketing of FS Directive (n 7 above) §6[7]; instead Distance Selling Directive (n 7 above) §6[4] or Timeshare Directive (n 11 above) §7 apply. 218 See below [6.14]. 219 Distance Selling Regs 2000 (n 7 above) reg 6(1); Timeshare Act 1992, c 35; see below [6.33]. 210 211

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(timesharing in caravans or as an investment) which is purely domestic. A timeshare may or may not create rights in particular land according to the way that a timeshare is structured and the domestic exclusion of timeshares from distance controls needs reshaping to apply only where the timeshare happens to be a true sale of land. 2 Is it a rental? If the timeshare is in the United Kingdom, the question is whether the lease falls into the short lease exemption, which turns on whether the term is for more or less than three years. The transpositor seems to have assumed that the term must be continuous, but he was obviously trained in pre-1926 law when a lease was short only if the time from its grant to its termination fell within three calendar years; as reworded in 1925 the crucial question for timeshares in England is the length of the term. Each sliver of exclusive possession under a discontinuous term must be added together to find an aggregate, so that one week intervals aggregated over an 80 year term would last less than two years, but a two week interval would give an overall term too long to fit within a three year rental exemption. If a right stretches from 4 pm on Saturday to 10 am on the Saturday following should one count a full week or should one count up hours like an office worker waiting for the weekend? The outcome is a matter of chance. Most intervals will be spent overseas when all one needs to ask is whether the agreement amounts to a rental. 3 This is the converse of the last point, since if a timeshare is not an ordinary rental it will be an accommodation agreement. 220

5

Policy objectives

[5.39] Apart from a ban on inertia selling, the main policy objectives of the distance selling regime are to provide: 앫 comprehensive information at a pre-contract stage; and 앫 withdrawal rights linked to a cooling-off period.221 UN FA I R MA R KETI N G PR ACTI CES

Unfair Marketing Practices 1

General ban on unfair commercial practices

[5.40] Unfair practices will be prohibited in commercial B2C marketing,222 proposals which have met with a general welcome but much picking at

220 221 222

Sparkes (n 208 above) 337–342, 253. See below [5.64ff], [5.73ff]. Unfair Practices Directive (n 5 above) §5, Unfair Practices EM (n 5 above) [53ff].

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217

details.223 Commercial practices are widely defined. Pre-contract activities already controlled included advertising, commercial communications and marketing, but the new regime extends wider to any acts or representations made in connection with the promotion, sale or supply of a product by a trader to a consumer, the active side, and on the passive side it will also catch omissions in commercial communications, most notably when an invitation to purchase is made.224 Practices may also take place at the point of sale (though excluding from the European ambit rules of contractual formation) and also included for the first time are commercial practices occurring after sale (after-sales service).225 Apart from the inherent limitation to B2C contracts,226 there will be no impact on intellectual property rights, competition rules or health and safety principles.227 Building regulations and standards of fitness for rental property remain national concerns and need not be kept in line with other European states. Brussels will eschew control over professions, their authorisation regimes, and ‘deontological’ codes of conduct — such as the Law Society rules about solicitors practising as conveyancers.228 Two vital limits do exist on the EU scope, already discussed. Facilitative contract law remains national, in particular domestic rules about the validity, formation and effect of contracts,229 and further, the Directive does not alter national rules for individual actions brought by those who have been harmed by an unfair commercial practice, though as suggested above some at least of the fair trading duties may well end up in the United Kingdom as statutory duties.230

2

General prohibition

[5.41] Fairness is tested at three levels.231 A general clause requiring fair trading is a departure for the common law but on the continent it will do no more than replace a multiplicity of similar rules 223 C Handig ‘A Milestone in European Unfair Competition Law?’ (2005) 16 European Business Law Review 1117–1132; G Howells, H Micklitz & J Wilhelmsson European Fair Trading Law (Aldershot, Ashgate Dartmouth, 2006, 0-7546-458-4); C Poncibo & R Incardona ‘A Faltering First Step’ (2005) 1 London Law Review 317–337; Stuyck, Terryn & Van Dyck (n 58 above) 143 (major step forward but not without faults). 224 Unfair Practices Directive (n 5 above) §2[d]; see below [5.50]. 225 Unfair Practices Directive (n 5 above) R[13], §3[1], Unfair Practices EM (n 5 above) [30], [59]. 226 See above [5.05]. 227 Unfair Practices Directive (n 5 above) R[9], §3[2]–[3]. The scope also excludes general criminal laws against fraud, theft and harassment: UK Consultation (n 5 above) [45]. 228 Unfair Practices Directive (n 5 above) §§2[l], 3[8]. For native English speakers deontology is the science of duty, that branch of knowledge dealing with moral obligation. 229 Unfair Practices Directive (n 5 above) R[9], §3[2]; UK Consultation (n 5 above) Annex I suggests no change for the Misrepresentation Act 1967 c 7, Unfair Terms Regs 1999 (n 9 above) and Unfair Contract Terms Act 1977 (n 38 above). 230 See above [5.15]. 231 Stuyck, Terryn & Van Dyck (n 58 above) 109, 133 (interplay between grand general clause, small general clauses and blacklist).

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with a single standard.232 Calls on the autonomous general prohibition should be infrequent, but its loose texture will catch new scams as they are thought up. It will apply to any B2C commercial practice within the scope of the Directive. Those affected are practices contrary to the standard of professional diligence with a materially distorting effect. None of this takes into account the motives of the trader.233 These aspects are now considered in turn.

(1)

Lacking professional diligence

[5.42] A trader who fails to display professional diligence runs the risk that his practice will be found to be unfair, that is, he falls short of the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers, commensurate with honest market practice and/or the general principle of good faith in the trader’s field of activity.234 Conduct short of that standard is potentially unfair, but it becomes a prohibited practice only if it also meets the test of material distortion considered next below. In other words, all of these tests are cumulative.235

(2)

Material distortion and the average consumer

[5.43] Distortion of economic behaviour will be determined according to a single autonomous test.236 Commercial practices will be barred only if they influence directly transactional decisions made by consumers, that is, they affect the decision to buy, how and on what terms, how to pay, whether to retain or dispose of a product, whether to exercise a contractual right, and whether to act or to refrain from acting.237 Matters of taste, decency and social responsibility remain a national responsibility.238 Europeans are sophisticated enough to enjoy product placement and brand differentiation commercials without taking them literally, and these practices will remain legitimate.239 Practices must also be material. A free cup of coffee will have a minimal impact on an average consumer, but the offer of a free copy of European Land Law might be a much more significant enticement.240 232 Unfair Practices Directive (n 5 above) R[13], EM [20], EM [49–52]; Draft Unfair Trading Regs 2007 (n 5 above) reg 3; C-73/04 Klein v Rhodos Management [2005] I ECR 8667 ECJ, AG[11] Geelhoed (good faith argument left to German court). The UK criminal sanction requires mens rea under Draft Unfair Trading Regs 2007 (n 5 above) reg 8. 233 Black (n 73 above). 234 Unfair Practices Directive (n 5 above) §2[h]; Draft Unfair Trading Regs 2007 (n 5 above) reg 2. 235 UK Consultation (n 5 above) [74]. 236 Unfair Practices Directive (n 5 above) R[11]. 237 Unfair Practices Directive (n 5 above) R[7], §2[k]. Aggressive debt collection would be covered because deciding how and whether to make payment is a transactional decision: UK Consultation (n 5 above) [32–34]; Draft Unfair Trading Regs 2007 (n 5 above) reg 2. 238 Unfair Practices EM (n 5 above) [39]; Unfair Practices Directive (n 5 above) R[7] gives the example of banning commercial solicitation in the street. 239 Unfair Practices Directive (n 5 above) R[6], §5[3]. 240 Unfair Practices Directive (n 5 above) R[6], §§6[1], 7[1], 8. See also, in the spirit of the Starship Enterprise, the definition of ‘to materially distort the economic behaviour of consumers’:


219

Distortion and materiality are both to be assessed against the benchmark of an average consumer,241 codifying the test elaborated by the European Court of Justice.242 An ‘average consumer’ is reasonably well informed and reasonably observant and circumspect, account being taken of social, cultural and linguistic characteristics.243 This benchmark could vary from state to state,244 but who will want to blink first and admit that their shoppers are particularly gullible? Perhaps the French can give a lead here. The average taken may be of all consumers, or of a specific group which is targeted by the marketing,245 this being a matter of national judgment, and another case where a practice is tested against a specific subset is where the practice reaches all consumers but has a greater distorting effect on those vulnerable through mental or physical infirmity, age or particular credulity.246 The Directive is too cocky by half about the average consumer test247; common lawyers would be much more wary of the superficial simplicity of the concept of reasonableness. [5.44] In the English wording of the Directive there is an ambiguity about whether the test to be applied is solely objective. An action,248 to take one example, is tested to see whether it is likely to deceive the average consumer and whether it is likely to cause him to take a transactional decision he would not otherwise have done. Ask not whether a particular consumer has been misled but what the impact would have happened had he been a reasonable consumer. Why then does the text contain the alternative test that conduct deceives him and causes him to change his transactional decision-making? Conduct cannot deceive a phantom consumer, it can only be likely to deceive, so the inclusion of the words ‘deceives’ and ‘causes’ seems to suggest that the conduct may also be tested against a real person, a consumer who has been addressed and misled. If that were genuinely intended it would be necessary for the two verbal forms, hypothetical and real, to be matched by two nouns, when in fact there is only the single noun ‘him’, meaning, apparently, an average consumer rather than a real §2[e]; better, surely, to use French than American; Draft Unfair Trading Regs 2007 (n 5 above) regs 5–7. 241 Unfair Practices Directive (n 5 above) §§5[2](b), 6[1], 6[2], 7[1], 7[2], 8; Unfair Practices EM (n 5 above) [66]; Draft Unfair Trading Regs 2007 (n 5 above) reg 2 applied in regs 3–7. 242 Unfair Practices Directive (n 5 above) R[18]; Unfair Practices EM (n 5 above) [35]; C-315/92 Verband Sozialer Wettbewerb v Clinique Labatories SNC and Estee Lauder Cosmetics [1994] I ECR 317 ECJ; C-210/96 Gut Springheide v Oberkreisdirektor des Kreises Steinfurt [1998] I ECR 4657 ECJ. 243 Unfair Practices Directive (n 5 above) R[18], §2[b]; the test is qualitative not statistical, that is, very close to the common law concept of reasonableness: Twigg-Flesner (n 73 above) 388 (with added requirement of detrimental reliance by reasonable recipient). 244 Twigg-Flesner (n 73 above) 388; UK Consultation (n 5 above) [67]. 245 Unfair Practices Directive (n 5 above) R[19], Unfair Practices EM (n 5 above) [30]. 246 UK Consultation (n 5 above) [74–78]; at [79–83] it states that the specific duties in Unfair Practices Directive (n 5 above) §§6–9 are intended to incorporate the vulnerable/targeted group variations. 247 Howells (n 73 above) lxxii. 248 Unfair Practices Directive (n 5 above) §6[1]; but Draft Unfair Trading Regs 2007 (n 5 above) reg 5(2) is all objective.

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one. This ambiguity needs to be excised before unfair commercial practice becomes a tort in English civil law, since the two types of civil liability would be quite different. A claimant will presumably need to show both that he has been deceived personally and, additionally, that a reasonable person would have been deceived. Clearly an objective test was wanted and intended, but we are really entitled to expect precision.

3

Other unfair practices

[5.45] Fairness is a concept which lacks clarity, so it is best twisted to its negative form for ease of definition, unfairness being clearer than fairness.249 The residual prohibition on unfair practices, just considered, is supplemented by specific rules which place dubious practice into five categories — misleading practices that are blacklisted, misleading actions, misleading omissions, blacklisted aggression and other aggressive practices. Further the Directive incorporates some special rules such as the controls on misleading advertisements and invitations to purchase. The Directive headings are therefore rearranged here into a more functional structure.

4

Marketing and promotions

[5.46] Some methods of marketing are so unfair that they are blacklisted.250 In these cases the impact on an average consumer can be taken as read. Examples are confusing promotions [13], pyramid promotions in which a consumer is paid to introduce other consumers into the scheme [14]251 and prizeless competitions [19].252 Less intrusive marketing techniques still need to avoid misleading by actions and hence being considered aggressive.253 Many states control cross-border sale promotions and it was proposed to free up European rules by imposing a continent-wide cap on the level of domestic protection, but this was stalled by opposition from Germany, France and Italy and the whole idea was thrown into the Bonfire of the Commission’s Vanities in 2006.254 So there will be no common standard for discounts, offers of free gifts, premiums, many promotional contests, games or loyalty programmes. The 249 Unfair Practices EM (n 5 above) [30]. Billy Bragg in concert once posed the example of that group of football fans defined by their dislike of Manchester United FC though no doubt Chelsea FC is now a more apt example. 250 Unfair Practices Directive (n 5 above) R[17], §5[5]; Annex 1 [1–23]; Draft Unfair Trading Regs 2007 (n 5 above) reg 3(5)(d), sch 1. 251 Unfair Practices Directive (n 5 above) Annex I [14] is already proscribed in the UK by the Trading Schemes Regulations 1997, SI 1997/30; UK Consultation (n 5 above) 88. 252 Blacklisted advertising is considered below [5.52]. 253 See below [5.47]. 254 Sales Promotions Proposed Regulation COM (2002) 585 final R Azim-Khan ‘Cross-border Sales Promotions’ (2002) 4 European Business Law 16. This proposal was dropped on March 17th 2006.


221

United Kingdom is already liberal in the freedom to put on such promotions and is not greatly affected either way.

5

Aggression

[5.47] Aggressive commercial practices were not previously regulated by European law,255 but they can significantly impair the consumer’s freedom of choice.256 Those on the blacklist because they are bad enough to intimidate on average consumer are257: 앫 keeping consumers on the premises [24], 앫 prolonged or repeated visits to a home after a request to leave and not to return [25], 앫 persistent unwanted solicitations by telephone etc (excluding legitimate enforcement of contractual rights) [26], 앫 requiring documents irrelevant to an insurance claim or persistent failure to respond to correspondence [27], 앫 pester power — exhorting children to persuade their parents to buy a product [28],258 앫 inertia selling — unsolicited supply of products for which payment or return is demanded [29]259; a demand for payment is prohibited for goods and non-financial services260 and for financial services,261 stating that a trader’s job or livelihood is in jeopardy [30], 앫 creating the impression a prize has been won when it does not exist or is subject 앫 to a cost [31]. [5.48] Beyond those specific irritations there is a wider prohibition of aggressive marketing practices, such as harassment, coercion and undue influence. The first two require no definition. Undue influence, EU style, involves exploitation of a position of power to apply pressure, without using physical force, in a

Unfair Practices Directive (n 5 above) R[11]. Unfair Practices Directive (n 5 above) R[16], §8; Unfair Practices EM (n 5 above) [70]; Draft Unfair Trading Regs 2007 (n 5 above) reg 7. 257 Unfair Practices Directive (n 5 above) §5[5], Annex 1 [24–31]; Unfair Practices EM (n 5 above) [30]; UK Consultation (n 5 above) [105ff]; the list is entrenched; Draft Unfair Trading Regs 2007 (n 5 above) sch 1 para 24ff. 258 The main selling point of the Directive in press releases; eg Times February 25th 2005. 259 Unfair Practices Directive (n 5 above) Annex 1 [29]; Draft Unfair Trading Regs 2007 (n 5 above) sch 1 para 29. 260 Distance Selling Directive (n 7 above) R[16], §9, as amended by Unfair Practices Directive (n 5 above) §15; Distance Selling Regs 2000 (n 7 above) reg 24. 261 Distance Marketing of FS Directive (n 7 above) R[25], §9, as amended by Unfair Practices Directive (n 5 above) §15; FS Distance Marketing Regs 2004 (n 7 above) reg 15. The rules bite at the time of the original agreement, or on a variation or after a break of a year; but there is nothing to prevent tacit renewal so long as the break in service is less than a year: Distance Marketing of FS Directive (n 7 above) R[16], §1[2]; FS Distance Marketing Regs 2004 (n 7 above) reg 5. 255 256

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way which significantly limits the consumer’s ability to make an informed decision.262 Relevant factors are the timing, nature and persistence of the practice; any threatening or abusive language or behaviour; exploitation of a specific misfortune; non-contractual barriers to exercise of rights; and threats to take an action that cannot legally be taken.263 Conduct becomes material if, taken in the round, it would have a significant impact on an average consumer.264

6

Cold calling and spamming

[5.49] Distance selling should not rely on ‘cold calling’ and ‘spamming’. The International Marketing Supervision Network aims to secure co-operation to prevent illegal marketing practices.265 Use of automatic calling machines and fax machines should require the consumer’s prior consent, an opt-in.266 Otherwise an opt-out system allows traders to use other distance systems unless and until there is a clear objection from the consumer.267 Neither has been implemented by the truly Euro-sceptic United Kingdom.

7

After-sales service

[5.50] Some methods of after-sales service are blacklisted, notably its provision in a foreign language without warning or making false claims about local availability.268 Other after-sales activities are regulated by the general controls on misleading actions and aggression. So, builders need to be careful about remedying defects after sale and landlords need to take care about repairing and other post-rental obligations.

262 Unfair Practices Directive (n 5 above) §2[h]. It is not necessarily related to the English law concept of the same name, which has a much higher threshold of conduct which renders a contract voidable: UK Consultation (n 5 above) [187]; at [107] an example of European undue influence is a promise to reschedule an existing debt if a consumer buys another product; Draft Unfair Trading Regs 2007 (n 5 above) reg 7(3)(b). 263 Unfair Practices Directive (n 5 above) §9; Draft Unfair Trading Regs 2007 (n 5 above) reg 7(2). 264 Unfair Practices Directive (n 5 above) R[16], §§5[4](b), 8; Draft Unfair Trading Regs 2007 (n 5 above) reg 7(1). 265 Report on Distance Selling Complaints March 2000 COM (2000) 127 final, [5]. 266 Distance Selling Directive (n 7 above) §10[1]; Distance Marketing of FS Directive (n 7 above) §10[1]. 267 Distance Selling Directive (n 7 above) §10[2]; Distance Marketing of FS Directive (n 7 above) §10[2]; eg entry in a register set up for the purpose: (2001) 86 EU Focus 25–26. 268 Unfair Practices Directive (n 5 above) Annex 1 [8, 23]; Draft Unfair Trading Regs 2007 (n 5 above) sch 1 para 8.

Unfair Advertising and Statements

223 UN FA I R A DVERTI SI N G A N D STATEMEN TS

Unfair Advertising and Statements 1

Advertisements

[5.51] Advertisers269 make representations in order to promote a business supply of goods or services, the products to be promoted including rights in land.270 It could take place in a wide variety of media so it is likely to reach all sorts of people, and to percolate readily across national frontiers. Patchy national laws have, in the past, made it difficult to mount a pan-European advertising campaign,271 so there was a strong case for EU-wide controls on misleading advertisements. The legislative history is slightly complex and each regime varies in detail.

(1)

Misleading advertising to consumers

The directive on misleading advertising272 will continue to protect consumers,273 until the Unfair Commercial Practices Directive bites late in 2007. Products affected include movable goods, services of the financial and non-financial varieties, and land.274 Advertisements are misleading if the presentation or other features are likely to deceive, applying objective criteria and imposing an onus on the advertiser to prove the material accuracy of factual claims made.275 Features tested include276: 앫 characteristics of the land or services, such as availability, nature, execution, composition, method and date of provision, fitness for purpose, uses, quantity, specification, geographical or commercial origin or the results to be expected from their use, or the results and material features of tests or checks carried out on the goods or services; 앫 the price and conditions, including any fixed price, the manner in which a variable price is calculated, and the conditions on which the land is supplied or services are provided;

269 Misleading and Comparative Advertising Directive 84/450/EEC [1984] OJ L250 17, as amended by 97/55/EC [1997] OJ L290 18; B2C parts are included in Unfair Practices Directive (n 5 above) §6 (misleading actions) and §9 (amendments to earlier Directive); B2B parts to be consolidated by the Misleading and Comparative Advertising Proposal (n 8 above); Draft Business Protection from Misleading Marketing Regs 2007 (n 8 above); Nebbia & Askham (n 1 above) ch 12. 270 Misleading and Comparative Advertising Directive (n 8 above) §2[1]. 271 Misleading and Comparative Advertising Directive (n 8 above) R[1–5]. 272 Misleading and Comparative Advertising Directive (n 8 above); first targeted at misleading adverts in 1984 (n 8 above), but extended to include comparative adverts in 1997 (n 8 above). 273 Misleading and Comparative Advertising Directive (n 8 above) §1. 274 Misleading and Comparative Advertising Directive (n 8 above) §2[1]. 275 Misleading and Comparative Advertising Directive (n 8 above) R[8], §2[2], also R[18], §6. 276 Misleading and Comparative Advertising Directive (n 8 above) §3.

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앫 the advertiser, his nature and attributes including his identity and assets, his qualifications and ownership of intellectual property rights or his awards and distinctions. National systems may give more extensive protection.277

(2)

Unfair commercial advertising to consumers

[5.52] The Directive against misleading advertising will be confined to traders and the protection of consumers against advertisements will be transferred to the unfair commercial practice regime when the new Directive is transposed late in 2007.278 False advertising will be treated as one example of a misleading action.279 Unfair advertising is either untruthful because of the inclusion of false information or deceptive in its overall presentation or otherwise, judged in each case in its transactional decision-making potential from the standpoint of the average consumer.280 Aspects considered are: 앫 the existence or nature of the product; 앫 the main characteristics of the product,281 such as its availability, benefits, risks, execution, composition, accessories, after-sale customer assistance and complaint handling, method and date of manufacture or provision, delivery, fitness for purpose, usage, quantity, specification, geographical or commercial origin or the results to be expected from its use, or the results and material features of tests or checks carried out on the product; 앫 the extent of the trader’s commitments, the motives for the commercial practice and the nature of the sales process, any statement or symbol in relation to direct or indirect sponsorship or approval of the trader or the product; 앫 the price or the manner in which the price is calculated, or the existence of a specific price advantage; 앫 the need for a service, part, replacement or repair; and 앫 the nature, attributes and rights of the trader or his agent, such as his identity and assets, his qualifications, status, approval, affiliation or connection and ownership of industrial, commercial or intellectual property rights or his awards and distinctions. 277 Misleading and Comparative Advertising Directive (n 8 above) R[19], §7. This liberty will end under the regime for unfair commercial practice and never applied to comparative advertising. 278 Misleading and Comparative Advertising Directive (n 8 above) §§1, 4[1], as amended by Unfair Practices Directive (n 5 above) §9[1], [4]; Draft Unfair Trading Regs 2007 (n 5 above) reg 5; the amendments omit consumers from the lists of those protected. 279 Unfair Practices Directive (n 5 above) §6[1]; Unfair Practices EM (n 5 above) [30], [61]. The list of factors below omits (g) which can only apply to goods. Transposition is discussed in UK Consultation (n 5 above) [84ff] which suggests that the exhaustive list of factors will have to be reproduced unchanged. 280 See above [5.43]. 281 National rules can determine what are to be treated as the ‘main’ characteristics of particular products: Unfair Practices Directive (n 5 above) R[14]; UK Consultation (n 5 above) [103]; Draft Unfair Trading Regs 2007 (n 5 above) reg 5(6).


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In order to avoid information overload, there are no specific disclosure requirements in advertisements,282 but only at the later stage at which the trader makes to a specific consumer an invitation to purchase.283 Advertisements must continue to meet existing European standards for information,284 affecting, for example, distance contracts285 and timeshares.286 Further, the content of an advertisement — like any other information provided in marketing — must not mislead by omission of material information,287 nor will it be acceptable to hide material information or to provide it in a way that is unclear, unintelligible, ambiguous or untimely or to conceal its commercial intent.288 [5.53] One or two forms of advertising are blacklisted since they are always apt to distort the consumption of an average consumer and are unfair.289 Worst is bait advertising — an offer at a specified price of a product which the trader will not be able to supply — and bait and switch where the bait is made to promote a different product. These are the staples of the timeshare industry. Another proscription applies to ‘advertorials’ — advertisement features paid for but not marked as such.290

(3)

Comparative advertising targeted at consumers

[5.54] Consumers are currently protected by the comparative advertising regime291 but this function is being transferred to the unfair commercial practices regime.292 It will be unfair to advertise to consumers in a comparative way, or to use any other comparative marketing technique, if it creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor.293 Builders who advertise new-build apartments need to be careful when referring to developments by other companies. Account should be taken of

282 Unfair Practices Directive (n 5 above) R[14], §6[1], Unfair Practices EM (n 5 above) [65]; Draft Unfair Trading Regs 2007 (n 5 above) reg 6. 283 See below [5.60]. 284 Unfair Practices Directive (n 5 above) §7[5], Annex II; also rules for doorstep selling (n 6 above), package holidays (Package Travel Directive 90/314/EEC [1990] OJ L158 59) and unfair contract terms (n 9 above). 285 Distance Selling Directive (n 7 above) §§4–5; Distance Marketing of FS Directive (n 7 above) §§3–4; see below [5.61]. 286 Timeshare Directive (n 11 above) §3[3]; see below [6.24ff]. 287 Unfair Practices Directive (n 5 above) §7[1]; C-44/01 Pippig Augenoptik [2003] I ECR 3095 ECJ, J[50] (misleading to omit brand); Draft Unfair Trading Regs 2007 (n 5 above) reg 6(1). 288 Unfair Practices Directive (n 5 above) §7[2]; Draft Unfair Trading Regs 2007 (n 5 above) reg 6(2). Regard shall be had to any spatial and temporal limitation imposed by the medium used for communication. 289 Unfair Practices Directive (n 5 above) R[17], §5[5], Annex 1; Draft Unfair Trading Regs 2007 (n 5 above) sch 1 paras 5, 6, 11. 290 Unfair Practices Directive (n 5 above) Annex 1 [5–6], [11]. 291 Misleading and Comparative Advertising Directive (n 8 above) §3a, inserted in 1997 (n 8 above). 292 Unfair Practices Directive (n 5 above) §14. 293 Unfair Practices Directive (n 5 above) §6[2](a).

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all features of the advertising to determine whether it is misleading to such an extent as to change the transactional decision-making of the average consumer.

(4)

Advertising to business

[5.55] The misleading advertising regime, already described, protects businesses against the unfair consequences of misleading advertising and will continue to do so after the regime is narrowed to move consumer protection elsewhere,294 and national law may protect businesses further.295 Controls on comparative advertising were added in 1997.296 This regime protects businesses now and will continue to do so in future, though national controls must be neither wider nor narrower.297 Advertising is comparative if it identifies a competitor or their products, explicitly or by implication,298 usually of course in order to compare prices.299 EU sectoral rules must be observed and also national bans on comparing professional services.300 It should be legitimate to compare like for like on objective grounds — based on material, relevant, verifiable and representative features — but not simply to knock a competitor, to mislead or to sow confusion.301

(5)

TV advertising

[5.56] This is controlled by the Directive creating ‘TV without frontiers’, chapter IV302 of which contains detailed rules about advertising breaks, subliminal images, surreptitious adverts and controls on advertising particular products such as alcohol and tobacco.

294 Misleading and Comparative Advertising Directive §1 (n 8 above) as amended by Unfair Practices Directive (n 5 above) §14; see above [5.54]. 295 Misleading and Comparative Advertising Directive (n 8 above) §7[1] as amended by Unfair Practices Directive (n 5 above) §14[5]. 296 Misleading Advertising Directive (n 8 above) as amended by the Comparative Advertising Directive 1997 (n 8 above). 297 Misleading and Comparative Advertising Directive (n 8 above) §7[1–2]. Misleading aspects of a comparison are judged by the European standard ignoring any harsher national rule: Pippig Augenoptik (n 287 above) J[42]. 298 Misleading and Comparative Advertising Directive (n 8 above) §2; Pippig Augenoptik (n 287 above) J[35]; C-112/99 Toshiba Europe [2001] I ECR 7945 ECJ, J[30–31]. 299 Pippig Augenoptik (n 287 above) J[50]; C-356/04 Lidl Belgium v Franz Colruyt [2007] 1 CMLR 9 @ 269 ECJ (basket of supermarket prices); C-381/05 De Landtsheer Emmanuel v Comité Interprofessionel du Vin de Champagne [2007] 2 CMLR 43 ECJ (use of champagne analogy in marketing beer); Bundesgerichthof 1 ZR 124/03, [2006] 12 ECL [45] (factual information re earnings of lawyer’s firms). 300 Misleading and Comparative Advertising Directive (n 8 above) R[20–22], §7[3–5]. 301 Misleading and Comparative Advertising Directive (n 8 above) R[7–9], §§1, 3a[1] as amended. An onus may be placed on the advertiser under §6[a]. Other grounds relate to intellectual property rights. 302 TV Without Frontiers Directive 89/552/EEC [1989] OJ L298 23, §§10–23.


2

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Invitation to purchase

[5.57] Specific disclosure is required when a trader makes to a consumer an invitation to purchase.303

3

False statements

[5.58] Some false statements are so inherently unfair and have such a disorting effect on the behaviour of the average consumer that they are blacklisted.304 Notable examples are claims about codes of conduct or quality marks or trade endorsement [1–4], stated time limits on product availability [7], title to sell a product [9], consumer rights distinctive to the trader [10], threats to the security of the consumer or his family [12], liquidation or removal sales [15], cures for illness or dysfunction [17], market conditions [18], descriptions of ‘free’ products [20], invoices implying that an order has been made [21], the private capacity of the seller [22].305 There are a number of other blacklisted practices.306 By all means advertise your new flat development in Spain, but be wary of paying a friend to write a feature for a magazine writing it up as the perfect cure for stress and boasting that a team of English-speaking plumbers are on call round the clock to solve any drainage problems! Lies less black than those above may be tested as misleading actions,307 or in the case of half-truths as misleading omissions. Existing United Kingdom legislation about (mis)statements made in trade has been brought into line with the unfair trading rules. Current legislation about price indications308 is amended to reflect the new transactional decision test,309 and legislation about notices of unfair contract terms also survives.310

4

Misleading endorsements

[5.59] False or deceptive information about endorsements may have a significant distorting economic impact,311 for example statements or symbols about See below [5.63]. Unfair Practices Directive (n 5 above) R[17], §5[5]; Annex 1 [1–23]; UK Consultation (n 5 above) [111ff]. 305 UK Consultation (n 5 above) 64, suggests that this is almost identical to the Business Advertisements (Disclosure) Order 1977, SI 1977/1918. 306 See above [5.47]. 307 See above [5.46]. 308 Trade Descriptions Act 1968, c 29; Draft Unfair Trading Regs 2007 (n 5 above) sch 2 paras 6–11. 309 Consumer Protection Act 1987, c 43, Pt III; Consumer Protection (Code of Practice for Traders on Price Indications) Approval Order 2005, SI 2005/2705; Price Indications (Method of Payment) Regs 1991, SI 1991/199; Draft Unfair Trading Regs 2007 (n 5 above) sch 4. 310 Fair Trading Act 1973, c 41, s 23; Consumer Transactions (Restrictions on Statements) Order 1978, SI 1978/127; Draft Unfair Trading Regs 2007 (n 5 above) sch 4. 311 Unfair Practices Directive (n 5 above) §§5[4](a), 6[1], Unfair Practices EM (n 5 above) [30], [61]; Draft Unfair Trading Regs 2007 (n 5 above) sch 1 para 3. 303 304

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sponsorship or approval of the product. Other aspects are: the price, its calculation and any price advantage; the need for a service or repair; attributes of the trader or his agent; or the consumer’s rights or risks he may face. Marketing should not create confusion with a competitor’s products, trade names or distinguishing marks.312 The European regulators accept the role of codes of conduct,313 and protect their role by imposing a ban on misleading practices relating to codes such as non-compliance by the trader with firm commitments in codes of conduct by which the trader has undertaken to consumers to be bound. Code owners may have control of misleading practices within their domain, but European injunctive powers are not displaced.314 This could have a powerful effect in the world of timeshares given the tight rein held by the main trade body, the Organisation for Timeshare in Europe.315

I N TER N ET A DVERTI SI N G (E-CO MMER CE)

Internet Advertising (e-Commerce) [5.60] False or deceptive information about endorsements may have a significant effect. A European community without borders has sprung up as a result of the development of the world wide web. By 2004 the internet had penetrated into more than 40 per cent of European homes and 60 per cent of businesses maintained websites.316 The web makes it easy for different nationalities to contract with one another, reducing language as a barrier and eliminating completely considerations of geographical location.317 Internet sales are important for on-line ordering of goods and for ordering services, and many services are capable of delivery over the internet, and it has quickly established itself as a key tool for advertising houses for sale. Where land is marketed from a website the E-Commerce regime applies, but its practical ambit is limited because national law is allowed to exclude land from e-contracting though e-rentals must be allowed; so the practical impact of the Directive depends upon the national implementation.318 If land is bought on-line it is likely to be paid for using on-line finance. Since the internet is virtual in character and lacks geographical 312 Unfair Practices Directive (n 5 above) §6[2](a); Draft Unfair Trading Regs 2007 (n 5 above) reg 5(3)(a). 313 Unfair Practices Directive (n 5 above) §6[2](b); ‘code’ and ‘code owner’ are defined by §2[f]; [g]; also correspondingly in Misleading and Comparative Advertising Directive (n 8 above) §2, as amended by Unfair Practices Directive (n 5 above) §9; Draft Unfair Trading Regs 2007 (n 5 above) reg 5(3)(b). 314 Unfair Practices Directive (n 5 above) R[20], §§10, 11, 17 (information about codes). 315 See below [6.09]. 316 Tourism and the Internet in the EU (Eurostat 20/2006); Internet World stats (2007) gives 38.9% in March 2007, 28% of world users drawn from 12% of world population. 317 E-Commerce Directive (n 20 above) R[1–2]. 318 See below [8.11].

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grounding, regulation is needed on a pan-European scale, but confined to specific legal obstacles and the minimum necessary to meet the logic of the internal market.319 In fact it is probably too minimalist at present. The E-Commerce Directive320 sets up a ‘light and flexible’ legal framework, supposedly technologically neutral, for electronic advertising and contracting.321 Here we consider B2B or B2C322 offers of land or land-related services from a website where an on-line order form is filled in and a contract made by clicking an ‘I accept’ button. Consumers are entitled to better protection because they can insist on the mandatory protections of the legal system of the state in which they have their habitual residence.323 It affects contracting by technological means over the internet and not contracting by an exchange of electronic mail or equivalent individual communications by natural persons acting outside their trade, business or profession.324 [5.61] Electronic services are described as ‘information society services’.325 These are free to move between EU states326 with national provisions approximated327 providing services via the internet, including commercial communications and electronic contracting.328 National monopolies remain for the notarisation of contracts and the formal validity of land contracts.329 Information society services are regulated by national law,330 within a level playing field called the ‘coordinated field’, though there does not need to be a specific national e-commerce regime,331 so that all service providers are required to meet broadly similar requirements when taking up or pursuing the activity of an information society service. A country of origin principle applies.332 This means that a service provider who meets his home state rules is then free to provide the same services throughout Europe. There is a delicate balance between the freedom to advertise legitimate services and the need to regulate the E-Commerce Directive (n 20 above) R[3], R[5–6], R[10]. E-Commerce Directive (n 20 above). 321 Digital signature and e-mail signature is considered below [8.01ff], [8.14]. 322 E-Commerce Directive (n 20 above) §§2[d]; Report on the Application of the Directive on E-Commerce COM (2003) 702 final [1]; see above [5.05] n 20. 323 E-Commerce Directive (n 20 above) §§2[d], 4–5; see below [10.15]. 324 E-Commerce Directive (n 20 above) R[18]. 325 E-Commerce Directive (n 20 above) §2[a]; the definition in §2[a] is borrowed from Technical Standards Information Directive 98/34/EC [1998] OJ L204 37, §1[2], as amended by Directive 98/48/EC, [1998] OJ L217 18. 326 E-Commerce Directive (n 20 above) §1[1]. 327 Non economic, unremunerated, services are included: E-Commerce Directive (n 20 above) R[18]. 328 E-Commerce Directive (n 20 above) §1[2]. 329 E-Commerce Directive (n 20 above) §3[3], Annex; see below [8.10]. 330 E-Commerce Directive (n 20 above) §3–5. 331 E-Commerce Directive (n 20 above) §2[h]. 332 E-Commerce Directive (n 20 above) R[23], §1[4]. M Hellner ‘The Country of Origin Principle in the E-Commerce Directive — a Conflict with Conflict of Laws’ (2004) 12 ERPL 193–213; Financial Services and Markets Act 2000, c 8, s 138; E-Commerce Directive (Financial Services and Markets) Regs 2002, SI 2002/1775 as amended by SI 2004/3378. 319 320

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dissemination of, say, hard-core pornography. States may restrict electronic services in a proportionate way for reasons of public policy, to assist the prosecution of offences, to protect public health, public security and protection of consumers.333 Restrictions have to be reported to, and are supervised by, the EU Commission.334 Liability does not usually attach to an internet service provider who acts as a ‘mere conduit’ for information or provides a ‘caching’ service (temporary storage), such a provider being under no general obligation to monitor what they transmit, though they have to respond to ‘take-down’ notices.335 [5.52] The internet makes it easy to advertise to business and consumers elsewhere in Europe. Some control is imposed by the E-Commerce Directive on advertising from websites. An advertisement or ‘commercial communication’ is defined as any form of communication designed to promote, directly or indirectly, the goods, services or image of a company, organisation or person; regulation applying to commerce and the professions.336 Businesses are not affected when providing a domain name or e-mail address, or disseminating independent services about goods and practices. If a commercial communication is provided electronically as part of an information society service it must make clear that it is a commercial communication and identify the person on whose behalf it is made.337 Additional requirements kick in at the order and contract stage.338 I N F O R MATI O N I N A N I N VI TATI O N TO PUR CHA SE

Information in an Invitation to Purchase 1

Invitations to purchase

[5.63] Disclosure requirements affect a trader at the pre-contract stage when he makes to a consumer an invitation to purchase by communicating the main characteristics of the product and the price so as to enable the consumer to make a purchase.339 An invitation should state340: E-Commerce Directive (n 20 above) R[24], §3[4], §3[5] (urgent action). E-Commerce Directive (n 20 above) §3[6]. 335 E-Commerce Directive (n 20 above) R[43], §§12–15; E-Commerce Report (n 322 above) [4.6]. 336 E-Commerce Directive (n 20 above) §2[f]; on the latter see below [7.66]. 337 E-Commerce Directive (n 20 above) §6; this is additional to other European information requirements. National law may restrict unsolicited commercial communications: E-Commerce Directive (n 20 above) §7; Processing of Personal Data Directive 2002/58/EC [2002] OJ L201 37; E-Commerce Report (n 322 above) [4.3]. 338 See below [8.20ff]. 339 Unfair Practices Directive (n 5 above) R[14], §2[i]; Draft Unfair Trading Regs 2007 (n 5 above) reg 2. 340 Unfair Practices Directive (n 5 above) §7[4] (unless apparent from the context); Draft Unfair Trading Regs 2007 (n 5 above) reg 6(4); UK Consultation (n 5 above) [27–29], [102]. These details are not required in advertisements: R[14]; Unfair Practices EM (n 5 above) [65]; Howells (n 73 above). 333 334

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앫 앫 앫 앫

the main characteristics of the product,341 the trading name and address of the trader and any trader for whom he is acting, the price, inclusive of taxes,342 unusual arrangements for payment, delivery, performance or complaint handling, and 앫 any right of withdrawal or cancellation.343 These bare bones are what a consumer really needs when deciding whether to commit to a deal, whilst avoiding information overload. Omissions outside advertisements and invitations to purchase — perhaps in after-sales service — could be misleading if related to information that was material (including EC required information) and that an average consumer would want before making a transactional decision, and also if material information is hidden or provided in a way that is unclear, unintelligible, ambiguous or untimely or to conceal its commercial intent.344

I N F O R MATI O N A B O UT DI STA N CE CO N TR ACTO R S

Information about Distance Contractors 1

Durable form of information

[5.64] Electronic technologies disseminate information to be read on a screen, but the content is ephemeral since the content of websites changes and sites can disappear entirely. Transience is overcome by rules requiring information to be provided to an individual consumer in a form that has a degree of permanence. An internet marketer will probably not want to provide information in old-fashioned writing, though it will always be open to an old-fashioned consumer to request a written statement of terms. In an electronic contracting process, it will be most convenient to provide information electronically and this is perfectly acceptable so long as the medium is ‘durable’. Information needs to be addressed to an individual consumer in a form which enables him to store it for future reference and to reproduce it unchanged. Suitable media are floppy discs, CDs, DVDs or memory sticks, but most commonly it will be an electronic message sent to the consumer which he can then save to his hard disk. This implies that the consumer will need his own e-mail account and will not, for example, be able to place an order from a computer in a public library without his own account. It

National law may indicate the main characteristics to spell out for particular products. It this is not fixed, a method of calculation. 343 See below [5.72ff]. 344 Unfair Practices Directive (n 5 above) §7[1–2]; the tests are explained above in the context of advertisements. 341 342

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is not sufficient to make an internet website available for visits, since the content is not proof against changes.345

2

Prior information

[5.65] A consumer must be provided with an appropriate level of information in good time before the conclusion of a distance contract.346 Having overcome the information deficit one must avoid an overload of legal guff.347 The commercial purpose of information should be clear, and its format clear and comprehensible, with particular care needed when dealing with minors and others unable to give a free consent.348 Requirements may be added by EU sectoral349 or national rules.350 They fall into four groups. [5.66] The supplier. A person who supplies goods or non-financial services at a distance must give his identity and, if payment is required in advance, his address. This applies to a property rental offered at a distance. More sophisticated rules have been developed for financial services: the supplier must state his main business, the address351 must include his establishment (in every case, not just where payment is in advance) and any other relevant address; in addition details are needed of the suppliers’ national representative and of any professional with whom the consumer has had dealings, and details are also required of any trade registration of the supplier. [5.67] The product. Information about the product to be provided at the pre-contract stage is: 앫 the main characteristics of the product, 앫 an inclusive price, indicating any taxes or costs borne by the consumer; financial services offered at a variable price should indicate a verifiable basis for the calculation of the price and a warning of the possibility of market fluctuations, 345 Distance Selling Directive (n 7 above) R[11]; §§4[1], 5[1]; Distance Selling Regs 2000 (n 7 above) reg 8; Distance Marketing of FS Directive (n 7 above) R[20], §§2[f]; FS Distance Marketing Regs 2004 (n 7 above) reg 3. 346 Distance Selling Directive (n 7 above) §4[1]; Distance Selling Regs 2000 (n 7 above) reg 7(1) (this adds (1) rights of substitution of goods and (2) the cost of returns); Distance Marketing of FS Directive (n 7 above) R[21], §3; FS Distance Marketing Regs 2004 (n 7 above) reg 7, sch 1. Exceptions may be made where it is up to the consumer to request information, other than the basics, the identity of the supplier, the main characteristics of the services and their price. 347 Donnelly & White (n 172 above) 213–214. 348 Distance Selling Directive (n 7 above) §4[2]; Distance Selling Regs 2000 (n 7 above) reg 7(1)–(3); Distance Marketing of FS Directive (n 7 above) §3[2]; FS Distance Marketing Regs 2004 (n 7 above) reg 7(2)–(3). 349 Distance Selling Directive (n 7 above) R[11]; §13. 350 Distance Marketing of FS Directive (n 7 above) §4[2] (if reported to the Commission). 351 All addresses must be geographical and not eg web addresses; the address supplied must be the one relevant to the consumer’s dealings.

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앫 any limit to the validity of the price, 앫 arrangements for payment, delivery and performance, 앫 premium rates for telephone calls and similar additional costs for use of the means of distance communication, 앫 the minimum duration of supply, and 앫 costs of early termination. [5.68] Withdrawal. The existence of a right of withdrawal, the terms and procedure, or the absence of a withdrawal right.352 [5.69] By the time that the financial services controls were worked up into a directive a number of additional pieces of information in relation to legal matters had been identified: 앫 앫 앫 앫 앫 앫

selection of the language of the contract, information and communications, selection of law governing relations with the consumer,353 selection of a forum for disputes, out-of-court complaint and redress mechanisms, any relevant supervisory authority, and guarantee funds or compensation arrangements.354

No doubt the same rules ought to be applied to goods and non-financial services.355

3

Information in telephone calls

[5.70] Telephone calls (or, as you call them, voice telephony communications) are a common means of marketing.356 Any telephone call to a consumer should begin by setting out the identity of the supplier and the commercial purpose of the call357 with considerable additional detail in the case of financial services, covering358: 앫 identity of the caller and his link with the supplier, 앫 main characteristics of the financial service, 앫 inclusive price, either fixed or variable but with a verifiable basis for calculation; the price quoted to be accompanied by a warning of other taxes and costs falling on the consumer,

Except under Distance Selling Directive (n 7 above) §6[3]. This must be an EU state. 354 Excluding deposit guarantee schemes and investor compensation schemes. 355 Donnelly & White (n 172 above) 215. 356 Distance Marketing of FS Directive (n 7 above) §3[3]; FS Distance Marketing Regs 2004 (n 7 above) reg 7(4), sch 2. 357 Distance Selling Directive (n 7 above) §4[2]; Distance Selling Regs 2000 (n 7 above) reg 7(4). 358 Distance Marketing of FS Directive (n 7 above) §3[3]; FS Distance Marketing Regs 2004 (n 7 above) reg 7(4), sch 2. 352 353

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앫 withdrawal, the existence or absence of the right and its terms, and 앫 availability of full information.359

4

Contractual information

[5.71] Specific information must be provided by distance contractors necessary for proper performance of the contract, irrespective of the means of communication used,360 and in good time during the performance of the contract, at the latest at the time of delivery of goods or when the consumer becomes bound to take financial services. If pre-contract information has been provided in full, the post-contract information is: 앫 conditions and procedures for withdrawal,361 앫 the loss of the right to cancel when the client requests an immediate commencement of the service,362 procedure for ending a contract of unspecified duration or exceeding one 앫 year, 앫 a geographical address for complaints,363 and 앫 details of after-sales services and guarantees. A paper copy can be requested at any time during a contract for financial services.364

WI THDR AWA L R I G HTS

Withdrawal Rights 1

Incoherence

[5.72] European protection often takes the form of the provision of a right of withdrawal from a consumer contract. Coherence is lacking,365 since even the 359 Information communicated during the pre-contractual phase must match the subsequent contractual obligations: Distance Marketing of FS Directive (n 7 above) §§3[4], 5. 360 Distance Selling Directive (n 7 above) §5; Distance Selling Regs 2000 (n 7 above) reg 8; Distance Marketing of FS Directive (n 7 above) §5[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 8. It is also necessary to comply with other EU rules, eg on misleading advertising and on the contents of an insurance policy. 361 Distance Selling Directive (n 7 above) §6, including the cases referred to in §6[3]. 362 Distance Selling Regs 2000 (n 7 above) reg 8(2)(b) inserted by Distance Selling (Amendment) Regs 2005, SI 2005/689, sch 1 para 1. 363 This is all that is required if services are performed and invoiced distantly on a single occasion: Distance Selling Directive (n 7 above) §5[2]; Distance Selling Regs 2000 (n 7 above) regs 9–10. 364 Distance Marketing of FS Directive (n 7 above) §5[3]; FS Distance Marketing Regs 2004 (n 7 above) reg 8(2). 365 D Staudmayer ‘The Commission Communication in European Contract Law and Future Prospects’ (2002) 51 ICLQ 673–688, 677; Hellwege (n 25 above).

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period allowed varies between the regimes for doorstep selling, distance selling, and timeshares, as will appear, and further harmonisation is needed.366 National tinkering has created additional cross-border friction,367 without discernible policy advantages, and the possibility of overlapping protections means that it is in practice necessary to take the longest period.368

2

Distance contracts for land

[5.73] Things bought distantly over the internet cannot be examined in advance,369 so the consumer may withdraw without giving any reason and at least seven working days are allowed.370 This applies particularly to rentals, the form of land contract most likely to be affected by the European distance selling regime.371 The period for reflection begins on the receipt of goods372 or at the time that a contract for services is concluded. Withdrawal is not possible if the consumer has waived the right by asking for the provision of services to begin within the withdrawal period nor where the price is subject to uncontrolled fluctuations on the financial market.373 However, the obligatory information includes notice of the withdrawal right and if that is omitted the period is three months from the receipt of goods or the conclusion of a contract for services, a period which can be curtailed to seven days by late provision of the information.374 A consumer who wishes to withdraw is obliged to return any goods supplied and to pay the direct cost of return, but otherwise cancellation should be without penalty and free of charge, and any prepayment made by the consumer should be reimbursed as soon as possible and certainly within 30 days.375 If payment has been by payment card any debit must be recredited and

366 Distance Selling Directive (n 7 above) §6[1]; Statement by the Council and the Parliament re §6[1] [1997] OJ L144 19. 367 Hellwege (n 25 above) 713. 368 Hellwege (n 25 above) 720, 738ff. 369 Distance Selling Directive (n 7 above) R[14]; Hellwege (n 25 above) 714. The period differs from doorstep selling in counting only working days (@ 717). 370 Periods may be varied by national law; in Germany it is 14 days: P Meeds ‘Distance Selling’ (2002) 13 International Company & Commercial Law Review 179–182. 371 See above [5.36]. 372 The consumer must be told if the goods or services ordered are unavailable, and offered a refund, and any wait for execution of an order exceeding 30 days must be agreed to by the consumer. Rights to substitute alternative goods depend on national legislation: Distance Selling Directive (n 7 above) §7; Distance Selling Regs 2000 (n 7 above) reg 19. Substitutions must be agreed in the contract. 373 Distance Selling Directive (n 7 above) §6[3]; Distance Selling Regs 2000 (n 7 above) reg 13. There are a number of other exceptions relating to goods and betting. 374 Periods may be varied by national law. Germany allows four months where information is not provided and Sweden one year: Meeds (n 370 above). 375 Distance Selling Directive (n 7 above) §6; Distance Selling Regs 2000 (n 7 above) regs 10, 14, 17; Hellwege (n 25 above) 727 points out gaps in the distance selling regime.

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any fraudulent use of his payment card in connection with distance contracts must be cancelled.376 Procedure for withdrawal is determined by national law.377 For example the United Kingdom prescribes in detail the procedure for giving notice of cancellation.378

3

Distance contracts for financial services

[5.74] Financial services affecting land are largely outside European control.379 When they are and when those financial services are agreed over the internet, the consumer must be allowed 14 calendar days in which to withdraw from the contract without penalty and without giving any reason,380 a period extended to 30 calendar days for life insurance cover and personal pensions. 381 There seems no good reason to allow only 7 days for non-financial services but 14 if they are financial. Performance of the contract may only begin after the consumer has given his approval,382 a matter on which national law may impose the burden of proof on the supplier,383 but an express request for performance to start precludes withdrawal thenceforth384 and there are a few other minor exceptions.385 A consumer should be adequately informed about his withdrawal rights,386 and if this is not the case the withdrawal period will not start until he has finally received proper information.387 National law may suspend the 376 Distance Selling Directive (n 7 above) §8; Distance Selling Regs 2000 (n 7 above) reg 21; Distance Marketing of FS Directive (n 7 above) §8; FS Distance Marketing Regs 2004 (n 7 above) reg 14. The former UK rule exposing the consumer to the first £50 of loss is abrogated. 377 Distance Selling Directive (n 7 above) R[14]; Communication on Distance Contracts (n 181 above) [7] discusses withdrawal and Annex IV has a summary of the length of national cooling off periods which are generally seven working days (eg the UK) or fourteen days. 378 Distance Selling Regs 2000 (n 7 above) reg 10(4); Hellwege (n 25 above) 723–725 finds this mix of the two cancellation traditions ‘inelegant’. 379 See above [5.34]. 380 Distance Marketing of FS Directive (n 7 above) §6[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 10(2). 381 Distance Marketing of FS Directive (n 7 above) §6[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 10(5); Life Insurance Directive 90/619/EC, [2002] OJ L330 50, §15[1](1) is amended to match by Distance Marketing of FS Directive (n 7 above) §17. 382 Distance Marketing of FS Directive (n 7 above) §7[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 13. 383 Distance Marketing of FS Directive (n 7 above) §15[1]. To place it on the consumer is an unfair term. 384 Distance Marketing of FS Directive (n 7 above) R[24], §6[2]; Distance Selling Amendment Regs 2005 (n 362 above) amending regs 8(2)(iii), 8(3), 12, 13 and inserting reg 12(3A); SI 2005/689 EM [2.1]. 385 (1) Services whose price depends on fluctuations in the financial market eg foreign exchange transactions or stock exchange and forward interest-rate agreements; and (2) travel insurance and similar short-term insurance of less than one month’s duration: Distance Marketing of FS Directive (n 7 above) §6[2]; FS Distance Marketing Regs 2004 (n 7 above) reg 11. 386 Distance Marketing of FS Directive (n 7 above) R[23]. 387 Distance Marketing of FS Directive (n 7 above) §§5[1–2]; UK law talks of a ‘conclusion day’: FS Distance Marketing Regs 2004 (n 7 above) reg 10(1), (3), (4). Time runs in relation to life assurance when the consumer is informed of the conclusion of the distance contract.

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enforceability of contracts relating to investment services for the duration of the withdrawal period. [5.75] The consumer must be given practical instructions about how to exercise the right of withdrawal,388 any notice being on paper or on some other durable medium accessible to the recipient and notified to the supplier within the relevant deadline, but dispatch before the deadline suffices.389 United Kingdom law prescribes methods of giving for the various means of distance communication.390 Notice to terminate should be in writing or other durable medium accessible to the supplier, oral cancellation only working where the supplier has indicated that this will suffice.391 United Kingdom law allows letter, fax or e-mail but not phone, website or text message.392 There is no particular form of words. [5.76] National law determines the legal effects of winding up a contract. In the United Kingdom the choice is for termination of a distance contract as at the time at which the notice of cancellation is given.393 Presumably the transpositor chose not to treat the contract as void so as to preclude restitutionary remedies.394 European rules state that cancellation must be without any penalty,395 payment being limited proportionately so that the consumer only has to pay for that proportion of the service actually provided,396 and only after the consumer was informed about the amount payable in advance, and after the consumer has made a prior request for performance to commence.397 Pre-payments need to be returned, subject only to proper deductions, within a maximum of 30 calendar days from notification to the supplier of withdrawal.398 The consumer also has 30 days to return any sums or property received from the date that he dispatches his notification of withdrawal.399

Distance Marketing of FS Directive (n 7 above) §6[6]. Distance Marketing of FS Directive (n 7 above) §§3[1](3)(d), 6[7]. Proof is governed by national law. 390 FS Distance Marketing Regs 2004 (n 7 above) reg 9(4). 391 FS Distance Marketing Regs 2004 (n 7 above) reg 9(3). 392 FS Distance Marketing Regs 2004 (n 7 above) reg 10(4). 393 FS Distance Marketing Regs 2004 (n 7 above) reg 9(1)–(2). This creates mutual obligations of restoral. 394 Hellwege (n 25 above) 712 points out that this depends on whether, as Peter Birks suggested, there is a general ground of restitution to avoid unjust enrichment. 395 Distance Marketing of FS Directive (n 7 above) §6[7]–[8]. Sanctions are left to national law: §11. 396 Distance Marketing of FS Directive (n 7 above) §7[1]; FS Distance Marketing Regs 2004 (n 7 above) reg 13(6)–(9). By §7[2] national law may prohibit any payment when withdrawing from an insurance contract. 397 Distance Marketing of FS Directive (n 7 above) §3[1](3)(a). 398 Distance Marketing of FS Directive (n 7 above) §7[4]; FS Distance Marketing Regs 2004 (n 7 above) reg 13(3). 399 Distance Marketing of FS Directive (n 7 above) §7[5]; FS Distance Marketing Regs 2004 (n 7 above) reg 13(11)–(12). 388 389

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Doorstep selling cancellation

[5.77] The Doorstep Selling Directive covers contracts made during unsolicited home visits and contracts concluded during an excursion away from the trader’s business premises. Some land contracts and most secured lending are affected.400 A consumer will be unprepared for contractual negotiations that take place in these circumstances and lacks an opportunity to compare rival offers properly. Hence seven days are allowed for reflection401 and hence the freedom to cancel without giving any reason or alleging any misconduct or manipulation by the trader is required.402 The consumer is given a second chance to form a free will.403 Consumers are entitled to know in advance, and in writing, of their right of cancellation and the period for it, together with the name and address of a person against whom that right may be exercised.404 Notice of renunciation should be sent by the consumer within a period of not less than seven days (the precise period being left to national transposition) from receipt by the consumer of the notice advising him of his cancellation right, but it is sufficient to dispatch notice before the end of that period.405 Procedure is laid down by national law. [5.78] Sanchis406 bought a timeshare made on an organised day trip to the town of Denia and promised that when he had returned home to Valencia he would appear at the resort-owner’s bank to sign a confirmatory document. He failed to do so because, when he got home, he decided that he wanted to cancel the purchase, and so he went instead to the seller’s offices in Valencia and stated orally that the whole contract was of no effect.407 According to the terms of the contract, cancellation had to be by way of an authenticated (notarised) document, but Spanish law408 requires no particular form for a notice, and Sanchis argued successfully that the European concept of ‘sending notice’ meant only a notification satisfying domestic rules about form, meaning that in Spain an oral communication was effective.409 States are free to make it easier for consumers to renounce. The Directive refers to ‘writing’ only when explaining how to calculate

400 Doorstep Selling Directive (n 6 above); C Joerges ‘Impact of European Integration in Private Law’ (1997) 3 ELJ 378–406, 403ff; see above [5.19ff]. 401 Doorstep Selling Directive (n 6 above) R[7–9]. 402 Doorstep Selling Directive (n 6 above) R[4]; Contracts Away from Business Premises Regs 1987 (n 6 above) reg 5ff; Travel Vac (n 95 above) J[39–43]; Crailsheimer (n 114 above) J[41–45]; Hellwege (n 25 above) 716 suggests that exploitation should be a requirement. 403 Hellwege (n 25 above) 715. 404 Doorstep Selling Directive (n 6 above) §4. Consequences of failure to provide information are left to national law: see below [5.76]. 405 Doorstep Selling Directive (n 6 above) §5[1]; Hellwege (n 25 above) 717. 406 Travel Vac (n 95 above). 407 Travel Vac (n 95 above) J[13]. 408 Spanish Doorstep Selling Law 26/91, Boletin Oficial del Estado November 26th 1991, §5[2]. 409 Travel Vac (n 95 above) J[12], J[45–48].

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the seven-day period when notice does happen to be given in writing, and it does not impose a requirement of writing.410 A post-doorstep cancellation releases the consumer from any obligations under the cancelled contract, but other effects such as reimbursement of advance payments and the return of goods received are left to national laws.411 The Travel Vac412 contract liquidated compensation caused to the seller by the consumer’s cancellation at 25 per cent of the total price of the transaction, but this stipulation fell foul of European law which imposed nullity of obligation on cancellation, a discharge which extinguishes any penalty clause.413

5

Doorstep cancellation procedure in the United Kingdom

[5.79] United Kingdom law couches the consumer’s rights in terms of a ‘notice of cancellation’,414 and lays down ‘prescribed information’ the trader is required to give the consumer in advance in writing,415 failing which the contract is unenforceable.416 A notice given here should be in writing but may express the consumer’s intention to cancel in any way; a blank form is provided but it is not necessary to use this.417 Notice needs to be served on the trader, or a person nominated by him for the receipt of notice; this may be done by personal delivery to an individual, by posting to his proper address or by leaving it at a proper address; service on a corporate seller may be effected on the secretary or any clerk and on a partnership by serving on any partner or a person having the control or management of the business.418 Proof of posting suffices even if it is never actually received.419 Our domestic law provides for notice to cancel the contract as if it had never been entered into by the consumer: prepaid sums are repayable, goods must be returned and any part-exchange unravelled.420

Travel Vac (n 95 above) J[50–51]. Doorstep Selling Directive (n 6 above) §§5[2], 7; Travel Vac (n 95 above) J[6–7]. Hellwege (n 25 above) 731–734 finds three gaps in the Contracts Away from Business Premises Regs 1987 (n 6 above) reg 5ff: failure to cover mixed services and goods, goods received but subsequently destroyed, and failure to give notice of the cancellation right. 412 Travel Vac (n 95 above) J[53–60]. 413 Travel Vac (n 95 above) AG[59] Alber, J[55–56]. 414 Contracts Away from Business Premises Regs 1987 (n 6 above) regs 2(1), 4(5). 415 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 4(1)–(4), sch pt I (information). If an offer is made on the doorstep, the time is when the consumer makes an offer. 416 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 4(1). It is also an offence to contract without giving the information: regs 4A-4H inserted by SI 1998/3050; reg 4C allows the prosecution of parties other than the trader. 417 Contracts Away from Business Premises Regs 1987 (n 6 above) sch pt II. 418 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 11(1); the last address known to the server of the document is treated as a proper address: reg 11(2). 419 Contracts Away from Business Premises Regs 1987 (n 6 above) reg 4(6). 420 Contracts Away from Business Premises Regs 1987 (n 6 above) regs 4(1), 4(5), 5(1), 7, 8. On related credit agreements, see below [5.79]. 410 411

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Credit Cancellation [5.80] Land purchase usually needs to be financed and if the deal turns sour the question is not so much whether the acquisition of the property right can be undone but more whether the finance deal can be undone. In truth a right to cancel one without the other is decidedly limited, a trap even, and the real question is whether the buyer is able to link together the two transactions enabling him to wriggle out of both at the same time.

1

Credit sold at a distance

[5.81] Let us start with a simple point. Is it possible to cancel a mortgage sold over the internet? This, at least, is straightforward. European law421 allows the exclusion of withdrawal rights for two categories of secured loan, that is: (1) where the purpose of the credit is to acquire or to retain property rights in land or an existing or projected building or for renovating or improving a building; or (2) any credit secured by mortgage on immovable property.422 True, this exclusion only applies if it has been adopted by national law, as it has in the United Kingdom,423 and a withdrawal period can be allowed for all residents of a state where the reflection time was available at the time of its introduction. Cancellation will be allowed of other contracts for financial services, including an attached contract for financing a service.424 Land sold at a distance will almost always be free of distance selling controls, but rentals and timeshares may be caught.425 It may be unlikely that credit will be associated with a rental, but let us suppose that it might be necessary to borrow to secure the rental deposit. In this case the question of cancellation might arise under the distance selling regime.426 The credit may be provided by the supplier of the land or by a third party under an arrangement with the supplier. A linked cancellation right arises whether the price is covered by credit in whole or in part. 421 Distance Marketing of FS Directive (n 7) §6[3]. Provisions are without prejudice to national rules about cancellation or termination or non-enforceability and the consumer’s right to fulfil his contractual obligations early and irrespective of the national rules for the effects on winding up. 422 This includes a right related to immovable property as security, to account for countries such as France where guarantees are the standard form of security. 423 FS Distance Marketing Regs 2004 (n 7 above) reg 11(1)(d). The exemption for secured credit is limited to legal mortgages; a potential problem is the position where registration is pending: P Susman ‘Another Fine Mess!’ [2005] NLJ 770–772. 424 Distance Marketing of FS Directive (n 7 above) §6[7] second para; FS Distance Marketing Regs 2004 (n 7 above) reg 12 (‘attached contract’). 425 See above [5.33]. 426 Distance Selling Directive (n 7 above) §6[4]; Distance Marketing of FS Directive (n 7 above) §6[7] is excluded.

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Details are left to national legislation, but the cancellation must, at least, be ‘without penalty’. An arrangement which covers the price, or part of the price, under a distance contract is described as a ‘related credit agreement’427 when the distance contract is cancelled. As usual the person putting up the money may be either the supplier or another person acting under an arrangement with him.428 There is a related right to cancel the credit agreement provided that provision of the service has not started,429 and no interest may be charged if the credit is repaid within one month of cancellation or before the date on which the first instalment is due,430 and the consumer should be given a recalculated written statement of account in writing before being asked for any payment. Any security provided under a distance contract which is cancelled is treated as never having had any effect, and the land must be returned free of the security and forthwith.431 No repayment will be due until the security has been returned.432 Changes are proposed.433

2

Credit sold on the doorstep or away from business premises

[5.82] An acquisition of land is usually financed by a mortgage secured on the land, the two distinct transactions forming a single economic unit. If the investment in land has been sold at the consumer’s home or on an organised excursion it is possible that the mortgage agreement can be cancelled under the protections against doorstep selling, though only in the period immediately after the mortgage has been concluded. The loan has to be repaid in full, immediately, and with interest at the agreed market rate; further, the cancellation may prove to be a trap because the agreement to buy the land will probably continue to stand: it will not generally enjoy doorstep protection because of the land exclusion, and it will not normally fall with the mortgage unless national law has adopted legislation allowing the cancellation of associated or linked contracts.434 [5.83] Lenders commonly omit to notify the consumer that he has rights of cancellation arising from the marketing of a loan on the doorstep or during an excursion, and in such circumstances the delayed right of cancellation is possible since the right continues indefinitely, 435 possibly for many years after the Distance Selling Regs 2000 (n 7 above) reg 3(1). Distance Selling Regs 2000 (n 7 above) reg 14(5). 429 Distance Selling Amendment Regs 2005 (n 362 above) regs 12–13; information is required under reg 8 about how the right to cancel is affected by agreeing to performance of services. 430 Distance Selling Regs 2000 (n 7 above) reg 16. 431 Distance Selling Regs 2000 (n 7 above) reg 14. 432 Distance Selling Regs 2000 (n 7 above) reg 16. 433 A cancellation right comparable to the doorstep regime is one possibility: Hellwege (n 25 above) 715. 434 See below [5.83]. 435 See above [5.82]. 427 428

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acquisition. The consumer can make the choice when it has become clear whether or not the land would turn out to be a poor investment. This was the case in the leading European Court of Justice decision in Heininger436 and in its clones, Schulte437 and Crailsheimer.438 [5.84] Control of the procedure for cancellation of a doorstep contract is ceded to national law, but the time limit is European.439 German domestic law restricted the consumer’s cancellation right to one year from conclusion of the contract on the doorstep, even when, as in Heininger, the consumer had never been told of his right of cancellation, but this was overridden by European law which allows a seven day period to run from the date when a consumer finally receives notice of his right, however many years down the line.440 Banks pleaded for legal certainty but this cry went unheeded because it had been the lender’s choice to ignore their consumers’ rights and their failure to take straightforward steps for their own protection.441 All titles become insecure if subject to cancellation rights that are unlimited in time, a point recognised by more recent legislation in related fields.442 [5.85] The first issue to arise is which of overlapping cancellation rights is in play? The Heiningers lacked rights to cancel under the European regime for consumer credit because although their finance deal fell within its general scope,443 it also fell within the exclusion of credit used for the acquisition of a building.444 German law445 was rather different: it applied to a partial exemption for land,446 but limited the maximum withdrawal period in any event to one year,447 so the Heiningers were too late to claim their limited domestic protection. Not only were they out of time but, worse, German law448 precluded use of the domestic doorstep regime in a case which was actually or potentially within the German consumer credit legislation.449 This last point was an improper Heininger (n 92 above). Schulte (n 112 above). 438 Crailsheimer (n 114 above). 439 Doorstep Selling Directive (n 6 above) §§4[3], 5[1]. 440 Heininger (n 92 above) J[41], J[45–46]. 441 Heininger (n 92 above) J[47]. The court declined at J[49ff] to make its judgment prospective even though the bank had acted in good faith, because this could only be done where there is a risk of serious difficulties as in C-128/93 Fisscher [1994] I ECR 4583 ECJ, J[18]. 442 Distance Selling Directive (n 7 above) §6 (three-month long-stop). 443 Consumer Credit Directive (n 10 above) §1[1], §1[2](c); Heininger (n 92 above) J[8ff]. 444 Consumer Credit Directive (n 10 above) §2[1](a); there is a partial exclusion for a mortgage secured on land as opposed to a building; see below [9.02]. 445 Gesetz über Verbraucherkredite ‘VerbrKrG’ amending the German Code of Civil Procedure, 1990 BGBl I, 2840. 446 VerbrKrG (n 445 above) §3[2] excludes many aspects of the credit regime where the loan is secured on land; Heininger (n 92 above) J[14]. 447 VerbrKrG (n 445 above) §7; Heininger (n 92 above) [15]. 448 Haustürwiderrufsgesetz (HWiG) §5[2] gave priority to VerbrKrG (n 445 above); this has subsequently been changed. 449 UK law excludes from the doorstep selling regime any cancellable consumer credit agreement: Contracts Away from Business Premises Regs 1987 (n 6 above) reg 4(7); but this excludes small 436 437

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transposition,450 and consumers should have the right to use either the credit or the doorstep cancellation right to their advantage. [5.86] National law had to decide the effects of cancellation on the land purchase contract and the security agreement.451 Did cancellation of the security leave in place the purchase and the debt? Mr and Mrs Heininger thought so, since the order they sought was for the bank to reimburse to them all capital and interest payments along with the costs incurred in connection with the execution of the loan agreement, not to mention a declaration that no rights at all accrued to the bank under the loan agreement.452 The European Court of Justice sent the case back to Germany with the observation that the effects were for the domestic courts using domestic laws. The Heiningers’ expectations were miles apart from German law as it stood at the time. The loan had to be repaid after cancellation with interest — and in order to do this they also needed to cancel the land purchase. Into the trap thus created fell the Schultes.453 They had invested in a refurbishment scheme for 1960s apartment blocks in Germany, investments which had been pitched to them in their home, borrowing to finance the deal, with the intention that the loan should be serviced from rental income. Arrears arose when the yield fell short of expectations and the bank began enforcement proceedings. The Schultes responded by cancelling the loan agreement believing that in this way they would release themselves from all obligations.454 In this they were sadly mistaken. Far from escaping all liability on the loan, they rendered the loan repayable,455 immediately456 and with interest.457 A second illustration of the disadvantage in cancellation of the loan agreement in isolation458 is provided by Crailsheimer.459 The couple had made a dodgy investment in self-catering apartments for business types visiting Stuttgart which had been pitched to them by a broker at their home using finance provided by the DSL Bank. When they were in default, the Crailsheimers attempted to use the doorstep regime as a defence, the issue referred to the European Court of Justice. It was decided that the borrowers were obliged to repay the loan, money still tied up in the land, and the repayment was immediate, in a single tranche, and with interest at the market rate.

agreements, granting credit up to £50: Consumer Credit Act 1974, c 39, s 74(2A) as amended in 1987 by reg 9. Query whether this complies with European law after Heininger (n 92 above). Heininger (n 92 above) J[25ff]. Heininger (n 92 above) J[35]; Schulte (n 112 above) J[68–69]. 452 Heininger (n 92 above) J[18]. 453 Schulte (n 112 above). 454 Schulte (n 112 above) J[54]; this took place after Heininger (n 92 above) was decided in the ECJ but before the domestic proceedings to decide the effect of the referral. 455 Schulte (n 112 above) J[82–86]. 456 Schulte (n 112 above) J[88–89]; immediate release of the bank follows from immediate release of the consumer. 457 Schulte (n 112 above) J[93]. 458 Schulte (n 112 above) J[56]. 450 451

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Effect on the purchase agreement

[5.87] What is the effect of cancelling the loan agreement? And can the agreement for purchase of the land be cancelled as a knock-on consequence? The last is the crucial question, since without a cancellation right all the rest is meaningless, and there is now, perhaps, a glimmer of light in the general gloom for consumers. In the subsequent domestic decision of Heininger the Bundesgerichtshof460 addressed the consequences only obiter. German law461 provided for the purchase contract to be cancelled as well if they were ‘interconnected transactions’ but this could not apply (at the time) to mortgage loans granted under usual market conditions. So domestic law left in place the purchase contract and the obligation to repay the loan. Banks were not to be left with a stockpile of unmarketable flats in the east. German law has been amended to grant the consumer a right to cancel the mortgage arrangement in full, whether or not it was concluded on the doorstep.462 [5.88] In Schulte a loan used to finance a purchase of land formed a single economic unit with the purchase agreement,463 but European law did not create any formal linkage and lacked rules on connected contracts.464 So there was no right to cancel the purchase agreement. National law was free to state an effect on a linked contract, but it was not required to do so,465 and the nature of that effect was left to national law.466 However, these issues were most likely to occur where the consumer had not been told of his doorstep rights of cancellation467 and here the issue is different because the failure to read the consumer his rights causes him to miss the opportunity to avoid exposure to the risk that the investment will not flourish. It seems that domestic law must adopt appropriate provisions to guard against the risk, from this passage of the European Court of Justice ruling: Member states… must ensure that their legislation protects consumers who have been able to avoid exposure to such risks by adopting suitable measures to allow them to avoid bearing the consequences of the materialisation of those risks.468

Here then is a glimmer of light for consumers.469 It is difficult to discern the consequences of this judicial innovation without more case law but it seems clear that Crailsheimer (n 114 above) AG[38ff] Leger; Schulte (n 112 above) J[46ff]. Bundesgerichtshof XI ZR 91/99 [2002] ECLYB [417]; Bundesgerichtshof XI ZR 151/99 [2003] ECLYB [265]. 461 German Consumer Credit Act §9; now Bürgerliches Gesetzbuch (German Civil Code) (n 53 above) §§358ff. 462 BGB (n 53 above) §491[3](1) exception deleted; the ‘doorstep cancellation right’ (BGB amended §312) was limited correspondingly; BGB amended §358[3], third sentence. 463 Schulte (n 112 above) J[74]. 464 Schulte (n 112 above) J[76]. 465 Schulte (n 112 above) J[85]. 466 Schulte (n 112 above) J[79]; Heininger (n 92 above) J[35]. 467 Schulte (n 112 above) J[94]. 468 Schulte (n 112 above) J[99]; Crailsheimer (n 114 above) J[49]. 469 Damages could be a useful second prize: Oberlandesgericht Bremen ZU 20/02 [2006] 07 ECL [37]. 459 460

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domestic doorstep regimes around Europe will be found wanting, and in particular that the current United Kingdom transposition does not meet this dictum.

R EMEDI ATI O N A N D R EF O R M

Remediation and Reform 1

Remediation

[5.89] Consumer protection is nothing without adequate enforcement. Again there is an unhappy mish-mash of national and European controls. Authorisation and supervision regimes are left to national authorities,470 so long as they meet the European standard in terms of having adequate bite. Host state enforcement catches, or at least may do so if national legislators so choose, both businesses trading out of the state and those trading into it as host. There were thoughts of switching to a country of origin principle, so that the commercial practices of, say, a Spanish company could be tested for fairness on Spanish standards when trading in Spain or in France or in Britain, but the original proposal has not survived into the enacted form of the regime for unfair commercial practices.471 Instead the basic technique is to identify a group of public bodies charged with enforcement and having standing to bring proceedings,472 for example, in the United Kingdom, typically the Director General of Fair Trading or local weights and measures authorities.473 Standing to seek injunctions is also conferred on consumer organisations,474 even in European countries beyond their normal base of operations.475 Control is maintained through injunctions, pre-emptive injunctions, interim injunctions, and the self-descriptive ‘stop now’ orders,476 supported on occasion by the publication of decisions and corrective statements,477 and increasingly through codes of practice.478 470 See eg: Distance Marketing of FS Directive (n 7 above) R[7], §16; FS Distance Marketing Regs 2004 (n 7 above) regs 3, 4 (EEA is base). Joined up enforcement across the EU is planned to target €3.5 billion a year in frauds: Guardian December 30th 2006. 471 G de Baere ‘Principle of Origin — a Hidden Conflict Rule’ (2004) 11 Maastricht Journal 287–319; J Hornle ‘Country of Origin Regulation in Cross-border Media’ (2005) 54 ICLQ 89–126. 472 Unfair Practices Directive (n 5 above) R[21], §11; UK Consultation (n 5 above) [138ff], [194]. 473 eg Distance Selling Regs 2000 (n 7 above) reg 3(1). 474 Unfair Practices Directive (n 5 above) R[21], §11; UK Consultation (n 5 above) [138ff], [194]; Draft Unfair Trading Regs 2007 (n 5 above) reg 20ff. 475 Injunctions Directive 98/27/EC [1998] OJ L166 51, §4; Enterprise Act 2002, c 40, pt 8; Misleading and Comparative Advertising Directive (n 8 above) §4[1] as amended by Unfair Practices Directive (n 5 above) §14[4]. 476 Stop now orders were introduced to the UK in June 2001: Stop Now Orders (EC Directive) Regs 2001 SI 2001/1422; S McCalla ‘Stop Now Orders’ [2001] NLJ 751–752; also Unfair Practices Directive (n 5 above) §11. 477 UK Consultation (n 5 above) [142ff]; Misleading and Comparative Advertising Directive (n 8 above) §§4–5. 478 Unfair Practices Directive (n 5 above) R[20], §§2[f], 2[j], 10[2]; Unfair Practices EM (n 5 above) [72ff]; UK Consultation (n 5 above) [170ff].

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Criminal sanctions are often added by national legislators. A massive review of criminal enforcement has been provoked because the existing due diligence defence has to be amended to reflect the average consumer test.479

2

Common Frame of Reference

[5.90] A review of the consumer acquis is under way that will eventually lead to a Common Frame of Reference which includes, for example, common definitions of consumers and traders and coherent withdrawal periods.480

479 UK Consultation (n 5 above) [153ff]; Draft Unfair Trading Regs 2007 (n 5 above) regs 8–19, schs 2–4. 480 Green Paper on Review of the Consumer Acquis (2006) COM 744); see below [8.50].

TI MESHA R E

6 Timeshare Regulation of Timeshare Marketing. Timeshares and Timeshare-likes. Information. Withdrawal Rights. Timeshare Vehicles. Unregulated Aspects. Cross-border Timesharing. Reform.

R EG ULATI O N O F TI MESHA R E MA R KETI N G

Regulation of Timeshare Marketing 1

Controls

[6.01] Timeshare marketing is regulated by a European Directive1 which applies across EEA-30.2 The basic rights are to information at the pre-contract stage and a time for reflection before rights become binding. European regulation interacts in a complex way with the pre-existing domestic legislation which has required tortuous reshaping to make it fit the new scheme.3 Imposition of European controls has crippled an industry which set out with high aspirations4 but which came to rely on dubious marketing techniques. Unfortunately the definition of timeshares has proved to be full of holes and it has been all too easy for unscrupulous traders to evade the European regime by designing ‘timeshare-like’ products, code for ‘not a timeshare’. Strict European controls have trapped many existing owners, and the current problems involve resale and the management of existing blocks.5 The whole situation is under review by the Commission.6

1 Timeshare Directive 94/47/EC [1994] OJ L280 83; Timeshare Transposition Report Application of the Timeshare Directive SEC (1999) 1795 final. 2 EEA Agreement [1992] OJ L12 13 as adjusted [1994] OJ L1 572 and amended [004] OJ L130 3, §72, Annex XIX. 3 Timeshare Act 1992, c 35; Timeshare Regulations 1997, SI 1997/1081; Timeshare Act 1992 (Amendment) Regs 2003, SI 2003/1922; Timeshare (Cancellation Information) Order 2003, SI 2003/2579. 4 J Edmonds International Timesharing (London, Information Services for Lawyers, 2nd edn, 1986, 0-9004-176-7X). 5 See below [6.50ff]. 6 Review of the Timeshare Directive (Health & Consumer Protection Directorate, 2006); Responses to the Timeshare Consultation (Health & Consumer Protection Directorate) [XI] (review process and stakeholders), [X] (policy); Timeshare and Long-term Holiday Products Proposal, Explanatory Memorandum and Impact Assessment COM (2007) 303 final; this was published on June 7th 2007,

248

2

Timeshare

The market

[6.02] Timeshare developed as a way of allocating access to mainframe computers7 but the term was soon appropriated to a particular method of sharing holiday accommodation. An outside observer looking at a hotel block or a tourist village would not be able to tell whether it was intended for outright sale as second homes or developed as a timeshare resort or used for the rental market to package tourists, and indeed many resorts are mixed.8 The difference is the basis of occupation: unlike rentals, timeshare is sold long-term, and, unlike holiday homes, what is sold is a limited right. A right to occupy accommodation for a particular week in the year means that one particular apartment is shared with up to 51 other owners. In essence timeshare is part ownership by way of consecutive sharing of holiday accommodation sold long-term by the week.9 If a particular family buy, say, week 24 in apartment 10, they can return year after year to that particular resort for that particular week in that particular flat, their friends in the neighbouring apartments doing the same. What fun. It all began as a loose kind of limited and intermittent leasehold, but the market has evolved so as to allow floating weeks and degraded to the point where most timeshares are confined to use rights and there are a multitude of ‘timeshare-like’ products which do not give rights in any specific accommodation, a holiday package10 devoid of land law elements. So misleading has ‘timeshare’ become that Spanish law now precludes any promise of ‘property’ and even the local word for ‘timeshare’ and insists on a circumlocution — a ‘right of rotational enjoyment of immovable property for tourist use’, perhaps most closely translated as a ‘use in turn’.11 ‘Interval’ is generally the best description of the interest acquired by the timesharer. Authoritative statistics about the market are hard to come by.12 Worldwide, timeshare is a $10 billion business, the largest slice being in America where timeshare was conceived as a means of offloading unwanted and unsaleable flats.13 Europe follows in second place, with a quarter of all resorts, 1.5K of them, too late for incorporation throughout this chapter but considered in outline at the end of the chapter: see below [6.66]. G Leposkis Timeshare Basics (Timeshare Today, ). C-73/04 Klein v Rhodos Management [2005] I ECR 8667 ECJ. 9 G Vedrickas Independent Property May 7th 2003; THS Bourne ‘Timeshare — the Way Forward’ [1992] NLJ 1581–1582, 1581. 10 See below [6.13ff]. 11 Spanish Timeshare Law 42/1998 (1998) 300 Boletin Oficial del Estado 42076; see below [6.41ff]. 12 Facts & Statistics (Timeshare Consumers Association,

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