The EU Succession regulation is creating a great many questions
as to how it works and how it will work for Brtish residents and
nationals after Brexit, when the UK is no longer a Member
State of the European Union. I can assist with that from Jersey as
I have a qualification in European Law, and a great deal of
experience in this matter. I have published several articles on its
workings corecting some of the errors made in the Regulation's
application, even by certain in Brussels.
I published this technical article on Linked In, but think that
it might be useful for professionals dealing with successions in
Europe generally, where these may be governed by English law under
the Regulation.
Note also that certain European states that are not members of
the EU, but were under communist influence and therefore without
any real laws of property to speak of, and may be in the process of
joining are adopting the basic structure of the EU Regulation as
their private international law process. There is nothing like a
clean slate to work off. The EU Regulation is in the direct line of
the processs initiated by the Hague Convention of 1989
on the law applicable to succession to the estates of deceased
persons. These things take time.
Some say, in error, that this concept and mode of
transmission of immovable property was eradicated from the English
and Welsh jurisdiction by the Real Representatives Law of 1897
carried over to the 1925 Law of property legislation. What follows
is little more that what I hope to be educated musings and I would
be quite happy to support its conclusions by an opinion if
required
The issue as to whether the old English common law manner of
devolution of immovables by direct seisin is coming back to the
fore in the light of the Unitary concept of the law governing
successions recently introduced in Europe, albeit not within the
United Kingdom jurisdictions, which induces the law of the habitual
residence of the deceased into the equation of a European
succession. However a recent Case in the High Court has illustrated
the complete chaos that can arise when an English Court attempts to
assert any jurisdiction over the devolution of a foreign immovable
and apply English trust or personal representative rules intended
for its own domestic consumption abroad.
I have written several times on the subject on Linked In with
varying degrees of interest being shown and I should admit a degree
of opposition from certain quarters including luminaries from STEP.
Without undue insinuation, STEP by definition has an interest in
promoting the interests of its members as personal representatives
acting outside of the English jurisdiction. Whilst English law
requires that certain categories of asset be dealt with under
the lex domicilii i.e. movables, and thus enables a
personal representative to act abroad under an English Grant, it
does not admit that a personal representative acting under a
statutory trusteeship or otherwise can have power over an immovable
situated outside the English jurisdiction without a refiling of a
grant in the other country. Try it on in Scotland or the Crown
Dependencies if you think otherwise.
Scission means just that. No jurisdiction over foreign
immovables.
I will cite the unfortunate chaos that has been instigated in a
will drafted by an English resident over land in Montenegro,
outside the EU Succession Regulation as an example. HHJ Paul
Matthews made the following statement in his judgment at [2020] EWHC 2236 (Ch) Case No:
C31BS010. The issue related to the devising of land in
Montenegro by an English will to the Serbian Orthodox Church. The
judge had previously ordered that it be held in trust. One can
already sense the issue arising, and given Professor Matthew's, as
he used to be, knowledge of Private International Law, it is
surprising that the initial order was granted without comment. The
notary in Montenegro simply said he was unable to process it, and
that is of no surprise. §17-19 of HHJ Matthew's judgment reads as
follows:
"The problem arises here because the way in which common law
and civil law legal systems deal with the property consequences of
death are fundamentally different. In civil law countries
(including, I assume Montenegro) the formalities of succession on
death are dealt with by a notary (or sometimes by way of an
officially issued certificate of inheritance), who takes care to
identify precisely the heirs and the assets (and sometimes
liabilities) of the deceased. The heirs are few, and are clearly
specified in the law (or in a will). Moreover, there are no trusts
to complicate matters. The transmission of rights (and liabilities)
is instantaneous on death, from the deceased to the heirs, without
the interposition of anyone like a personal representative. The
heirs will pay the debts of the deceased. Moreover, this takes
place in the context of a precise registration system both of
persons (using concepts such as the French état civil) and of
property (often cadastral, as it apparently is in this case). The
notarial act or (or certificate of inheritance) will be tailored
exactly to the needs of the registration systems.
In England and Wales, however, there is no instantaneous
transmission from deceased to those who inherit, no état
civil, and no cadastral property system in the civil law sense.
Instead, there is interposed between the deceased and the
beneficiaries of his estate a personal representative, whose
function is to collect in assets and pay debts, before passing any
remaining positive balance to those entitled to inherit. There is
no notary involved, and no official inheritance certificate. This
means that in practice succession on death is dependent upon the
due performance of the duties of a (private-sector) personal
representative, who need not rely on any official information. Here
the personal representative could (and no doubt, if the Montenegrin
property were situated in England, would) use such extrinsic
evidential tools as were available to him or her to identify the
property in question. Since the deceased owned only one property in
Montenegro, that would present no problem. However, in a civil law
system with a cadastral registration scheme, such a pragmatic,
"flying-by-the-seat-of-your-pants" approach is unlikely to be
acceptable, as indeed the Montenegrin court has confirmed.
It is one thing to recognise the cause of the problem. It is
another to propose a solution to it. Undoubtedly, the parties did
not at the time of the litigation think forward to the problems
that might arise with the enforcement of any order made. The
lawyers concerned cannot be blamed for this. Their expertise lies
in the law of their own countries, and not that of different ones
(that is, on the one hand, civil law countries like Montenegro, or,
on the other, common law countries like England and Wales). The
court is asked to make an order under the slip rule in CPR 40.12.
For the reasons given, it cannot do this. There was no accidental
slip or omission. The court decided what it was asked to decide. A
certificate of that decision cannot change that. I must therefore
dismiss this application."
One can but feel for him. it appears to be a mess. The English
Court only had jurisdiction to allocate title over a foreign
immovable when the parties to the case are domiciled in England and
the will or disposition affects both English immovables and foreign
immovables. You still cannot sue over title to a foreign immovable
alone in an English court. The remedy of a resulting trust was
granted in Webb v Webb on a personal basis, not on
an in rem basis.
When HHJ Matthews says "In England and Wales, however, there
is no instantaneous transmission from deceased to those who
inherit, no état civil, and no cadastral property system in
the civil law sense" he may have only stated the part of the
law of England and Wales applicable following the Real
Representatives Law 1897 in England and Wales. There is in fact
another solution than that of holding fast to the English
scissionist concept for dear life and applying English rules as if
the scissionist concept allowed it.
What did the Real Representatives Law 1897 accomplish? Firstly
Dicey states in his edition following the 1897 Law and Megarry
agrees in his Third Edition that that Law and as to its
consolidation in the 1925 Law of Property consolidation, that that
Law only applied to England and Wales. It did not apply to land or
its administration outside the jurisdiction. It certainly did not
apply to Scotland or Northern Ireland and therefore anywhere else,
including what is now Serbia or Montenegro. Parliament sitting as
the English or the UK Parliament does not declare jurisdictional
war abroad whether by clam, vi or precario so as to
appropriate foreign land to its jurisdiction merely by statute. It
has aircraft carriers, and an army for that.
What the 1897 Law did not do was to totally excise the original
common law concept of direct seisin to immovables from English law.
As a statutory amendment to the common law of Norman origin, it
only did so and could only do so in relation to immovable property
situated within the English jurisdiction, leaving the Norman
concept in a limbo from which it has been released inter
alia by the European Succession Regulation's unitary approach
and by the Anglo-Norman habit of owning property abroad in
jurisdictions that, now, might require its devolution to be dealt
with under the English common law. The scope of the Law of Property
Act following on the from the 1897 Law and the Administration of
Estates Act 1925 is inherently limited to land in England and
Wales. STEP should perhaps take note.
It is that point that is crucial to the correct and orderly
administration of English law abroad to the extent that it is
called upon in aid by foreign friendly jurisdictions. The common
law concept of direct seisin can apply to foreign immovables in a
unitary context as it has not been overridden or expressly
"repealed" outside the Anglo-Welsh jurisdiction. Under the EU
Regulation generally, and in this case, the Montenegrin private
international law certification, it is the foreign jurisdiction
applying English law, not the English courts. The EU Regulation has
effectively abolished renvoi except where the concept is relevant
tothrid states in very limited cases. This is not one of them as
article 34 of the EU Regulation amply describes.
The case of the Montenegro immovable could have been resolved
expeditiously with a little knowledge of what the law of England
was prior to 1897, and still remains.
Objections have been raised by elaborate legal engineers as
to renvois being required. Renvoi is a
tool, not a law or a legal requirement per se. Its
sole justification and application lies in the area referred to as
that of the Conflict of laws, not in general law. Where there is no
conflict, it is unnecessary and frankly a waste of time and energy
equivalent to complete destruction of the estate in the Dickensian
case of Jarndyce v. Jarndyce (available at all good
booksellers). The EU Succession Regulation has deliberately
and intentionally put renvoi back in its box, and
sealed it in, in relation to internal EU successions by an
adaptation process. However, in order not to deregulate successions
with third states, it has been admitted in relation to Third
States' laws as an exception. Where is no conflict, there is no
need for renvoi. It is not a law. What is more,
the renvoi concerned is a European concept, it is not
an English one. Those reading the preparatory documentation
submitted prior to the drafting of the Regulation will appreciate
that there are significant differences between the English concept
of renvoi and that for example prevalent in German and other
laws.
I would refer the reader to the fundamental differences as
to Renvoi and its application isolated by the German
Notarial Institute s compiling the Rapport Final: Synthèse
et Conclusions of 18 septembre/8 novembre 2002. The summary at
page 59 clearly shows that there is no fundamental and
comprehensive common ground as to what renvoi is as
between all Member States concerned. There are different
mechanisms by which for example, each court decides which law to
follow, whether it sits as itself or as a foreign court or
then apply other mechanisms for different reasons in different
areas and classifications of law. I can only echo John Pawley
Bates' Notes on the doctrine of Renvoi commentary in
stating that the word term renvoi in itself is
fallacious as it implies a sending back, which is not a full
description of the legal phenomenon at all, particularly in the
case where the jurisdiction or legal system to which the issue is
sent by the adjudicating forum retains jurisdiction and does not
send it elsewhere or back. He cites the German
terms Rückverweisung
and Weiterverswiesung to illustrate that fundamental
distinction.
Might I suggest this "Jack in the box" is still a troublesome
pest despite it being eradicated from the European law of
succession by the Regulation? The reference to renvoi
made in article 31 of the Regulation as being applicable to the law
of habitual residence or the continental lex
domicilii, where it is applied is within the context of good
order, it does not render renvoi a principle of law.
It is a tool, no more.
Considerant 57 of Regulation (EU) n° 650/2012 states:
The conflict-of-laws rules laid down in this Regulation may
lead to the application of the law of a third State. In such cases
regard should be had to the private international law rules of that
State. If those rules provide for renvoi either to the law of a
Member State or to the law of a third State which would apply its
own law to the succession, such renvoi should be accepted in order
to ensure international consistency. Renvoi should, however, be
excluded in situations where the deceased had made a choice of law
in favour of the law of a third State.
Renvoi is therefore limited to what is necessary to
ensure international consistency, whatever that may b etaken to
mean.
A renvoi to the lex rei loci sitae
is not therefore required where English law applies the same or
equivalent principle as the lex rei loci sitae.
Renvoi is not a law, it is not orthodoxy or doctrinal
either.
Article 34 (1) refers to conflict of laws, not to a position
where there is no conflict.
1. The application of the law of any third State specified
by this Regulation shall mean the application of the rules of law
in force in that State, including its rules of private
international law in so far as those rules make a renvoi:
(a) to the law of a Member State; or
(b) to the law of another third State which would apply its
own law.
2. No renvoi shall apply with respect to the laws referred
to in Article 21(2), Article 22, Article 27, point (b) of Article
28 and Article 30.
In the Montenegro case, by way of example, were the English
doctrine of direct seisin to have been applied, then there would
have been no conflict to resolve. It is simple, where there is no
conflict, as there appears to be none, between the civil law
concept of le mort saisit le vif in simple French and
direct seisin, Renvoi to the law of an EU States is not
required, where the same principle applies in both jurisdictions.
To argue from a Third State perspective as certain commentators are
doing that the "law" in a unitary context requires
a renvoi is futile.
Rereading pages 6-16 of Dicey's Introduction to his second 1908
Edition pages demonstrates the fallacy of assuming
that renvoi is a rule of law and
that Conflict of laws is a separate set of legal
rules - I cite that edition as it is the one following on from the
1897 Law- they are not, for the reasons Dicey sets out. It is a
cold shower for those who believe that renvoi and
scissionism/duallism are absolutes rather than tools of the
profession.
I therefore urge practitioners faced with these issues to
consider reconfiguring their applications for relief abroad along
the lines of Direct Seisin, citing the common law of England, if
for any reason there is an immovable situated in a jurisdiction
that uses the concept of direct seisin or an equivalent as its own
manner of transferring immovables on death. I stress that the
Cridon of Lyon has heard my proposal and is deploying it amongst
its French notary members without any apparent difficulty. This has
been confirmed by an English notaire practicing in a
well established in the French Alps The main issue with Direct
seisin in England was that debts could not be recovered without a
mortgage surety or guarantee. The English rules are clearer now and
can be used in the French succession by the notary administering
the estate under the Regulation, thus avoiding fraud. They are
imagiative enough to conclude that The Inheritance (Provision for Family and
Dependants) Act 1975 is part of the law of succession of the United
Kingdom, so ...
The point is that in the framework of the EU Succession
Regulation n° 650/2012, English law as it stands leaves the
questions of the administration of the estate prior to its
devolution or distribution in the hands of the lex
fori. That includes the collecting in of the assets and the
payment of creditors. The direct seisin principle applies only when
the estate has been finalised. Those who fear a return to the bad
old days when the English nobility or landed gentry were able, in
the absence of a mortgage charge, to elude neo-capitalistic
creditors seizing their lands may need to think again. That is
dealt with by the lex fori, and there is
no renvoi from English law to the lex
fori which is already seized of the issue as such by the
Regulation. The English language version of article 23 of the
Regulation which probably will not be replaced
by Gaeilige as from the Saint Sylvestre, reads as
follows as to the scope of the applicable law:
"2. That law shall govern in particular: ...
(f) the powers of the heirs, the executors of the wills and
other administrators of the estate, in particular as regards the
sale of property and the payment of creditors, without prejudice to
the powers referred to in Article 29(2) and (3);
(g) liability for the debts under the succession;
...
"Governing" does not induce the actual application of the law of
England as to priority and payment of creditors, the Regulation
leaves that by necessity to the EU competent court or the notary or
the heirs administering the succession. The term "shall regulate"
is not used. The actual provision as to any renvoi
cited above reads as follows, and does not preclude the application
of the English rules as to the priorities of creditors or their
payment by the EU person charged with the administration of the
succession.
"1. The application of the law of any third State specified
by this Regulation shall mean the application of the rules of law
in force in that State, including its rules of private
international law in so far as those rules make a renvoi:
(a) to the law of a Member State; or
....."
Neither does it preclude the use of the law of the Member State
concerned in a case governed by the habitual residence of the
deceased, rather than any option made by the deceased for the
application of the law of their nationality.
"Unitary" does not mean foreign court theory: it has replaced it
in Europe.
Peter Harris
peter.harris@overseaschambers.com
www.overseaschambers.com