Amendments CIVIL CODE On 1 January 2012, thirteen National ordinances have taken effect for Curaçao. Herewith a second stage in the project to introduce a new Civil Code in Curaçao has been completed. The first stage of this project had already been completed in 2001, when eighteen National ordinances took effect for - then - the Netherlands Antilles. The current thirteen National ordinances concern all eight books of the Civil Code. After reading this publication, one will be familiar with the most important amendments. Clicking on page 2 of the selected chapter automatically leads to the relevant description. For questions regarding the interpretation of a certain amendment, please contact one of the lawyers mentioned in this publication. January 2012 Curaçao
Transcript
Amendments CIVIL CODE
On 1 January 2012, thirteen National ordinances have taken effect for Curaçao.
Herewith a second stage in the project to introduce a new Civil Code in Curaçao has
been completed. The first stage of this project had already been completed in 2001,
when eighteen National ordinances took effect for - then - the Netherlands Antilles.
The current thirteen National ordinances concern all eight books of the Civil Code.
After reading this publication, one will be familiar with the most important amendments.
Clicking on page 2 of the selected chapter automatically leads to the relevant
description. For questions regarding the interpretation of a certain amendment, please
contact one of the lawyers mentioned in this publication.
January 2012 Curaçao
January 2012
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The amendment concern the following thirteen National ordinances:
1. NATIONAL ORDINANCE to amend Book 1 of the Civil Code (National Ordinance Revision Marital Property Law).
2. NATIONAL ORDINANCE to amend Book 1 of the Civil Code (National Ordinance Judicial Determination of Paternity).
3. NATIONAL ORDINANCE to amend Book 1 of the Civil Code concerning joint custody of minor children
(National Ordinance Joint Custody).
4. NATIONAL ORDINANCE to amend Book 1 of the Civil Code (Introduction Central Reporting Center Child Abuse).
5. NATIONAL ORDINANCE to amend Book 2 of the Civil Code (National Ordinance Revision Book 2 Civil Code).
6. NATIONAL ORDINANCE containing supplement to Book 3 of the Civil Code with provisions on trusts
(Trust Ordinance).
7. NATIONAL ORDINANCE to lay down Book 4 and Title 3 of Book 7 of the Civil Code National Ordinance Inheritance Law and Donations).
8. NATIONAL ORDINANCE to supplement Title 1 of Book 7 of the Civil Code with provisions concerning purchase of real estate and to lay down of Title 12 of Book 7 of the Civil Code
(National Ordinance Purchase of Real Estate and Contracting of Work).
9. NATIONAL ORDINANCE to supplement Title 1 of Book 7 of the Civil Code with provisions to protect the consumer, in particular concerning distance contracts and warrantees
(National Ordinance Distance Purchase Consumers).
10. NATIONAL ORDINANCE to lay down Title 4 of Book 7 of the Civil Code (Rent Ordinance).
11. NATIONAL ORDINANCE to lay down Title 13 of Book 7 of the Civil Code (Partnership Ordinance).
12. NATIONAL ORDINANCE to lay down Titles 17 and 18 of Book 7 of the Civil Code (Insurance and Annuity Ordinance).
13. NATIONAL ORDINANCE to amend the Code of Civil Procedure and the Bankruptcy Decree 1931 to several supplements to the new Civil Code
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1. NATIONAL ORDINANCE to amend Book 1 of the Civil Code (National Ordinance Revision Marital Property Law).
With the introduction of the National Ordinance Revision Marital Property Law, inter alia the rule that the claim for compensation between spouses in their private capacities is a nominal claim has in principle been abandoned. With the introduction of the National Ordinance Revision Marital Property Law, this “nominal doctrine” has been replaced with the “investment doctrine”. This latter doctrine entails that upon determination of the claim for compensation, the value of the object bought or improved with money contributed to the community of property (gemeenschap van goederen) will be assessed. This causes the spouse entitled to compensation to also share in loss, if any. This new rule also applies if two people have cohabited as if they were married.
Also new, is the provision that an acquired property does not become part of the community of property in case more than half of the property has been paid with the capital of the acting spouse. Consequently, there are only two possibilities concerning objects in the (marital) community of property: an object either becomes part of the community of property, or does not become part of the community of property.
The point in time of dissolution of a marital community of property has been fixed at an earlier date with the introduction of the National Ordinance Revision Marital Property Law. In case the marriage ends by divorce, the community of property shall dissolve by operation of law at the moment the application for divorce is filed. This new provision has been introduced in order to prevent that the spouse is prejudiced by acts of the other spouse during the (often long) divorce proceedings.
It is noteworthy that with the introduction of the National Ordinance Revision Marital Property Law, the provision entailing that spouses are obligated towards each other to cohabit still applies, even though this provision is difficult or almost impossible to enforce. This provision no longer exists in the Netherlands.
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2. NATIONAL ORDINANCE to amend Book 1 of the Civil Code (NATIONAL Ordinance Judicial Determination of Paternity).
The law, applicable until 31 January 2011, did not (yet) provide for the possibility to determine paternity judicially. However, every child had the right to know the identity of their biological parents. The fact that there was no statutory provision facilitating judicial determination of paternity could be considered to be in conflict with several important human rights conventions (e.g. the ECHR and ICCPR).With the introduction of the National Ordinance Judicial Determination of Paternity this has been changed.
Mainly the aspects of inheritance law (erfrecht) make this matter particularly interesting. By judicial determination of paternity, “problems” may arise, e.g. in case children fathered out of wedlock by the deceased father request for paternity to be judicially determined and subsequently share in the inheritance as fellow heirs. However, Article 1:207a Civil Code as contained in the National Ordinance Judicial Determination of Paternity, stipulates that the judge is authorized to limit the rights of a child under inheritance law if the judicial determination of paternity has not taken place until after his death.
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3. NATIONAL ORDINANCE to amend Book 1 of the Civil Code Concerning Joint Custody of Minor Children (National Ordinance Joint Custody).
By introducing the National Ordinance Joint Custody, a new standard has been introduced. Contrary to before, the joint custody (gezamenlijk gezag) of parents remains intact after divorce. The rationale behind this stipulation is, inter alia, that pursuant to the old law, parents already could at their joint request remain charged with the joint custody. However, the Supreme Court considered the fact that it was only possible at the joint request of both parents, to be in conflict with Articles 6 and 8 ECHR. According to the Explanatory Memorandum to the National Ordinance Joint Custody, joint custody has the advantage that both parents can be better held accountable for their responsibility towards their child.
But a parent (or both parents together) can request to be granted sole custody of the children after the divorce. The fact that one of the parents requests custody is not sufficient for this purpose. The parent requesting sole custody has an obligation to National law. Also after one parent has been granted custody, joint custody can be requested again afterwards.
Equal to law in force prior to the introduction of the National Ordinance Joint Custody, the mother has custody of a child by operation of law in case the child is born out of wedlock. However, with the introduction of the National Ordinance Joint Custody, the father is entitled to independently file a petition for sole custody or joint custody provided that the father has acknowledged the child.
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4. NATIONAL ORDINANCE to amend Book 1 of the Civil Code (National Ordinance Introduction Central Reporting Center Child Abuse).
To profession occupational groups bound to confidentiality based on their profession (e.g. lawyers) it was not always clear when such professional privilege may or may not be breached to report child abuse. In Curaçao, such occupational groups have the right (and not the duty) to report child abuse since the introduction of the National Ordinance Introduction Central Reporting Center Child Abuse. By order of the Minister of Justice of 12 February 2009, it was decided to establish a separate section within the Guardianship Council called Central Reporting Center Child Abuse. Article 1:243b Civil Code as contained in the National Ordinance Introduction Central Reporting Center Child Abuse stipulates that in the fulfillment of its task this reporting center must take account of the desire of the person reporting to stay anonymous. This does not mean that anonymity is permitted towards the reporting center itself, for that matter. This “only” means that the identity of people reporting child abuse may not be disclosed to third parties. Professional privilege can be breached in case of important public interests.
5. NATIONAL ORDINANCE to amend Book 2 of the Civil Code (National Ordinance revision Book 2 Civil Code).
The National Ordinance revision Book 2 was mainly inspired by the Dutch legislative bill “Flexibility and Security Act” as adopted by the House of Representatives in December 2009. The correlation with the Netherlands, very important to the legal development within the Kingdom, is promoted by it. Meanwhile, other important amendments induced by the experience with the current Book 2 have been made. On that occasion, sometimes solutions have been chosen that will increase the flexibility and usability of the system even more than the Dutch Flexibility and Security Act. All in all, this has led to rather radical amendments and supplements. In this publication only some of these amendments can be discussed.
An important amendment to the National Ordinance revision Book 2 is that it contains a ranking applicable between the various regulations that control or can control the organization of a legal entity. The starting point continues to be that the provisions of Book 2 are at the top of the ranking. Then the Articles of Incorporation of a legal entity follow. The corporate agreement is next, and last in the ranking the regulations. Provisions of a lower regulation are invalid in as far as they are in conflict with a higher regulation. The corporate agreement, even more than the shareholders’ agreement in the old regulation, has been given a clear place in the organization of the legal entity. It has been explicitly determined that provisions in a corporate agreement have the same legal consequence as provisions in the Articles of Incorporation, in as far as the contrary does not follow from the law, the Articles of Incorporation or the corporate agreement itself. By recording the existence and annulment of a corporate agreement in the Trade Register, it is also possible for third parties to know about the existence of this agreement. It is noteworthy that this knowledge based on the recording in the Trade Register does NOT entail that restrictions in the management authority contained in a corporate agreement can be invoked against a third party pursuant to Article 2:10, paragraph 3, letter b.1 The explanation given on this point is that by recording the fact that there is a corporate agreement, the third party does not yet know the content of the corporate agreement, and consequently does not know the restrictions in the management authority it contains. This will be different if apart from recording the existence of the corporate agreement this agreement is also actually open for inspection. Merely making the agreement available for inspection at the Trade Register is not sufficient, because the third party does not have the obligation to investigate whether a corporate agreement is available for inspection. Merely submitting the corporate agreement with the restrictions in the power of representation it contains to a third party will lead to it that the third party knew about the restrictions and that these restrictions can be invoked against him. The same applies to the restrictions contained in regulations.
Another amendment important to practice is the rewriting of the conflict of interest regulation. In the old regulation, the general meeting of shareholders was authorized in all cases of a conflict of interest between the legal entity and a managing director or the legal entity and a supervisory director to appoint a special representative. This authority existed irrespective of what the law, the Articles of Incorporation or regulations based thereon regulated with regard to a conflict of interest. In practice, this led to the problem that, despite the fact that the regulations laid down in the law or Articles of Incorporation were followed, one was not really sure whether the general meeting had not wanted to appoint someone as special representative. So in practice
1 Article 2:10, paragraph 3, letter b stipulates that restrictions in the management authority with which a third party could be familiar by consulting the Trade Register can be invoked against this third party.
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one had to ask the general meeting, to be sure, in all cases of a conflict of interest whether it wanted to appoint someone to represent the legal entity. This power of the general meeting no longer exists in the new regulation as contained in the National Ordinance revision Book 2. The regulation now contains a brief and clear description of who is authorized to represent the legal entity in the event of a direct conflict of interest between the legal entity and a managing director. In addition, the regulation gives the liberty to include an entirely different regulation in the Articles of Incorporation or regulations.
Other important amendments are that the regulation for the transgression of the object has been amended, the regulation on director’s and officers’ liability in the event of bankruptcy has been improved, the inquiry regulation has been introduced for all legal entities, merger of limited liability company (naamloze vennootschap) or private company with limited liability (besloten vennootschap) with a foreign corporation in which the N.V. or B.V. disappears in a foreign corporation has become possible and the personal liability of directors and shareholders in the event of conversion of an N.V. or B.V. into a foreign legal entity disappears.
Finally, an important amendment is the possibility to include obligations under law of obligations in the Articles of Incorporation of an N.V. or B.V. that will be attached to being a shareholder and that will apply to the corporation or third parties or between shareholders among themselves. The Explanatory Memorandum belonging to the National Ordinance revision Book 2 gives as example of such an obligation the obligation not to compete with the corporation, the obligation to enter into a corporate agreement at some point in time or e.g. the obligation to have to offer shares before being allowed to transfer the shares to a third party. In all cases, the possibility to include additional obligations is restricted to obligations of holders of registered shares.
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6. NATIONAL ORDINANCE containing a supplement to Book 3 of the Civil Code with provisions on trusts (Trust Ordinance).
A trust as referred to in the Trust Ordinance is a legal relationship created by a unilateral or multilateral legal act in which objects are or will be placed under the control of a trustee for a beneficiary or a certain purpose. The unilateral or multilateral legal act with which the trust is created has to appear from a notarial deed. The notarial deed also contains who the trustee is, who the beneficiary is, what the purpose of the trust is, and a description is given of the trust property. At least one trustee living or domiciled in Curaçao has to be appointed. The Central Bank of Curaçao and St. Maarten (Central Bank) may grant exemption from this obligation. Based on the financial supervision regulations of the Central Bank (the Trust Supervision Ordinance) the trustee may be required to apply for a license with the Central Bank.
The trust is an agreement of its own. The trust is not a legal entity and in general, does not qualify as a partnership. One of the most important characteristics of the trust is that the trust property has been separated from the equity of the trustee and of other trust properties, if any, held by the trustee. Consequently, a trustee has two types of capital, his equity and one or more trust properties. The difference between these two capitals is found in the purpose of these capitals: the equity is for the trustee’s own benefit and use; the trust property is for the beneficiary’s benefit and use or for a certain purpose. The trustee is legal owner of the trust property without an interest of his own, but with obligations to the beneficial owner, the beneficiary. The separate nature of the trust property entails that the legal ownership of the trust property belonging to the trustee is not involved in the trustee’s bankruptcy, is not part of the marital community in which the trustee might be married, and is not part of his inheritance. The separated trust property also entails that private directors of a trustee do not have recourse from the trust property. Vice versa, creditors of the trust property, viz. creditors who were notified that they acted with a trustee in his capacity of trustee of the trust property, do not have recourse from the trustee’s equity, in principle.
The trustee is fully authorized to dispose of the trust property. The trust deed can restrict the power of disposition of the trustee concerning the trust property. This restriction of the power of disposition of the trustee is justified, according to the Explanatory Memorandum belonging to the Trust Ordinance, because the trust property is not for his own benefit and use, but for the benefit or use of the beneficiary. In order to protect the trust property and in the interest of the beneficiary, it is important that a restriction, if any, also under law of property, applies to acquirers who knew or were deemed to know this lack of power of disposition. Third parties are protected by the obligation to disclose restrictions, if any, of the trustee’s power of disposition contained in the trust deed. The effect of the trustee’s restriction of the power of disposition under law of property leads to invalidity of transfer of trust objects by a trustee having no power of disposition to a third party acquirer which was not in good faith, and consequently trust objects can be claimed back. It also entails that the trust objects also remain a separate capital during the time they are held by the third party.
The Trust Ordinance also provides the possibility to appoint a protector. The role of the protector within the trust is to supervise the trustee and render its advice to the trustee.
The civil law notary who has executed the deed of creation of the trust is obligated to record the trust and restrictions in the trustee’s power of disposition, if any, in the Trade Register of the Chamber of Commerce.
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7. NATIONAL ORDINANCE to lay down Book 4 and Title 3 of Book 7 of the Civil Code (National Ordinance Inheritance Law and Donations).
Inheritance lawThe most important and radical amendment the introduction of the National Ordinance Inheritance Law and Donations entails, is the abolition of the statutory share (wettelijk aandeel). In the Netherlands the statutory share has not been abolished as yet.
According to the Explanatory Memorandum to the National Ordinance Inheritance Law and Donations, the reason for abolishing the statutory share is that the statutory share entails a serious infringement of the freedom of disposition (beschikkingsvrijheid) of a person without constituting sufficient justification for this infringement (by stating that the statutory share ensures peace in the family).
The introduction of the statutory division (wettelijke verdeling), being the successor of division of the parental estate by will, is another important amendment to inheritance law (erfrecht). It constitutes that the surviving spouse acquires the objects of the estate by operation of law. Payment of the debts of the estate is also borne by the surviving spouse. Subsequently, every child acquires a non-payable claim on the surviving spouse, in principle, in the amount of the value of his share in the estate. In principle, each child has to be part of the joint children of the deceased and the longest-living spouse. The deceased can determine, however, that this regulation concerning the statutory division also applies to the children that are not the children of his/her spouse. Under circumstances, specified in further detail in the regulation, the children of the deceased do not have to accept their monetary claim and can still receive good/property from the estate.
Another important amendment taking effect upon introduction of the National Ordinance Inheritance Law and Donations, is the settlement procedure. The settlement procedure can be regarded as a succession of the beneficiary acceptance and stipulates that the estate shall be settled with due observance of the regulations in Section 3 of the new Book 4 Civil Code. DonationTitle 3 of Book 7 Civil Code has also been introduced in the National Ordinance Inheritance Law and Donations. Consequently, Articles 7A:1685 through 1712 Civil Code concerning donations have been replaced. Because of the close connection to inheritance law, this matter has been included simultaneously in one National Ordinance, combined with the amendments to inheritance law.
The National Ordinance Inheritance Law and Donations consists of fifteen Articles (7:175-188), the first twelve Articles of which provide for regulations regarding donation (schenking) and the last three concern the (new) concept of the gift (gift). The gift is a broader concept and also includes, contrary to donation, acts other than an agreement for no consideration (overeenkomst zonder tegenprestatie). Thus making the donation a species of the gift.
The relevance of the distinction between these two concepts is that the provisions on donations apply to gifts other than donations. This, however, with the restriction: “unless the provisions pertaining to donation oppose such applicability in view of the nature of the act.”
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The rationale of this provision is that it is better to first regulate the clearly defined concept of donation, and to subsequently create a general and flexible regulation for gifts similar to a donation.
Important differences between the new concepts of donation and gift are:• in case of a gift, there does not have to be an agreement;• the “without a consideration” requirement is not set for a gift.
The distinction between the formal donation, being the obligatory agreement as described in Article 7A:1685 Civil Code, and the material donation, being each act with the intent to enrich a third party at the expense of the equity (e.g. sale at too low a price), has been codified in the National Ordinance Inheritance Law and Donations in the concepts “donation” and “gift”. Literature and case law prior the introduction of the National Ordinance Inheritance Law and Donations will therefore (partially) retain their validity. The National Ordinance Inheritance Law and Donations meets the criticism raised in literature that the previous law only provided for regulation of the formal donation, making it unclear which provisions applied solely to formal donations and which also applied to material donations.
In addition, the definition of the concept donation has been broadened in the National Ordinance Inheritance Law and Donations. The matter of “giving an object from the capital of the donator” no longer exists. Under the new regulation, the donation can also relate to an act or omission and can take place by way of cancellation or settlement agreement.Furthermore, the requirement that donations, except informal donations, in all cases have to take place by notarial deed, have been cancelled. Under the National Ordinance Inheritance Law and Donations, Donations by notarial deed are only required in case the donation (i) has the purpose of being executed after the death of the donator, or (ii) relates to registered property.
Contrary to the regulation of Book 7A Civil Code, that stipulated a donation to be irrevocable, a donation can now be revoked under the National Ordinance Inheritance Law and Donations. This is notably of importance for the donation of a periodical payment until notice of termination (opzegging), which is considered to be a donation under the resolute condition of termination.
Furthermore, the regulation of Article 7A:1697 Civil Code, prohibiting donations between spouses during the marriage, no longer exists.
Finally, it should be observed that the provisions of the National Ordinance Inheritance Law and Donations are substantively equal to Title 7.3 of the Dutch Civil Code which has taken effect as per 1 January 2003. However, with the proviso that the National Ordinance Inheritance Law and Donations has been supplemented with Article 7:175a Civil Code; “Donation of a registered property takes place by notarial deed (notariële akte).”
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8. NATIONAL ORDINANCE to supplement Title 1 Book 7 Civil Code with provisions concerning purchase of real estate and to lay down Title 12 Book 7 Civil Code (National Ordinance Purchase of Real Estate and Contracting of Work).
Purchase of Real EstateIn the National Ordinance Purchase of Real Estate and Contracting of Work, Title 1 of Book 7 Civil Code, inter alia, is supplemented with provisions concerning the purchase of real estate. It is notably relevant that every purchase of property is to be entered into writing hereafter, and that a buyer of a property meant for habitation now has a reflection period of three days after the purchase has been concluded.
The purchase of a property has to be entered into writing. As long as this formal rule has not been complied with and the property has not been delivered as yet, the purchase can be annulled by both the buyer and the seller. By imposing the formal rule one intends to achieve unambiguity as to the question whether, and if so when, there is a consensus between buyer and seller. The power of attorney (volmacht) to buy/sell a property also has to be granted in writing, for that matter.
When a property meant for habitation is bought, while the buyer is a natural person who does not act in the practice of a profession or conduct of a business, the written purchase agreement has to be given to the buyer. The buyer has the right to dissolve the purchase for three days after having been given the agreement, unless delivery has already taken place. The reflection period gives the buyer the opportunity to engage an expert and reverse a rash decision to buy.
If, within six months after the buyer has used aforementioned right, a new purchase is concluded between the same parties concerning the same object, the right to dissolve the purchase for three days will not apply again, for that matter.
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Contracting of workNew in the National Ordinance Purchase of Real Estate and Contracting of Work is Title 12 (Articles 750 through 769) in which the special contractor agreement has been regulated.
A contractor agreement is an agreement under which one party, the contractor, undertakes towards the other party, the client, to create tangible work, to be delivered at a price to be paid by the client in money. The contractor will not extend this work as an employee. It is an obligation to achieve a result. There is also the question of the contracting of work if the consideration does not, or only in part, consist of money. However, this applies in as far as the nature of the consideration does not oppose it. The National Ordinance Purchase of Real Estate and Contracting of Work will not apply to contractor agreements concluded before the amendment took effect, until one year after it has taken effect, therefore on January 1, 2013. However, the National Ordinance will apply to the consequences of breach (niet nakoming) if one of the parties fails to meet its obligations after the National Ordinance has taken effect, unless this breach is a continuation of an earlier breach.
The contractor agreement distinguishes itself from an employment contract as described in Article 7A:1613a Civil Code, because contrary to the employment contract, amongst others the contractor of work does not undertake to perform work for a certain period of time. The intention of the contractor agreement is that a certain result is achieved. However, for this purpose a delivery time can be agreed upon.
In practice, it often happens that the contractor not only undertakes to perform work, but also to supply the necessary materials to realize the work. In order to distinguish contracting of work from a purchase agreement (Article 7:1 ff. Civil Code), one has to consider the nature of the object to be realized and the nature of the performance to take place. Inter alia parties’ intention and the purpose of the agreement will be relevant when qualifying the agreement.
The National Ordinance contains a special division – division 2 – applicable to contracting of work serving to build a house, consisting of an immovable property or component thereof, on instructions of a natural person who does not act in the practice of a profession or conduct of a business. This agreement is to be entered into writing subject to annulment. The instrument or copy hereof, prepared between parties, will be given to the client. The provisions of division 2 of Book 7 Civil Code do not apply to contractor agreements concluded before the time the National Ordinance took effect. Also in this case, the National Ordinance does apply to the consequences of breach if one of the parties fails to meet its obligations after the National Ordinance has taken effect, unless this breach is a continuation of earlier breach.
9. NATIONAL ORDINANCE to supplement Title 1 Book 7 Civil Code with provisions to protect the consumer, in particular concerning distance contracts and warrantees (National Ordinance Distance Purchase Consumers).
Division 9A “Distance Contracts” has been added to Title 1 Book 7 Civil Code. The provisions in this division serve to improve consumer sale law with regard to distance contracts concluded.
A distance contract can be an agreement concluded via the internet, telephone, fax, or mail. Article 7:46a Civil Code, as contained in the National Ordinance Distance Purchase Consumers, defines the distance contract as follows: the contract for which, within the framework of a system for distance selling or service organized by the seller or service provider, exclusively one or more techniques for distance communication are used to conclude the agreement.
The legislator believes that consumers who buy products and services by distance purchase should be better protected. This consumer protection is concretized in several ways in the National Ordinance Distance Purchase Consumers.
For instance, the seller has to provide the buyer with certain information, timely before a distance purchase is concluded. These are data concerning, inter alia, the seller’s identity, the price (including all taxes), cost of delivery, payment method, etc.
The buyer also gets a reflection period of seven days if he buys by distance purchase. Viz. the buyer can dissolve a distance purchase for seven days after receipt of the object without stating reasons. In that case, the seller can only charge the buyer the direct cost of return of the object. The buyer is entitled to refund of the purchase price if he dissolves the distance purchase within seven days, without further costs arising for him from same. The object bought has to be returned to the seller as soon as possible, though, and in any event within thirty days after the dissolution.
The National Ordinance Distance Purchase Consumers also contains provisions protecting the consumer against fraudulent use of his/her credit/debit card. Article 7:46d Civil Code as contained in the National Ordinance Distance Purchase Consumers stipulates that the natural person who does not act in the practice of a profession or conduct of a business, whose credit/debit card has been used fraudulently within the framework of distance purchase, cannot be obligated to pay the defrauded amounts, unless the fraudulent use of the credit/debit card can be attributed to the natural person.
An arrangement was also made for the use of electronic contact data, if these contact data have been obtained within the framework of the sale of an object and someone wants to use these contact data to advertise similar objects. The use of these electronic contact data is permitted, but the customer has to be given the opportunity to object to further use of the contact data. For instance a newsletter sent by e-mail: the party presenting a newsletter should place a link in the e-mail the customer can click on if he no longer wants to receive the newsletter.
The National Ordinance Distance Purchase Consumers also supplements Title 1 Book 7 Civil Code with provisions serving to better protect the consumer when he buys products and applies for services from professional providers.
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Consumer sale (consumentenkoop) is understood to be the purchase of a movable object, concluded by a seller who acts in the practice of a profession or conduct of a business, and a buyer, natural person, who does not act in the practice of a profession or conduct of a business.
An object does not correspond with the agreement if, also given the nature of the object and the statements of the seller concerning the object, it does not have the properties the buyer could expect based on the agreement. In case of consumer sale the object is suspected not to correspond with the agreement upon delivery if the deviation of the object delivered manifests itself within a period of six months after delivery, unless the nature of the object or of the deviation opposes it. This new provision accommodates the consumer who might be unable to meet the standard of proof, because it can be difficult for him to prove that a defect already existed when the object was delivered.
If the object delivered to the consumer does not correspond with the agreement, the buyer can demand, inter alia, repair or replacement of the object delivered, free of charge. The seller is obligated to comply with it within a reasonable period of time, unless repair or replacement is impossible or cannot reasonably be demanded from the seller. In that case, the buyer can dissolve the agreement.
Within due time after he has found out or should have reasonably found out that the object delivered does not correspond with the agreement, the consumer has to notify the seller. If the consumer fails to do so in time, he cannot invoke that the object delivered does not correspond with the agreement anymore. This protects the seller against late complaints that are consequently difficult to challenge. It has been laid down by law that notice within a two-month period after detection is in time. Whether in general notice after two months can still be deemed to be in time depends on the circumstances of the case.
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10. NATIONAL ORDINANCE to lay down Title 4 of Book 7 of the Civil Code (Rent Ordinance).
When the Rent Ordinance took effect, Title 7 of Book 7A Civil Code was replaced with Title 4 (Rent) of Book 7 Civil Code. The Dutch maintenance enforcement provisions (gebrekenregeling) improving the tenant’s position has been copied on this occasion. One of the other amendments is that the rent assessment committee regulation has been copied in outline and modernized, while the rent assessment committee regulation itself has been revoked.
A defect (gebrek) is a condition or characteristic of the object or another circumstance not attributable to the tenant on account of which the object cannot give the tenant the enjoyment a tenant may expect when he enters into the agreement. The landlord is obligated to repair defects on the tenant’s request, unless this is impossible or requires expenses that cannot reasonably be demanded from the landlord in the given circumstances. This obligation does not apply to minor repairs and to defects the tenant is liable for towards the landlord.
The tenant can claim reduction of rent if a defect decreases the enjoyment under the lease. The reduction of rent has to be in proportion to the decrease of enjoyment, though. If a defect makes the rented living space necessary for the tenant uninhabitable, the tenant has the right to dissolve the lease agreement.
As said, the provisions of the rent assessment committee regulation have been integrated in outline in the Rent Ordinance, while the provisions have been amended on some points. For instance, the tenant and landlord can request the rent assessment committee to fix the maximum rent, if the market value of the residential accommodation when not inhabited is ANG 150.000 or less. The rent assessment committee fixes the maximum rent as of a date to be determined by the rent assessment committee. It takes into account the market value of the residential accommodation in question when it fixes the maximum rent, when previously the historic building cost of the residential accommodation was followed.
If the rent assessment committee grants permission to terminate a lease agreement, it stipulates the time the lease will end, and it gives an order to vacate. An order to vacate that has become irrevocable constitutes an enforcement order that can be enforced.
The decision of the rent assessment committee can be appealed from for six weeks to the Court of First Instance of Curaçao. There is no other possible remedy against its decision than cassation in the interests of the law.
The entire system of tenant protection and rent protection (§2, “The Rent”, §3 “Termination by landlord” and §4 “The Rent Assessment Committee”), for that matter, does not apply to lease concerning use of residential accommodation which is only short-term in nature. The general provisions of the Rent Ordinance cannot be deviated from to the detriment of the tenant.
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11. NATIONAL ORDINANCE to lay down Title 13 of Book 7 of the Civil Code (Partnership Ordinance).
When this State Ordinance was introduced, the amendment to Book 8 concerning the limitation of the liability for maritime claims was also considered.
PartnershipsWith the Partnership Ordinance (personenvennootschappen), Title 13 of Book 7 Civil Code was introduced, containing regulations concerning partnerships. These regulations replace the current Title 8 of Book 7A Civil Code, containing the rules for the professional partnership (maatschap), and the second division of the second Title of the First Book of the Code of Commerce, containing the rules concerning the commercial partnership (vennootschap onder firma) and the limited partnership (commanditaire vennootschap).
The Partnership Ordinance has been derived from the Dutch legislative bill for Title 13 of Book 7 of the Dutch Civil Code. It is noteworthy that the Dutch legislative bill was recently revoked by the Dutch Minister of Security and Justice, in connection with a critical report of the standing parliamentary committee and based on observations of “VNO-NCW” and “MKB Nederland”. The new regulations concerning partnerships would be too constrictive for existing professional partnerships and commercial partnerships, and would lead to unnecessary costs. According to the Dutch Minister, the primary objective of the legislative bill was facilitating entrepreneurs. This would be insufficiently expressed in the legislative bill.
The legislative bill for the Partnership Ordinance has recently been amended in the sense that the possibility to grant the public partnership and the limited partnership legal personality was cancelled. The difference between the legal entities contained in Book 2 Civil Code and the partnerships as contained in the Partnership Ordinance thus continues to exist.
The Partnership Ordinance introduces the following three companies: (i) the undisclosed partnership, (ii) the public partnership, and (iii) the limited partnership. The terms professional partnership and commercial partnership are cancelled.
The public partnership (openbare vennootschap) is the partnership to practice a profession or conduct a business (or to perform professional or business acts) that presents itself in a manner clearly recognizable to third parties by a name it bears as such. The undisclosed partnership (stille vennootschap) is a partnership that is not a public partnership. This can be because it does not develop professional or business activities or because it does not present itself in a manner clearly recognizable to third parties by a name it bears as such. The Partnership Ordinance explicitly attaches consequences to being a public partnership or an undisclosed partnership. Examples of such consequences are the difference in power of representation of the partners of the public or undisclosed partnership, and the difference in liability of the partners for the obligations of the public or undisclosed partnership.
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The public partnership can be a limited partnership (commanditaire vennootschap) if, beside one or more ordinary partners, it has one or more silent partners. The silent partner distinguishes himself from the ordinary partner in the sense that he:• does not exclusively contribute labor;• is excluded from the power to perform legal acts;• is not liable for obligations of the partnership, in principle; and• does not have to share in the loss of the partnership for more than his contribution or the amount he is obligated to contribute.The undisclosed partnership cannot be a limited partnership.
New in the Partnership Ordinance is the possibility to convert a public partnership into a limited liability company (naamloze vennootschap) or private company with limited liability (besloten vennootschap). By the conversion the partners of the public partnership become shareholders in the N.V. or B.V. by operation of law in proportion to each one’s share in the public partnership to be converted.
Summarized, one may say that since the introduction of the Partnership Ordinance the internal powers of the partners are more clearly and accurately described, the quite obsolete distinction between professional and business acts disappears, clear rules for liability of partners and the recovery position of creditors of the partnership are introduced, while representation regulations that are difficult to interpret are cancelled.
January 2012
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Limitation maritime claimsMaritime law has, internationally, always had a regulation for the limitation of the entrepreneurial risk for ship owners. Curaçao (and previously the Netherlands Antilles) have followed international developments in limitation of liability for maritime claims in outline by incorporating parts of the London Limitation Convention, including liability limits set in same, in local legislation.
The government of the former Netherlands Antilles announced that, besides the fact that the London Limitation Convention is applicable, it also deems the amendments to same as laid down in the Protocol of May 2, 1996 desirable (“Protocol”). Within that framework proposals were made to amend Articles 8:753, 755, and 756 Civil Code. The amendments have been included and consequently introduced together with the Partnership Ordinance.
Article 8:753 paragraph Ia Civile Code, sees to it that liability for the special compensation (the compensation that can be paid under certain conditions and within certain limits in addition to the normal salvage money for assisting a ship that in itself or because of its cargo was at risk of harming the environment) cannot be limited by invoking the limits in the Protocol.
The amendment of Article 8:755 paragraph I Civil Code is a dynamic reference to the limits of the (amended) London Limitation Convention. It always refers to the most recent applicable liability limits of the convention.
Article 8:756 paragraph 1 Civil Code concerns the claims risen on account of an incident in which there is damage as a result of death or injury of passengers of a ship. The article thus provides for a so-called rough limit, implying that the liability of the ship owner on account of one incident cannot exceed the amount mentioned in same, multiplied by the number of passengers the ship is allowed to transport according to its safety certificate. This absolute upper limit has the advantage for ship operators and insurers of (very) large passenger ships that they were certain of a maximum amount of the liability, lower than the maximum amount per passenger, multiplied by the number of passengers the ship is allowed to transport according to its safety certificate.
Curaçao’s interest in following the international developments in this matter is regularly experienced in maritime practice. Despite the fact that safety in the Curaçao port is very important, it does happen, unfortunately, that (foreign) captains cause great damage to the Curaçao waters in an unguarded moment. The fact that Curaçao is a party to the London Limitation Convention and the Protocol can give foreign insurers and advisors some reassurance when they settle the claim in – to them perhaps exotic – regions.
12. NATIONAL ORDINANCE to lay down Titles 17 and 18 of Book 7 of the Civil Code (Insurance and Annuity Ordinance).
The introduction of this National Ordinance also considered the amendment to Book 6 Civil Code concerning electronically entering into an agreement and amendment to Book 3 Civil Code concerning prescription of public land.
Insurance and AnnuityThe Insurance and Annuity Ordinance introduces Title 17 of Book 7 Civil Code, which in one shot, modernizes the new country’s insurance law (verzekeringsrecht). The new Title 17 is identical to Title 17, Book 7 of the Dutch Civil Code, introduced on January 1, 2006. The most important changes to the new insurance law compared to the old insurance law under the Netherlands Antilles Commercial Code (“Commercial Code”) are discussed here as follows.
The new insurance law is now divided into three separate sections in Book 7, namely:1. General Provisions.2. Indemnity Insurance3. Fixed sum insurance, including life insurance.Under the old insurance law, fire and marine insurance where separate sections, which is not the case anymore.
The Insurance and Annuity Ordinance includes a disclosure obligation in Article 7:928 Civil Code, applicable to the applicant applying for the insurance. Articles 7:929 and 7:930 Civil Code contain sanctions if the aforementioned disclosure obligation is violated. The old insurance law followed a more rigid sanction system under Article 320 Commercial Code. Based on this formerly applicable provision, each non-disclosure or wrong statement, even done in good faith by the applicant, was punished with annulment of the insurance. The underlying reasoning would be that the insurer would not have entered into an insurance agreement with the applicant if it had known the true state of affairs, at least not under the same conditions. Under the new insurance law, if the insurer discovers that the applicant has failed to properly meet his disclosure obligation, the insurer must notify the now policy holder hereof within two months, stating the consequences. If the policyholder has intentionally misled the insurer or the insurer would not have entered into an insurance agreement with the policy holder in the first place if it had known the real state of affairs, the insurer can terminate the insurance agreement with immediate effect within two months upon discovering the aforementioned.
The old insurance law contained a general own fault (eigen schuld) condition in Article 342 Commercial Code, allowing an insurer to escape its payment obligation pursuant to an insurance policy. The more severe form of fault in Article 360 Commercial Code, namely gross negligence (merkelijke schuld), applied for the exclusion or denial of payment due to damages from fire. However, based on case law, this requirement of the insured party’s gross negligence was also declared applicable to insurances other than fire. Consequently an insurer was only relieved from its obligation to pay compensation if the insured party was guilty of gross negligence.
With the introduction of the Insurance and Annuity Ordinance, an insurer can only escape its payment obligation where damage caused by the insured party is done so with intent (opzet) or carelessness (roekeloosheid); this according to Article 7:952 Civil Code. The degree of culpability of intent is greater than gross negligence or fault. As such the new insurance law requires a
January 2012
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greater extent of culpability for an insurer to be relieved from its obligation to pay compensation. Nevertheless as Article 7:952 Civil Code is not a mandatory provision, it is possible for the insurer to exclude gross negligence and fault from compensation where it is expressly stipulated in the insurance agreement.
The new insurance law further introduces concepts with regard to establishing the level of compensation to be paid on account of damage. Terms such as total loss, replacement value, reconstruction value and new- value are introduced and accurately described in the Insurance and Annuity Ordinance. Although not provisions of mandatory law, this it does provide for further clarity regarding these terms.
Under the old law, there were no provisions with regard to limitation periods. One had to as such fall back on the general limitation periods found in the Civil Code. This meant that insurers were free to determine their own limitation periods. The Insurance and Annuity Ordinance introduces a general limitation period of three years under Article 7:942 Civil Code, that begins its run from the day after that day on which the beneficiary has discovered that compensation obligation of the insurer has become due and payable. The limitation period can be interrupted by a written notice claiming the benefit, were interruption causes the limitation period to commence from the beginning. As provision of mandatory law, deviation there from is not permitted.
The old insurance law contained no provisions with regard to contract duration or notice periods. Under the new insurance law, insurance agreements (personal insurances excluded) concluded for a period longer than five years can always be terminated after the end of every fifth year. The new law also introduces a general notice period of two months, which cannot be deviated from to the detriment of the policyholder. The Insurance and Annuity Ordinance further introduces the possibility for a policyholder to terminate the contract of insurance electronically. Interestingly, the Dutch Civil Code does not offer any such possibility allowing Curaçao to take a modern lead with regard to this area of insurance law.
January 2012
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Electronic contractingThe Civil Code as in effect until 31 December, 2011 already stipulated for some agreements that they can only be entered into validly, if they are recorded in writing. These were for instance agreements on hire-purchase, contracting of work, and purchase of real estate. The requirement that an agreement has to be entered into in writing is called a formal rule. If a statutory formal rule is not complied with, in general the agreement is consequently invalid.
In modern commerce, it is customary to enter into agreements electronically, for instance by e-mail, the internet, or fax. The National Ordinance Electronic Agreements that took effect in 2001 contains provisions concerning agreements concluded electronically. However, this National Ordinance does not answer the question whether and if so, how, it is possible to enter into agreements, by law required to be entered into in writing, electronically.
To end the lack of clarity in this respect, and to promote electronic commerce (elektronische handel), it was proposed to amend Book 6 Civil Code. The Insurance and Annuity Ordinance provides for the introduction of a new Article 6:227a Civil Code, stipulating that an agreement concluded electronically meets the requirement of being in writing, if four conditions mentioned in the Article have been complied with.
The text for the new Article 6:227a Civil Code reads as follows:“1. If it follows from the law that an agreement is only validly and indisputably concluded in writing, without prejudice to the provisions in or by virtue of the National Ordinance electronic agreements, this requirement has been met if the agreement has been concluded electronically and: a) can be consulted by the parties; b) the authenticity of the agreement has been adequately guaranteed; c) the time of entering into the agreement can be determined with adequate certainty;
and d) the identity of the parties can be determined with adequate certainty2. The first paragraph shall not apply to agreements for which the law prescribes intervention by the court, a government body or a professional fulfilling a public task.”
The Article only applies to agreements concluded electronically. They include, as already explained above, inter alia agreements concluded by fax, e-mail, or the internet.
The first condition stipulates that the agreement has to be recorded in such a way that the parties to the agreement can take cognizance of its content during, but also after entering into the agreement.
Based on the second condition, the agreement has to be recorded in such a way that the parties to the agreement can adequately rely on the accuracy of the content of the agreement. Such security measures have to be taken that there is sufficient certainty that the content of the agreement has not been unilaterally amended after having been entered into. Whether the security measures taken suffice will always depend on the circumstances of the case.
The third requirement of Article 6:227a Civil Code stipulates that it has to be clear when the agreement has been entered into. This requirement was included because it is important to the parties to an agreement to know as of what date the agreement between them is valid and as of what time they have obligations towards each other.
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The last requirement was included because it is important to the parties to an agreement that they have certainty about the party with which they have entered into the agreement. This requirement can be met by the contracting parties, for instance, by placing an electronic signature under the agreement.
The second paragraph of Article 6:227a Civil Code shows that agreements cannot always be concluded electronically. The Article does not apply to agreements for which the law prescribes intervention by the court, a government body or a professional fulfilling a public task, for instance a prenuptial agreement (huwelijkse voorwaarden) concluded when you get married. By law, this agreement has to be included in a notarial deed. With a view to the nature of these agreements, the legislator does not deem it desirable for the time being that they can be concluded electronically.
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Prescription government landGovernment land is often used by third parties in the Caribbean part of the Kingdom of the Netherlands. The government often tolerates the use of government land as long as it does not have plans for the designated use of this land. On account hereof, the user often claims that the land has become his property by prescription. In order to create clarity in such situations, a new Article is introduced in Book 3 Civil Code by the Insurance and Annuity Ordinance.
The text of the newly introduced Article 3:106a Civil Code reads as follows:“An owner who knew or should have known that a property or a right it is subject to belongs to the government cannot invoke prescription with regard to this property or that right towards the government.”
The above means that an owner in bad faith (te kwader trouw), viz. who knew that the land was not his, but also an owner who cannot be deemed to otherwise act in good faith (te goeder trouw), cannot invoke prescription towards the government after the lapse of the prescription period of a claim to terminate the possession of a property or a right it is subject to.
Within this framework, it is also worth mentioning that a new Article 436a Code of Civil Procedure has been introduced, stipulating that seizure of properties meant for the public service is not possible (government land). In order to qualify as government land, there should be a direct purpose of the use of the property in question for the public interest.
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13. NATIONAL ORDINANCE to amend the Code of Civil Procedure and the Bankruptcy Decree 1931 to several supplements to the new Civil Code
On account of the revisions of the Civil Code, amendments to the Code of Civil Procedure and the Bankruptcy Decree 1931 have also been implemented, related to marital property law, trust, insurance and annuity, inheritance law, and the donation and partnership. In addition, with the amendments to the Code of Civil Procedure, the electronic instrument in general has been regulated, and provisions have been inserted that make it possible for the court to determine that forfeited penalties accrue to the government of Curaçao in whole or in part.
Code of Civil ProcedureThe newly added Article 135a Code of Civil Procedure contains the regulations concerning the electronic instrument. Briefly stated, it has to be possible to store the content of the electronic instrument for the party to whom the instrument constitutes evidence in a way that makes the content accessible for future use for a period adjusted to the purpose the instrument is meant to serve, and that makes unaltered reproduction of the content of the instrument possible. A statutory obligation to provide a private instrument can only be met by an electronic instrument if the recipient of the instrument agrees to it.
Other important amendments are the introduction of an entirely new division within civil procedure containing provisions referring to seizure under foreclosure of rights under an insurance providing for the payment of a capital sum and seizure against the policyholder of his rights under a life insurance. In addition, prejudgment seizure of the rights under an insurance providing for the payment of a capital sum has been regulated.
In connection with the introduction of the National Ordinance inheritance law and donations, provisions have been included concerning the legal remedies against decisions in proceedings concerning an inheritance.
Bankruptcy DecreeArticle 2, paragraph 3, Bankruptcy Decree has been amended in connection with the introduction of the Partnership Ordinance. This Article stipulates that filing for bankruptcy of a public partnership can also be done with the Court of First Instance of the place where its office is domiciled. The court that has jurisdiction with regard to a partnership also has jurisdiction with regard to the partners that have taken liability for the debts of the partnership.
Declaring a public or undisclosed partnership bankrupt does not entail the bankruptcy of the partners that have taken liability for the debts of the partnership as a consequence of these amendments.
Currently a new Article 18a Bankruptcy Decree has been added governing a life insurance contract. Article 18a Bankruptcy Decree stipulates that the following fall outside the estate with regard to a life insurance contract: a. the right to cause a life insurance to be surrendered in as far as the beneficiary or the policyholder is unreasonably prejudiced by surrender;b. the right to change the beneficial entitlement, unless the change is made for the estate and the beneficiary or policyholder is not unreasonably prejudiced by it;c. the right to borrow money on the insurance.
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The trustee needs the permission of the bankruptcy judge to exercise the right to cause the insurance to be surrendered and the right to change the beneficial entitlement, while the judge determines, if necessary, up to what amount these rights can be exercised. The trustee is only authorized to transfer the insurance with written permission of the policyholder. If the trustee has changed the beneficial entitlement (begunstiging), this change is cancelled when the bankruptcy is terminated.
If the beneficial entitlement becomes irrevocable after the declaration of bankruptcy, this irrevocability cannot be invoked against the estate. The insurer is then obligated to keep a benefit the beneficial entitlement relates to under its control. If it has been established that the beneficial entitlement will not be changed, the first and second sentence will not apply. In deviation from the above, the insurer can invoke a payment to a beneficiary against the estate in as far as the trustee fails to prove that the insurer knew about the bankruptcy or a seizure against the policyholder preceding it at the time of payment. In that case, the trustee has recourse against the beneficiary.
The beneficiary can challenge every act of the trustee before the bankruptcy judge by petition, or he can obtain an order from this judge that the trustee has performed a certain act or omitted an intended act.
Furthermore, the first paragraph of Article 39 Bankruptcy Decree contains an amendment in connection with the introduction of the Trust Ordinance. If creditors have been prejudiced by a legal act serving to place an object under a trust, the knowledge of prejudice to the creditors is suspected to exist on both sides, without evidence to the contrary, if the legal act has been performed within one year before the declaration of bankruptcy and the debtor had not already committed himself to it before the start of this term. The capacity of trustee, protector, or beneficiary of a trust has also been put on a par with the capacity of managing director, supervisory director or shareholder of a legal entity.
For the general community of property created between the spouses by operation of law at the time the marriage is solemnized, in as far as not deviated from by a prenuptial agreement, Article 57, paragraph 2, Bankruptcy Decree currently stipulates that, in the event of a dispute, description or documents have to provide evidence of the rights to bearer and objects that are not registered property, falling outside the community of property, accrued to the spouse or registered partner of the bankrupt.
The objects arising from the investment or re-investment of money belonging to the spouse of the bankrupt outside the community of property are also taken back by this spouse, provided that the investment or re-investment is proven with sufficient documents to the satisfaction of the court in the event of a dispute, with the addition that, with regard to the investment or re-investment, for a debt of a spouse that is part of the community of property the objects of the community and his own objects can be sold.
Article 58 Bankruptcy Decree, which Article stipulated that the spouse of the bankrupt does not have a right to the estate with regard to benefits described in the prenuptial agreement and that the creditors cannot reciprocally enjoy the benefits promised to the bankrupt by his spouse by a prenuptial agreement was cancelled on account of the amendment and consequently does not apply anymore.
January 2012
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EPILOGUE
This document solely contains general information. It is not meant to serve as legal advice. In specific situations the reader is advised to seek further advice. Should you have any questions related to this summary, we will be pleased to answer them.
All rights reserved. Nothing from this publication may be multiplied, stored in an automatic file or published, in any form or in any way, whether electronically, mechanically, by photocopies, recordings or any other way, without prior written permission of VanEps Kunneman VanDoorne. On behalf of VanEps Kunneman VanDoorne,
Sabine M. AltenaAttorney at lawJulianaplein 22P.O. Box 504 Curaçao T +599 (9) 461 3400 ext. 186F +599 (9) 461 [email protected]
Frank KunnemanAttorney at lawJulianaplein 22P.O. Box 504 Curaçao T +599 (9) 461 3400 ext. 254F +599 (9) 465 [email protected]
