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ECJ, judgement of 9 September 2021 - C -277/20- (choice of law for inheritance contracts and gifts)

Central standards: EuErbVO Art. 3 para. 1 letter b, Art. 83 para. 2

  1. The terms of a provision of EU law which does not expressly refer to the law of the Member States in order to determine its meaning and scope must, as a rule, be given an autonomous and uniform interpretation throughout the Union, taking into account not only its wording but also the context of the provision and the objective pursued by the provision in question. (para. 29)
  1. Art. 83 para. 2 Succession Regulation regulates the validity of the choice of law for the entire succession. (para. 39)
  1. Article 83(2) of the Succession Regulation must be interpreted as meaning that it does not apply to the assessment of the validity of a choice of law made before 17 August 2015 only for a contract of succession within the meaning of Article 3(1)(b) of that regulation, which concerns a specific asset of the deceased and not his entire succession.

Tenor:

  1. Article 3(1)(b) of Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession must be interpreted as meaning that a contract in which a person provides that, on his death, ownership of a property belonging to him is to pass to other parties to the contract constitutes a contract of succession within the meaning of that provision.
  1. Article 83(2) of Regulation No 650/2012 must be interpreted as not applying to the assessment of the validity of a choice of law made before 17 August 2015 only in respect of an agreement as to succession within the meaning of Article 3(1)(b) of that regulation, which concerns a specific asset of the deceased and not his entire succession.

Reasons: 

1 This reference for a preliminary ruling concerns the interpretation of Article 3(1)(b) and Article 83(2) of Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law and the Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (OJ 2012 L 201, p. 107, and corrigenda OJ 2012 L 344, p. 3, OJ 2013 L 41, p. 16, OJ 2013 L 60, p. 140, and OJ 2014 L 363, p. 186; 'the Succession Regulation'): Succession Regulation).

2 The request is made in the context of proceedings initiated by the German national UM concerning an application for the registration of the title to a property located in Austria in the land register.

Legal framework

Union law

3 Recitals 9, 11, 14 and 49 of the Inheritance Regulation state:

„(9) The scope of this Regulation should cover all civil law aspects of succession, namely any form of transfer of assets, rights and obligations upon death, whether by intestate succession through a disposition of property upon death or by intestate succession.

...

(11) This Regulation should not apply to areas of civil law other than succession. For reasons of clarity, a number of matters which could be considered as relating to succession should be expressly excluded from the scope of this Regulation.

...

(14) Rights and assets created or transferred otherwise than by intestate succession, such as by gratuitous gifts, should also be excluded from the scope of this Regulation. ...

...

(49) A contract as to succession is a type of disposition of property upon death, the admissibility and recognition of which differ from one Member State to another. In order to facilitate the recognition of succession rights acquired on the basis of a contract of succession in the Member States, this Regulation should determine which law should govern the admissibility of such contracts, their substantive validity and their binding effects, including the conditions for their cancellation.“

4 Art. 1 („Scope of application“) of the Succession Regulation:

„(1) This Regulation shall apply to succession by reason of death. ...

(2) The following are excluded from the scope of this Ordinance:

...

  1. g) rights and assets that are created or transferred other than by succession, such as gratuitous gifts, joint tenancy, pension plans, insurance contracts and similar agreements, without prejudice to Art. 23 para. 2 letter i;

...

  1. (l) any registration of rights in movable or immovable property in a register, including the legal requirements for such registration, and the effects of the registration or lack of registration of such rights in a register.“

5 Art. 3 („Definitions“) para. 1 of the Succession Regulation states:

„(1) For the purposes of this Regulation, the following definitions shall apply

  1. (a) ‚succession by reason of death‘ means any form of transfer of assets, rights and obligations by reason of death, whether by intestate succession through a disposition of property upon death or by intestate succession;
  1. (b) ‚agreement as to succession‘ means an agreement, including an agreement based on reciprocal wills, which creates, modifies or withdraws rights, with or without consideration, in the future estate or estates of one or more of the parties to that agreement;

...

  1. (d) ‚disposition of property upon death‘ means a will, a joint will or an agreement as to succession;

...“

6 Chapter III („Applicable law“) of the Succession Regulation comprises its Art. 20 to 38.

7 Art. 21 („General rule on conflict of laws“) of the Succession Regulation reads:

„(1) Unless otherwise provided for in this Regulation, all succession shall be governed by the law of the State in which the deceased had his habitual residence at the time of death.

(2) If, exceptionally, the circumstances as a whole show that at the time of death the deceased had an obviously closer connection with a State other than the State whose law would be applicable under paragraph 1, the law of that other State shall apply to the succession.“

8 Art. 22 („Choice of law“) para. 1 and 2 of the Succession Regulation states:

„(1) A person may choose the law of the country to which he or she belongs at the time of the choice of law or at the time of death for the succession.

...

(2) The choice of law must be made expressly in a declaration in the form of a disposition of property upon death or must result from the provisions of such a disposition.“

9 Art. 83 („Transitional provisions“) para. 2 of the Succession Regulation provides:

„If the deceased had chosen the law applicable to his succession before 17 August 2015, this choice of law shall be valid if it meets the requirements of Chapter III or if it is valid under the rules of private international law in force at the time of the choice of law in the country in which the deceased had his habitual residence or in a country of which he was a national.“

Austrian law

10 § Section 956 of the General Civil Code in the version applicable to the dispute in the main proceedings:

„A gift whose fulfilment is to take place only after the death of the donor is valid as a legacy if the prescribed formalities are observed. It is only to be regarded as a contract if the donee has accepted it, the donor has expressly renounced the right to revoke it and a written deed has been handed over to the donee.“

11 § Section 1(1)(d) of the Notarial Deeds Act links the validity of a gift agreement without an actual transfer to the recording of a notarial deed.

12 § Section 26 of the Land Register Act provides:

„(1) Incorporations and reservations may only be authorised on the basis of deeds executed in the form prescribed for their validity.

(2) These deeds must contain a valid legal basis if they relate to the acquisition or modification of a right in rem.“

13 § Section 2 of the Rechtspflegergesetz (hereinafter: RpflG):

„A court official may be appointed as a Rechtspfleger for one or more of the following areas of work: ...

  1. Land register and ship register matters;

...“

14 § Section 16 (2) RpflG provides:

„The judge always reserves the right to ...

  1. Decisions where foreign law is applicable.“

The main proceedings and the questions referred

15 According to the file before the Court, UM's father undertook, by contract of 22 July 1975, to transfer, subject to certain conditions, to his son and his then daughter-in-law the ownership of a property situated in Austria, including all the buildings on it at the time of his death, in equal shares. When this contract was concluded, for which Austrian law was determined to be applicable, all parties had their habitual residence in Germany.

16 The conditions stipulated in this contract included the obligation of UM's father to build a two-family house within ten years of the contract being concluded, as well as the fact that UM and his wife still had to be married and that she still had to be alive. Otherwise, UM was to be the sole beneficiary according to the contract. UM's father also authorised the entry of the transfer of ownership in the Austrian land register, provided that an official death certificate was presented and proof was provided that the conditions for carrying out the transfer had been met. Prior to the death of UM's father on 13 May 2018 in Cologne (Germany), UM and his wife divorced and subsequently died.

17 Probate proceedings were opened at the Cologne District Court (Germany), the last place of residence of UM's father.

18 UM applied to the Bezirksgericht Hermagor (District Court, Hermagor, Austria) for the registration of his title to the property at issue in the main proceedings in the land register, claiming in that regard that he was the sole beneficiary of the abovementioned contract at the time of his father's death. The judicial officer of this court, who was responsible for deciding on this request, was of the opinion that Austrian law should be applied and dismissed the request due to a lack of evidence that the conditions of the contract at issue in the main proceedings had been met.

19 The Regional Court of Klagenfurt (Austria) confirmed this decision and stated that, firstly, the Inheritance Regulation was not applicable due to the choice of Austrian law made in this contract and, secondly, the transfer of the property on the basis of the gift on death could not take place without proof of the construction of the house as provided for in this contract.

20 UM lodged an appeal on a point of law with the referring court, the Austrian Supreme Court.

21 The referring court states that the question of the validity of the choice of Austrian law as the law applicable to a contract for the transfer of property upon death and the application to it of the Succession Regulation are preliminary questions which it must examine of its own motion in order to determine the functional jurisdiction of the Rechtspfleger in the main proceedings.

22 The documents submitted to the competent land registry court allowed the conclusion that, according to the criteria of Austrian law, a contract for the transfer of ownership by reason of death had been concluded in favour of UM. However, it was questionable whether this contract fell within the scope of the Inheritance Regulation and could be regarded as a „contract of succession“ within the meaning of Article 3(1)(b) and (d) of that Regulation.

23 In the affirmative, the referring court considers that the transitional provisions of the Succession Regulation apply to the applicability of the Austrian law chosen by the parties to the contract at issue in the main proceedings, but has doubts as to the interpretation of Article 83(2) of the Regulation, in particular with regard to the choice of law made by the contracting parties.

24 In those circumstances, the Supreme Court decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

  1. Is Article 3(1)(b) of Regulation No 650/2012 to be interpreted as meaning that a contract of gift on death concluded between two German nationals who have their habitual residence in Germany concerning a property situated in Austria, under which the donee, after the death of the donor, is to have a claim under the law of obligations against the estate for registration in the land register of his right of ownership on the basis of that contract and the donor's death certificate, thus without the intervention of the Abhandlungsbehörde, is an inheritance contract within the meaning of that provision?
  1. In the event that this question is answered in the affirmative:

Is Article 83(2) of Regulation No 650/2012 to be interpreted as meaning that it also governs the validity of a choice of law made before 17 August 2015 for a contract of gift on death which qualifies as a contract of succession within the meaning of Article 3(1)(b) of that regulation?

25 Having decided to rule without an oral procedure in accordance with the first paragraph of Article 61 of its Rules of Procedure, the Court put a number of questions to the parties and the interested persons referred to in Article 23 of the Statute of the Court of Justice of the European Union for written answer, to which UM, the German and Spanish Governments and the European Commission replied.

On the questions referred

To the first question

26 By its first question, the referring court asks, in essence, whether Article 3(1)(b) of the Succession Regulation must be interpreted as meaning that a contract in which a person provides that, on his death, ownership of a property belonging to him is to pass to other parties to the contract constitutes a contract of succession within the meaning of that provision.

27 By way of introduction, it should be noted that Article 1(2)(g) of the Succession Regulation excludes from its scope „rights and assets which are created or transferred otherwise than by succession, such as gifts made free of charge“. By contrast, the contracts of succession defined in Article 3(1)(b) of the Succession Regulation, as well as wills or joint wills, constitute „dispositions of property upon death“ within the meaning of Article 3(1)(b) of this Regulation.

28 According to Article 3(1)(b) of the Succession Regulation, the term „agreement as to succession“ means „an agreement, including an agreement based on reciprocal wills, which, with or without consideration, creates, modifies or withdraws rights in the future estate or estates of one or more of the parties to that agreement“.

29 According to settled case-law of the Court of Justice, it follows from the requirements of both the uniform application of EU law and the principle of equality that the terms of a provision of EU law which does not expressly refer to the law of the Member States in order to determine its meaning and scope must, as a general rule, be given an autonomous and uniform interpretation throughout the EU, taking into account not only its wording but also the context of the provision and the objective pursued by the legislation in question (judgment of 1 March 2018, Mahnkopf, C-558/16, ECLI:EU:C:2018:138, para. 32 and case-law cited). March 2018, Mahnkopf, C-558/16, ECLI:EU:C:2018:138, para. 32 and the case-law cited therein).

30 As regards the wording of Article 3(1)(b) of the Succession Regulation, it should be noted that this provision generally refers to an agreement which, in particular, creates rights in the future „estate“.

31 In this regard, it should be noted that, according to Article 3(1)(a) of this Regulation, the term „succession“ means „any form of transfer of assets ... whether by way of intestate succession by disposition of property upon death or by intestate succession“.

32 It follows that a contract in which a person provides for the transfer of ownership of a property belonging to him/her on his/her death, thereby granting other parties to that contract rights to his/her future estate, constitutes a „contract of succession“ within the meaning of Article 3(1)(b) of the Succession Regulation.

33 That interpretation is confirmed by the objective pursued by that regulation, which is to prevent the division of succession in accordance with the principle of the unity of succession and to create a single set of rules applicable to all civil-law aspects of a cross-border succession, in particular to „any form of transfer of assets ... upon death“, as is apparent from recital 9 in the preamble to that regulation (see, to that effect, judgment of 21 June 2018, Oberle, C-20/17, ECLI:EU:C:2018:485, paragraphs 55 and 56).

34 In this regard, it should be noted that although Article 1(2)(g) of the Succession Regulation excludes from its scope assets that are transferred other than by succession, such as gratuitous gifts, this exception must be interpreted narrowly.

35 It follows that a provision contained in an agreement relating to the estate which, like a „gratuitous gift“ within the meaning of Article 1(2)(g), consists of a gift but takes effect only on the death of the deceased, falls within the scope of that regulation.

36 In the light of the foregoing, the answer to the first question is that Article 3(1)(b) of the Succession Regulation must be interpreted as meaning that a contract in which a person provides that, on his death, ownership of a property belonging to him is to pass to other parties to the contract constitutes a contract of succession within the meaning of that provision.

The second question

37 By its second question, the referring court asks, in essence, whether Article 83(2) of the Succession Regulation must be interpreted as applying to the assessment of the validity of a choice of law made before 17 August 2015 in respect of a contract of succession within the meaning of Article 3(1)(b) of that regulation.

38 According to Art. 83 („Transitional provisions“) para. 2 of this Regulation, if „the deceased had chosen the law applicable to his succession before 17 August 2015, this choice of law shall be valid if it fulfils the conditions of Chapter III of this Regulation or if it is valid under the rules of private international law in force at the time of the choice of law in the State in which the deceased had his habitual residence or in a State of which he was a national“.

39 In that regard, it should be noted that that provision, as is clear from its wording in conjunction with Articles 21 and 22 of the Succession Regulation, governs the validity of the choice of law applicable to the succession as a whole. In the present case, however, it is apparent from the file before the Court and subject to review by the referring court that the choice of Austrian law concerned only the contract of succession concluded by the deceased in respect of one of his assets and did not serve to determine the law applicable to the entire succession, so that the condition for the application of Article 83(2) of the Succession Regulation cannot be met in such circumstances.

40 In the light of the foregoing, the answer to the second question is that Article 83(2) of the Succession Regulation must be interpreted as not applying to the assessment of the validity of a choice of law made before 17 August 2015 only in respect of a contract of succession within the meaning of Article 3(1)(b) of that regulation, which concerns a specific asset of the deceased and not his entire succession.

Costs

41 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. The costs incurred by other parties in submitting observations to the Court are not recoverable.

For these reasons, the Court (First Chamber) ruled in favour of the applicant:

  1. Article 3(1)(b) of Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession must be interpreted as meaning that a contract in which a person provides that, on his death, ownership of a property belonging to him is to pass to other parties to the contract constitutes a contract of succession within the meaning of that provision.
  1. Article 83(2) of Regulation No 650/2012 must be interpreted as not applying to the assessment of the validity of a choice of law made before 17 August 2015 only in respect of an agreement as to succession within the meaning of Article 3(1)(b) of that regulation, which concerns a specific asset of the deceased and not his entire succession.