Curaçao. Amendments CIVIL CODE. January PDF

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Amendments CIVIL CODE On 1 January 2012, thirteen National ordinances have taken effect for. Herewith a second stage in the project to introduce a new Civil Code in has been completed. The first stage

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Amendments CIVIL CODE On 1 January 2012, thirteen National ordinances have taken effect for. Herewith a second stage in the project to introduce a new Civil Code in 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. 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 Page 2 of 27 For more information regarding this National ordinance, please contact: Mayesi R. Hammoud 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. G.B. (Molly) Steward 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. Page 3 of 27 For more information regarding this National ordinance, please contact: 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. Mayesi R. Hammoud 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. G.B. (Molly) Steward Page 4 of 27 For more information regarding this National ordinance, please contact: Mayesi R. Hammoud 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. G.B. (Molly) Steward 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. Page 5 of 27 For more information regarding this National ordinance, please contact: Mayesi R. Hammoud 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, 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. G.B. (Molly) Steward Page 6 of 27 For more information regarding this National ordinance, please contact: Sabine M. Altena Focco W. Lunsingh Scheurleer 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 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 Page 7 of 27 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. 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. Page 8 of 27 For more information regarding this National ordinance, please contact: Sabine M. Altena 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 has to be appointed. The Central Bank of 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. J.M. Randolph S. van Eps 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. Page 9 of 27 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. For more information regarding this National ordinance, please contact: 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 law The most important and radical amendment the introduction of the National Ordi
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