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Legal tip 1404. LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL & BANCO SABADELL for our client who purchased an off-plan property from the developer Promociones Eurohouse at Apartmentos Turisticos Pueblo La Sal
09 September 2016

LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL & BANCO SABADELL for our client who purchased an off-plan property from the developer Promociones Eurohouse at Apartmentos Turisticos Pueblo La Sal

We were pleased to inform our client recently that we had won their case against Caja Rural Central & Banco Sabadell in the First Instance Court.

The client paid their off-plan deposit to the developer’s bank accounts at Caja Rural Central & Banco Sabadell (formerly Banco CAM).  The client did not receive individual Guarantees for their off-plan deposit from the developer, Promociones Eurohouse or from Caja Rural Central Or Banco CAM.

The First Instance Court has now found both Banks guilty according to their legal obligations under Article 1.2 of LEY 57/1968.  The banks must refund the amounts paid to the developer’s accounts opened at its branches, plus interest at the legal rate from the date the funds were paid into the account.  Legal costs were not imposed on either Bank due to the fact that the Judge is of the opinion there was conflicting jurisprudence regarding banks liabilities according to LEY 57/1968 at the time the Lawsuit was filed and the Banks submitted their written defence.

Re: YOUR CASE AGAINST CAJA RURAL CENTRAL & BANCO DE SABADELL
PO xxxx/2015

Please find attached Sentence No. xxx/2016 from the First Instance Court No.1 in Orihuela.

Your case against CAJA RURAL CENTRAL & BANCO SABADELL has been won.

The final paragraph of the First Instance Sentence delivered on 5 September 2016 and notified on 5 September 2016 states:



“Upholding the Lawsuit filed by xxxxx against CAJA RURAL CENTRAL & BANCO SABADELL, in its subsidiary claim, with the following pronouncements:

1. I declare the legal responsibility of the entities CAJA RURAL CENTRAL & BANCO SABADELL pursuant to Article 1.2 of LEY 57/1968.

2. Consequently I condemn the financial entity CAJA RURAL to refund the sum of xx,xxx Euro, being the amount deposited in the account opened by the developer in the said bank and condemn the financial entity BANCO SABADELL to refund the sum of x,xxx Euro, being the amount deposited in the account opened by the developer in the former Banco CAM.

3. The amounts indicated will accrue interest at the legal rate from the date of payment, or in this case, the date the funds were deposited in the accounts opened by the developer in Caja Rural Central & Banco Sabadell (formerly CAM).  The interest rate will be increased by 2 points from the date of this Sentence according to Article 576 of the Civil Procedure Act.

4. Without the express imposition of costs of the proceedings”



So CAJA RURAL CENTRAL & BANCO SABADELL are sentenced to refund the amount of xx,xxx€ & x,xxx€ respectively, plus interest at the legal rate from the date the funds were paid into the developer’s accounts opened at Caja Rural Central & Banco Sabadell (formerly Banco CAM).

The Judge did not impose costs on the banks; therefore each party will pay its own costs.

Interesting statements from the Judge in the Sentence were:


“On 20 October 2015 the plaintiffs filed a Lawsuit against Caja Rural Central & Banco Sabadell, requesting the conviction of the bank according to its responsibility under Article 1.2 of LEY 57/1968.  The plaintiff requested the refund of the total amount paid to the developer under the Purchase Contract plus interest & costs, alternatively, the amount actually credited to the Caja Rural Central & Banco Sabadell accounts opened by the developer.

Caja Rural Central & Banco Sabadell opposed the Lawsuit both stating that they had not guaranteed the funds and that the funds were paid to ordinary current accounts opened by the developer, over which the banks had no control or monitoring.  They also said that they were unable to monitor the funds because they were paid to the account by an intermediary agent, Ole Mediterraneo, on behalf of the buyer.  The banks deny all liability because they state that they have no contractual link with the buyers.

Caja Rural also stated that it was not the bank listed in the Purchase Contract and that it had not granted a loan to the developer for the construction of the houses.

The Preliminary Hearing was held on 16 February 2016 & the Trial was held on 10 May 2016.

Documentary evidence was provided to prove that xx,xxx€ was entered into the Caja Rural Central account opened by the developer and x,xxx€ was entered into the Banco CAM (now Sabadell) account opened by the developer.

The fact that the funds were paid to the banks by a third party agent, Ole Mediterraneo, does not remove the protection offered to the buyer by LEY 57/1968 as Article 1158 of the Civil Code allows payment by a third party on behalf of the buyer.

The witness on behalf of the Caja Rural branch in which the account was held, gave evidence at the Trial.  He stated that the account was an ordinary account opened by the developer and that it was not possible to control and monitor income in this type of account.

The witness on behalf of Banco Sabadell said she had no knowledge of the facts of the case.

However the banks are to blame as they knew that the accounts were opened by a company dedicated to the construction and promotion of off-plan properties.  One just has to look at the historical movements of the accounts to see that they were funded largely by amounts paid by buyers to purchase their off-plan homes.

This does not prevent the accounts to be considered as Special Accounts according to the regulatory framework. 

Therefore, having opened accounts for an off-plan property developer, the banks have a legal duty to ensure these funds were guaranteed by an Insurance Certificate or Bank Guarantee.  Having failed in their legal duty, the banks then have a legal liability.

The banks should not allow the opening of accounts or the placing of deposits in those accounts, without first ensuring that the developer has assumed a legal obligation to guarantee the repayment of the funds. 

The banks were fully aware of the business of the developer and the fact that the accounts were being used to receive funds from off-plan buyers.  The fact that the accounts were opened as a normal current accounts, as alleged by the defendant banks, cannot prejudice the plaintiffs as the Supreme Court Sentence of 30 April 2015 confirms.

 

Banks that receive funds from off-plan buyers into developer’s accounts, although not called Special Accounts, must be responsible to the buyers for the total amounts paid to these accounts opened in its branches.  This doctrine, if there is any doubt, has again been reiterated and confirmed by the Sentences of the Supreme Court dated 9 & 17 March 2016.

Therefore, the banks are responsible for all amounts proved to have been paid by the buyer to the developer’s accounts opened at Caja Rural Central & Banco Sabadell (CAM).

As for costs, the plaintiff requested costs to be imposed on the banks.  Even though the Lawsuit has been upheld substantially in its subsidiary claim for the amounts deposited in the developer’s accounts at the defendant banks, there is more or less uniform criteria in the Courts of this city (Orihuela) and in the Provincial Appeal Court of Alicante, to understand that the question before the prosecution regarding the liability of the Bank according to Article 1.2 of LEY 57/1968, has resulted in contradictory jurisprudence comparable to the existence of doubt.  So I plead the faculty contained in Article 394 of the Civil Procedure Act not to impose costs on the bank.  The Supreme Court Sentence of 21 December 2015 which clarifies the responsibility of financial institutions had not been published at the time the Lawsuit was filed (20 October 2015) or when the bank filed its written defence to the Court”



CAJA RURAL CENTRAL & BANCO SABADELL have 20 working days from the date of notification of the Sentence, which was 5 September 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by CAJA RURAL CENTRAL or BANCO SABADELL it will be necessary for us to file an Opposition to the Appeal on your behalf.



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Legal tip 1403.LEY 57/1968 Won Case in First Instance Court against BANCO SABADELL for our client who purchased an off-plan property from the developer Tecnologia Urbanistica at Colinas De La Zenia Elite Fase III in Orihuela Costa
09 September 2016

LEY 57/1968 Won Case in First Instance Court against BANCO SABADELL for our client who purchased an off-plan property from the developer Tecnologia Urbanistica at Colinas De La Zenia Elite Fase III in Orihuela Costa

We were pleased to inform our client recently that we had won their case against Banco Sabadell (formerly Banco CAM) in the First Instance Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at Banco CAM (now Banco Sabadell).  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Tecnologia Urbanistica or from Banco CAM.

The First Instance Court has now found the Bank guilty according to its legal obligations under Article 1.2 of LEY 57/1968.  The bank must refund the amount paid to the developer’s account plus interest at the legal rate from the date the money was paid into the account.  Legal costs were not imposed on the Bank due to the fact that the Judge is of the opinion there was conflicting jurisprudence regarding banks liabilities according to LEY 57/1968 at the time the Lawsuit was filed and the Bank submitted its written defence.

Re: YOUR CASE AGAINST BANCO DE SABADELL S.A.
PO xxxx/2015

Please find attached Sentence No. xxx/2016 from the First Instance Court No.1 in Orihuela.

Your case against BANCO SABADELL has been won.

The final paragraph of the First Instance Sentence delivered on 5 September 2016 and notified on 5 September 2016 states:



“Upholding the Lawsuit filed by xxxxxx against BANCO DE SABADELL S.A. with the following pronouncements:

1. I declare the legal responsibility of the entity BANCO DE SABADELL S.A. pursuant to Article 1.2 of LEY 57/1968 and therefore condemn the financial entity to refund the sum of xx,xxx Euro, being the amount deposited in the account opened by the developer in the said bank.

2. The amount indicated will accrue interest at the legal rate from the date of payment, or in this case, the date the funds were deposited in the account opened by the developer in Banco de Sabadell S.A.  The interest rate will be increased by 2 points from the date of this Sentence according to Article 576 of the Civil Procedure Act.

3. Without the express imposition of costs of the proceedings”



So BANCO SABADELL is sentenced to refund the amount of xx,xxx€ plus interest at the legal rate from the date the funds were paid into the developer’s account opened at Banco Sabadell.

The Judge did not impose costs on the bank; therefore each party will pay its own costs.

Interesting statements from the Judge in the Sentence were:


“On 12 November 2015 the plaintiffs filed a Lawsuit against Banco Sabadell, requesting the conviction of the bank according to its responsibility under Article 1.2 of LEY 57/1968.  The plaintiff requested the refund of the total amount paid to the developer under the Purchase Contract plus interest & costs, alternatively, the amount actually credited to the Banco Sabadell account opened by the developer, which was 3,000€ less than the total amount.

Banco Sabadell opposed the Lawsuit and said that it had not guaranteed the funds and that the funds were paid to an ordinary current account opened by the developer, over which the bank had no control or monitoring. 

The Preliminary Hearing was held on 8 March 2016 & the Trial was held on 23 May 2016.

Documentary evidence was provided to prove that xx,xxx€ was entered into the former Banco CAM (now Sabadell) account opened by the developer.  However, there is no evidence to confirm that the amount of £2,000 paid by cheque was entered into the developer’s account at Banco CAM.  This leads us to analyze the alternative claim for xx,xxx€ being the amount actually paid to the developer’s account at Banco CAM.

The former Deputy Director of the Banco CAM branch in which the account was held, gave evidence at the Trial.  She stated that the account was an ordinary account opened by the developer and that it was very difficult to control and monitor income in this type of account.

It is a completely reprehensible attitude of the bank knowing that it was an account opened by a developer which was funded largely by amounts paid by buyers to purchase off-plan homes.  However, this does not prevent this account to be considered as a Special Account according to the regulatory framework. 

Therefore, the bank has a legal duty to ensure these funds were guaranteed by an Insurance Certificate or Bank Guarantee.  Having failed in its legal duty, the bank then has a legal liability.

The bank should not allow the opening of accounts or the placing of deposits in those accounts, without first ensuring that the developer has assumed a legal obligation to guarantee the repayment of the funds. 

The bank was fully aware of the business of the developer and the fact that the account was being used to receive funds from off-plan buyers.  The fact that the account was opened as a normal current account, as alleged by the defendant bank, cannot prejudice the plaintiffs as the Supreme Court Sentence of 30 April 2015 confirms.

 

Banks that receive funds from off-plan buyers into developer’s accounts, although not called Special Accounts, must be responsible to the buyers for the total amounts paid to these accounts opened in its branches.  This doctrine, if there is any doubt, has again been reiterated and confirmed by the Sentences of the Supreme Court dated 9 & 17 March 2016.

As for costs, the plaintiff requested costs to be imposed on the bank.  Even though the Lawsuit has been upheld substantially in its alternative claim for the amount deposited in the developer’s account at the defendant bank, there is more or less uniform criteria in the Courts of this city (Orihuela) and in the Provincial Appeal Court of Alicante, to understand that the question before the prosecution regarding the liability of the Bank according to Article 1.2 of LEY 57/1968, has resulted in contradictory jurisprudence comparable to the existence of doubt.  So I plead the faculty contained in Article 394 of the Civil Procedure Act not to impose costs on the bank.  The Supreme Court Sentence of 21 December 2015 which clarifies the responsibility of financial institutions had not been published at the time the Lawsuit was filed (12 November 2015) or when the bank filed its written defence to the Court”



BANCO SABADELL has 20 working days from the date of notification of the Sentence, which was 5 September 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by BANCO SABADELL it will be necessary for us to file an Opposition to the Appeal on your behalf.



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Legal tip 1402.LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL for our client who purchased an off-plan property from the developer Promociones Eurohouse at Fortuna Golf Resort
09 September 2016

LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL for our client who purchased an off-plan property from the developer Promociones Eurohouse at Fortuna Golf Resort

We were pleased to inform our client recently that we had won their case against Caja Rural Central in the First Instance Court.

The client paid their off-plan deposit to the developer’s bank account at Caja Rural Central.  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Promociones Eurohouse or from Caja Rural Central.

The First Instance Court has now found the Bank guilty according to its legal obligations under Article 1.2 of LEY 57/1968.  The bank must refund the amount paid to the developer’s account plus interest at the legal rate from the date the money was paid into the account.  Legal costs were not imposed on the Bank due to the fact that the Judge is of the opinion there was conflicting jurisprudence regarding banks liabilities according to LEY 57/1968 at the time the Lawsuit was filed and the Bank submitted its written defence.

Re: YOUR CASE AGAINST CAJA RURAL CENTRAL
PO xxxx/2015

Please find attached Sentence No. xxx/2016 from the First Instance Court No.1 in Orihuela.

Your case against CAJA RURAL CENTRAL has been won.

The final paragraph of the First Instance Sentence delivered on 5 September 2016 and notified on 5 September 2016 states:



“Upholding the Lawsuit filed by xxxxx against CAJA RURAL CENTRAL with the following pronouncements:

1. I declare the legal responsibility of the entity CAJA RURAL CENTRAL pursuant to Article 1.2 of LEY 57/1968 and therefore condemn the financial entity to refund the sum of xx,xxx Euro, being the amount deposited in the account opened by the developer in the said bank.

2. The amount indicated will accrue interest at the legal rate from the date of payment, or in this case, the date the funds were deposited in the account opened by the developer in Caja Rural Central.  The interest rate will be increased by 2 points from the date of this Sentence according to Article 576 of the Civil Procedure Act.

3. Without the express imposition of costs of the proceedings”



So CAJA RURAL CENTRAL is sentenced to refund the amount of xx,xxx€ plus interest at the legal rate from the date the funds were paid into the developer’s account opened at Caja Rural Central.

The Judge did not impose costs on the bank; therefore each party will pay its own costs.

Interesting statements from the Judge in the Sentence were:


“On 5 November 2015 the plaintiffs filed a Lawsuit against Caja Rural Central, requesting the conviction of the bank according to its responsibility under Article 1.2 of LEY 57/1968.  The plaintiff requested the refund of the total amount paid to the developer under the Purchase Contract plus interest & costs, alternatively, the amount actually credited to the Caja Rural Central account opened by the developer.  The total off-plan deposit was xx,xxx€ and the amount proved to be paid to the Caja Rural account was xx,xxx€.

Caja Rural Central opposed the Lawsuit and said that it had not guaranteed the funds and that the funds were paid to an ordinary current account opened by the developer, over which the bank had no control or monitoring.  It also said that it was unable to monitor the funds because they were paid to the account by an intermediary agent, Ole Mediterraneo, on behalf of the buyer.  The bank denies all liability because it states that it has no contractual link with the buyers. 

The Preliminary Hearing was held on 2 March 2016 & the Trial was held on 10 May 2016.

Documentary evidence was provided to prove that xx,xxx€ was entered into the Caja Rural Central account opened by the developer.  However, there is no evidence to confirm that the remaining amount of xx,xxx€ was paid into the developer’s account at Caja Rural Central.  This leads us to analyze the alternative claim for xx,xxx€ being the amount actually paid to the developer’s account at Caja Rural Central.

The witness on behalf of the Caja Rural branch in which the account was held, gave evidence at the Trial.  He stated that the account was an ordinary account opened by the developer and that it was not possible to control and monitor income in this type of account.

However the bank is to blame as it knew that this account was opened by a company dedicated to the construction and promotion of off-plan properties.  One just has to look at the historical movements of the account to see that it was funded largely by amounts paid by buyers to purchase their off-plan homes

This does not prevent the account to be considered as a Special Account according to the regulatory framework. 

Therefore, having opened an account for an off-plan property developer, the bank has a legal duty to ensure these funds were guaranteed by an Insurance Certificate or Bank Guarantee.  Having failed in its legal duty, the bank then has a legal liability.

The bank should not allow the opening of accounts or the placing of deposits in those accounts, without first ensuring that the developer has assumed a legal obligation to guarantee the repayment of the funds. 

The bank was fully aware of the business of the developer and the fact that the account was being used to receive funds from off-plan buyers.  The fact that the account was opened as a normal current account, as alleged by the defendant bank, cannot prejudice the plaintiffs as the Supreme Court Sentence of 30 April 2015 confirms.

 

Banks that receive funds from off-plan buyers into developer’s accounts, although not called Special Accounts, must be responsible to the buyers for the total amounts paid to these accounts opened in its branches.  This doctrine, if there is any doubt, has again been reiterated and confirmed by the Sentences of the Supreme Court dated 9 & 17 March 2016.

Therefore, the bank is responsible for all amounts proved to have been paid by the buyers to the developer’s account opened at Caja Rural Central.

As for costs, the plaintiff requested costs to be imposed on the bank.  Even though the Lawsuit has been upheld substantially in its alternative claim for the amount deposited in the developer’s account at the defendant bank, there is more or less uniform criteria in the Courts of this city (Orihuela) and in the Provincial Appeal Court of Alicante, to understand that the question before the prosecution regarding the liability of the Bank according to Article 1.2 of LEY 57/1968, has resulted in contradictory jurisprudence comparable to the existence of doubt.  So I plead the faculty contained in Article 394 of the Civil Procedure Act not to impose costs on the bank.  The Supreme Court Sentence of 21 December 2015 which clarifies the responsibility of financial institutions had not been published at the time the Lawsuit was filed (5 November 2015) or when the bank filed its written defence to the Court”



CAJA RURAL CENTRAL has 20 working days from the date of notification of the Sentence, which was 5 September 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by CAJA RURAL CENTRAL it will be necessary for us to file an Opposition to the Appeal on your behalf.



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Legal tip 1401.LEY 57/1968 Won Case in Provincial Appeal Court against BANCO POPULAR for our client who purchased an off-plan property from the developer Marbella Vista Golf SL at Santa Maria Green Hills
26 July 2016

LEY 57/1968 Won Case in Provincial Appeal Court against BANCO POPULAR for our client who purchased an off-plan property from the developer Marbella Vista Golf SL at Santa Maria Green Hills

We were pleased to inform our client recently that we had won their case against Banco Popular in the Provincial Appeal Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at Banco Popular.  Banco Popular issued a Bank Guarantee to cover the off-plan deposit.

The First Instance Court upheld our Lawsuit in which we claimed against the Bank Guarantee as the Judge was of the opinion that according to LEY 57/1968 the Guarantee only expires when the First Occupation Licence is issued and that the Licence cannot be understood to have been issued due to administrative silence.  The First Instance Court also dismissed the counterclaim made against our client by Marbella Vista Golf SL.

Banco Popular filed an Appeal against the First Instance Sentence.  The Provincial Appeal Court has dismissed the Banco Popular Appeal and confirmed the First Instance Sentence.


Re: YOUR CASE AGAINST MARBELLA VISTA GOLF S.L. & BANCO POPULAR ESPAÑOL S.A. PO-xxxx/2010

Please find attached Sentence number xxx/2016 from the Provincial Appeal Court of Malaga Section 4.

I am very pleased to advise you that the Appeal filed by BANCO POPULAR has been dismissed and the First Instance Sentence has been confirmed.

The final paragraphs of the First Instance Sentence delivered on 30 September 2013 stated:

1. “I estimate in full the Lawsuit filed by xxxxx against MARBELLA VISTA GOLF S.L. and against BANCO POPULAR ESPAÑOL S.A. with the following statements:

a) The Contract of Sale signed by xxxxx & MARBELLA VISTA GOLF S.L. dated 18 December 2003 is cancelled due to breach of the seller.

b) I order the defendants, in solidarity, to pay to the plaintiffs xxx,xxx Euros plus legal interest under the terms indicated in Item 4 of this Sentence.

c) Costs are imposed on the defendants

2. I completely dismiss the counterclaim made by MARBELLA VISTA GOLF S.L. against xxxxx and absolve the plaintiffs of all claims against them.  The costs of the counterclaim are imposed on MARBELLA VISTA GOLF S.L.”


The final paragraph of the Provincial Appeal Court Sentence delivered on 12 July 2016 and notified on 18 July 2016 states:


“Dismissing the appeal filed by BANCO POPULAR against the Sentence dated 30 September 2013 issued by the Judge of the First Instance Court No. 2 of Marbella, we must confirm that Sentence.  We expressly condemn the appellant bank to pay the costs of this appeal”


So the Appeal filed by BANCO POPULAR has been dismissed and the First Instance Sentence is confirmed.

The costs relating to the Appeal are imposed on the Bank.

As per the First Instance Sentence MARBELLA VISTA GOLF S.L. & BANCO POPULAR are jointly & severally liable to refund the total amount of xxx,xxx€.  Marbella Vista Golf is sentenced to pay interest at the legal rate from the date of payment (18 December 2003).  Banco Popular is sentenced to pay interest at the legal rate from the date of the Court Summons (9 February 2010).

Costs of the First Instance & Appeal are imposed on the defendants.

Interesting statements by the Appeal Court Magistrates are:


“Banco Popular opposed the Lawsuit and appealed on the grounds that they had set a time limit in the Bank Guarantee and that this limit had expired.  They also argued that the Guarantee had expired due to the fact that the Final Works Certificate was issued. 

However, we share the view of the First Instance Court as the Guarantee only expires when the First Occupation Licence is issued, which in this case has not been explicitly issued by the Marbella Town Hall.  The Licence cannot be understood to have been issued due to administrative silence.

The restrictive terms with regards to a pre-determined expiry of the Guarantee provided by Banco Popular are not in accordance with the scope of LEY 57/1968”



BANCO POPULAR has 20 working days from the date of notification of the Sentence, which was 18 July 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If a Cassation Appeal is filed by the defendant it will be necessary for us to file an Opposition to the Appeal on your behalf.

Santa Maria Green Hills, Elviria, Marbella, Málaga, South eastern Spain



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Legal tip 1400.LEY 57/1968 Won Case in Provincial Appeal Court against ZURICH INSURANCE for our client who purchased an off-plan property from the developer Sea Golf Apartments SL at La Alcaidesa
26 July 2016

LEY 57/1968 Won Case in Provincial Appeal Court against ZURICH INSURANCE for our client who purchased an off-plan property from the developer Sea Golf Apartments SL at La Alcaidesa

We were pleased to inform our client recently that we had won their case against Zurich Insurance in the Provincial Appeal Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account.  Zurich issued an insurance policy to cover the off-plan deposit.

The First Instance Court dismissed the Lawsuit in which we claimed against the insurance policy, as the Judge was of the opinion that this type of action to claim on an insurance policy issued according to LEY 57/1968 had a time limit of 2 years.

Under instruction from our client, we filed an Appeal against the First Instance Sentence.  The Provincial Appeal Court has upheld our Appeal and revoked the First Instance Sentence.  Zurich is now sentenced to refund the principal amount of the off-plan deposit plus interest at 6% per annum from the date of filing of the Lawsuit.

Re: YOUR CASE AGAINST ZURICH INSURANCE PLC.
PO xxxx/2014

Please find attached Sentence number xxx/2016 from the Provincial Appeal Court of Madrid Section 12.

I am very pleased to advise you that your Appeal against the First Instance Sentence has been won.

The final paragraph of the First Instance Sentence delivered on 10 June 2015 and notified on 15 June 2015 stated:


“I entirely dismiss the Lawsuit filed on behalf of xxxxxx against ZURICH INSURANCE PLC, and absolve the defendant of all claims against it, all with no explicit imposition of costs”


The final paragraph of the Provincial Appeal Court Sentence delivered on 29 June 2016 and notified on 22 July 2016 states:


“Upholding the appeal filed by xxxxxx against the Sentence dated 10 June 2015 issued by the Judge of the First Instance Court No. 33 of Madrid in Ordinary Procedure 1076/14, we must revoke that sentence and instead uphold the Lawsuit filed by the plaintiff against the defendant, condemning it to pay to the plaintiff the amount of xx,xxx€ of principal, plus 6% annual interest from the date of filing the Lawsuit, without prejudice to the second paragraph of the seventh article of this sentence, all without imposing costs of both instances”


So your Appeal has been won and the First Instance Sentence has been revoked.

Zurich Insurance is now liable to refund the principal amount of xx,xxx€ plus 6% annual interest from the date of filing of the Lawsuit.

There was no imposition of costs relating to the First Instance procedure or to the Appeal.  Therefore, each party will pay its own costs for both procedures.

Interesting statements by the Appeal Court Magistrates are:


“The claimant states in the Lawsuit that he reserved an off-plan property that should have been completed and delivered in February 2003, but in 2014 when the Lawsuit was filed the house had not been completed.  He paid his off-plan deposit according to the purchase contract signed under LEY 57/1968.

Zurich opposed the Lawsuit on the grounds of Res. Judicata, since there was a previous action against the developer and the insurer which ended in an agreement that the developer would repay the money and that no action would be taken against Zurich.  The developer never honoured that agreement.

Zurich also opposed the Lawsuit on the grounds that the time limit for actions against insurers is 2 years as per Article 23 of the Insurance Contract Law.

The Judge of the First Instance Court agreed with Zurich’s arguments and dismissed the Lawsuit.

The plaintiff appealed arguing that the limitation period provided for in Article 23 of the Insurance Contract Law cannot be applied, since this action is subject to Articles 1 & 3 of LEY 57/1968 and therefore the general limitation period of 15 years must apply.

The appeal must be upheld.

 

The limitation period provided for in Article 23 of the Insurance Contract Law is applicable only for those actions that arise as a direct and exclusive result of a contract being entered into specifically for insurance. The term of 2 years is not applicable to a claim against the insurer’s liability as a result of the event covered by this insurance. 

 

The defendant also raised the exception in the First Instance procedure of Res. Judicata, given the existence of a previous procedure which concluded with a compromise agreement in which the plaintiff renounced any further actions against the defendant.

Even assuming that the plaintiff had agreed not to take further actions against Zurich, that waiver of rights would have been ineffective due to the fact that Article 7 of LEY 57/1968 recognises that the rights granted to the buyer by that Law are inalienable and cannot be waived.

In terms of interest, the defendant must be ordered to pay the interest as agreed in the guarantee policy, i.e. the interest rate of 6%.  The fact that the First Additional Provision of the Law on Construction & Planning of 1999 established interest at the legal rate shall not apply because since it is for the benefit of the acquirer the higher rate in the policy must prevail.

It is appropriate to maintain the non-imposition of costs as per the First Instance Sentence, given the existence of questions of fact and law, since as indicated in the judgement, the question of term limitation of actions directed against the insurer is a subject that has resulted in different opinions of the Provincial Courts , which implies the existence of questions of fact and law which is referred to in Article 394 of the Civil Procedure Act.

As this appeal has been upheld, according to Article 398.2 of the Civil Procedure Act, there is no imposition of costs of this appeal”



ZURICH has 20 working days from the date of notification of the Sentence, which was 22 July 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If a Cassation Appeal is filed by the defendant it will be necessary for us to file an Opposition to the Appeal on your behalf.

La Alcaidesa, Cádiz, Southern Spain



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Legal tip 1399.LEY 57/1968 Won Case in Provincial Appeal Court against SGR for 2 clients who purchased off-plan properties from the developer Herrada del Tollo at Residencial Santa Ana del Monte
21 July 2016

LEY 57/1968 Won Case in Provincial Appeal Court against SGR for 2 clients who purchased off-plan properties from the developer Herrada del Tollo at Residencial Santa Ana del Monte

We were pleased to inform our clients recently that we had won their case against SGR in the Provincial Appeal Court.

The clients paid their off-plan deposits according to the Purchase Contracts to the developer’s bank account at various banks.  The clients did not receive individual Guarantees for their off-plan deposits from the developer, Herrada del Tollo or from the developer’s banks or from SGR who had issued a General Guarantee for the development.

The First Instance Court condemned Banco Popular only for the actual amounts for which the buyers had proof of payments to the developer’s accounts opened at its branches.

SGR who issued a General Guarantee to the developer was acquitted and absolved of any liability.

Banco Popular filed an Appeal.  Its Appeal was dismissed and the First Instance Sentence against Banco Popular was confirmed.

On the instructions of our clients we filed an Appeal regarding the acquittal of SGR.  Our Appeal was upheld and SGR was sentenced to refund the full amount paid by both buyers according to the General Guarantee it issued to the developer.  This also included amounts for which the buyers did not have specific proof of payment, but which were recognised in the insolvency procedure of the developer.


Re: YOUR CASE AGAINST SOCIEDAD DE GARANTIA RECÍPROCA DE LA COMUNIDAD VALENCIANA & BANCO PASTOR (now BANCO POPULAR)
PO xxxx/2011

Please find attached Sentence number xxx/2016 from the Provincial Appeal Court of Alicante Section 9 in Elche.

I am very pleased to advise you that the Appeal filed by BANCO POPULAR has been dismissed.

Your Appeal against the acquittal of SGR has been upheld.

The final paragraphs of the First Instance Sentence delivered on 2 June 2015 and notified on 5 June 2015 stated:


“That partially upholding the Lawsuit filed on behalf of 2 BUYERS against SOCIEDAD DE GARANTIA RECÍPROCA DE LA COMMUNIDAD VALENCIANA and against BANCO PASTOR, I condemn Banco Pastor only to pay to BUYER 1 the sum of xx,xxx Euros plus legal interest from the date of payment by the buyers and to pay nothing to BUYER 2, and I also acquit and absolve Sociedad de Garantía Recíproca de la Communidad Valenciana of any liability in this case.

 

As for costs it will be as per the third article of this resolution.

THIRD – In respect of costs, they are imposed as follows:  In respect of the costs incurred by Sociedad de Garantía Recíproca de la Communidad Valenciana these are imposed on the plaintiffs.  In respect of the costs of the action against Banco Pastor each party shall pay its own costs and any common costs will be halved”


The final paragraphs of the Provincial Appeal Court Sentence delivered on 19 May 2016 and notified on 27 May 2016 state:


“Dismissing the appeal filed by BANCO POPULAR and partially upholding the Appeal filed by 2 BUYERS, against the Sentence dated 2 June 2015 issued by the Judge of the First Instance Court No. 5 of Orihuela, we reverse that Sentence and instead say:

Upholding entirely in its alternative claim the Lawsuit filed by 2 BUYERS against Sociedad de Garantía Recíproca de la Comunidad Valenciana (SGR), condemning it to pay to BUYER 1 the amount of xx,xxx€ and to BUYER 2 the amount of xx,xxx€, plus legal interest from the date the amounts were paid to the developer’s bank account.

Upholding substantially in its alternative claim the Lawsuit filed by BUYER 1 against Banco Popular, condemning it to pay to them the amount of xx,xxx€ plus legal interest from the date the amount was paid to the developer’s bank account.

Dismissing the Lawsuit filed by BUYER 2 against Banco Popular and absolve the claims made against it.

Declare the joint liability of the co-defendants for the condemned amounts”



So the Appeal filed by BANCO POPULAR has been dismissed.

Your Appeal against SGR has been upheld.

SGR is now sentenced to pay:

xx,xxx€ to Messrs xxxxx

xx,xxx€ to Messrs xxxxx (of this amount Banco Popular is jointly liable for xx,xxx€)

As per the First Instance Sentence, Banco Popular is not liable to pay Messrs xxxxx anything.

On 27 June 2016 the Court issued a decree which slightly amended the Provincial Appeal Court Sentence in respect of the costs.

The Sentence is amended as follows:

“Dismissing the appeal filed by BANCO POPULAR and partially upholding the Appeal filed by 2 BUYERS, against the Sentence dated 2 June 2015 issued by the Judge of the First Instance Court No. 5 of Orihuela, we partially reverse that Sentence and instead say:

Upholding entirely in its alternative claim the Lawsuit filed by 2 BUYERS against Sociedad de Garantía Recíproca de la Comunidad Valenciana (SGR), condemning it to pay to BUYER 1 the amount of xx,xxx€ and to BUYER 2 the amount of xx,xxx€, plus legal interest from the date the amounts were paid to the developer’s bank account.  Expressly condemns such co-defendant with the costs incurred in this procedure.

Imposing on Banco Popular the costs of its Appeal.  Without special pronouncement of costs relating to the Appeal of the plaintiffs.

The original Sentence is otherwise confirmed”



Interesting statements by the Appeal Court Magistrates are:


“Regarding the appeal filed by Banco Popular we refer to the reasoning of the lower court which reflects the existing case law on this subject.  So we dismiss the appeal based on the criteria of the Supreme Court and also of this Section 9 of the Provincial Appeal Court of Alicante in the Sentence of 1 April 2014 on the matter of interpretation of LEY 57/1968.

Regarding the Appeal of Messrs xxxxx & Messrs xxxxx against the acquittal of SGR, the condemnation of SGR from the moment it gave a Guarantee Line (General Guarantee) to the developer, has already been decided on several occasions by this Appeal Court Section 9 in similar cases, as an example we cite the Sentence of 12 May 2015, that both litigants know perfectly well.

In addition and subsequently there is the Supreme Court Sentence of 23 September 2015.

Regarding the amounts claimed, given the Sentence that recognizes the amount paid and the other documents provided for that purpose, we conclude that SGR must return to Messrs xxxxx the amount of xx,xxx€ and to Messrs xxxxx the amount of xx,xxx€ (including the x,xxx€ reservation deposit paid at the signing of the contract) claimed in respect of advance payments for off-plan homes.  These amounts accrue legal interest from the date of payment to the developer’s bank account”



SGR & Banco Popular have 20 working days from the date of the Decree modifying the Sentence, which was 27 June 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If a Cassation Appeal is filed by the either defendant it will be necessary for us to file an Opposition to the Appeal on your behalf.

A view of Valencia, Eastern Spain



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Legal tip 1398.LEY 57/1968 Won Case in Provincial Appeal Court against SGR for a group of 3 clients who purchased off-plan properties from the developer Herrada del Tollo at Residencial Santa Ana del Monte
20 July 2016

LEY 57/1968 Won Case in Provincial Appeal Court against SGR for a group of 3 clients who purchased off-plan properties from the developer Herrada del Tollo at Residencial Santa Ana del Monte

We were pleased to inform our clients recently that we had won their case against SGR in the Provincial Appeal Court.

The clients paid their off-plan deposits according to the Purchase Contracts to the developer’s bank account at BBVA.  The clients did not receive individual Guarantees for their off-plan deposits from the developer, Herrada del Tollo or from the developer’s bank BBVA or from SGR who had issued a General Guarantee for the development.

The First Instance Court condemned BBVA & SGR jointly & severally to refund the off-plan deposits plus interest from the date of payment.  Costs of the First Instance were also imposed on the defendants.

SGR filed an Appeal against the First Instance Sentence.  The Provincial Appeal Court dismissed the SGR Appeal in all aspects, except for the imposition of costs of the First Instance.  This part of the First Instance Sentence has now been reversed by the Provincial Appeal Court.  So costs of both the First Instance & Provincial Appeal are not imposed on SGR.


Re: YOUR CASE AGAINST SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA (SGR) & BANCO BILBAO VIZCAYA ARGENTARIA S.A. (BBVA)
PO xxxx/2014

Please find attached Sentence number xxx/2016 from the Provincial Appeal Court of Alicante Section 9 in Elche.

I am very pleased to advise you that the Appeal filed by SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA has been dismissed except for the issue of the costs of the First Instance procedure.

The final paragraph of the First Instance Sentence delivered on 26 October 2015 and notified on 26 October 2015 stated:



“Fully estimating the Lawsuit filed on behalf of 3 BUYERS against SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA & BANCO BILBAO VIZCAYA ARGENTARIA S.A. I condemn the defendants jointly & severally to pay the plaintiff the amount of xxx,xxx Euro plus legal interest from the date of delivery or deposits in the current accounts of BBVA until the full repayment and legal costs”


The final paragraph of the Provincial Appeal Court Sentence delivered on 1 July 2016 and notified on 8 July 2016 states:


“Partially upholding the appeal filed by SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA against the Sentence dated 26 October 2015 issued by the Judge of the First Instance Court No. 2 of Orihuela, we partially reverse that Sentence, in respect of the costs, in the sense of not imposing the costs incurred in the First Instance on SGR, leaving intact the rest of the pronouncements of the contested Sentence.  No imposition of costs of this appeal”


So the Appeal filed by SGR has been dismissed, except for the issue of costs of the First Instance procedure.  In the First Instance Sentence the Judge imposed costs on the defendants (SGR & BBVA).  The Appeal Court magistrates have reversed the part of the decision relating to the costs being imposed on SGR.  Costs of the First Instance procedure are now not imposed on SGR.  Therefore, each party will pay its own costs relating to the First Instance Proceedings and common costs will be halved.

Costs of the First Instance are still imposed on BBVA, because it did not Appeal.

There was no imposition of costs relating to the SGR Appeal.  Therefore, each party will pay its own costs relating to the Provincial Appeal Court procedure and common costs will be halved.

All other aspects of the First Instance Sentence have been confirmed.

As per the First Instance Sentence SGR & BBVA are jointly & severally liable to refund the total amount of xxx,xxx€ legal interest from the date each amount was paid to the developer’s account.

Interesting statements by the Appeal Court Magistrates are:


“With regards to costs of the First Instance, certainly there were significant legal doubts on the question at issue.  The Lawsuit was filed in November 2014 at which time there were indeed serious questions of law with mixed resolutions in the various Provincial Courts, including sections of the Alicante Provincial Court.  The Supreme Court Sentence which mainly supports the condemnation of SGR according to the General Guarantee it issued is dated 23 September 2015, so at the time the Lawsuit was filed in November 2014 that Supreme Court Sentence had not been issued.  Therefore, we must reverse the imposition of costs of the First Instance.  Therefore in accordance with article 394 of the LEC, each party will pay its own costs of the First Instance procedure.

Regarding the costs of this Appeal, although the Appeal was filed after the Supreme Court Sentence of 23 September 2015, the fact is that the Appeal filed by SGR has been partially successful in the sense that the part of the First Instance Sentence relating to the imposition of costs has been reversed according to Article 394 of the LEC.  So pursuant to Article 398.2 of the LEC costs of this Appeal are not imposed on any party.  Therefore, each party will pay its own costs in respect of this Appeal”



SGR has 20 working days from the date of notification of the Sentence, which was 8 July 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If a Cassation Appeal is filed by the defendant it will be necessary for us to file an Opposition to the Appeal on your behalf.



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Legal tip 1397.LEY 57/1968 Won Case in First Instance Court against Banco Popular for our client who purchased an off-plan property from the developer Huma Mediterraneo at the Mazarron Country Club
19 July 2016

LEY 57/1968 Won Case in First Instance Court against Banco Popular for our client who purchased an off-plan property from the developer Huma Mediterraneo at the Mazarron Country Club

We were extremely pleased to inform our client recently that we had won their case against BANCO POPULAR in the First Instance Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at Banco Popular.  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Huma Mediterraneo or from the developer’s bank, Banco Popular, which was the bank that received the funds and also issued General Guarantees on the development.


Re: YOUR CASE AGAINST BANCO POPULAR ESPAÑOL S.A.
PO xxxx/2014

Please find attached the Sentence from the First Instance Court No.8 in Murcia.

Your case against BANCO POPULAR ESPAÑOL S.A. has been won.

The final paragraph of the First Instance Sentence delivered on 12 July 2016 and notified on 12 July 2016 states:



“Substantially upholding the Lawsuit filed on behalf of xxxxxx against BANCO POPULAR ESPAÑOL S.A., I must condemn the defendant bank to pay to the plaintiff the amount actually deposited by the plaintiffs in the account of the developer at Banco Popular on account of the anticipated price for the acquisition of housing promoted by Huma Mediterraneo S.L., resulting in the conviction of the amount of xx,xxx Euro, plus interest at the rate of 6% per annum as agreed in the Guarantee Policies issued by Banco Popular from the delivery date of the advance payments until payment in full, with the imposition of procedural costs on the defendant”


So BANCO POPULAR ESPAÑOL S.A. is sentenced to refund the amount of xx,xxx€ (which was the amount for which you had proof of payment to the Banco Popular account) plus interest at the rate of 6% per annum from the date you paid to the developer’s bank account until complete repayment.

Costs of the legal proceedings are also imposed on Banco Popular.

Interesting statements from the Judge in the Sentence were:


“The defendant, Banco Popular, must be responsible to the plaintiff for the sums of money paid to the seller for the purchase of off-plan housing which were entered into the developer’s account at Banco Popular.

For this purpose the mention of ‘Global Currency Exchange Network’ as the payer of the transfer has no bearing on the outcome of this procedure, as documentary evidence was provided to show that the payment related to the exact house/plot number reserved by the buyers.

Regarding the initial reservation deposit of x,xxx€, this must be excluded from the liability of Banco Popular as it was not entered into the developer’s account at Banco Popular.

I must order the defendant bank to pay interest at the rate of 6% per annum as agreed in the General Guarantees dated 12 May 2005 and this is payable from the date the amounts were paid to the developer’s account at Banco Popular until the date the full refund is made.

In terms of legal costs, this is governed by article 394 of the Civil Procedure Act.  Therefore, as the Lawsuit has been upheld substantially with only a slight difference of less that 10% between the amount claimed and the amount awarded, legal costs must be paid by the defendant bank”




BANCO POPULAR has 20 working days from the date of notification of the Sentence, which was 12 July 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Murcia.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by BANCO POPULAR it will be necessary for us to file an Opposition to the Appeal on your behalf.



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Legal tip 1396.LEY 57/1968 Won Case in First Instance Court against Banco Sabadell for our client who purchased an off-plan property from the developer Casa Mediterranea Construcciones at Residencial Pinada del Rio
19 July 2016

LEY 57/1968 Won Case in First Instance Court against Banco Sabadell for our client who purchased an off-plan property from the developer Casa Mediterranea Construcciones at Residencial Pinada del Rio

We were extremely pleased to inform our client recently that we had won their case against BANCO SABADELL in the First Instance Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at Banco Guipuzcuano (now Banco Sabadell).  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Casa Mediterranea Construcciones or from the developer’s bank.


Re: YOUR CASE AGAINST BANCO GUIPUZCUANO (now BANCO DE SABADELL S.A.)
PO xxxx/2012

Please find attached Sentence number xx/2016 from the First Instance Court No.11 in Alicante.

Your case against BANCO SABADELL has been won.

The final paragraph of the First Instance Sentence delivered on 21 June 2016 and notified on 22 June 2016 states:



“Fully upholding the Lawsuit filed on behalf of xxxxxx against BANCO DE SABADELL S.A. and condemn the defendant, BANCO DE SABADELL, to pay the plaintiff, xxxxxx, the amount of xxx,xxx€ plus legal interest from the date on which the amounts were paid to the account.  Costs are imposed on the defendant as per article 394 of the LEC”


So BANCO SABADELL is sentenced to refund the total amount of xxx,xxx€ plus interest at the legal rate from the date on which each amount was paid to the developer’s bank account.

Costs of the First Instance procedure are imposed on BANCO SABADELL.

Interesting statements from the Judge in the Sentence were:


“The claimant signed a purchase contract with the entity Casa Mediterranea Construcciones S.A. on 10 August 2004 for the purchase of a home in the development Residencial Pinada del Rio.

The off-plan deposit was paid to the Special Account of the developer at Banco Guipuzcuano (now Banco Sabadell).

The Bank argued that it was not a Special Account.  However, during questioning at the Trial the developer confirmed that the Bank had knowledge that the account was used for the receipt of off-plan funds.  From documentary evidence relating to the account it is clear that payments into the account were referenced as being for specific housing types at Pinada Del Rio.

Therefore it is clear that the funds were from buyers for off-plan purchases.  If the Bank did not make adequate efforts to manage control of the said account then it cannot claim that lack of diligence against a third party”


  
BANCO SABADELL S.A. has 20 working days from the date of notification of the Sentence, which was 22 June 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If an Appeal is filed by BANCO SABADELL S.A. it will be necessary for us to file an Opposition to the Appeal on your behalf.



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Legal tip 1395.LEY 57/1968 Won Case in Provincial Appeal Court against SGR for our client who purchased an off-plan property from the developer Herrada del Tollo at Residencial Santa Ana del Monte
19 July 2016

LEY 57/1968 Won Case in Provincial Appeal Court against SGR for our client who purchased an off-plan property from the developer Herrada del Tollo at Residencial Santa Ana del Monte

We were pleased to inform our client recently that we had won their case against SGR in the Provincial Appeal Court.

The client paid their off-plan deposit according to the Purchase Contract to the developer’s bank account at BBVA.  The client did not receive an individual Guarantee for their off-plan deposit from the developer, Herrada del Tollo or from the developer’s bank BBVA or from SGR who had issued a General Guarantee for the development.

The First Instance Court condemned BBVA & SGR jointly & severally to refund the off-plan deposit plus interest from the date of payment.  Costs of the First Instance were also imposed on the defendants.

SGR filed an Appeal against the First Instance Sentence.  The Provincial Appeal Court dismissed the SGR Appeal in all aspects, except for the imposition of costs of the First Instance.  This part of the First Instance Sentence has now been reversed by the Provincial Appeal Court.


Re: YOUR CASE AGAINST SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA (SGR) & BANCO BILBAO VIZCAYA ARGENTARIA S.A. (BBVA)
PO xxxx/2011

Please find attached Sentence number xxx/2016 from the Provincial Appeal Court of Alicante Section 9 in Elche.

I am pleased to advise you that the Appeal filed by SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA has been dismissed except for the issue of the costs of the First Instance procedure.

The final paragraph of the First Instance Sentence delivered on 23 September 2015 and notified on 2 October 2015 stated:



“Estimating the Lawsuit filed on behalf of xxxxxx against SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA & BANCO BILBAO VIZCAYA ARGENTARIA S.A. I condemn the defendants jointly & severally to pay to Mrs XXXXXXXXXXXX the amount of xx,xxx Euro plus legal interest on x,xxx€ from 28 April 2006 & on xx,xxx€ from 16 August 2006 until the full repayment and impose the costs on the defendants”


The final paragraph of the Provincial Appeal Court Sentence delivered on 20 June 2016 and notified on 1 July 2016 states:


“Partially upholding the appeal filed by SOCIEDAD DE GARANTÍA RECÍPROCA DE LA COMUNIDAD VALENCIANA against the Sentence dated 23 September 2015 issued by the Judge of the First Instance Court No. 6 of Orihuela, we partially reverse that Sentence, in respect of the costs, in the sense of not imposing the costs incurred in the First Instance to any of the parties involved, leaving intact the rest of the pronouncements of the contested Sentence.  No imposition of costs of this appeal”


So the Appeal filed by SGR has been dismissed, except for the issue of costs of the First Instance procedure.  In the First Instance Sentence the Judge imposed costs on the defendants (SGR & BBVA).  The Appeal Court magistrates have reversed the part of the decision relating to the costs.  Costs of the First Instance procedure are not imposed on any party.  Therefore, each party will pay its own costs relating to the First Instance Proceedings and common costs will be halved.

There was no imposition of costs relating to the Appeal.  Therefore, each party will pay its own costs relating to the Provincial Appeal Court procedure and common costs will be halved.

All other aspects of the First Instance Sentence have been confirmed.

As per the First Instance Sentence SGR & BBVA are jointly & severally liable to refund the total amount of xx,xxx€ legal interest from the date each amount was paid to the developer’s account.

Each party pays its own costs of both procedures.

Interesting statements by the Appeal Court Magistrates are:


“With regards to the payment of interest, the purpose of the Act (LEY 57/1968) is to protect consumers who have paid amounts in advance for housing that has not been delivered.  That purpose is not achieved if interest is not paid from the date the payments were originally made to the developer’s bank account.

With regards to costs of the First Instance, the appellant (SGR) alleges infringement of article 394 of the LEC (Civil Code).  The Lawsuit was admitted into procedure in 2012.  The appellant (SGR) filed its defence in time on 14 February 2013.  The Supreme Court Sentence which mainly supports the condemnation of SGR according to the General Guarantee it issued is dated 23 September 2015, so at the time that SGR filed its defence in February 2013 that Supreme Court Sentence had not been issued.  Therefore, it is true that in February 2013 there existed legal doubts regarding the liability of the General Guarantor in these types of cases.  Therefore, we must reverse the imposition of costs of the First Instance.  Therefore in accordance with article 394 of the LEC, each party will pay its own costs of the First Instance procedure.

Regarding the costs of this Appeal, the truth is that the Appeal filed by SGR has been partially successful in the sense that the part of the First Instance Sentence relating to the imposition of costs has been reversed.  So pursuant to Article 398.2 of the LEC costs of this Appeal are not imposed on any party.  Therefore, each party will pay its own costs in respect of this Appeal”



SGR has 20 working days from the date of notification of the Sentence, which was 1 July 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.

Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.

If a Cassation Appeal is filed by the defendant it will be necessary for us to file an Opposition to the Appeal on your behalf.



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