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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 1161. Aifos and GOOD for Malaga Courts
04 June 2014 @ 14:51

We have recently received a good deal of information from AIFOS Judicial Administrators through the judicial preliminary work we started in regards to our Aifos clients.

Some (1) General Bank Guarantees, which will enable us to act against those guaranteeing financial institutions regardless of the client having the individual certificate, and also information on (2) Bank Accounts were money was paid to, which will enable us to use action of provision 1.2 of Law 57/68.

Specially good for those who have a contract cancelled against Aifos as the Supreme Court is somehow limiting cancalletion rights for those who have been non active along all these years.

The best of news here is that Judges are understanding and applying Law 57/68 correctly and requesting judicial administrators to provide to lawyers what is necessary for the action.

Good!

Costa Luz Left

Málaga, South eastern Spain, by Alfredo Rodriguez Brondo, at flickr.com



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21 Comments


ads said:
04 June 2014 @ 18:19

Good news Maria and well done, but what I can't understand is why would the Supreme Court limit cancellation rights for those who have been non active for years?

How many, for instance, felt that their cases were a lost cause (due to no fault of their own) having been subjected to MAJOR and unacceptable delays in the justice system themselves, which directly impacted their ability to gain enforcements /embargoes etc?

Isn't this failure to recognise what they have been subjected to and the impact on their psyche with regard to non-persuance of their cases, not to mention the impact of failure to enforce successful rulings during these past years sufficient reason for the Supreme Court to recognise the injustices that they have been subjected to?

Isn't this a failure of moral authority from the Supreme Court to limit cancellation rights in this way?

Is there nothing that can be done to challenge this response from the Supreme Court?

Perhaps I have misunderstood?




mariadecastro said:
04 June 2014 @ 18:30

Ads:

I think the Supreme Court is making a broad interpretation of law based on provision 3 of our Civil Code which offers guidelines for Judge´s work in this way:

Artículo 3

1. Las normas se interpretarán según el sentido propio de sus palabras, en relación con el contexto, los antecedentes históricos y legislativos y la realidad social del tiempo en que han de ser aplicadas, atendiendo fundamentalmente al espíritu y finalidad de aquellas.

( Interpretation of Law will be made according to own sense of words, in relation to the context, the historical and legislative precedents and the social time they are being applied to, calling to spirit and goal of them )

When a buyer starts cancellation many years after a default, with no previous cancellation activity in between, it can be understood, as the Supreme Court is saying here that the business has been of no interest for a long period and therefore rights can somehow " fall"




ads said:
04 June 2014 @ 18:57

Thank you Maria.

So they make no allowance for the fact that many have been understandably fearful of the effects that court / judicial delays and early "mis-interpretations" of Ley 57/68 by some judges within the justice system, have had on their faith of a successful outcome in the early years. These were early years, when the risks due to lack of case law (and non recognition by some law firms who suggested this to be a lost cause) were understandably acting as a major deterrent?

It's ironic that now that case law is more substantial, acting as support for those subjected to such injustices, that the Supreme Court should now not recognise their cancellation rights.

It appears morally indefensible.




ads said:
05 June 2014 @ 11:42

Maria, looking to the wider picture, does this SC ruling and interpretation of the civil code as you have explained above, have wider reaching consequences?

Does this mean that only those who have gained cancellation of contract can confidently pursue recovery of monies that were paid to developers?

Does this mean that those just starting the process of recovery of their monies will ultimately be denied justice based upon "long periods of no interest" prior to pursuing their inalienable rights?

Surely not, when there are all too many who only now are sufficiently aware of their inalienable rights and feel confident enough (given supportive case law and the increasing option of no win no fee) to pursue recovery of their monies?

As you can see I'm confused by who will fall within this time constraint that appears to have been imposed by the Supreme Court, and I'm sure many would be extremely grateful for clarification!

Many thanks as ever for all your continuing endeavours and pioneering hard work to ensure inalienable rights are respected..



mariadecastro said:
05 June 2014 @ 11:49

Thanks Anne. Yes, certainly hard and pioneer work. Thanks to all members of the team who cannot be better and who are, due to payment defaults of many of our clients, struggling to keep their jobs!

In my opinion, and that is what we would deffend, any attempt to cancel the contract needs to be addressed and rewarded by Law. Of course out of Courts attempts in the past needs to be valued, in our opinion. Soecially as the inactivity there is by the developers/Bank side and not the client.

If not through an action against Bank, through an action against whoever professional advise the client not to proceed to cancellation. It is our initial opinion on this.

If nothing was done by the client, lamentably , that it was a risk he took and it means just that the non activity is now making its effects.


belucky358 said:
05 June 2014 @ 15:38

Hi Maria,
Since the "Cancellation of the Contract" is so important could you tell me how a person proves that it was done ?

Should I or my Spanish Lawyer have received from AIFOS a document confirming the Contract is cancelled ?




mariadecastro said:
05 June 2014 @ 17:12

In this type of businesses, yes, you need an express contract cancellation agreed by the two parties or a judicial decission.


belucky358 said:
06 June 2014 @ 09:34

Hi Maria,
Can you be a bit more explicit please, what is an "express contract cancellation" ? and would the following cover it ?

In February 08, I was informed by my Spanish Lawyer that he had formally sent a request to AIFOS for an administrative and legal situation, and that If AIFOS did not reply within 15 days he would formally cancel the contract.
In March 08, I was informed that my contract with AIFOS was cancelled as the cancellation procedure had been followed and they were able to eventually explain to a Judge that AIFOS was given ample opportunity to find a solution and when AIFOS failed to reply the contract was cancelled.

Does the following amount to a Judicial decision ?
Also in January 09, I was informed that we had "won" our Court case during which both sets of Lawyers had agreed in writing in front of the Judge. AIFOS had admitted that they had not fulfilled the contract and that the "contract cancellation" was correct. Also AIFOS acknowledged the debt and would pay the outstanding amount within 2 months.



mariadecastro said:
06 June 2014 @ 14:13

Belucky

If a Court case for contract cancellation has been won, that is more than enough!

Kindest,

Maria


johnparker said:
07 June 2014 @ 17:22

I paid a deposit to AIFOS for a property in Haciendas Casarus, but the property was never built. I am registered as a creditor of AIFOS, but I have not received my deposit back. Can you advise me of what action I should take? Or if you can help me recover my money.
Thanking you.

P.S. Are you aware of what the situation is regarding bank guarantees on this development?


ads said:
08 June 2014 @ 14:40

Maria,
How can "non activity" be suggested by the Supreme Court when the purchaser does not have detailed knowledge of BG law and is dependent on their legal advisers to act at all times in accordance with existing law and with all due diligence in protection of their client's interests?
There should be no risk for those who used legal representation for property purchase relating to offplan property, when Ley 57/68 provides inalienable rights to cover developer breach of contract, and for the Supreme Court to suggest otherwise, or remove the right to cancel a contract given developer breach of contract and place time constraints against inalienable rights in this way is surely questionable is it not?


mariadecastro said:
09 June 2014 @ 08:50

Ads:
Supreme Court is not analysing behaviour of lawyers in this case. That requires a different type of action, which requires this one -- against developers and Bank-- to be exhausted first.

Cheers

Maria


mariadecastro said:
09 June 2014 @ 09:41

John Parker:

There is a General Bank Guarantee for this development.
If you need help with this, you can contact us at: web at costaluzlawyers.es

Cheers

Maria


ads said:
09 June 2014 @ 10:29

Is the following correct Maria?
So now we have the scenario that the conveyancing law firm who did not act in the best interest of their clients, by not ensuring that they followed the requirements of Ley 57/68 nor advising them to take early cancellation action and make a claim against the Bank (where a developer has gone into administration), is only made accountable (through their legal indemnity) as a last resort, AFTER a developer/Bank claim fails.
So the innocent purchaser has to prove developer breach of contract and in the process meet the costs of a foregone conclusion that any Bank claim will fail (given the time constraints now placed upon the action). Then and only then will they be able to take action against the conveyancing lawyer.....
This in itself is a nightmare for clients, not only because of the prolonged litigation process (given the excessive court delays/judicial rulings) but also presumably the fact that very few to date have taken action against lawyers and won.
Coming back to the basics here, we now have a decision by the Supreme Court (time constraints on action against developer/Bank) that in effect does not make the Banks/developers accountable for their non adherence to Ley 57/68 and in the process the innocent purchaser is exposed to extended litigation as the claim against the lawyer cannot be severally and jointly combined from the outset.
I have to ask therefore, why is the Supreme Court not allowing cancellation action to proceed (without imposing time constraints) and thereby make the developer/Banks fully accountable.


ads said:
09 June 2014 @ 11:27

Also, how can the Supreme Court be allowed to "cherry pick" the application of inalienable rights as defined within existing law Ley 57/68 in this way by recognising time constraints which impact its application? Doesn't this in effect work against the principle of ensuring that a member state has to comply with its own laws and does not act OUTSIDE the rule of law and adheres to the principal of legal certainty? Doesn't this also work against your observation “The existence of Law 57/68 provides obligations established not by the will of parties but by the Law itself. As a matter of public order, with an imperative character ( nothing different can be agreed by parties) and with inalienable strength. “?


mariadecastro said:
09 June 2014 @ 11:33

All that assertion are right if Law is exercised within a reasonable time period after the breach. If many years have passed and nothing has been done by the buyer, the exercise of this right might be an expample of:

"Summum jus summa injuria" ‘extreme justice is extreme injustice.’

Law cannot be enforced literally per its terms to widely varying circumstances.

In those cases, where clients were advised not to proceed, an action against their advisors may be the appropriate one to explore.


mariadecastro said:
09 June 2014 @ 12:18

If you take an action against a Lawyer before this against the Bank, they can oppose Banks liability and the action be frustrated


ads said:
09 June 2014 @ 15:34

Thank you Maria.

Does a general warning (legal tip) need to be emphasised now for those coming "late" to this legal action, to ensure that they are aware of the risks associated with remaining with the same law firm who (unbeknown to them) will have compromised their action against the Bank by not correctly "exercising their rights within a reasonable time period" when trying to recoup their monies?

Presumably, given this latest SC ruling, this emphasises the fact that they would be very unwise to take any inducements for no win no fee if being offered by the same firm that has apparently compromised their rights in the first place, or by any law firm for that matter that is unwilling to follow through with action against lawyer's legal indemnity as a last resort mechanism, when required to do so?



johnparker said:
09 June 2014 @ 22:23

What does a General Bank Guarantee mean? And what bank is it with? I'll be in touch with your office soon.


mariadecastro said:
10 June 2014 @ 15:07

Ads: If lawyers did the conveyancig, they will certainly have the means to prove where payments were made and if there was a Bank Guarantee.

They should have provided this to their clients from minute one. If any detriment is finally suffered because of this ( lost of action, lost of interests...) yes, clients will have an action against conveyancing lawyers for this.

JohnParker:

A general bank Guarantee is a document where a guarantoor ( Bank or Insurance company) is agreeing of guaranteeing refunds to buyers in the development. The General agreement between developer and Bank.


ads said:
10 June 2014 @ 22:08

Thanks Maria,

Does this mean that if costs and interest relating to the claim against the developer cannot be recouped using the Bank action as Keith identified quite some time ago (for those who pursued separate actions in the early days), that they could recoup these outgoings related to developer action from the lawyer's legal indemnity (if stipulated in the original successful judicial ruling against the developer)?
Or would this prove cost prohibitive?

As things stand, there are probably many who don't realise they could lose costs/interest associated with the earlier developer action, so it would be reassuring for many to know if this legal option would be worthwhile.
Would failed preliminary enforcement costs also be recoverable via this route?


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