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.
Calpe, Alicante, Valencia, Eastern Spain