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El blog de Maria

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Legal tip 1422. Case won in the Provincial Appeal Court against SGR for an off-plan property from Herrada del Tollo at Santa Ana del Monte
21 December 2016 @ 18:59

Our clients were extremely pleased to hear recently that we had won their LEY 57/1968 Bank Action case against SGR in the Provincial Appeal Court.

No Individual Guarantee

Our clients did not receive an individual Guarantee from the developer, Herrada del Tollo or from the Bank to which their off-plan deposit was paid, BBVA.  SGR did grant a General Guarantee to the developer.

First Instance Court Sentence

In the First Instance Sentence BBVA was convicted according to its obligations under Article 1.2 of LEY 57/1968 for the off-plan deposit paid by our clients to the developer’s bank account at BBVA.  SGR (an insurance company) was also convicted jointly and severally with BBVA due to the General Guarantee it issued to the developer.

The Appeal

SGR appealed using 4 main arguments which were all rejected by the Magistrates in the Provincial Appeal Court.  The First Instance Sentence has been confirmed.  Costs of the First Instance procedure were not imposed on any party; therefore each party will pay its own costs relating to the First Instance procedure.  Costs of the Appeal are imposed on SGR.

As per the First Instance Sentence SGR & BBVA are jointly & severally liable to refund the total amount of our clients off-plan deposit plus legal interest from the date the amount was paid to the developer’s account.

Important Statements from the Appeal Court Magistrates

“The appellant argued in the Appeal that the buyers were never informed of or provided with, a copy of the General Guarantee at the time of signing the Purchase Contract with the developer and therefore they are not protected by the policy.  However, as we have already pointed out in our Sentence of 19 May 2016 the conviction of SGR applies from the moment a line of Guarantees or General Guarantee is granted to the developer.

In short it is irrelevant whether or not the buyers were provided with a copy of the General Guarantee because the responsibility of SGR arises from the mere fact of having granted the Guarantee to the developer, who then failed to complete the housing.

The appellant also argues that it never received the amounts paid by the buyer as the funds were paid to the developers account at BBVA & Banco CAM.  However, SGR is responsible under the General Guarantee regardless of whether it received the amounts paid by the buyers or not.

SGR stated that the maximum limit of the General Guarantee was 6.5 million euros and that it could not be liable for any amounts in excess of that limit.  The Supreme Court has already ruled that whether in the form of a Bank Guarantee or Certificate of Insurance there cannot be a limit imposed which is less than the total amount delivered by the buyers.

The appellant company also stated that there was an unfair delay in the claim made by the buyers, since they waited more than 9 years to file the Lawsuit and therefore interest should only be payable from the date of filing of the Lawsuit.  This Court has repeatedly ruled in accordance with Article 3 of LEY 57/1968 that interest shall accrue from the date the buyers paid to the developer’s bank account.

In light of the above, all the arguments of the appellant are dismissed.  According to Article 398.1 and Article 394 of the Civil Code the appellant should be ordered to pay the costs of this Appeal”

Possible Supreme Court Appeal

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

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

If a Cassation Appeal to the Supreme Court is filed by the Bank it will be necessary for us to file an Opposition to the Appeal on behalf of our client.

Like 1


briando55 said:
22 December 2016 @ 16:24

I may be a little confused but I thought the first instance court then led to a trial court. Then came the appeal.

Was this a different procedure for this case at all?

Keith110 said:
22 December 2016 @ 16:49

The case was won against BBVA & SGR in the First Instance Court earlier in 2016.

SGR then appealed to the Provincial Appeal Court.

The Provincial Appeal Court Magistrates dismissed the SGR Appeal and confirmed the First Instance Sentence.

SGR now has the right to file a Cassation Appeal to the Supreme Court.

briando55 said:
22 December 2016 @ 21:41

Sorry Keith but I did think it was Preliminary hearing followed by first instance court. Followed by trial. And the appeal came after the trial verdict.

Maybe I was mixed up?

Keith110 said:
22 December 2016 @ 22:22

Yes, there was a Preliminary Hearing before the Trial in the First Instance Court.

So the normal process is:

If client does not have all the required evidence there may first be a Court Procedure called Preliminary Diligences. This is where the plaintiff requests the Court to instruct the bank to provide evidences of payments, bank guarantees etc.

If and when client has all the required evidences then:

Filing of Lawsuit

Written defence from defendant

Preliminary Hearing in First Instance Court

Trial in First Instance Court

Sentence from First Instance Court

Appeal to Provincial Appeal Court

Opposition to Appeal

Sentence from Provincial Appeal Court

Cassation Appeal to Supreme Court

Decision from Supreme Court whether to admit the Cassation Appeal

If Cassation Appeal is not admitted then Provincial Appeal Court Sentence will be declared firm and final

If Cassation Appeal is admitted then Opposition to Cassation Appeal is filed

Sentence from Supreme Court

mariadecastro said:
23 December 2016 @ 08:20

Keith.... you are a star!

briando55 said:
23 December 2016 @ 17:09


Just wondering why you call my case

Filing in the courts

Preliminary hearing

Final hearing

With my case being the first instance trial in February, I am getting really down about how long the whole thing is going to take.

I suppose we should think about taking out a will which includes this case being passed to our immediate family, but I am scared about passing on more debt and misery.

Thanks for the update but its just misery after misery really

Keith110 said:
23 December 2016 @ 18:13

The Trial in the First Instance Court is sometimes referred to as a Final Hearing in the First Instance Court.

So if you have the Trial/Final Hearing in February then the Sentence from the First Instance Court should be issued a few weeks after the Trial.

Who is your case against?

briando55 said:
23 December 2016 @ 22:07

Keith it's against San Jose.

We have exchanged mails many times in the past.

Keith110 said:
23 December 2016 @ 22:22

OK. I can see that you name is Brian from your EOS user name, but I do not know your surname

briando55 said:
24 December 2016 @ 09:06


ads said:
21 January 2017 @ 17:57

You haven't identified in your list applying for preliminary enforcement for return of principal into the court, according to successful first instance ruling, in the interim period whilst waiting for a ruling from the appeal process?
Is this no longer relevant and are Banks now refusing to deposit the monies into the court until such time as a firm and final ruling is achieved which could be many years hence?
If this is the case is this deemed an abuse by the Banks and are they legally obliged to do so?
Is it now becoming increasingly difficult for clients to regain monies at preliminary enforcement stage, which only accentuates how clients are increasingly comprised by the excessive delays in the justice system?
Likewise, if the bank do not go to appeal following successful first instance ruling, are Banks legally obliged to deposit the monies to the court irrespective of any ongoing client appeal (where for instance an appeal for additional interest has become necessary)?

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