A strong battle against Supreme Court´s recent interpretation of Law 57/68 we are in

A recent email to someone who contacted us after losing a case against the bank where her off plan payments were made.

Supreme Court  has recently set that teh control duties of the Bank do not exist if the payment ws not detailed by the client. This ws never made a condition for the client who trust on the existence of a protected account and is against the protective charcter of Law 57/68. As we say to the client, we are trying to battle this in favour of clients needing it.

Dear xxxxx:

It is totally natural and reasonable you are perplexed. Interpretation of Provision 1.2 of Law 57/68 ( liabilities of deposit banks) was totally rights till very recently, our Supreme Court made what we consider a very wrong and against Law interpretation of the same by stating that for a Bank to be made liable ( due to lack if active surveillance of funds deposited in their accounts), the buyer had to (1)pay himself, never through an intermediary-- requisite that has been later on suppressed by SC--- and (2) specify property in the off plan payment.

These requisites are against former CaseLaw interpretation on active surveillance of banks. We are still defending this cases. So far we have failed both at the Constitutional Court and European Court of Human Rights. Cases were not admitted into procedure by none of these Courts.

Many Appeal Courts ( lower than Supreme) defend that there is no no need for specification and we strongly defend that as according to Supreme Court, the surveillance duties starts as soon as a Bank realises the possibility of off plan funds being deposited in a developer´s bank account, that is , in our opinion, as soon as the Bank account is opened by the developer. There are also Money Laundering protection legal reasons which makes this control necessary since a developer opens an account.

The change of criteria by the Supreme Court is the reason we won cases in the past which are not being won anymore

Hope this explains

Kind regards

Maria

Basic questions.

When monies are deposited into a Spanish Banks safe keeping into a defined developer account, what law protects those monies from “ theft” by the Bank itself, I.e. enables the return of those monies upon request, when substantiated proof of deposit has been provided together with substantiated proof of developer breach of contract? Was this not law Ley 57/68?

What laws are in place to safeguard interim monies deposited into developer accounts in the event of developer insolvency? Was this not law Ley 57/68?

What legal guarantees are in place to ensure that in the event of developer insolvency deposited monies are rightly safeguarded? Was this not law Ley 57/68?

What legal mechanisms are in place to ensure that safeguarding existing guarantee laws of this nature are adhered to? Is this not the rule of law which provides the basics upon which laws in Spain are required to be enforced and adhered to?

What message does this relay to purchasers when Spanish Banks and legal mechanisms in place to protect are “allowed” to be overridden by the highest court in the land ? 

Is the Supreme Court in this instance in breach of the rule of law?

Is the Supreme Court now acting in a protectionist manner to safeguard the Banks at the expense of purchasers?

What message does this relay to the whole of the Spanish real estate industry if protective safeguarding laws are not enforced and adhered to? Does this undermine faith in this industry as a whole?

What message does this relay to the wider aspect of adhering to the rule of law?

Does this undermine faith in the rule of law and thereby undermine faith in  the Spanish justice system?

How can any of this be in the interests of Spain as a whole when it appears to be undermining trust in the very basics of justice and Banking compliance, the basis upon which the Spanish real estate industry is so reliant?

Stay strong Maria and once again thank you for all your educative postings.

Answer in bold green, Ads:

Basic questions.

When monies are deposited into a Spanish Banks safe keeping into a defined developer account, what law protects those monies from “ theft” by the Bank itself, I.e. enables the return of those monies upon request, when substantiated proof of deposit has been provided together with substantiated proof of developer breach of contract? Was this not law Ley 57/68? Yes, it is.

What laws are in place to safeguard interim monies deposited into developer accounts in the event of developer insolvency? Was this not law Ley 57/68? Yes, it is.

What legal guarantees are in place to ensure that in the event of developer insolvency deposited monies are rightly safeguarded? Was this not law Ley 57/68? Yes, it is.

What legal mechanisms are in place to ensure that safeguarding existing guarantee laws of this nature are adhered to? Judicial mechanisms. Is this not the rule of law which provides the basics upon which laws in Spain are required to be enforced and adhered to? Correct.

What message does this relay to purchasers when Spanish Banks and legal mechanisms in place to protect are “allowed” to be overridden by the highest court in the land ? ....

Is the Supreme Court in this instance in breach of the rule of law? It clearly is , in my opinion. In sensitive matters such as property, second residencies, retirement savings, consumers

Is the Supreme Court now acting in a protectionist manner to safeguard the Banks at the expense of purchasers? It is, in my opinion.

What message does this relay to the whole of the Spanish real estate industry if protective safeguarding laws are not enforced and adhered to? Does this undermine faith in this industry as a whole? It does, in my opinion.

What message does this relay to the wider aspect of adhering to the rule of law? Terrible, in my opinion.

Does this undermine faith in the rule of law and thereby undermine faith in  the Spanish justice system? It does, in my opinion. And in the European Court of Human Rights, as it has dismissed to give its voice on the matter, which we based on Right to Property, one of the rights of the Chart, saying that it is not under its scope of juriscition.

How can any of this be in the interests of Spain as a whole when it appears to be undermining trust in the very basics of justice and Banking compliance, the basis upon which the Spanish real estate industry is so reliant? Should be alarming as it is voiding all the active surveillance duties of banks in off plan projects. The very essence of Law 57/68.

Stay strong Maria and once again thank you for all your educative postings. Thanks. Not easy sometimes!

Thank you for your honest responses Maria.

LEGAL CERTAINTY....

According to this contribution on the rule of law by the European Commission no less

https://ec.europa.eu/info/sites/info/files/stakeholder_contribution_on_rule_of_law_-_european_central_bank.pdf

"Third, from a general economic perspective, legal certainty - one of the fundamental precepts contained within the rule of law, ensuring that people are able to organise their lives relying on the predictable legal consequences of their actions and forming reliable expectations on the basis of the law7 - is a prerequisite for economic stability. Where the integrity, stability and proper functioning of the safeguard mechanisms established at national level to secure effective protection for the rule of law falter, the economic stability and prosperity are also at risk. As the Commission notes, effective judicial systems and robust anti- corruption frameworks are essential for the economy. 

In this instance legal certainty appears to have been undermined in favour of the Banks, and in that process reliable citizens' expectations have been significantly compromised have they not?

So how can this be deemed " not under the scope of jurisdiction"? 

If legal certainty according to existing law has been proven to have been undermined by the Spanish Supreme Court in this instance, surely this is deemed part of the scope of the EU Commission's jurisdiction is it not?

Or are we now questioning the independence of the EU Commission with regard to ensuring the rule of law is adhered to in terms of ensuring legal certainty principles are fully adhered to? 
 

Isn't this threatening the basis upon which all citizens rely, I.e. the legal certainty that their matters with regard to property acquisition, contract law, ( whether this be single or second residencies) and monies deposited into Banks safekeeping in all good faith according to existing law in Spain are entitled to protection under the rule of law?

Are you fighting this alone Maria or are the various legal professional bodies coming together to fight for this basic principle of legal certainty within the rule of law in Spain, as one voice? Or are the Banks working on the principle that they can divide and rule the legal fraternity in Spain given this scenario?
 

It would be interesting to know now if this scenario re SC ruling against Ley 57/68 has since been challenged and brought once again to the attention of the Supreme Court for them to reconsider their ruling based upon new detailed legal reasoning, especially if appeal courts are continuing to successfully win appeals against the Banks.

How long can this cat and mouse scenario continue where clients are being exposed to supportive appeal court rulings but which appear out of line with SC ruling? Isn't this in itself exposing a major problem of inconsistency in interpretation of law in Spain? How many successful supportive appeal rulings is it going to take for the SC to take note of what is happening here?

How long is this going to be allowed to continue?

ARE THE BANKS NOW SEEKING SC DOCTRINE TO PUT THIS ONCE AND FOR ALL TO BED, or are they playing games and withdrawing their SC appeals at the last minute, thus scuppering any final SC doctrine from being achieved? ( Hopefully Maria can confirm if it takes 2 SC rulings on the same point of law before SC doctrine is achieved and only then do appeal judges have to adhere to those rulings? Is this correct Maria?)
 

 I wonder if Maria could advise exactly where this stands now for all those currently exposed to such inconsistencies? Are there any outstanding CLIENT appeals to the SC awaiting rulings in this regard, and if so when were they submitted?  How long have clients been left waiting for a final SC ruling?
 

I would also ask what EFFECTIVE deterrents are being employed by the SC to prevent such manipulation of the system of justice IF Banks are purposefully causing delays in this manner?

Thanks, Ads.... we keep fighting for this Case Law to be reverted!

Dear Maria,

With regard to your previous responses

“What legal mechanisms are in place to ensure that safeguarding existing guarantee laws of this nature are adhered to? Judicial mechanisms. Is this not the rule of law which provides the basics upon which laws in Spain are required to be enforced and adhered to? Correct.

What message does this relay to purchasers when Spanish Banks and legal mechanisms in place to protect are “allowed” to be overridden by the highest court in the land ? ....

Is the Supreme Court in this instance in breach of the rule of law? It clearly is , in my opinion. In sensitive matters such as property, second residencies, retirement savings, consumers

Is the Supreme Court now acting in a protectionist manner to safeguard the Banks at the expense of purchasers? It is, in my opinion.

What message does this relay to the whole of the Spanish real estate industry if protective safeguarding laws are not enforced and adhered to? Does this undermine faith in this industry as a whole? It does, in my opinion.

What message does this relay to the wider aspect of adhering to the rule of law? Terrible, in my opinion.

Please can you note and comment on the following observation with regard to protectionism of the Banks…..

Under rule of law, an independent judiciary answers to no political masters

It has been argued that judicial independence goes beyond notions of patriotism, as judges are duty-bound to be fair.

Presumably you are aware of the practice of withdrawing SC appeals by the banks at the last minute, so to your knowledge are these instances growing?

Is it the case that it is only the banks that are able to get an appeal submitted to the SC, so long as the appeal judges rulings are supportive of the client’s submissions? ( There will be nothing for clients lawyers to appeal against in supportive rulings ….since ironically only the Banks will need to appeal to the SC to have these supportive rulings overturned.)

In other words are the Banks by their actions of withdrawing their appeals  from the Supreme Court at the last minute in effect compromising the rule of law by their actions to manipulate delays and thereby restrict the opportunity to gain fair and reasonable reversion of this harmful case law which it would appear the appeal judges are in support of?

Isn’t this in effect not only compromising the principle of legal certainty for clients but also as you rightly identify is alarmingly voiding all the active surveillance duties of banks in off plan projects. The very essence of Law 57/68.
Isn't the consequence of this manipulative behaviour on the part of Banks in itself therefore directly linked to purposeful failure of timely enforcement mechanisms which should include return of awarded costs and interests.

Is there not a case therefore to have this reviewed by the EU Commission when this behaviour on the part of the Banks is in effect in contravention of the rule of law by their apparent purposeful interference with the enforcement processes?

Likewise with the principle of legal certainty?

Likewise with the principle of adhering to judicial independence and non protectionist behaviour even at the SC level?

Have these legal arguments relating to contravention of the rule of law in Spain under this circumstance been brought before the EU Commission ?

Dear Ads:

So far we have appealed before our Constitutional Court and the European Court of Human rights being the Appeals rejected by both Courts on the basis that the matter does not fall into their spheres of competency.

Yes, we understant that the ultra-formlalist  interpretation that the Supreme Court is doing to the guarantees expressed in article 1.2 of law 57/68 are against Law ( Consumer Law, Contract Law, Law 57/68, Constitutional rights involved...)

In regards to Banks taking advantagde of the Court system... yes, I also agree on your considerations. A reform of this aspect of the Cassation Appeal should be made.

The rule of law should fall into their sphere of competency so might this legal link be another way to challenge and gain support for your appeals Maria?

Just a thought?

Re reform of Cassation appeal would your Barristers have enough evidence to call for this? Or if not could good legal professionals work together to achieve this to the benefit of the justice system and thereby prevent the Banks from unfairly interfering with the enforcement processes in this way? Or is there little appetite by the legal professionals to gain reform in this regard?

Are the courts back working yet?

Have been waiting to hear about my costs which we were awarded by the SC in 2018. Nothing so far!

Joyjo

joyjo

Has your lawyer ( or Barrister) submitted the calculation for costs for approval by the judge and if so have you been advised when this was actually submitted? This is an additional procedure following a successful ruling and again relies upon the judge to review and approve the calculations so have you asked your lawyer on average how long this is taking?