Enforcement proceedings and unfairness continued: AG Szpunar in Case C-421/14 (Banco Primus)
In yet another case following a preliminary reference from a Spanish court, Advocate-General Szpunar has delivered an opinion about the implications of Directive 93/13 for the ex officio assessment of unfair contract terms. The most important feature of this case is the fact that an ex officio assessment had already taken place at an earlier stage. The referring court has asked whether this limits its obligation to assess other potentially unfair terms which have not been part of the initial assessment. This case is of interest both from a procedural and a substantive perspective.
The consumer, Mr. Jesús Gutiérrez García, had started extraordinary opposition proceedings (incidente extraordinario de oposición) against Banco Primus SA in a final attempt to stop the mortgage enforcement proceedings initiated against him. These proceedings were “extraordinary” in that the normal opposition period of 10 days had lapsed, and even the expiry period of 1 month (on the basis of transitional law after the introduction of Ley 1/2013 in Spain, on which the Aziz judgment had a determining effect). In previous proceedings, the contractual default interest had already been assessed and diminished to zero, and the stay of the enforcement proceedings (predating Ley 1/2013) had been terminated. In the subsequent extraordinary opposition proceedings, the referring court noted that several other clauses in the mortgage agreement could be considered as unfair, but it was prevented from assessing these clauses because the proceedings were brought too late under the applicable transitional law.
The referring court asked various questions concerning the scope of the obligation to assess the unfairness of contract terms of its own motion, touching on the interpretation of Articles 3, 4, 6 and 7 of Directive 93/13 and the principles of equivalence and effectiveness (interestingly, there is no reference to Article 47 of the EU Charter of Fundamental Rights). In his opinion (paras. 28 ff.), AG Szpunar first comments that the Spanish government’s and Banco Primus’ arguments that Mr. Gutiérrez García’s claim is inadmissible do not preclude the admissibility of the request for a preliminary reference. Spzunar then refers to the BBVA case to conclude that the expiry period of 1 month is unlawful. He moves on to explain his view that the mere fact that an ex officio assessment has been carried out previously does not limit the referring court’s obligation to assess the unfairness of contract terms that have not been assessed yet. Szpunar does not address the (hypothetical) question what should happen if the terms at issue have already been assessed and the previous decision has acquired res judicata force.
In the second part of his opinion (paras. 52 ff.), AG Szpunar gives an overview of the EU case law on the assessment of the unfairness of contract terms. Spanish law allows for early termination / acceleration of the mortgage agreement insofar as a serious breach on the part of the consumer is foreseeable. According to Szpunar, this is not contrary to Directive 93/13 as such, as long as the national court’s assessment of the unfairness of a contractual clause providing for early termination is not anticipated, and as long as the national court can still declare the clause at issue to be not binding on the consumer. However, in the present case, the mortgage agreement offered Banco Primus the option of early termination in the event of a minor default on the part of Mr. Gutiérrez García. Although the bank did observe the national procedural requirements in practice, Szpunar puts forward that the court's assessment should not depend on whether an unfair term is actually applied or not. The clause may be unfair even if the bank acts within the limits indicated by the law, but the clause would open the possibility for going beyond that.