HAVET & VANHUFFEL – Association d’avocats
The Prešov Regional Court (Slovakia) heard a dispute in which a company, which was awarded a family home following an extrajudicial auction, is seeking to evict the building’s former owners.
The persons to be evicted are the beneficiaries of the mortgage on the house. The seizure and sale took place due to their failure to repay the loan.
They claim a violation of their consumer rights and refuse to vacate the premises.
The Prešov Regional Court refers the matter to the Court of Justice of the European Union and refers two questions for a preliminary ruling:
– Does such legal proceedings fall within the scope of the directive on unfair terms in consumer contracts?
– Does this directive preclude national legislation that allows extrajudicial enforcement of a mortgage security interest despite the existence of a request for suspension based on a possible unfair term in the loan agreement?
The Court answers both questions in the affirmative.
For the Court:
1. Article 6(1) and Article 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, read in the light of Articles 7 and 47 of the Charter of Fundamental Rights of the European Union, must be interpreted as meaning that their scope covers judicial proceedings in which, first, the company which was the successful bidder in an auction of immovable property constituting the family home of a consumer, sold in the context of extrajudicial enforcement of a mortgage granted over that property by that consumer for the benefit of a creditor acting in the course of trade, applies for the eviction of that consumer and, secondly, the consumer challenges, by means of a counterclaim, the lawfulness of the transfer of ownership of that property to that company making the successful bid, that transfer taking place despite court proceedings which were still pending at the time of that transfer and which sought suspension of the enforcement of that mortgage on the ground that there were unfair terms in the contract on which that enforcement was based, the company making the successful bid having been previously informed of those pending proceedings by that consumer. That applies in so far as, at the time of the sale concerned, there was corroborating evidence that the terms were potentially unfair and that the consumer had availed him or herself of the legal remedies that an average consumer could reasonably be expected to avail him or herself of, with a view to obtaining judicial review of those terms.
2. Article 6(1) and Article 7(1) of Directive 93/13, read in the light of Articles 7 and 47 of the Charter of Fundamental Rights, must be interpreted as precluding national legislation which allows extrajudicial enforcement of a mortgage, granted by a consumer for the benefit of a creditor acting in the course of trade, on immovable property constituting that consumer’s family home to continue despite the existence of a pending application before a court for an interim measure seeking suspension of that enforcement, and corroborating evidence as to the possible presence of a potentially unfair term in the contract on which that enforcement was based, and which does not moreover provide for any possibility of obtaining by judicial means the annulment of that enforcement on the ground that there are unfair terms in that contract.
To access The jusgment, follw the link : https://curia.europa.eu/juris/document/document.jsf?text=&docid=301563&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=4563105.