Opinion of the Advocate General — ECLI:EU:C:2023:22
Date: 2023-01-12
Language of the case: Slovak
Subject matter: Consumer protection;Approximation of laws;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Slovakia

Summary  C-598/21 –1 
Case C-598/21 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
28 September 2021 
Referring court:  
Krajský súd v Prešove (Slovakia) 
Date of the decision to refer:  
13 September 2021 
Applicants:  
SP 
CI 
Defendant:  
Všeobecná úverová banka, a.s. 
  
EN 
REQUEST FOR A PRELIMINARY RULING (SUMMARY) OF 13. 9. 2021 – CASE C-598/21 
 
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Subject matter of the main proceedings 
Consumer protection – Default on repayment – Accelerated repayment – 
Proportionality in relation to the amount of credit – Credit granted without an 
agreed purpose – Enforcement of a lien by way of a voluntary (private) auction of 
immovable property – Loss of right of ownership  
Subject matter and legal basis of the reference 
The questions referred for a preliminary ruling concern the compatibility with the 
Charter of Fundamental Rights, with Council Directive 93/13/EEC, Directive 
2005/29/EC of the European Parliament and of the Council, with Directive 
2008/48/EC of the European Parliament and of the Council and with the case-law 
of the Court of Justice of the European Union of enforcement of a lien on 
immovable property in the form of a voluntary auction, accelerated repayment of 
the credit, repeated conclusion of new loan agreements for repayment of the 
preceding loans and of the costs on the credit. 
Questions referred 
1. Does Article 47 of the Charter of Fundamental Rights of the European 
Union (‘the Charter’), in conjunction with Articles 7 and 38 thereof, Directive 
92/13/EEC of 5 April 1993 on unfair terms in consumer contracts (‘Directive 
93/13/EEC on unfair terms’), Directive 2005/29/EC of the European Parliament 
and of the Council concerning unfair business-to-consumer commercial practices 
in the internal market and amending Council Directive 84/450/EEC, Directives 
97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the 
Council and Regulation (EC) No 2006/2004 of the European Parliament and of 
the Council (‘Directive 2005/29/EC on unfair commercial practices’) and the 
principle of effectiveness of EU law preclude legislation such as Paragraph 53(9) 
and Paragraph 565 of the Občiansky zákonník (Slovak Civil Code), pursuant to 
which in the event of accelerated repayment no account is taken of the 
proportionality of that transaction, in particular the gravity of the infringement by 
the consumer of his or her obligations in relation to the amount of the credit and 
its term? 
2. If the answer to Question 1 is in the negative (it is not precluded), the 
national court asks the following questions: 
2.(a) Does Article 47 the Charter, in conjunction with Articles 7 and 38 thereof, 
Directive 93/13/EEC on unfair terms, Directive 2005/29/EC on unfair commercial 
practices and the principle of effectiveness of EU law preclude case-law which 
does not preclude the enforcement as to its substance of a lien by means of a 
VŠEOBECNÁ ÚVEROVÁ BANKA, A.S. 
 
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private auction of immovable property, consisting of the home of consumers or of 
other persons and which simultaneously does not have regard to the gravity of the 
infringement by the consumers of their obligation in relation to the amount of the 
credit and its term, even where there is another way in which the credit provider's 
claim may be satisfied through judicial enforcement, in the context of which the 
sale of the home over which the lien has been granted does not take precedence ? 
2.(b) Is Article 3(1) of Directive 2005/29/EC on unfair commercial practices to be 
interpreted as meaning that the protection of consumers against unfair commercial 
practices in the granting of credit to consumers extends to all forms of satisfaction 
of the credit provider’s claim, including the agreement on a new loan granted for 
repayment of the obligations arising from an earlier loan? 
2.(c)  Is Directive 2005/29/EC on unfair commercial practices to be interpreted 
as meaning that the conduct of a credit provider who repeatedly grants credit to a 
consumer who is incapable of repaying the credit such that the result is a chain of 
credit, which the supplier does not in reality pay to the consumer but itself 
receives for the repayment of the previous loans and the total costs on the credit, is 
also regarded as an unfair commercial practice? 
2.(d) Must Article 2(2)(a) of Directive 2008/48/EC of the European Parliament 
and of the Council on credit agreements for consumers and repealing Council 
Directive 87/102/EEC (‘Directive 2008/48/EEC on consumer credit’), read in 
conjunction with recital 10 thereof, be interpreted as not excluding the application 
of that directive even in the case of loan having all the characteristics of consumer 
credit, where the purpose of the loan has not been agreed upon, the entirety of 
which loan, with the exception of an insignificant part thereof, the credit provider 
used to ensure payment of previous consumer loans and as security for which a 
lien over immovable property was agreed upon ? 
2.(e) Is the judgment of the Court of Justice of the European Union in Case 
C-377/14 of 21 April 2016, Radlinger and Radlingerová, ECLI:EU:C:2016:283 to 
be interpreted as meaning that it also applies to a loan agreement granted to a 
consumer where, under that agreement, part of the credit granted was designated 
for the repayment of the credit provider’s costs? 
Provisions of EU law and the case-law of the Court of Justice relied on 
EU Charter: Articles 7, 38 and 47 
Council Directive 93/13/EEC on unfair terms in consumer contracts: twelfth to 
fourteenth recitals thereof, sixteenth, twentieth, twenty-first and twenty-fourth 
recitals thereof; Articles 1 and 3, 4(1), 6(1), 7 and 8. 
Directive 2008/48/EC of the European Parliament and of the Council on consumer 
credit: recital 10 thereof, Articles 1, 2(2)(a), 3(g),(h) and (l) and Article 23. 
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Directive 2005/29/EC of the European Parliament and of the Council on unfair 
commercial practices: Articles 2(c) to (e) and (k), Articles 3, 5, 6, 7, 11 and 13. 
Judgment of the Court of Justice of 21 April 2016, C-377/14, 
ECLI:EU:C:2016:283, paragraph 3 in particular; 
Relevant provisions of national law 
Občiansky zákonník (the Civil Code) 
Paragraph 53 unfair terms in consumer contracts. 
Paragraph 151h(6), Paragraph 151j(1) and Paragraph 151m govern certain 
conditions for the enforcement of a lien. 
Paragraph 565 provides for payment of the entire claim for failure to comply with 
any monthly instalment. 
Zákon č. 129/2010 o spotrebiteľských úveroch a o iných úveroch a pôžičkách 
pre spotrebiteľov a o zmene a doplnení niektorých zákonov (Law 
No 129/2010 on consumer credit and other forms of credit and loans for 
consumers, amending and supplementing certain other laws) 
Zákon č. 258/2001 Z.z. o spotrebiteľských úveroch (Law No 258/2001 on 
consumer credit) (First Law on consumer credit) 
Paragraph 4(2) governs the specific terms of the consumer credit agreement. 
The last sentence of Paragraph 4(3) provides for a penalty for failure to mention 
specific terms of the consumer credit agreement. 
Zákon 527/2002 Z.z. o dobrovoľných dražbách (Law No 527/2002 on 
Voluntary Auctions) 
The first sentence of Paragraph 6(1) defines the auctioneer. 
Zákon 160/2015 Z.z. Civilný sporový poriadok (Law 160/2015 on the Code of 
Civil Procedure) 
Paragraph 325(1)(2)(d) – regulation of interim measures 
Zákon 233/1995 Z.z. Exekučný poriadok (Law 233/1995 on the Enforcement 
Code) 
Article 61g – request by the person liable to pay in instalments. Paragraph 63 –
means of execution of enforcement. 
VŠEOBECNÁ ÚVEROVÁ BANKA, A.S. 
 
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Outline of the facts and the main proceedings  
1 The defendant, the Všeobecná úverová banka, a.s.. (‘VUB Bank’) and the 
company Consumer Finance Holding a.s. (‘CFH’) were economically linked in 
the past. CFH managed loans for VUB Bank. Both VUB Bank and CFH had, in 
the past, granted consumer credit to the applicants. As far back as 2004, Ms SP 
and Mr CI (‘the applicants’) had subscribed to consumer credit with CFH. 
Subsequently, other consumer credit was taken out. The applicants were not able 
to repay the loans and VUB Bank therefore granted them new loans, not paying 
them to the applicants but using them directly for the repayment of the claims 
arising from the earlier consumer credit. VUB Bank unilaterally fixed the amount 
of the debts.  
2 Whereas, in 2004, the applicants took out consumer credit, still in the former 
currency, of 18000 Slovak kronor (EUR 597.49), the most recent credit granted to 
them by VUB Bank was by an agreement dated 9 February 2012, entitled ‘Hypo 
Pôžička’, and amounted to EUR 30 221.50 for the period up to 2032 (‘the loan at 
issue’). 
3 VUB Bank used almost the whole of the loan at issue to repay the previous 
consumer loans granted since 2004, that is to say, both VUB Bank’s consumer 
loans and those granted by CFH. VUB Bank used a part of the loan at issue for 
CFH ‘to pay the costs connected with providing the loan at issue'. The purpose of 
the loan at issue is not set out in the loan agreement. VUB Bank submits that the 
loan at issue does not enjoy the protection provided for by the rules on consumer 
credit. 
4 Even in respect of the period prior to 2012, VUB Bank granted loans to the 
applicants which were used for the payment of earlier debts. For example, by a 
consumer credit agreement of 23 November 2009, VUB Bank granted the 
applicants a loan of EUR 25 156.98 in respect of interest and charges of 
EUR 24 593.60, and that loan is also mentioned in the agreement for the loan at 
issue. There are doubts as to the legitimacy of interest charged, inter alia, for 
failure to fulfil the terms of an agreement under Law No 258/2001 (First Law on 
Consumer Credit).  
5 The special feature of the loan at issue by VUB Bank is that it is secured by a lien 
on immovable property – a detached house in which the applicants and other 
persons have their home. Following the grant of the loan at issue (on 9 February 
2012), the applicants defaulted on the payment of instalments amounting to 
EUR 1 106.50. VUB Bank, on the ground of non-repayment, announced the 
repayment date of the loan of its entirety (13 January 2013). The contractual terms 
of the loan at issue provided for the accelerated repayment of the loan. That 
agreed term was set out in Article VI., points 42 and 42.1 [of the loan agreement]. 
The law provides for a single condition for announcement of accelerated 
repayment, namely there is a default on repayment of three months of instalments, 
and then provides for an additional period of 15 days notice. Subsequently, on 
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12 April 2013, VUB Bank served notice of enforcement of the lien in the form of 
a voluntary auction for the sale of the applicants’ house, the value of which is at 
least 30 times higher than the sum for which the bank had activated the 
accelerated repayment of the loan and the subsequent sale of the house. 
6 The applicants brought an action before the Okresný súd Prešov (District Court, 
Prešov, Slovak Republic) for an injunction prohibiting enforcement of the lien by 
way of voluntary auction. The applicants allege that the Bank, inter alia, infringed 
their rights guaranteed by EU law when the credit agreements were concluded. By 
a first judgment, the Okresný súd (District Court, Prešov) dismissed the action. 
According to the Okresný súd (District Court, Prešov), in essence, there were no 
obstacles to the sale of the applicants’ house in the context of an extra-judicial 
procedure. 
7 On appeal by the applicants, the Krajský súd v Prešove (Regional Court, Prešov, 
Slovak Republic) set aside the judgment and found that the ground of lack of 
proportionality precluded the voluntary auction of the applicants’ house. 
According to the Krajský súd (Regional Court, Prešov), the sale of the applicants’ 
house is disproportionate, since there is another means of enforcing the lien, in the 
context of [judicial] enforcement proceedings in which VUB Bank’s claim may be 
satisfied and the applicants do not lose ownership of the house. The Krajský súd 
(Regional Court, Prešov) took account of the infringement of consumer law. 
8 In a second judgment, the Okresný súd (District Court, Prešov) again dismissed 
the action. It referred to the judgment of the Court of Justice of the European 
Union in Case C-34/13, according to which even unfair contract terms do not 
preclude the applicants’ home from being sold in the context of an extrajudicial 
lien enforcement process. The Okresný súd (District Court, Prešov) gave 
precedence to the decision of the Najvyšší súd Slovenskej republiky (Supreme 
Court of the Slovak Republic) in another case, in which the Najvyšší súd 
(Supreme Court) did not accept ex ante consumer protection by refraining from 
the extra-judicial sale of consumers’ homes by voluntary auction. 
9 The applicants brought an appeal seeking an injunction against enforcement of the 
lien by voluntary auction and stress, inter alia, infringement of their consumer 
rights and infringement of their right to accommodation in the event of the sale of 
their house. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
10 There is no explicit requirement under Slovak law, in connection with the 
enforcement of a lien, to have regard also to the circumstances which Court of 
Justice stated to be significant in the judgment in Case C-415/11 Mohamed Aziz, 
paragraph 73: ‘In particular, with regard, first, to the term concerning 
acceleration, in long-term contracts, on account of events of default occurring 
within a limited specific period, it is for the referring court to assess in particular, 
as stated by the Advocate General in points 77 and 78 of her Opinion, whether the 
VŠEOBECNÁ ÚVEROVÁ BANKA, A.S. 
 
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right of the seller or supplier to call in the totality of the loan is conditional upon 
the non-compliance by the consumer with an obligation which is of essential 
importance in the context of the contractual relationship in question, whether that 
right is provided for in cases in which such non-compliance is sufficiently serious 
in the light of the term and amount of the loan, whether that right derogates from 
the relevant applicable rules and whether national law provides for adequate and 
effective means enabling the consumer subject to such a term to remedy the effects 
of the loan being called in.’ 
11 The referring court considers that the institute of sale by voluntary (private) 
auction is relevant, including in cases concerning consumer rights. The issue is 
that of the proportionality of voluntary auctions, which is not settled by the case-
law. Were the principle of proportionality not to be observed, the voluntary sale 
by auction of the consumer’s immovable property, including his home, would be 
tolerated in the event of any breach, even minor, of the consumer’s obligation. 
12 It is indisputable that consumer protection is not absolute. Despite [the fact that 
these may constitute] unfair contract terms (C-34/13), consumers’ homes may be 
sold even in the absence of legal proceedings. 
13 The Slovak Republic has two methods of enforcement of a lien. The first is the 
sale of the pledged property by means of a voluntary auction. That sale is carried 
out by a private person, a trader. The creditor unilaterally determines the amount 
of the claim. Another trader – the auctioneer – normally sells the consumers’ 
home without any legal proceedings and without any objective assessment of the 
amount of the claim and of the proportionality of the sale by auction of the 
consumer’s home. Despite the consumers’ opposition, the law describes that 
auction as ‘voluntary’. 
14 The second means allowed for enforcement of a lien is the court enforcement 
procedure under Law 233/1995 on the Enforcement Code. That procedure is 
preceded by the judicial review of the terms of the agreement, in which the court 
may authorise repayment in instalments and the court must therefore raise of its 
own motion the protection of the consumer under all the Directives hitherto 
mentioned. The creditor may give the subsequent court judgment to a bailiff, who 
may also authorise repayment in instalments, who may seize the consumer's 
movable assets, seize his or her money in bank accounts and other claims, he may 
order sums to be withheld from the consumer’s wages and may also order the sale 
of the immovable property in which the consumer has his or her home. 
15 Even prima facie there is a considerable difference between those methods of 
enforcement. In the context of both operations the consumer’s home may be sold, 
but, in the context of court enforcement proceedings the consumer may be 
permitted to pay the debt in instalments and penalties may be added for delay. In 
the case of long-term loans in particular, it is thus possible to generate the level of 
the initial credit instalments until the end of the credit period. Thus, the creditor 
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may have his or her debt satisfied by the same point as that agreed with the 
consumer and the consumer may retain his or her home. 
16 The process of sale by voluntary auction does not offer such guarantees. Nor do 
court proceedings on unfair contract terms stop the process of sale by voluntary 
auction. If the sale by auction proceeds, the consumer loses ownership of his or 
her home and must vacate it without delay. Ex post (post-auction) proceedings 
seeking that the auction be found invalid, after the loss of rights of ownership, are 
particularly emotional for consumers. 
17 Protection against disproportionate interference with consumers’ rights, including 
their homes, is however particularly important ex ante before the auction is held 
and, since substantive law does not provide for any other possibility of ex ante 
protection, only an action for an injunction against enforcement of the lien 
during a voluntary auction process is conceivable. The order for payment, first, 
does not have the force of res judicata and, secondly, allows the creditor another 
means to enforce the lien by auction in enforcement proceedings. 
18 Creditors refer to the speed at which an item is sold in the voluntary auction 
process, but the spirit and purpose of a credit agreement are not trade in 
immovable property, but the grant of a loan to consumers without unfair contract 
terms and without unfair commercial practices in order to ensure a better quality 
of life for the consumer. 
19 Slovak legislation makes it possible to declare accelerated repayment without 
examining whether the consumer has failed to fulfil a obligation which is of 
essential importance, whether such a breach is sufficiently serious in the light 
of the term and the amount of the loan and whether national law provides for 
adequate and effective means enabling the consumer to remedy the effects of 
the loan being called in. 
20 The referring court considers that, if the law required, for the purposes of 
accelerated repayment, circumstances such as those referred to by the Court of 
Justice in paragraph 73 of the judgment in Aziz, C-415/11, the creditor could thus 
apply penalties, he or she could also claim and enforce lower repayment 
instalments, but he or she definitely would not be able, for a small breach of 
payment obligations, to commence the sale of the applicants’ house.  
21 More proportionate rules would also allow for the possibility of asserting rights 
and of ex officio review of unfair contract terms and unfair commercial practices. 
However, according to the decision-making practice referred to above, the sale of 
a house in the form of a voluntary auction cannot be stopped by an injunction 
brought against that auction. 
22 The referring court states that the loan at issue and earlier consumer credit were 
used to repay earlier loans. It is clear that the applicants were repeatedly granted 
consumer credit even though they did not have sufficient income.  
VŠEOBECNÁ ÚVEROVÁ BANKA, A.S. 
 
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23 The national court does not see a reason for the exclusion of circumstances such 
as the repayment of the consumer credit in the present case from the sphere of 
practice falling within the scope of Directive 2005/29. It is furthermore of the 
opinion that such unfair consumer practices should not be exempt from review by 
a court under Directive 2005/29. The opposite scenario would lead to an 
inconsistency of logic, since the period during which unfair practices fall to be 
assessed in commercial transactions for consumer credit would expire before the 
actual repayment of the consumer credit. The referring court notes that Article 3 
of Directive 2005/29/EC provides for protection not only before and during a 
commercial transaction, but also after the transaction. If the repayment of 
consumer credit does not fall within the period ‘during the commercial 
transaction’, then it should fall within the period ‘after the completion of the 
commercial transaction’. That court adds that although potentially unfair 
commercial practices do not directly affect the nullity of a legal act, they affect the 
assessment of the unfairness of contractual terms as one of the circumstances 
within the meaning of Article 4(1) of Directive 93/13. 
24 According to the referring court, it should not be the purpose of consumer credit 
that the credit is repeatedly not paid out to the consumers but retained by the 
creditor to repay its own claims on previous loans. Such grant of credit is 
meaningless in the light of the objective of Directive 2008/48/EC. 
25 The referring court notes that the agreement for the credit at issue did not define 
the purpose of the credit and that it contains the terms of a consumer credit 
agreement. The single circumstance that is supposed to exempt the loan at issue 
from the scope of that directive is the security over the immovable property. 
26 The loan at issue is not a mortgage and nor is it a credit which would be followed 
by investments in real estate or housing. The purpose of the security on the 
property is to repay the previous consumer credits. 
27 The national court sees no practical difference in terms of economic meaning 
between the loan at issue and the consumer credit agreements which preceded the 
loan at issue. If the loan at issue is to be used to repay the earlier consumer credit, 
there is a very close connection in terms of the purpose of the conclusion of the 
agreements between the loan at issue and the earlier consumer credit for the 
repayment of which the loan at issue was agreed. 
28 As regards the last question, as to whether the judgment of 21 April 2016 in Case 
C-377/14 Radlinger and Radlingerová must be interpreted as meaning that it also 
applies to an agreement providing a consumer with credit where, by such an 
agreement, part of the credit granted was intended to reimburse the credit 
provider’s costs, that will be one of the circumstances determining the amount of 
the debt in respect of which the process of selling the applicants’ home was 
commenced. VUB Bank regards the sums at issue as having genuinely been paid 
to the applicants and has included them in the amount of the loan at issue actually 
granted to the applicants.