OPINION OF ADVOCATE GENERAL

TIZZANO

delivered on 25 September 2003





Cofinoga Merignac SA

v

Sylvain Sachithanathan





(Reference for a preliminary ruling from the Tribunal d'instance de Vienne (France))

(Consumer protection – Consumer credit – Renewal of an agreement – Variable interest rate – Annual percentage rate of charge – Failure to provide the consumer with information – Issues which may be raised of a court's own motion – Time-limit – Compatibility with Community law)

(a) a statement of the annual percentage rate of charge;

(b) a statement of the conditions under which the annual percentage rate of charge may be amended.

‘1. (a) The annual percentage rate of charge, which shall be that equivalent, on an annual basis, to the present value of all commitments (loans, repayments and charges), future or existing, agreed by the creditor and the borrower, shall be calculated in accordance with the mathematical formula set out in Annex II.

...’

‘...

(e) credit in the form of advances on a current account granted by a credit institution or financial institution other than on credit card accounts.

Nevertheless, the provisions of Article 6 shall apply to such credits;

...’

‘1. Notwithstanding the exclusion provided for in Article 2(1)(e), where there is an agreement between a credit institution or financial institution and a consumer for the granting of credit in the form of an advance on a current account, other than on credit card accounts, the consumer shall be informed at the time or before the agreement is concluded:

– of the credit limit, if any,

– of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended,

– of the procedure for terminating the agreement.

This information shall be confirmed in writing.

2. Furthermore, during the period of the agreement, the consumer shall be informed of any change in the annual rate of interest or in the relevant charges at the time it occurs. Such information may be given in a statement of account or in any other manner acceptable to Member States.

...’

‘1. On a proper construction of [Directives 87/102 and 90/88], must a national court uphold the interpretation of its law which requires institutions which lend consumer credit to inform a borrower-consumer in writing of the current annual percentage rate of charge before each extension of a renewable agreement for credit that is drawable in instalments and bears interest at a rate that is expressed to be variable?

2. On a proper construction of those directives, must the national court uphold the interpretation of its law which requires lending institutions to inform that consumer of the clause concerning the variation of that annual percentage rate of charge before each renewal of such an agreement?

3. On a proper construction of those directives, is the national court to uphold the interpretation of its law which permits it to allow, without any time-limit, a plea of illegality vitiating the formation or extension of a consumer credit agreement, such as that arising from failure to state the annual percentage rate of charge, raised by the consumer or by the court of its own motion, in a dispute arising from an action for payment brought by the lending institution?

4. If not, must the national court, on a proper construction of those directives, uphold the interpretation of its law which permits it to set aside a provision of its national law which prohibits the consumer or the court of its own motion from raising a plea of illegality vitiating the formation or extension of a consumer credit agreement after a time-limit which derogates from the general law, on the grounds that this would constitute an exceptional restriction on the right of action of the consumer and undermine the effectiveness of consumer protection?’

Views of the parties

Assessment

– Article 4 of the Directive

– Article 6 of the Directive

(a) to uphold the interpretation of its national law which authorises it to raise, without any time-limit, of its own motion or following a complaint from a consumer, possible irregularities of the kind considered in the first two questions that vitiate the conclusion or renewal of a consumer credit agreement such as that in the present case (third question), or

(b) to set aside a provision of its national law which sets a time-limit for such irregularities to be raised by the court, of its own motion or following a complaint from a consumer (fourth question).

– Original language: Italian.

– OJ 1987 L 42, p. 48, as amended by Council Directive 90/88/EEC of 22 February 1990 (OJ 1990 L 61, p. 14).

– Unofficial translation.

– Unofficial translation. It should be noted that pursuant to Article 16 (II-1) of Law 2001-1168 of 11 December 2001 (JORF 288 of 12 December 2001, p. 19703) the second sentence of Article L. 311-37 was amended as follows with effect for agreements concluded after enactment of that Law (see Article 16(II-3): ‘Actions for payment brought before that court as a result of the default of the borrower must be raised within two years of the event which gave rise to them and shall otherwise be time-barred’ (unofficial translation, italics added to indicate the insertions).

– The latter at least for the situation in which renewal cannot be regarded, according to the national law applicable, as the conclusion of a new agreement.

– Which ‘shall at least include the information provided for in the second indent of Article 6(1)’ (second subparagraph of Article 4(2)).

– Under Italian law, for example, the application of the principles laid down in Articles 1230 and 1231 of the Civil Code would lead to the conclusion, in such cases, that no new agreement comes into being and that the contractual relationship is not interrupted.

– Emphasis added.

– Emphasis added.

– Proposal for Directive of the European Parliament and of the Council on the harmonisation of the laws, regulations and administrative provisions of the Member States concerning credit for consumers, COM(2002) 443 final (OJ 2002 C 331 E, p. 200).

– Emphasis added.

– Emphasis added.

– An examination of the other language versions confirms and even reinforces the conclusion that can be drawn from the Italian version: the opening words of the second paragraph read, in the French version, ‘De plus, en cours de contrat, …’, which in English becomes ‘Furthermore, during the period of the agreement, …’, in Spanish ‘Además, mientras dure el contrato, …’, which corresponds in German to ‘Ferner (…) während der Laufzeit des Vertrages, …’. In all of these versions the conjunction used and the reference to the ‘contract’ or ‘agreement’ without further specification make it clear that the obligations laid down in the second paragraph relate precisely to the continued performance of the contract, the conclusion of which is governed by the first paragraph.

– For the record, this is the information laid down in Article 6(2).