Judgment of the Court (Grand Chamber) of  25 October 2005  in Case C-350/03: Reference for a preliminary ruling from the Landgericht Bochum, Germany in Elisabeth Schulte, Wolfgang Schulte v Deutsche Bausparkasse Badenia AG (Consumer protection — Doorstep selling — Purchase of immovable property — Investment financed by a secured loan — Right of cancellation — Effects of cancellation)
Date: 2006-04-08
Institutions: Court of Justice
Subjects: commercial contract, consumer protection, interpretation of the law, investment transaction, loan, real property, redemption

C 86/2

EN

Official Journal of the European Union

8.4.2006

(Ingesa), formerly Instituto Nacional de la Salud (Insalud), inter-
ested parties: Air Liquide Medicinal SL, Sociedad Española de
Carburos Metálicos SA — the Court
(Third Chamber),
composed of A. Rosas (Rapporteur), President of the Chamber,
J. Malenovský, J.-P. Puissochet, S. von Bahr and U. Lõhmus,
Judges; C. Stix-Hackl, Advocate General; M. Ferreira, Principal
Administrator,
for the Registrar, gave a judgment on 27
October 2005, in which it ruled:

Article 49 EC precludes a contracting authority from providing, in the
tendering specifications for a public contract for health services of
home respiratory treatments and other assisted breathing techniques,
first,
for an admission condition which requires an undertaking
submitting a tender to have, at the time the tender is submitted, an
office open to the public in the capital of the province where the
service is to be supplied and, second, for evaluation criteria which
reward, by awarding extra points, the existence at the time the tender
is submitted of oxygen production, conditioning and bottling plants
situated within 1 000 kilometres of that province or offices open to
the public in other specified towns in that province, and which, in the
case of a tie between a number of tenders, favours the undertaking
in so far as
which was previously providing the service concerned,
those criteria are applied in a discriminatory manner, are not justified
by imperative requirements in the general interest, are not suitable for
securing the attainment of the objective which they pursue or go
beyond what is necessary to attain it, which is a matter for the
national court to determine.

(1) OJ C 184, 02.08.2003.

JUDGMENT OF THE COURT

(Third Chamber)

of 9 February 2006

in Case C-305/03 Commission of the European Commu-
nities v United Kingdom of Great Britain and Northern
Ireland (1)

(Failure of a Member State to fulfil obligations — Sixth
VAT Directive — Articles 2(1), 5(4)(c), 12(3), and 16(1) —
Transaction within the territory of the country — Sale by
auction of works of art imported under the arrangements for
temporary importation — Auctioneers' commission)

(2006/C 86/03)

(Language of the case: English)

In Case C-305/03 Commission of the European Communities
(represented by: R. Lyal, Agent) v United Kingdom of Great
Britain and Northern Ireland (represented by: C. Jackson and R.
Caudwell, Agents, and N. Paines QC) — action under Article

226 EC for failure to fulfil obligations, brought on 16 July
2003 — the Court (Third Chamber), composed of A. Rosas,
President of the Chamber,
J.-P. Puissochet, S. von Bahr, U.
J. Kokott,
Lõhmus (Rapporteur) and A. Ó Caoimh,
Advocate General; L. Hewlett, Principal Administrator, for the
Registrar, gave a judgment on 9 February 2006, in which it:

Judges;

1. Declares that, by applying a reduced rate of value added tax to the
commission received by auctioneers on sales by auction of works of
art, antiques and collectors' items imported under the arrangements
for temporary importation, the United Kingdom of Great Britain
and Northern Ireland has failed to fulfil its obligations under Arti-
cles 2(1), 5(4)(c), 12(3) and 16(1) of the Sixth Council Directive
77/388/EEC of 17 May 1977 on the harmonisation of the laws
of the Member States relating to turnover taxes — Common
system of value added tax: uniform basis of assessment, as
amended by Council Directive 1999/49/EC of 25 May 1999;

2. Orders

the United Kingdom of Great Britain and Northern

Ireland to pay the costs.

(1) OJ C 226, 20.09.2003.

JUDGMENT OF THE COURT

(Grand Chamber)

of 25 October 2005

in Case C-350/03: Reference for a preliminary ruling from
the Landgericht Bochum, Germany in Elisabeth Schulte,
Wolfgang Schulte v Deutsche Bausparkasse Badenia AG (1)

(Consumer protection — Doorstep selling — Purchase of
immovable property — Investment financed by a secured loan
— Right of cancellation — Effects of cancellation)

(2006/C 86/04)

(Language of the case: German)

In Case C-350/03: reference for a preliminary ruling under
Article 234 EC from the Landgericht Bochum,
(Germany),
made by decision of 29 July 2003, received at the Court on 8
in the proceedings between Elisabeth Schulte,
August 2003,
Wolfgang Schulte and Deutsche Bausparkasse Badenia AG —
the Court (Grand Chamber), composed of V. Skouris, President
of the Chamber, P. Jann and A. Rosas, Presidents of Chambers,
C. Gulmann (Rapporteur), R. Schintgen, N. Colneric, S. von
Bahr, R. Silva de Lapuerta and K. Lenaerts, Judges; P. Léger,
Advocate General; M.-F. Contet, Principal Administrator, for
the Registrar, gave a judgment on 25 October 2005, in which
it ruled:

8.4.2006

EN

Official Journal of the European Union

C 86/3

1. Article 3(2)(a) of Council Directive 85/577/EEC of 20 December
1985 to protect the consumer in respect of contracts negotiated
away from business premises must be interpreted as excluding
from the scope of the Directive contracts for the sale of immovable
property even where they are merely a component of an investment
scheme financed by a loan for which the negotiations prior to the
conclusion of the contract were held in a doorstep-selling situation,
both as regards the contract for the purchase of the immovable
property and the loan agreement serving solely to finance that
purchase.

JUDGMENT OF THE COURT

(Grand Chamber)

of 31 January 2006

in Case C-503/03 Commission of the European Commu-
nities v Kingdom of Spain (1)

2. Directive 85/577 does not preclude national rules which limit the
effect of cancellation of the loan agreement to the avoidance of
that agreement, even in the case of investment schemes in which
the loan would not have been granted at all without the acquisi-
tion of the immovable property.

(Freedom of movement for persons — Directive 64/221/EEC
— National of a third country who is the spouse of a
national of a Member State — Right of entry and residence
— Restriction imposed on grounds of public policy —
the
Schengen Information System — Alert
purposes of refusing entry)

issued for

3. Directive 85/577 does not preclude:

— a requirement that a consumer who has exercised his right to
cancel under the Directive must pay back the loan proceeds to
the lender, even though according to the scheme drawn up for
the investment the loan serves solely to finance the purchase of
the immovable property and is paid directly to the vendor
thereof;

— a requirement that the amount of the loan must be paid back

immediately;

— national legislation which provides for an obligation on the
consumer, in the event of cancellation of a secured credit agree-
ment, not only to repay the amounts received under the agree-
ment but also to pay to the lender interest at the market rate.

However, in a situation where, if the Bank had complied with
it obligation to inform the consumer of his right of cancella-
tion, the consumer would have been able to avoid exposure to
the risks inherent in investments such as those at issue in the
main proceedings, Article 4 of Directive 85/577 requires
Member States to ensure that their legislation protects consu-
mers who have been unable to avoid exposure to such risks, by
adopting suitable measures to allow them to avoid bearing the
consequences of the materialisation of those risks.

(1) OJ C 264, 01.11.2003.

(2006/C 86/05)

(Language of the case: Spanish)

In Case C-503/03 Commission of the European Communities
(represented by: C. O'Reilly and L. Escobar Guerrero, Agents) v
Kingdom of Spain (represented by: M. Muñoz Pérez, Agent) —
action under Article 226 EC for failure to fulfil obligations,
(Grand
brought on 27 November 2003 — the Court
Chamber),
Jann
(Rapporteur), C.W.A. Timmermans, A. Rosas, J. Malenovský,
Presidents of Chambers, S. von Bahr, J.N. Cunha Rodrigues, R.
Silva de Lapuerta, K. Lenaerts, E. Juhász, G. Arestis, A. Borg
Barthet and M. Ilešič, Judges; J. Kokott, Advocate General; R.
Grass, Registrar, gave a judgment on 31 January 2006,
in
which it:

composed of V. Skouris, President, P.

1. Declares that, by refusing entry into the territory of the States
party to the Agreement on the gradual abolition of checks at their
common borders, signed on 14 June 1985 at Schengen, to Mr
Farid, and by refusing to issue a visa for the purpose of entry into
that territory to Mr Farid and Mr Bouchair, nationals of a third
country who are the spouses of Member State nationals, on the
sole ground that they were persons for whom alerts were entered in
the Schengen Information System for the purposes of refusing
them entry, without first verifying whether the presence of those
persons constituted a genuine, present and sufficiently serious
threat affecting one of the fundamental
interests of society, the
Kingdom of Spain has failed to fulfil its obligations under Articles
1 to 3 of Council Directive 64/221/EEC of 25 February 1964
on the coordination of special measures concerning the movement
and residence of foreign nationals which are justified on grounds
of public policy, public security or public health;

2. Orders the Kingdom of Spain to pay the costs.

(1) OJ C 21, 24.01.2004.