Juan Carlos Sánchez Morcillo and María del Carmen Abril García v Banco Bilbao Vizcaya Argentaria SA.
Date: 2014-07-17
11. According to Article 557 of the LEC, relating to the procedure for objecting to enforcement based on instruments that are neither judicial nor arbitral:
‘1. When enforcement is ordered on the basis of instruments referred to in Article 517(2)(4), (5), (6) and (7) and of other enforceable documents referred to in Article 517(2)(9), the party against whom enforcement is sought may lodge an objection, within the period and in the form provided for in the preceding article, only if he relies on one of the following grounds:
…
7° the instrument contains unfair terms.
2. If an objection referred to in the previous paragraph is made, the Judicial Officer shall suspend the enforcement by a measure of organisation of the procedure.’
22. In this regard, it should be observed, first, that according to the Court’s settled case-law, the system of protection introduced by the directive is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge (judgments in Barclays Bank , C‑280/13, EU:C:2014:279, paragraph 32, and Aziz , C‑415/11, EU:C:2013:164, paragraph 44).
23. As regards that weaker position, Article 6(1) of the directive provides that unfair terms are not binding on the consumer. That is a mandatory provision which aims to replace the formal balance which the contract establishes between the rights and obligations of the parties with an effective balance which re-establishes equality between them (judgment in Banco Español de Crédito , C‑618/10, EU:C:2012:349, paragraph 40 and case-law cited).
24. In that context, the Court has already stated on several occasions that the national court is required to assess of its own motion whether a contractual term falling within the scope of the directive is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier, where it has available to it the legal and factual elements necessary to that end ( Aziz , EU:C:2013:164, paragraph 46, and Barclays Bank , EU:C:2014:279, paragraph 34).
25. National enforcement proceedings, such as mortgage enforcement proceedings, are subject to the requirements arising out of this case-law of the Court which seeks to ensure the effective protection of consumers.
26. Thus, in connection with such proceedings, the Court has held that Directive 93/13 must be interpreted as precluding legislation of a Member State which does not allow the court before which an application for an order for payment has been brought to assess of its own motion, in limine litis or at any other stage during the proceedings, even though it already has the legal and factual elements necessary for that task available to it, whether a term concerning interest on late payments contained in a contract concluded between a seller or supplier and a consumer is unfair, in the case where that consumer has not lodged an objection (see Banco Español de Crédito , EU:C:2012:349, paragraph 57).
27. The Court has also decided that the directive must be interpreted as precluding the legislation of a Member State which, while not providing in mortgage enforcement proceedings for grounds of objection based on the unfairness of a contractual term on which the right to seek enforcement is based, does not permit the court before which declaratory proceedings have been brought, which does have jurisdiction to assess the unfairness of such a term, to grant interim relief, including, in particular, the staying of those enforcement proceedings, where the grant of such relief is necessary to guarantee the full effectiveness of its final decision (see Aziz , EU:C:2013:164, paragraph 64).
28. The Court’s case-law has also established that Directive 93/13 precludes national legislation which does not allow the court responsible for the enforcement, in mortgage enforcement proceedings, either to assess of its own motion or at the consumer’s request, the unfairness of a term contained in the contract which gives rise to the debt claimed and which constitutes the basis of the right to enforcement, or to grant interim relief, including, in particular, staying the mortgage enforcement proceedings, where such relief is necessary to ensure the full effectiveness of the final decision of the court hearing the declaratory proceedings before which the consumer argues that that term is unfair (order in Banco Popular Español and Banco de Valencia , C‑537/12 and C‑116/13, EU:C:2013:759, paragraph 60).
31. In this respect, it must be noted that, in the absence of harmonisation of national enforcement procedures, the detailed rules establishing the right of appeal against a decision ruling on the legality of a contractual clause, arising in the course of mortgage enforcement proceedings, are matters falling within the domestic legal order of each Member State, in accordance with the principle of the procedural autonomy of the Member States. Nonetheless, the Court has emphasised that those detailed rules must meet the conditions that they should be no less favourable than those governing similar domestic situations (principle of equivalence) and that they should not in practice render impossible or excessively difficult the exercise of rights conferred by the EU legal order (principle of effectiveness) (see, to that effect, judgments in Mostaza Claro , C‑168/05, EU:C:2006:675, paragraph 24; Asturcom Telecomunicaciones , C‑40/08, EU:C:2009:615, paragraph 38; Aziz , EU:C:2013:164, paragraph 50; and Barclays Bank , EU:C:2014:279, paragraph 37).
33. It is apparent, notably from the provisions of Article 695(1) and (4) of the LEC, that the Spanish procedural system does not provide that a consumer may bring an appeal against a decision dismissing his objection to the enforcement, not only when that objection is based on the unfairness, within the meaning of Article 6 of Directive 93/13, of a clause in the contract agreed between a seller or supplier and the consumer, but also when it is based on breach of a national rule of public policy, which it is, nevertheless, for the national court to ascertain (see Aziz , EU:C:2013:164, paragraph 52).
34. Second, as regards the principle of effectiveness, the Court has previously held that every case in which the question arises whether a national procedural provision makes the application of EU law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies. In that context, it is necessary to take into consideration, where relevant, the principles which lie at the basis of the national legal system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of the proceedings (see, to that effect, judgments in Asociación de Consumidores Independientes de Castilla y León , C‑413/12, EU:C:2013:800, paragraph 34, and Pohotovosť , C‑470/12, EU:C:2014:101, paragraph 51 and case-law cited).
35. Thus, the obligation for the Member States to ensure the effectiveness of the rights that the parties derive from Directive 93/13 against the use of unfair clauses implies a requirement of judicial protection, also guaranteed by Article 47 of the Charter, that is binding on the national court (see, to that effect, judgment in Banif Plus Bank , C‑472/11, EU:C:2013:88, paragraph 29). That protection must be assured both as regards the designation of courts having jurisdiction to hear and determine actions based on EU law and as regards the definition of detailed procedural rules relating to such actions (see, to that effect, the judgment in Alassini and Others , C‑317/08 to C‑320/08, EU:C:2010:146, paragraph 49).
36. In that connection, it should be observed that, according to EU law, the principle of effective judicial protection does not afford a right of access to a second level of jurisdiction but only to a court or tribunal (see, to that effect, judgment in Samba Diouf , C‑69/10, EU:C:2011:524, paragraph 69). Consequently, the fact that the only remedy available to the consumer, as a debtor against whom mortgage enforcement proceedings are brought, is to bring an action before a single jurisdictional level in order to protect the rights derived from Directive 93/13 is not, in itself, contrary to EU law.
42. Furthermore, it is apparent from the information provided to the Court that the Spanish procedural system in relation to mortgage enforcement is characterised by the fact that, once the procedure has been initiated, any other legal claim that the consumer might bring, including claims contesting the validity of the instrument enforced, enforceability, certainty, or extinction or the amount of the debt, is dealt with in separate proceedings and by a separate decision, without either one or the other having the effect of staying or terminating the pending enforcement proceedings, except in the residual circumstances in which a consumer has lodged a preliminary application for annulment of the mortgage before the marginal note regarding issue of the security certificate (see, to that effect, Aziz , EU:C:2013:164, paragraphs 55 to 59).
43. Having regard to those characteristics, if the consumer’s objection to the enforcement of the mortgage against his property is dismissed, the Spanish procedural system, taken as a whole and in the manner applicable in the main proceedings, exposes consumers, and possibly, as is the case in the main proceedings, their family, to the risk of losing their dwelling in an enforced sale, while the enforcing court may have, at most, delivered a rapid assessment of the validity of the contractual clauses upon which the seller or supplier bases his application. The protection that the consumer, as a mortgage debtor against whom enforcement proceedings are brought, might obtain by way of a separate judicial scrutiny undertaken in the context of substantive proceedings brought in parallel with the enforcement proceedings, cannot offset that risk because, even if the scrutiny revealed the existence of an unfair clause, the consumer would not be granted a remedy reflecting the damage he had suffered by restoring him to the situation he was in before the enforcement proceedings against the mortgaged property, but, at best, an award of compensation. The purely compensatory nature of the remedy that might be awarded to the consumer would confer on him only incomplete and insufficient protection. It would not constitute either adequate or effective means, within the meaning of Article 7(1) of Directive 93/13, of preventing the continued use of the clause, found to be unfair, in the instrument that contains a pledge by way of mortgage against a property on the basis of which enforcement proceedings were brought against that property (see, to that effect, Aziz , EU:C:2013:164, point 60).
44. In the second place, having regard once again to the role played by Article 695(4) of the LEC within the scheme of mortgage enforcement proceedings as a whole under Spanish law, it should be noted that that provision gives the seller or supplier, as a creditor seeking enforcement, the right to bring an appeal against a decision ordering a stay of enforcement or declaring an unfair clause inapplicable, but does not permit, by contrast, the consumer to exercise a right of appeal against a decision dismissing an objection to enforcement.
46. In those circumstances, it must be stated that the procedural system at issue in the main proceedings places at risk the attainment of the objective pursued by Directive 93/13. The imbalance between the procedural rights available to the consumer, on the one hand, and to the seller or supplier on the other hand, simply accentuates the imbalance existing between the parties to the agreement, already mentioned at paragraph 22 of this judgment, and which is also echoed in the context of an individual action involving a consumer and the seller or supplier who is his co-contractor (see, by way of analogy, Asociación de Consumidores Independientes de Castilla y León , EU:C:2013:800, paragraph 50).
47. Furthermore, such a procedural system proves to be contrary to the Court’s case-law according to which the specific characteristics of court proceedings, which take place under national law between sellers or suppliers and consumers, cannot constitute a factor liable to affect the legal protection from which consumers must benefit under the provisions of Directive 93/13 (see, to that effect, Aziz , EU:C:2013:164, paragraph 62).
48. It also follows that, in Spanish Law, if a consumer and a seller or supplier are parties to mortgage enforcement proceedings, the way in which the proceedings before the national court hearing an objection to the enforcement of the mortgage progress, under Article 695 of the LEC, is contrary to the principle of equality of arms or procedural equality. That principle is, however, an integral element of the principle of effective judicial protection of the rights that individuals derive from EU law, such as that guaranteed by Article 47 of the Charter (see, to that effect, judgments in Otis and Others , C‑199/11, EU:C:2012:684, paragraph 48, and Banif Plus Bank , EU:C:2013:88, paragraph 29).
49. It is settled case-law that the principle of equality of arms, together with, among others, the principle audi alteram partem , is no more than a corollary of the very concept of a fair hearing that implies an obligation to offer each party a reasonable opportunity of presenting its case in conditions that do not place it in a clearly less advantageous position compared with its opponent (see the judgment in Sweden v API and Commission , C‑514/07 P, C‑528/07 P and C‑532/07 P, EU:C:2010:541, paragraph 88).
50. In those circumstances, it must be held that a national procedure for mortgage enforcement, such as that at issue in the main proceedings, is liable to jeopardise the effectiveness of consumer protection intended by Directive 93/13, read in conjunction with Article 47 of the Charter, in that the procedural system reinforces the inequality of arms between sellers or suppliers, as creditors in mortgage enforcement proceedings, on the one hand, and consumers, as debtors subject to mortgage enforcement proceedings, on the other hand, in the exercise of legal claims based on the rights that the latter derive from Directive 93/13, all the more so because the detailed procedural rules giving effect to such claims are incomplete and inadequate for preventing the continued application of an unfair clause contained in the instrument establishing the mortgage on the basis of which the seller or supplier brings enforcement proceedings against the property pledged as security.