El blog de Maria

ChrisW said:
Wednesday, April 24, 2013 @ 2:44 PM

Fantastic News!! Do you have any more details, which development was this for?

Many thanks,
Chris

MAria said:
Wednesday, April 24, 2013 @ 4:38 PM

Leonardo da Vinci and BBVA

Keith said:
Wednesday, April 24, 2013 @ 5:42 PM

Developer was Leonardo Davinci Promociones Inmobiliarias S.L. Development was Cañadas del Parque.

This is a First Instance Sentence. It is an excellent decision that makes the Bank 'jointly and severally' liable with the developer to refund the buyers deposit plus legal interest.

It is not Case Law and can be appealed by the Bank and/or developer.

The Bank and/or developer has 20 working days to file an appeal.

More and more Courts are now producing decisions that uphold the inalienable rights granted to buyers by Article 7 of LEY 57/1968.

Kind regards

Keith

ChrisW said:
Wednesday, April 24, 2013 @ 5:50 PM

Thanks Keith, I would we can also bring some more good news for Granada soon!

Cheers,
Chris

Anne said:
Wednesday, April 24, 2013 @ 7:35 PM

Excellent news.
Does this now demonstrate the need to make developers and Banks jointly and severally liable Maria?
It's hard on those who have been legally advised to date to take action solely against developers, as presumably they cannot amend their lawsuits.
What would you advise in cases such as this? Do they have to abandon their lawsuit against the developer and resubmit a new lawsuit?

Keith said:
Wednesday, April 24, 2013 @ 9:49 PM

It is always best whenever possible to file a joint Lawsuit against the Developer and Bank and to go for a 'joint and several' judgment. It is important to obtain contract cancellation due to breaches by the developer and have the bank made jointly and severally liable for the refund of the deposit.

As you know during the period prior to 2011 there was not the concept or available case law to include the Bank in the Lawsuit. It would have been too risky, as a loss against the bank would have almost certainly resulted in the banks legal fees being imposed on the buyer.

So the previous advice to take action only against the developer was, at that time, the most prudent course of action. On most occasions it results in the cancellation of the purchase contract which is an important element of any future action against the bank. The contract cancellation part of the procedure does not then need to be repeated.

Any Lawsuits currently in procedure against only the developer should be concluded prior to any action commencing against the bank. It is not advisable to withdraw or abandon the Lawsuit against the developer and start again with a joint lawsuit, as almost certainly you will be made liable for all the developers costs with regards to the withdrawn action.

Anne said:
Wednesday, April 24, 2013 @ 11:18 PM

Thanks for the clarification Keith.
Doesn't this only emphasize the importance of informed CONSISTENT judicial rulings for all those who have been denied their inalienable rights according to Ley 57/68?
I hope that judges take into account the whole costs, stress and extensive timeframes that innocent purchasers have been exposed to, when making their final judgements.
Will costs pertaining to the whole case (including procurator costs) be redeemable in cases where the purchaser has had to change lawyers in order to further pursue a claim against the Bank?

Keith said:
Thursday, April 25, 2013 @ 11:42 AM

Consistent judicial rulings. We can but hope!

I don't think that Judges take into account stress and other such factors. They study the facts and the evidence in each case and then issue a ruling based on their interpretation/understanding/opinion of those facts together with available case law on the subject. It is not mathematics.

Each case is unique in its own way. Cases are heard in various Courts around Spain. Many different Judges and Magistrates issue rulings on the subject of Bank Guarantees. 100% consistency is difficult but rulings against the Banks are increasing.

If the buyer has taken a case against the developer and won, with costs imposed on the developer, but for whatever reason it is impossible to force the developer to pay, then the costs of that particular case are not recoverable.

In any subsequent action against the Bank the legal costs (lawyer and procurator) of that particular Bank action will be claimed as part of the Lawsuit against the Bank. If the case is won and the Judge imposes the costs on the Bank then those costs of that case will be recovered from the Bank.

But the buyer cannot claim as part of the Bank Action the costs incurred in the first action against the developer.

Anne said:
Thursday, April 25, 2013 @ 2:00 PM

Thanks Keith.
Would all costs be redeemable if the case was brought jointly and severally against the developer and Bank? i.e. if the developer was unable to pay then the costs would fall on the Bank?
If so, this would appear to compromise (discriminate) those who through no fault of their own had to take action against a developer and Bank separately? Would you know if litigators have taken this into account in their legal arguments to date? Has this ever been legally challenged?

Keith said:
Thursday, April 25, 2013 @ 3:14 PM

In a joint Lawsuit, if the Bank & Developer were sentenced by the Judge as 'jointly and severally' liable and if costs were imposed on the defendants then yes........If the developer does not pay then the bank must pay all the costs.

As for compromising or discriminating against those who took action against a bank and developer separately........The whole situation is evolving and you can only take the action that was PRUDENT, given the judicial situation and Case Law available at the time.

It is true......due to the ever increasing Case Law against Banks, those who now in 2013 file a joint Lawsuit against Bank & Developer are at a distinct advantage to those who commenced legal action at an earlier time.

But that is life I suppose. With Finca Parcs we were pioneers in 2011 by filing a 'joint action' against Bank & Developer. We knew and understood the risks and as a large group were prepared for any eventuality.

Also what you must consider when you say 'through no fault of their own had to take action against a developer and bank separately'.................. There are two aspects here........one is the contract cancellation and the other is the refund of deposit. Contract cancellation is vitally important, not only for the fact that it makes any future case against the Bank clearer - but it also protects the buyer from the possibility of the developer forcing completion with payment of additional funds or by way of a mortgage, on what maybe an unfinished development.

So it is important to consider the wider picture. You can only take the course of action that is right at that time. Hindsight is a wonderful thing!

Anne said:
Thursday, April 25, 2013 @ 4:16 PM

I understand Keith but when you refer to "prudent and available case law at that time", if a case is still ongoing, and new case law has been established in the interim, (which presumably can be reviewed by judges within their "database"... unsure what this is called!), then why should costs be treated any differently in the two scenarios? It shouldn't come down to hindsight now, but rational and evolving judgements based on increasing case law to substantiate correct application of law 57/68.
Isn 't it worth litigators fighting for a consistent approach to costs in this regard?

Anne said:
Thursday, April 25, 2013 @ 4:27 PM

I understand Keith but when you refer to "prudent and available case law at that time", if a case is still ongoing, and new case law has been established in the interim, (which presumably can be reviewed by judges within their "database"... unsure what this is called!), then why should costs be treated any differently in the two scenarios? It shouldn't come down to hindsight now, but rational and evolving judgements based on increasing case law to substantiate correct application of law 57/68.
Isn 't it worth litigators fighting for a consistent approach to costs in this regard?

Keith said:
Thursday, April 25, 2013 @ 5:29 PM

When I say 'prudent' and 'available case law at the time' - I mean the decision as to whether at that time to file a Lawsuit against only the developer or jointly against Bank and Developer.

Yes, Judges and Magistrates can use up to date and all available case law for making their current decisions even though the case may have been originally started two or three years ago.

At the end of the day the final decision of who is guilty is down to a human beings interpretation of each case - one Judge in the First Instance Court or 3 magistrates in an Appeal Court.

Also, even if the decision is in favour of the buyer, it is not automatic that they will also be awarded interest and costs. This again is down to the particular Judge or Magistrate.

Sometimes interest may be awarded - but it could be at the legal rate or at 6% as per LEY 57/1968. Also it could be from the date the deposit was paid or it could be from the date the Lawsuit was filed or even just from the date of the decision until the date of payment. Or no interest could be awarded.

Costs may or may not be awarded in full to the buyer or the Judge could say that each party pay its own costs.........

It is all down to each particular Judge or Magistrate who must interpret the Law and apply it to each individual case.

That is why I say that Law is not Mathematics. There are so many variables.

Maria said:
Thursday, April 25, 2013 @ 5:34 PM

Anne:
There is no possibility of changing the type of action, once this is in Courts, basing the change on new case emerging. That would involve withdrawing and starting again, which would involve imposition of legal costs to claimant.

Keith said:
Thursday, April 25, 2013 @ 5:42 PM

Exactly María. Thanks for confirming what I said earlier in this thread of replies:

Any Lawsuits currently in procedure against only the developer should be concluded prior to any action commencing against the bank. It is not advisable to withdraw or abandon the Lawsuit against the developer and start again with a joint lawsuit, as almost certainly you will be made liable for all the developers costs with regards to the withdrawn action.

Anne said:
Friday, April 26, 2013 @ 6:42 AM

Maria and Keith,
Thank you for clarifying the situation which I hope will be of benefit to those who have already submitted lawsuits against the developer.
Keith.
Are you advising that legal costs incurred to date to gain a successful cancellation of the contract (and previously awarded following a successful legal ruling against a developer appeal) cannot be recouped from the subsequent lawsuit against the Bank, where a developer for whatever reason has not been able to pay? And yet a lawsuit brought jointly and severally can qualify for return of costs if the developer cannot pay? Or have I misunderstood?

Anne said:
Friday, April 26, 2013 @ 7:11 AM

In case there is any misunderstanding, what I mean is do costs incurred to date to gain cancellation of the contract have to be written off under this scenario where the original case was won against the developer alone but the developer could not pay?
I appreciate that costs and return of deposited monies relating to the subsequent bank claim can be recouped if a successful ruling is achieved against the Bank, but I think it would help if the aspect of writing off costs associated with prior action against the developer could be clarified.
Many thanks for your continuing patience to explain the complexities!!

Anne said:
Friday, April 26, 2013 @ 10:47 AM

Why should the purchaser who from the outset has been denied a legal BG have to pay the costs for gaining cancellation of the contract under these circumstances (where an initial case was taken against the developer)? It doesn't make sense to me.... the Bank surely in these circumstances should be made liable for those costs shouldn't they?

Keith said:
Friday, April 26, 2013 @ 12:04 PM

In a successful action only against the developer which results in contract cancelation, legal costs, if imposed on the developer, would normally then be claimed as part of the overall refund from the developer. If this proves impossible due to the financial situation or otherwise of the developer then the buyer must pay their own fees to their own Lawyer.

These fees for the first action cannot then be reclaimed in a subsequent new action against the Bank.

Contract Cancellation is a vitally important part of the process and should not be taken lightly. So any fees that for whatever reason that cannot be recovered from the developer and have to be paid by the buyer for this part of the process should not be viewed as a waste of money.

Contract Cancellation strengthens any subsequent case against the Bank and just as importantly it protects the buyer from the possibility of being forced through legal action by the developer to complete the purchase of the property as per the contract, which would be at the original price.

Maria said:
Friday, April 26, 2013 @ 12:37 PM

Yes, that is why we always called this action:
The Restore Action
This is the revisioned article dated 2012.
http://www.eyeonspain.com/blogs/costaluz/7627/legal-tip-817-the-restore-action-a-revision.aspx

Anne said:
Friday, April 26, 2013 @ 1:47 PM

And yet Keith those costs are recoverable from the Bank if the case is brought as a joint case against developer and Bank. So the inference is that the Bank is ultimately made responsible for costs associated with the cancellation part of the lawsuit, if the developer cannot pay.
This is the aspect that I find inconsistent between the two scenarios, and why I wondered if the litigation team could use this legal argument to gain return of these associated costs.

Maria said:
Friday, April 26, 2013 @ 1:55 PM

Costs are iomposed jointly and severally against both entities

Keith said:
Friday, April 26, 2013 @ 2:23 PM

Yes, but only those costs relating to the action that involves the Bank.

The bank will not be liable for the legal fees of a case that did not involve them. If they were then that means they would be paying the buyers legal fees for 2 separate cases - one of which they were not involved in.

In a joint Lawsuit, the bank, if made liable for costs - (and that is not always the case) - would only be paying the buyers costs for one action, not two.

There is no doubt that in todays world, subject to it being possible, then a 'joint lawsuit' against Bank and Developer is the best option.

This option was not available to buyers taking action a few years ago. The concept of banks liabilities was not established and there was not the available case law.

Now it is different.

I accept that this may not seem 'fair' to those buyers who took legal action during the period prior to 2011, but the situation has evolved, for the better, over the past few years.

Many things change and evolve over time and people later on get the benefit.

For example: What about people who bought a house in Spain (or anywhere for that matter) in 2006 and paid 250,000€. Now the next door house is sold to somebody for 100,000€. It may not be fair but it is a fact of life.

Or somebody who in 2006 buys a Lexus IS 250 and is paying £100 per week in fuel. Then their friend this year buys the brand new IS 300h - same car but a brand new hybrid version. They only pay £40 per week for the same mileage....... Is that fair? Fact is that the hybrid version was not available in 2006 - things evolve - some people benefit more than others...........

Anyway, remember - CONTRACT CANCELLATION is NOT a waste of money or time. It was vitally important as a 'protective measure' at the time it was obtained and it is important for any future action against the Bank.

Also those now taking action against the Bank have a much better chance of success given the ever increasing amount of Case Law now available.

So a buyer now starting a bank action has their case supported by much more case law than those buyers who took bank actions in 2011 or 2012.........

So there is some benefit as a result of the evolution of the Bank Action for those who through no fault of their own or through no fault of their Lawyers have, as a result of the circumstances at the time, had to take two separate actions.

Anne said:
Sunday, April 28, 2013 @ 2:03 PM

Keith,
This begs the question, can you proceed for return of monies with a case against the Bank without first gaining cancellation of the contract? If not then why should costs relating to this aspect of the case not be subsequently recoverable from the Bank where the developer cannot pay (for whatever reason).
In the case I am referring to (i.e. early cases against the developer), where legal costs and deposited monies have been unable to be recouped from the developer that has no ability to pay, you appear to be suggesting that the costs for the required action against the developer to gain cancellation of the contract, which is necessary before proceeding with an additional Bank claim (the only way at that point to gain return of monies), should subsequently be written off by the innocent purchaser? This does not make any sense when it is stated that the Bank becomes jointly and severally liable should the developer not be able to pay. Surely in the subsequent lawsuit against the Bank there will be reference made to the successful appeal resolution against the developer, so that recovery of costs associated with cancellation of the contract, as per the ruling, is applied?