WON CASE in FIRST INSTANCE COURT AGAINST PASTOR SELECTED VILLAS INTERNATIONAL WITH JOINT LIABILITY OF CAIXABANK
We were pleased to inform our clients today that we had won their case against Pastor Selected Villas International & Caixabank in the First Instance Court. The clients did not receive an individual Guarantee from the developer, Pastor Selected Villas International or from the Bank to which their off-plan deposit was paid, CAIXABANK (formerly LA CAIXA).
Re: YOUR CASE AGAINST PASTOR SELECTED VILLAS INTERNATIONAL S.L. & CAIXABANK S.A.
PO: xxx/2013
Please find attached the Sentence from the First Instance Court No.4 in Orihuela.
Your case against PASTOR SELECTED VILLAS INTERNATIONAL S.L. & CAIXABANK S.A. has been won.
The final paragraphs of the First Instance Sentence delivered on 27 October 2015 and notified on 2 November 2015 state:
“That estimating the Lawsuit filed on behalf of xxxxxx xxxxxx & xxxxxx xxxxxx against the entity PASTOR SELECTED VILLAS INTERNATIONAL S.L. & against the entity CAIXABANK S.A. with the following pronouncements:
1. Must declare the cancellation of the Purchase Contract signed between the parties on 5 May 2006, document 1 of the Lawsuit, I must condemn the entity PASTOR SELECTED VILLAS INTERNATIONAL S.L. to refund the sum of xxx,xxx euros.
2. I must declare the legal responsibility of the entity CAIXABANK S.A. as provided in Article 1.2 of LEY 57/1968, therefore, I condemn and order the defendant Bank to pay the sum of xxx,xxx euros.
3. The amounts indicated accrue legal interest from the date of delivery or, where applicable, from the date of the deposits in the current account of CAIXABANK S.A.
4. The costs of the Lawsuit directed against PASTOR SELECTED VILLAS INTERNATIONAL S.L. are imposed on that entity. Without express imposition of legal costs arising from the Lawsuit directed against CAIXABANK S.A”
So your purchase contract is cancelled and PASTOR SELECTED VILLAS INTERNATIONAL S.L. is sentenced to refund the amount of xxx,xxx euros plus legal interest from the date you paid the amounts until the date of full payment to the Court.
CAIXABANK S.A. is jointly & severally liable to refund the amount of xxx,xxx euros (this being the actual amount proved to be paid into the Caixabank account) plus legal interest from the date the amounts were paid into the Caixabank account until the date of full payment to the Court.
Legal costs for the Lawsuit against Pastor Selected Villas International S.L. are imposed on that entity.
There was no imposition of costs relating to the Lawsuit against Caixabank S.A. Therefore for this part of the procedure each party will bear its own legal costs and any common costs will be halved.
The Sentence explains the liability of CAIXABANK according to its obligations under LEY 57/1968 for the off-plan deposits paid to account opened by the developer, PASTOR SELECTED VILLAS INTERNATIONAL S.L. in CAIXABANK.
Particular points of interest stated by the Judge in the Sentence are:
“Such guiding principals of consumer protection offered by LEY 57/1968 and reaffirmed by the Supreme Court states that the interpretation of the terms of the law should not be formalistic or to the detriment of the consumer.
The respondent company alleges that they have no contractual relationship with the claimants as they have not issued an individual guarantee to them. Against this, it should be noted that we are not facing an endorsement or common strengthening of those provided for in Article 1822 of the Civil Code, but to an endorsement of a special nature regulated by the Law, LEY 57/1968 that favors an interpretation in favor of the consumer. Therefore, we should not forget that although insurance companies or financial institutions are not parties to contracts of sale, the truth is that they are not alien to their content or the performance of the obligations arising thereof, therefore they must ensure that they themselves meet the guarantees and obligations established by LEY 57/1968.
In this case we have off-plan amounts paid by the claimants and admitted to the developer’s account stipulated in the contract at Caixabank. The witness from the Bank said it was not a special account, but an ordinary current account and due to the ordinary nature of the account the bank did not carry out any checks on the movements or amounts credited to the account. Moreover, they argue that they have no obligation to maintain such control.
The truth is that the bank opened an account for the developer in which the amounts paid by the buyers (here plaintiffs) to acquire their homes was paid and the witness has not convincingly explained to the Court what became of the amounts paid into that account.
But the truth is that the promoter opened an account to receive the amounts advanced by the purchasers and there then emerged for the bank a legal duty to ensure that those amounts were guaranteed by a certificate of insurance or a bank guarantee. It is due to the bank having breached that duty that its legal liability is created.
However, in this case the responsibility of the Bank can only be extended to the amounts that were actually entered into the developers account and not the rest of amounts that were not paid into the account of this entity.
It should be noted that Article 1 of Law 57/1968 in its desire to protect purchasers of off-plan housing, also involves financial institutions in which the accounts are opened, establishing an obligation to them, which is none other than to demand "under its responsibility, the Guarantees referred to in the previous condition”. That is, to require, under its responsibility, that the developer has guaranteed the repayment of the amounts paid in advance (I understand that is the amounts paid to the accounts opened by the developer in this entity). This does not mean that it is the receiving bank that must issue the Guarantees, as the guarantor may be another entity. But the term under its responsibility, is interpreted in the sense of making it responsible for damages arising to buyers to whom the security has not been provided, since by this failure, the consumers could not obtain reimbursement of the amounts paid in advance in the event of breach of contract by the developer.
In other words, the bank should not allow the opening of special accounts and allowing deposits from buyers in such accounts, without first making sure that the promoter has assumed a legal obligation to ensure the return of the amounts paid on account, and if it fails in this legal duty, the Bank is liable for the damages that such a breach creates to the buyers who cannot obtain the repayment of their advance payments.
In this case it is clear that the bank was well aware of the business in which the developer was engaged and that the income to the account by the plaintiffs was for the purchase of an off-plan property, so we are declaring that we are facing special accounts, not by the title given by both parties, but due to the origin and the destination of the funds in the account. The fact that the account was titled as ordinary and not Special cannot be attributed to the plaintiffs. Therefore, the Bank is not unrelated to the content of the purchase contracts and, therefore, in compliance with the obligations arising thereof, it must ensure that these are met with the guarantees established by LEY 57/1968.
Finally in relation to the alleged time limitation to bring the action, I understand that the time limit under Article 1968 of the Civil Code does not apply as it is an assumption of liability derived from Article. 1.2 of LEY 57/1968, which results in the application of the general limitation period of Article 1964 of the Civil Code.
Regarding the payment of default interest it is appropriate to order the defendants to pay the legal interest on the amounts claimed and such interest shall be computed from date the buyers paid to the account of the developer”
The river Segura, acrossing Orihuela, Alicante, East of Spain