LEY 57/1968 Won Case in First Instance Court against CAJA RURAL CENTRAL for our client who purchased an off-plan property from the developer Promociones Eurohouse at Fortuna Golf Resort
We were pleased to inform our client recently that we had won their case against Caja Rural Central in the First Instance Court.
The client paid their off-plan deposit to the developer’s bank account at Caja Rural Central. The client did not receive an individual Guarantee for their off-plan deposit from the developer, Promociones Eurohouse or from Caja Rural Central.
The First Instance Court has now found the Bank guilty according to its legal obligations under Article 1.2 of LEY 57/1968. The bank must refund the amount paid to the developer’s account plus interest at the legal rate from the date the money was paid into the account. Legal costs were not imposed on the Bank due to the fact that the Judge is of the opinion there was conflicting jurisprudence regarding banks liabilities according to LEY 57/1968 at the time the Lawsuit was filed and the Bank submitted its written defence.
Re: YOUR CASE AGAINST CAJA RURAL CENTRAL
PO xxxx/2015
Please find attached Sentence No. xxx/2016 from the First Instance Court No.1 in Orihuela.
Your case against CAJA RURAL CENTRAL has been won.
The final paragraph of the First Instance Sentence delivered on 5 September 2016 and notified on 5 September 2016 states:
“Upholding the Lawsuit filed by xxxxx against CAJA RURAL CENTRAL with the following pronouncements:
1. I declare the legal responsibility of the entity CAJA RURAL CENTRAL pursuant to Article 1.2 of LEY 57/1968 and therefore condemn the financial entity to refund the sum of xx,xxx Euro, being the amount deposited in the account opened by the developer in the said bank.
2. The amount indicated will accrue interest at the legal rate from the date of payment, or in this case, the date the funds were deposited in the account opened by the developer in Caja Rural Central. The interest rate will be increased by 2 points from the date of this Sentence according to Article 576 of the Civil Procedure Act.
3. Without the express imposition of costs of the proceedings”
So CAJA RURAL CENTRAL is sentenced to refund the amount of xx,xxx€ plus interest at the legal rate from the date the funds were paid into the developer’s account opened at Caja Rural Central.
The Judge did not impose costs on the bank; therefore each party will pay its own costs.
Interesting statements from the Judge in the Sentence were:
“On 5 November 2015 the plaintiffs filed a Lawsuit against Caja Rural Central, requesting the conviction of the bank according to its responsibility under Article 1.2 of LEY 57/1968. The plaintiff requested the refund of the total amount paid to the developer under the Purchase Contract plus interest & costs, alternatively, the amount actually credited to the Caja Rural Central account opened by the developer. The total off-plan deposit was xx,xxx€ and the amount proved to be paid to the Caja Rural account was xx,xxx€.
Caja Rural Central opposed the Lawsuit and said that it had not guaranteed the funds and that the funds were paid to an ordinary current account opened by the developer, over which the bank had no control or monitoring. It also said that it was unable to monitor the funds because they were paid to the account by an intermediary agent, Ole Mediterraneo, on behalf of the buyer. The bank denies all liability because it states that it has no contractual link with the buyers.
The Preliminary Hearing was held on 2 March 2016 & the Trial was held on 10 May 2016.
Documentary evidence was provided to prove that xx,xxx€ was entered into the Caja Rural Central account opened by the developer. However, there is no evidence to confirm that the remaining amount of xx,xxx€ was paid into the developer’s account at Caja Rural Central. This leads us to analyze the alternative claim for xx,xxx€ being the amount actually paid to the developer’s account at Caja Rural Central.
The witness on behalf of the Caja Rural branch in which the account was held, gave evidence at the Trial. He stated that the account was an ordinary account opened by the developer and that it was not possible to control and monitor income in this type of account.
However the bank is to blame as it knew that this account was opened by a company dedicated to the construction and promotion of off-plan properties. One just has to look at the historical movements of the account to see that it was funded largely by amounts paid by buyers to purchase their off-plan homes
This does not prevent the account to be considered as a Special Account according to the regulatory framework.
Therefore, having opened an account for an off-plan property developer, the bank has a legal duty to ensure these funds were guaranteed by an Insurance Certificate or Bank Guarantee. Having failed in its legal duty, the bank then has a legal liability.
The bank should not allow the opening of accounts or the placing of deposits in those accounts, without first ensuring that the developer has assumed a legal obligation to guarantee the repayment of the funds.
The bank was fully aware of the business of the developer and the fact that the account was being used to receive funds from off-plan buyers. The fact that the account was opened as a normal current account, as alleged by the defendant bank, cannot prejudice the plaintiffs as the Supreme Court Sentence of 30 April 2015 confirms.
Banks that receive funds from off-plan buyers into developer’s accounts, although not called Special Accounts, must be responsible to the buyers for the total amounts paid to these accounts opened in its branches. This doctrine, if there is any doubt, has again been reiterated and confirmed by the Sentences of the Supreme Court dated 9 & 17 March 2016.
Therefore, the bank is responsible for all amounts proved to have been paid by the buyers to the developer’s account opened at Caja Rural Central.
As for costs, the plaintiff requested costs to be imposed on the bank. Even though the Lawsuit has been upheld substantially in its alternative claim for the amount deposited in the developer’s account at the defendant bank, there is more or less uniform criteria in the Courts of this city (Orihuela) and in the Provincial Appeal Court of Alicante, to understand that the question before the prosecution regarding the liability of the Bank according to Article 1.2 of LEY 57/1968, has resulted in contradictory jurisprudence comparable to the existence of doubt. So I plead the faculty contained in Article 394 of the Civil Procedure Act not to impose costs on the bank. The Supreme Court Sentence of 21 December 2015 which clarifies the responsibility of financial institutions had not been published at the time the Lawsuit was filed (5 November 2015) or when the bank filed its written defence to the Court”
CAJA RURAL CENTRAL has 20 working days from the date of notification of the Sentence, which was 5 September 2016, to comply with the Sentence or to file an Appeal to the Provincial Appeal Court of Alicante.
Although any appeal must be submitted strictly within the 20 working day deadline, we may not receive notification of an Appeal or of a firm sentence from the Court for a few weeks after the deadline due to the workload of the Court.
If an Appeal is filed by CAJA RURAL CENTRAL it will be necessary for us to file an Opposition to the Appeal on your behalf.
Denia, province of Alicante, Valencia, East of Spain