Legal tip 1422. Case won in the Provincial Appeal Court against SGR for an off-plan property from Herrada del Tollo at Santa Ana del Monte
Wednesday, December 21, 2016 @ 6:59 PM
Our clients were extremely pleased to hear recently that we had won their LEY 57/1968 Bank Action case against SGR in the Provincial Appeal Court.
No Individual Guarantee
Our clients did not receive an individual Guarantee from the developer, Herrada del Tollo or from the Bank to which their off-plan deposit was paid, BBVA. SGR did grant a General Guarantee to the developer.
First Instance Court Sentence
In the First Instance Sentence BBVA was convicted according to its obligations under Article 1.2 of LEY 57/1968 for the off-plan deposit paid by our clients to the developer’s bank account at BBVA. SGR (an insurance company) was also convicted jointly and severally with BBVA due to the General Guarantee it issued to the developer.
The Appeal
SGR appealed using 4 main arguments which were all rejected by the Magistrates in the Provincial Appeal Court. The First Instance Sentence has been confirmed. Costs of the First Instance procedure were not imposed on any party; therefore each party will pay its own costs relating to the First Instance procedure. Costs of the Appeal are imposed on SGR.
As per the First Instance Sentence SGR & BBVA are jointly & severally liable to refund the total amount of our clients off-plan deposit plus legal interest from the date the amount was paid to the developer’s account.
Important Statements from the Appeal Court Magistrates
“The appellant argued in the Appeal that the buyers were never informed of or provided with, a copy of the General Guarantee at the time of signing the Purchase Contract with the developer and therefore they are not protected by the policy. However, as we have already pointed out in our Sentence of 19 May 2016 the conviction of SGR applies from the moment a line of Guarantees or General Guarantee is granted to the developer.
In short it is irrelevant whether or not the buyers were provided with a copy of the General Guarantee because the responsibility of SGR arises from the mere fact of having granted the Guarantee to the developer, who then failed to complete the housing.
The appellant also argues that it never received the amounts paid by the buyer as the funds were paid to the developers account at BBVA & Banco CAM. However, SGR is responsible under the General Guarantee regardless of whether it received the amounts paid by the buyers or not.
SGR stated that the maximum limit of the General Guarantee was 6.5 million euros and that it could not be liable for any amounts in excess of that limit. The Supreme Court has already ruled that whether in the form of a Bank Guarantee or Certificate of Insurance there cannot be a limit imposed which is less than the total amount delivered by the buyers.
The appellant company also stated that there was an unfair delay in the claim made by the buyers, since they waited more than 9 years to file the Lawsuit and therefore interest should only be payable from the date of filing of the Lawsuit. This Court has repeatedly ruled in accordance with Article 3 of LEY 57/1968 that interest shall accrue from the date the buyers paid to the developer’s bank account.
In light of the above, all the arguments of the appellant are dismissed. According to Article 398.1 and Article 394 of the Civil Code the appellant should be ordered to pay the costs of this Appeal”
Possible Supreme Court Appeal
SGR has 20 working days from the date of notification of the Sentence, which was 20 December 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.
Although Appeals must be submitted strictly within a 20 working day deadline, we do not normally receive notification of an Appeal or of a firm sentence from the Court until a few weeks after the deadline due to the workload of the Court.
If a Cassation Appeal to the Supreme Court is filed by the Bank it will be necessary for us to file an Opposition to the Appeal on behalf of our client.
