PRESS / MEDIA RELEASE - FOR IMMEDIATE RELEASE
FINCA PARCS ACTION GROUP vs CAJA DE AHORROS DEL MEDITERRÁNEO (CAM BANK) & SPANISH DEVELOPER, CLEYTON GES SL
APPEAL SUBMITTED BY BANCO CAM
BANCO CAM (SabadellCAM) FILES AN APPEAL AGAINST THE FIRST INSTANCE COURT JUDGMENT WHICH SENTENCED IT TO REPAY 1.5 MILLION EUROS OF PURCHASERS DEPOSITS AT FINCA PARCS
FINCA PARCS ACTION GROUP – TIMELINE OF THE LAWSUIT
● No legally required Bank Guarantees for Off-Plan deposits totalling 1.5 million Euros
● Lawsuit against CAM Bank & developer Cleyton GES SL filed in February 2011
● First Instance Court Preliminary Hearing held on 12 January 2012
● Trial held on Monday 21 May 2012 & Tuesday 22 May 2012
● Judgment released in favour of Finca Parcs Action Group on Friday 8 June 2012
● CAM Bank and Cleyton GES SL sentenced to return deposits amounting to almost 1.5
million Euros to the buyers with the addition of legal interest and costs
● CAM Bank appeals the First Instance Court Judgment
MEMBERS OF THE FINCA PARCS ACTION GROUP OUTSIDE THE FIRST INSTANCE COURT AND CAM BANK IN HELLÍN –MAY 2012
CAM BANK APPEAL
CAM Bank, recently rebranded as SabadellCAM, has filed an appeal against the Judgment of the First Instance Court in Hellín which sentenced it along with the developer Cleyton GES SL to refund buyers deposits in the case of the Las Higuericas Finca Parcs development near Murcia, Spain.
In the First Instance Judgment CAM Bank was sentenced, jointly and severally, with Cleyton GES SL to refund almost 1.5 million Euros plus interest and costs relating to 55 sales contracts for 47 members of the Finca Parcs Action Group.
The deadline for the submission of an appeal and payment of the deposits to the Court was Tuesday 10 July 2012 and the CAM Bank Appeal was dated 9 July.
The developer, Cleyton GES SL, did not appeal the First Instance Court Judgment.
RESPONSE TO THE APPEAL
The Appeal filed by CAM Bank was admitted into the Court system on 13 July and the Finca Parcs Action Group now has 10 working days to file their opposition to the appeal.
Jaime de Castro, Lawyer for the Finca Parcs Action Group, expects a favourable decision from the Albacete Appeal Court considering “the strength of the First Instance Judgment against CAM Bank and the available Case Law relating to Banks liabilities and obligations according to Spanish Law, LEY 57/1968”
PAYMENT OF 1.5 MILLION EUROS
De Castro also announced that payment of 1,494,710 Euros had not been made to the Court by either defendant; therefore he has now “requested the provisional execution of the Judgment while the appeal process continues”.
As for the timescales for reaching a Judgment in the Appeal, De Castro said that the Albacete Appeal Court normally resolves these cases in a reasonable time, which can be between two months and one year depending on the characteristics of each case.
Throughout the trial in May, CAM Bank maintained it was not responsible for the situation and that all irregular actions and illegalities were committed only by the developer.
MISMANAGEMENT, NEGLIGENCE & MALPRACTICE
However, regarding the involvement of CAM Bank, which claimed it has no relationship with the buyers, the judgment of the First Instance Court states that:
“The truth is that CAM knew that the payments made by buyers into accounts at their branches were on account of real estate purchases and CAM showed absolute disregard to the obligations imposed on financial institutions by LEY 57/1968 and this behaviour can be described as banking malpractice. It is clear the off-plan deposits were used in a manner contrary to the requirements of Spanish Law, LEY 57/1968.
We must not forget that the obligation to deposit the amounts advanced to an account opened specifically for that purpose is that of the financial institution as not only does it receive the premium of the guarantees but also benefits by way of profit from the project”
SabadellCAM
CAM Bank was taken over by the Bank of Spain in July 2011 and then sold to Banco Sabadell for One Euro at the end of 2011. The report produced for the Bank of Spain by the FROB described the many irregularities committed by the former CAM managers, especially the reckless real estate lending and the granting of annuities and pensions to senior management.
In March 2011 CAM reported profits of 38.9 million Euros, however just 3 months later its accounts showed losses of 1,136 million Euros.
In 2011 the Bank of Spain described CAM as ‘Scandalous’ and called the Bank ‘The Worst of The Worst’.
The CAM senior managers to whom the Finca Parcs Action Group took their complaint in 2009 are currently appearing in the High Court accused of committing corporate crime, price manipulation, embezzlement, fraud and misappropriation.
Last week CAM Bank was liquidated after 137 years as a Savings Bank (Caja) and the CAM business is now incorporated under the Banco Sabadell brand as SabadellCAM.
APPEAL WAS EXPECTED
Keith Rule, coordinator of the Finca Parcs Action Group said:
“We expected an appeal from CAM and were therefore prepared to respond accordingly. We are in a good position with a high profile case and a very strong First Instance Judgment against both defendants.
Our fight is not yet over; this is just another hurdle that CAM is putting in our way on the long road to Justice. However, we remain positive and I believe we have one of the strongest cases of its type – that of buyers without Bank Guarantees.
The First Instance Judgment was a landmark ruling and therefore the result of the appeal will be eagerly awaited by many thousands of buyers of off-plan property in Spain.
It is clear from the First Instance Judgment that Banks do have liabilities and obligations according to Spanish Law, LEY 57/1968. This law was introduced in the public interest in 1968 specifically to protect purchasers’ deposits when purchasing off-plan properties in Spain. It was even strengthened by the Building Act of 1999 but has been largely ignored by the developers and Banks over the past decade.
If the Law had been adhered to and properly enforced during the real estate boom then the Banks would not have lent so recklessly to builders and developers as they would have been restricted by the liabilities imposed on them by LEY 57/1968.
Let’s hope that many other Lawyers now see that the Courts do recognise that in certain circumstances Banks do have liabilities and obligations according to LEY 57/1968”
BBC RADIO 4 INTERVIEW
Keith Rule, coordinator of the Finca Parcs Action Group was interviewed by Radio 4 on Wednesday 11 July. You can listen to that interview on the link below:
http://www.bbc.co.uk/programmes/p00vymv3
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"Playa de Barbate", Barbate, Cádiz, South of Spain, by woto at flickr.com