Case law

  • Case Details
    • National ID: 2. Kf.27.379/2003/3.
    • Member State: Hungary
    • Common Name:Holiday Club Hungary Kft, Proinvest 2001 Kft gg. Wirtschaftswettbewerbsamt (GVH)
    • Decision type: Other
    • Decision date: 01/12/2004
    • Court: Fővárosi Ítélőtábla (Appellate court)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Timeshare Directive, Article 5, 1. Timeshare Directive, Article 6 Timeshare Directive, Article 8
  • Headnote
    Under Government Decree 20/1999 on timeshare contracts, the supplier is not allowed to demand any form of payment – even payments held in trust – from the purchaser during the cooling-off period. The supplier must provide the purchaser with precise information about the contract’s contents. It is not permissible to restrict the right of withdrawal in any way.
  • Facts
    On the instructions of Proinvest 2001 Kft, Holiday Club Hungary Kft sold timeshare entitlements for the Petnehazy Club Hotel. In selling these entitlements, Holiday Club Hungary Kft made use of guidelines, instructions and printed material provided by Proinvest.
    The Hungarian Competition Agency (GVH) launched an investigation into Holiday Club Hungary Kft and Proinvest 2001 Kft. The investigation was aimed at establishing whether the two companies had infringed competition regulations, and in particular whether they had unfairly influenced the purchaser’s decisions. With decision VJ-59/2001/57, the GVH ruled that the price discounts on offer, the influence exerted on the purchaser’s decision to exercise his right of withdrawal and the written information provided could potentially influence and mislead consumers.
    Holiday Club Kft sold the timeshare entitlements exclusively at organised sale functions and in conjunction with the sale of shares. Although § 11 para 1 of the Timeshare Regulation states that it is not permissible to demand payment from the purchaser within the 15-day cooling-off period, the company offered a price discount if the contract was agreed on the day of the sales function or if payment was made within three days of the contract’s being agreed. The price for the timeshare rights could only be paid with the acquisition of shares. Buyers were informed that they could influence the price of using the timeshare property by buying shares. However, these shares did not come with a right to vote in the shareholders’ AGM. Any buyers wishing to exercise their right of withdrawal were informed that the limited company would sell the timeshare rights. On buying the timeshare entitlements, purchasers had to sign blank forms including a pledge to abide by the terms and conditions. These included a commitment to pay a lawyer who had acted as a trustee within 15 days of the contract’s being agreed. In the course of its investigation, the GVH also established that the purchasers were never correctly informed about the price benefits.
    On the basis of § 8 para 1 of Act 57 (1996), the Hungarian Competition Agency imposed a fine and an injunction order banning the companies from continuing their commercial activities.
    Holiday Club Hungary Kft filed a lawsuit to challenge the GVH’s decision. In its submission, Holiday Club argued that it had acted under the instructions of Proinvest 2001 Kft. Furthermore, Holiday Club also disputed the claim that it had taken payment from purchasers within 15 days. It stated that holding the purchaser’s payment in trust was just one possible option. Moreover, Holiday Club argued that the Hungarian Competition Agency had failed to conduct the evidence gathering process in sufficient detail.
    The Court of First Instance rejected the claim, stating that the arguments put forward by the GVH had been proven during the trial. In particular, the court referred to the ban on advanced payment under § 11 of the Regulation. It also ruled that § 8, § 11 para 1, and § 16 paras 1 and 2 of the Timeshare Regulation had been contravened.
    Both parties subsequently lodged an appeal with the Budapest Appeal Court.
  • Legal issue
    The Budapest Appeal Court, as the court of second instance, upheld the Court of First Instance’s ruling and also concurred with the reasons it had given for its verdict. The court pointed out that the parties had failed to present any new evidence to support their claims when they lodged the appeal. Thus, the claims they made in the original lawsuit remained unproven. The court then stated that, under the Timeshare Regulation, it is not permissible to take payment from the purchaser within the cooling-off period and that this also applies to payments made to a trustee lawyer.
  • Decision

    Full text: Full text

  • Related Cases

    No results available

  • Legal Literature

    No results available

  • Result