Case law

  • Case Details
    • National ID: 682/2003
    • Member State: Spain
    • Common Name:Benedicto and Margarita v “Palm Oasis Maspalomas S. L.”
    • Decision type: Other
    • Decision date: 22/11/2003
    • Court: Audiencia Provincial (Appellate court, Las Palmas)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Timeshare Directive, Article 1 Timeshare Directive, Article 5, 1. Timeshare Directive, Article 5, 3. Timeshare Directive, Article 6 Timeshare Directive, ANNEX
  • Headnote
    1. The law is applied to the timeshare rights agreed after the Law 42/1998 came into force even though those rights and its regime were already constituted for existing property before that Law.
    2. The guarantees of the deferred price are valid even during the 3 month period of the right to terminate, as long as they do not represent an advance payment of the price, which is prohibited.
    3. The nullity of the contract does not stop the consumer to have the right to get double the advanced amounts, since this is in any case a mandatory legal sanction.
  • Facts
    The consumers signed a contract on timeshare rights with the seller company after the Law 42/1998 came into force, despite of the fact that the provisions for these rights on the properties had been constituted already before the Law. Since the consumers had made advance payments, they tried to have them refunded, as well as to get double those amounts, as the Law establishes. The court in the first instance ordered the company to refund the advance amounts, but not double. The order from the appeal court accepts the rights to receive double that amount as well, as it is established in the art. 11.2 of the Law 42/1998.
  • Legal issue
    The defendant company is of the view that the Law 42/1998 is not applicable because the timesharing regimen on the apartments owned by this company was in place before the Law came into force. According to court, due to the application of the Transitory Disposition 2nd of that Law, the arrangements of timesharing already constituted on immovable goods, the properties that in the future were used in that way and even the rights that have not been transferred on to immovable goods in which some of the rights were already transmitted, are all of them ruled by the new Law.

    The court does not accept either the line of argument by the defendant whereby the charges made during the three month period where the consumer has the right to terminate are not advance payments but simple guarantees of the deferred payment, allowed by the art. of the Law 42/1998. According to the judgment, the article is also clear in prohibiting that the guarantees of the deferred price consist precisely on prohibited advance payments.

    The judgment in the first instance ordered the refund of the advance payments, but not doubled, as the law establishes, due to the argument that the doubled refund can only be applied to valid contracts, and that court declared the nullity ex officio of the contract due to the absence of some clauses required by law. According to the court of appeal, not only the nullity ex officio (on the initiative of the court itself), has to be treated extremely carefully and as of a very exceptional nature according to the Supreme Court, but also the refund of double the amount that was advanced constitutes the legal compensation for the purchaser for the abuse of rights carried out by the seller. “It is a mandatory legal rule that it is found even out of the agreed contractual content, and it is independent of the validity or nullity of the contractual relationship. It would be a contradiction in terms that the rules to protect the consumer were applicable on valid contracts but not on those where their nullity is due precisely to the omissions and negligence of the vendor party, and that on top of that the nullity is applied ex officio when the defendant himself has not asked for it”.
  • Decision

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