Judge disagrees with the Supreme Court

By Mariano Zunino

I HAVE referred to the recent Supreme Court ruling, previously, that mortgage taxes must be paid by the bank, following its 15th March judgement.

Technically, it refers to Transfer Tax and Stamp Duty, while other costs are to be divided between client and bank.

Despite this ruling, however, one Instance Court recently reversed this argument, and, after cancelling the distribution of expenses as “abusive”, decided that the BBVA bank must refund the client the entire sum paid out for the tax.

It calls our attention to the judge’s interpretation of the initial Supreme Court ruling. According to his “humble opinion”, the question is not whether the client is or is not a “taxpayer”, but, whether or not he is enforced to pay such taxes, because “this is clear”.

The important issue, he warns, is to see whether the clause in which the payment of the tax, and other expenses imposed, is abusive or not.

The Supreme Court’s March judgement established that this type of clause, in which all costs are imposed on the client, suggest an imbalance between the rights and obligations of the parties to the contract, and should be labelled as abusive.

But, afterwards, and with regard to the distribution of the same sum that each one had to pay, he distinguished between notary, registry and administrative expenses, which, undoubtedly, had to be paid by the bank.

And, he said, taxes, indicating expressly that those generated by the constitution of the loan, had to be paid by the client.

The judge, with his interpretation of what had already been said in the judgement of the Supreme Court, considered that, in this specific case, the imposition of expenses, including the payment of the tax, was abusive, and, therefore, the clause should be declared null and void.

This means that the controversial clause disappears from the contract. It is considered “not written” and is taken away.

In practice, this means that the clause does not exist, so the consumer is back where he started, immediately before his signature, having to return all the sums paid.

The judgement will, surely, be appealed by the bank and the new decision will be taken by the High Court, which will be in charge of studying the new interpretation of the Supreme Court resolution.

It will be a hard decision, because the backgrounds of the First Instance are very consistent. We will see what happens.

In another vein, the European Court is, shortly, expecting to rule in relation to the “early expiration date”.


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Posted by on May 25 2018. Filed under Business & Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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