Casilda v Banco Cetelem SA (C-302/21)

Contents

Judgment of the Court (Fourth Chamber)24 November 2022^note(Reference for a preliminary ruling — Dispute in the main proceedings which has become devoid of purpose — No need to adjudicate)In Case C‑302/21,REQUEST for a preliminary ruling under Article 267 TFEU from the Juzgado de Primera Instancia n^o 4 de Castelló de la Plana (Court of First Instance, No 4, Castelló de la Plana, Spain), made by decision of 7 May 2021, received at the Court on 12 May 2021, in the proceedingsCasildavBanco Cetelem SA,THE COURT (Fourth Chamber),composed of C. Lycourgos, President of the Chamber, L.S Rossi, J.‑C Bonichot, S. Rodin and O. Spineanu-Matei (Rapporteur), Judges,Advocate General: G. Pitruzzella,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– Banco Cetelem SA, by D. Sarmiento Ramírez-Escudero and C. Vendrell Cervantes, abogados,– the Spanish Government, by M.J. Ruiz Sánchez, acting as Agent,– the European Commission, by J. Baquero Cruz, I. Rubene and N. Ruiz García, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of the principles of the primacy of EU law and of legal certainty, of Article 120 TFEU and of Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).

2The request has been made in proceedings between Casilda, a consumer, and Banco Cetelem SA concerning a revolving credit card agreement, granted by Banco Cetelem to Casilda, the rate of interest of which is of a predatory nature.

Legal context

European Union law

Directive 93/13

3Article 4 of Directive 93/13 provides:1. Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.’

4Article 8 of that directive states:‘Member States may adopt or retain the most stringent provisions compatible with the Treaty in the area covered by this Directive, to ensure a maximum degree of protection for the consumer.’

Directive 2008/48/EC

5Article 22 of Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC (OJ 2008 L 133, p. 66), entitled ‘Harmonisation and imperative nature of this Directive’, provides:1. In so far as this Directive contains harmonised provisions, Member States may not maintain or introduce in their national law provisions diverging from those laid down in this Directive.2. Member States shall ensure that consumers may not waive the rights conferred on them by the provisions of national law implementing or corresponding to this Directive.3. Member States shall further ensure that the provisions they adopt in implementation of this Directive cannot be circumvented as a result of the way in which agreements are formulated, in particular by integrating drawdowns or credit agreements falling within the scope of this Directive into credit agreements the character or purpose of which would make it possible to avoid its application.…’

Spanish law

The Civil Code

6According to Article 1255 of the Código civil (Civil Code), ‘the contracting parties may draw up such agreements, terms and conditions as they deem appropriate, provided that they are not contrary to law, morality or public order’.

The Law on predatory lending

7Under the first paragraph of Article 1 of the Ley sobre nulidad de los contratos de préstamos usurarios (Law on the nullity of predatory loan agreements) of 23 July 1908 (BOE No 206 of 24 July 1908, ‘the Law on predatory lending’):‘A loan agreement shall be null and void if it stipulates an interest rate that is significantly higher than the standard rate of interest and manifestly disproportionate to the circumstances of the case, or does so under conditions such as to make that rate unconscionable, there being reasons to believe that the latter was accepted by the borrower because of the distress in which he or she finds himself or herself or because of his or her limited mental capacity.’

The LGDCU

8Article 80 of the recast text of the General Law on consumer and user protection, approved by Real Decreto Legislativo 1/2007, por el que se aprueba el texto refundido de la Ley General para la Defensa de los Consumidores y Usuarios (Royal Legislative Decree 1/2007 approving the consolidated version of the General Law on consumer and user protection) of 16 November 2007 (BOE No 287 of 30 November 2007, ‘the LGDCU’), concerning ‘Requirements of terms not individually negotiated’, mentions as one of those requirements in point (c) ‘good faith and fair balance between the rights and obligations of the parties, which excludes, under all circumstances, the use of unfair terms’.

9Under Article 82(1) of the LGDCU:‘All contractual terms not individually negotiated and all practices for which express consent has not been given that, contrary to the requirement of good faith, cause a significant imbalance in the parties’ rights and obligations arising under the contract to the detriment of the consumer or user shall be regarded as unfair terms.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

10On 8 April 2011, the applicant in the main proceedings, a consumer, entered into a revolving consumer credit agreement with Banco Cetelem, which provided for an annual percentage rate of charge (‘APRC’) of 23.14% and which was associated with the provision of a credit card (‘the credit agreement at issue’).

11That consumer brought an action before the referring court, the Juzgado de Primera Instancia n^o 4 de Castelló de la Plana (Court of First Instance, No 4, Castelló de la Plana, Spain), seeking a declaration that the credit agreement at issue is void, on the grounds, primarily, of a lack of transparency and information at the time of its conclusion in so far as it sets an APRC of 23.14% and, alternatively, that that interest rate must be classified as predatory. That action also seeks a declaration that Banco Cetelem be ordered to reimbourse the interest already paid, while the applicant in the main proceedings must be required to repay only the loan capital.

12Banco Cetelem disputes the lack of transparency and the predatory nature of the credit agreement at issue. To that end, it relies, in particular, on judgment No 149/2020 of the Tribunal Supremo (Supreme Court, Spain) of 4 March 2020 (ES:TS:2020:600), concerning an interpretation of the Law on predatory lending. It follows from that judgment that the rate stipulated in the credit agreement at issue cannot be regarded as being of a predatory nature. It is clear from that judgment that, in order to determine whether an interest rate is of such a nature, reference must be made to the average interest rate applicable to the category to which the transaction in question belongs, as published in the official statistics of the National Bank of Spain. In the present case, the APRC of 23.14% mentioned in the credit agreement at issue is lower than the average interest rate generally applied for that category of contracts, namely revolving credit agreements.

13The referring court harbours doubts as to the compatibility of the judgments of the Tribunal Supremo (Supreme Court) No 628/2015 of 25 November 2015 (ES:TS:2015:4810) and No 149/2020 of 4 March 2020 (ES:TS:2020:600) with the principles of the primacy of EU law and of legal certainty and with Directives 93/13 and 2008/48.

14According to the referring court, the principles identified in those judgments of the Tribunal Supremo (Supreme Court) not only distort the concept of ‘predatory’, in that they eliminate the subjective element, namely the assessment of a situation of vulnerability on the part of the consumer, but are also incompatible with Article 4(2) of Directive 93/13, in that they allow the setting or review by courts of the price or the cost of consumer credit, without any legal basis and outside the context of a declaration that the agreement is void on the ground that it is predatory in nature. Consequently, that court raises the question whether, in accordance with the principle of the primacy of EU law, it must disapply that case-law of the Tribunal Supremo (Supreme Court) in the context of the dispute before it.

15In addition, since the Tribunal Supremo (Supreme Court) held, in judgment No 149/2020 of 4 March 2020 (ES:TS:2020:600), that the court may examine the unfairness of the term setting the rate of interest only where the consumer has made an application to that effect, that case-law would also be incompatible with the obligation on the court, arising from Directive 93/13, to verify of its own motion whether a term in a consumer credit agreement is unfair.

16Finally, according to the referring court, the Tribunal Supremo (Supreme Court), in that judgment, limited the national court’s discretion as to whether a consumer credit agreement may be predatory in nature, by laying down criteria for that purpose, which are neither objective nor precise, thereby infringing the principle of legal certainty, as evidenced by the inconsistent case-law of the national courts. That legal uncertainty is incompatible with the objective of the effective functioning of the internal market in consumer credit pursued by Directive 2008/48 and Article 120 TFEU.

17In those circumstances, the Juzgado de Primera Instancia n^o 4 de Castelló de la Plana (Court of First Instance, No 4, Castelló de la Plana) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1)(a) In accordance with the principle of the primacy of EU law within the sphere of its applicability, and in particular within the context of the regulation of consumer credit and agreements with consumers, must the national court assess “of its own motion” the compatibility with EU law of the case-law established by the Spanish Supreme Court (being the highest court [in Spain]), with respect to the interpretation and application of the [Law on predatory lending] being a national provision, in so far as that case-law applies not only to the invalidity of the agreement concluded, but also to the definition of the “main subject matter” of the consumer credit agreement, in the form of a “revolving” credit facility, and to the adequacy of the “quality/price” ratio of the service provided? Or is it the case, by contrast, as the Spanish Supreme Court states, that that duty to assess compatibility with EU law and EU directives remains conditional upon, or subordinate to, the “relief sought” by the applicant (principle of party disposition), with the result that if the declaration that the consumer credit agreement is void on the ground that it is “of a predatory nature” is sought as the “sole or main action”, that action being derived from a provision of national law, the view must be taken that the primacy of EU law and its harmonising effects “do not come into play”, even though the case-law established by the Spanish Supreme Court with respect to the interpretation and application of the aforementioned Law on predatory lending applies to the definition of the main subject matter and the adequacy of the quality/price ratio of the consumer credit agreement forming the subject of the case that falls to be disposed of by the national court?(b) In accordance with the aforementioned primacy and harmonising effects of EU law in the context of the regulation of consumer credit and credit agreements with consumers, given that the Spanish Supreme Court has itself reiterated in numerous judgments in its case-law that, since the “exclusion” provided for in the harmonising provision Article 4(2) of Directive [93/13] has been fully transposed into the Spanish legal system, it is not appropriate for the national court to conduct a judicial review of prices, and given that no legislation within the Spanish legal system – not even [the Law on predatory lending], affords permission or provides a basis in general terms for such a judicial review of prices, and given further that there has been no assessment of whether the provision determining the price of the consumer credit lacks transparency, is it contrary to Article 4(2) of Directive [93/13] for the national court, acting pursuant to a provision of national law in the form of the aforementioned [Law against predatory lending], and operating outside its natural jurisdiction in the context of a declaration as to the nullity of the agreement concluded, to exercise, under a “newly created” power, a “judicial review” of the main subject matter of the agreement whereby it determines in general terms either the price of the consumer credit, understood as being a reference to the remunerative interest (Nominal Interest Rate) applied to it, or the cost of the consumer credit, understood as being a reference to the [APRC]?(c) In accordance with the foregoing and having regard to the framework of regulation and harmonisation laid down in the TFEU, in particular as regards the European Union’s competence in relation to the functioning of the internal market, is the review exercised by the national court with a view to setting, in general terms, the price or cost of the consumer credit, in the absence of a prior provision of national law expressly establishing a legal basis for doing so, “compatible” with Article 120 TFEU, in the context of an open market economy and in the light of the principle of the freedom of contract enjoyed by the parties?(2) In accordance with the principle of the primacy of EU law within the sphere of the harmonisation of the matters to which it applies, in particular in the context of the directives regulating consumer credit and agreements with consumers, given that the principle of legal certainty constitutes a condition precedent to the proper and effective functioning of the internal market in consumer credit, is it contrary to that principle of legal certainty (being a condition of the proper functioning of the internal market in consumer credit) to place a limit on the [APRC] which may be imposed, in general terms, on the consumer in a consumer credit agreement with a view to combating predatory lending, such as the limit established by the Spanish Supreme Court, not on the basis of objective and precise parameters but merely by reference to an approximate criterion, with the result that it is left to the discretion of each national court to determine the specific value of that limit in order to dispose of the dispute pending before it?’

Procedure before the Court

18The referring court requested that the present case be dealt with under the expedited procedure provided for in Article 105 of the Rules of Procedure of the Court of Justice. In support of its request, the referring court stated that the questions referred have a significant impact on the current context of the financial market in consumer credit.

19Article 105(1) of the Rules of Procedure provides that, at the request of the referring court or tribunal or, exceptionally, of his own motion, the President of the Court may, where the nature of the case requires that it be dealt with within a short time, after hearing the Judge-Rapporteur and the Advocate General, decide that a reference for a preliminary ruling is to be determined pursuant to an expedited procedure.

20In that connection, as regards the fact that the questions raised by the present case may affect a large number of persons and legal relationships, it must be borne in mind that the expedited procedure referred to in that provision is a procedural instrument intended to address matters of exceptional urgency (see, to that effect, judgment of 15 September 2022, Veridos, C‑669/20, EU:C:2022:684, paragraph 24 and the case-law cited).

21The large number of persons or legal situations which may be affected by the decision that a referring court must give after making a reference to the Court for a preliminary ruling does not, as such, constitute an exceptional circumstance justifying the application of the expedited procedure (judgment of 3 March 2022, Presidenza del Consiglio dei Ministri and Others (Trainee specialist doctors), C‑590/20, EU:C:2022:150, paragraph 28 and the case-law cited).

22In those circumstances, on 12 May 2021, the President of the Court decided, after hearing the Judge-Rapporteur and the Advocate General, that it was not appropriate to grant that request.

Developments after the request for a preliminary ruling was made

23By letter of 1 August 2022, Banco Cetelem informed the Court, with supporting evidence, first, that, on 29 April 2021, a deed of acquiescence, by which Banco Cetelem accepted all the claims made by the applicant in the main proceedings, had been lodged with the referring court. Secondly, Banco Cetelem states that the parties to the main proceedings reached a settlement agreement by which the applicant in the main proceedings waives all of her heads of claim in exchange for payment by Banco Cetelem of the amount claimed. A copy of the application for approval of that settlement agreement, submitted to the referring court on 10 May 2021, and a copy of the proof of payment of the agreed amount of 12 May 2021 were attached to that letter.

24Under that agreement, the credit agreement at issue is terminated and each of the parties declares that no further claims will be pursued against the other.

25When asked by the Court whether an answer to the questions referred for a preliminary ruling was still necessary for the purposes of resolving the dispute in the main proceedings, the referring court stated, in its reply of 31 August 2022, that it had decided, on 7 May 2021, that, notwithstanding the deed of acquiescence, the request for a preliminary ruling should be maintained where the request had a clear public interest underlying it. Furthermore, on 11 May 2021, it decided that the application for approval of the settlement agreement could not be granted as long as the proceedings were suspended pending the Court’s preliminary ruling.

On the need to adjudicate

26According to settled case-law of the Court, questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance (judgment of 26 March 2020, Miasto Łowicz and Prokurator Generalny, C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 43 and the case-law cited).

27However, it has also been consistently held that the procedure provided for in Article 267 TFEU is an instrument of cooperation between the Court of Justice and the national courts, by means of which the Court provides the national courts with the points of interpretation of EU law which they need in order to decide the disputes before them (judgment of 26 March 2020, Miasto Łowicz and Prokurator Generalny, C‑558/18 and C‑563/18, EU:C:2020:234, paragraph 44).

28Furthermore, in accordance with Article 100(2) of its Rules of Procedure, the Court may at any time declare that the conditions of its jurisdiction are no longer fulfilled.

29In the present case, first, it is apparent from the letter of 1 August 2022 sent to the Court by Banco Cetelem that the parties to the main proceedings concluded a settlement agreement, by which the applicant in the main proceedings, in consideration for the payment of a sum by Banco Cetelem, waived all claims against it arising from the credit agreement at issue. As is apparent from its letter of 31 August 2022 and from the documents annexed thereto, the referring court confirms the existence of that settlement agreement.

30Secondly, it must be stated that, in its letter of 31 August 2022, the referring court indicated that it wished to maintain its request for a preliminary ruling on the ground that its questions relate to a matter of public interest. In its opinion, the answers could put an end to a situation of legal uncertainty, generated by the case-law of the Tribunal Supremo (Supreme Court) and could be relevant for the resolution of numerous similar disputes pending, inter alia, before it.

31It is, however, settled case-law that the justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute. Therefore, if it appears that the question raised is manifestly no longer relevant for the purposes of deciding the case, the Court must declare that there is no need to proceed to judgment (judgment of 19 November 2019, A. K. and Others (Independence of the Disciplinary Chamber of the Supreme Court), C‑585/18, C‑624/18 and C‑625/18, EU:C:2019:982, paragraph 70 and the case-law cited).

32In particular, since it is apparent from both the wording and the scheme of Article 267 TFEU that the preliminary ruling procedure presupposes that a dispute is actually pending before the national courts in which they are called upon to give a decision which is capable of taking account of the preliminary ruling, the Court must find that there is no need to adjudicate if the dispute in the main proceedings has become devoid of purpose (see, to that effect, judgment of 12 March 1998, Djabali, C‑314/96, EU:C:1998:104, paragraphs 21 and 22, and order of 1 October 2019, YX (Forwarding of a judgment to the Member State of nationality of the sentenced person), C‑495/18, EU:C:2019:808, paragraphs 19 and 24 to 26).

33In the present case, even though the dispute in the main proceedings is still formally pending before the referring court, that court having decided to stay the proceedings for the purposes of the present reference for a preliminary ruling, it is apparent from the information available to the Court that the parties to the main proceedings concluded a settlement agreement, which was implemented and that they lodged an application with the referring court seeking approval of that agreement which puts an end to their dispute. It follows that the Court’s answer to the referring court’s questions would be of no use to that court in ruling on that dispute, which has become devoid of purpose.

34In those circumstances, there is no need to adjudicate on this request for a preliminary ruling.

Costs

35Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Fourth Chamber) hereby rules: It is not necessary to give a ruling on the request for a preliminary ruling submitted by the Juzgado de Primera Instancia n^o 4 de Castelló de la Plana (Court of First Instance, No 4, Castelló de la Plana, Spain) by decision of 7 May 2021.