Sogefinancement (Consumer protection - Credit agreements for consumers - Right of withdrawal - Judgment) [2023] EUECJ C-50/22 (09 March 2023)

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(Reference for a preliminary ruling – Consumer protection – Directive 2008/48/EC – Credit agreements for consumers – Scope – Right of withdrawal – Article 14(7) – National provisions establishing a period of time during which the performance of the contract may not begin – National procedural rules governing how the national courts raise of their own motion and penalise breaches of those provisions – Article 23 – Effective, proportionate and dissuasive sanctions)

REQUEST for a preliminary ruling under Article 267 TFEU from the cour d’appel de Paris (Court of Appeal, Paris, France), made by decision of 16 December 2021, received at the Court on 25 January 2022, in the proceedings

composed of K. Jürimäe, President of the Chamber, M. Safjan (Rapporteur), N. Piçarra, N. Jääskinen and M. Gavalec, Judges,

– the French Government, by A.-L. Desjonquères and N. Vincent, acting as Agents,

– the European Commission, by G. Goddin and N. Ruiz García, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

1 This request for a preliminary ruling concerns the interpretation of Article 23 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).

2 The request has been made in proceedings between Sogefinancement SAS and RW and UV concerning a claim for payment of the outstanding amount due under an agreement for a loan which Sogefinancement had granted to them.

‘(9) Full harmonisation is necessary in order to ensure that all consumers in the Community enjoy a high and equivalent level of protection of their interests and to create a genuine internal market. Member States should therefore not be allowed to maintain or introduce national provisions other than those laid down in this Directive. However, such restriction should only apply where there are provisions harmonised in this Directive. Where no such harmonised provisions exist, Member States should remain free to maintain or introduce national legislation. …

(10) The definitions contained in this Directive determine the scope of harmonisation. The obligation on Member States to implement the provisions of this Directive should therefore be limited to its scope as determined by those definitions. …’

‘1. The consumer shall have a period of 14 calendar days in which to withdraw from the credit agreement without giving any reason.

7. This Article shall be without prejudice to any rule of national law establishing a period of time during which the performance of the contract may not begin.’

5 Article 22 of that directive, entitled ‘Harmonisation and imperative nature of this Directive’, provides in paragraph 1:

‘Insofar 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.’

‘Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive.’

7 Article L. 311-14 of the code de la consommation (French Consumer Code), in the version before 1 July 2016 (‘the Consumer Code’) provided:

‘During a period of seven days from the borrower’s acceptance of the agreement, no payment in any form or for any reason whatsoever may be made by the lender to the borrower or for the borrower’s account, or by the borrower to the lender.

Nor may the borrower, during that period, make any deposit to the lender or for the lender’s account in respect of the transaction in question.

If the borrower signs a direct debit authorisation in respect of his or her bank account, its validity and entry into effect shall be subject to the validity and entry into effect of the credit agreement.’

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

8 On 5 November 2011, Sogefinancement concluded with RW and UV a consumer credit agreement for a sum of EUR 15 362.90 repayable in 84 monthly payments (‘the credit agreement at issue’). On 20 October 2015 the parties agreed to restructure the debt.

9 Hearing an action brought by Sogefinancement seeking, principally, that RW and UV be ordered to pay the outstanding balance owed, the tribunal d’instance du Raincy (District Court, Raincy, France), by a judgment of 25 January 2018, ordered RW and UV to repay the balance of the capital received only, finding that the credit agreement at issue was null and void. To that end, that court raised of its own motion a ground based on the breach of Article L. 311-14 of the Consumer Code by finding that, contrary to that provision, which was a matter of public policy, the funds that were the subject of the credit agreement at issue had been put at the disposal of RW and UV less than seven days after the offer of the loan had been accepted.

10 Sogefinancement brought an appeal against that judgment before the referring court, namely the cour d’appel de Paris (Court of Appeal, Paris, France), submitting that, first, the question of whether the credit agreement at issue was null and void could not be raised of the court’s own motion outside the five-year limitation period which applies to consumers themselves in respect of seeking the annulment of such an agreement. Second, that company considers that only a party is entitled to plead the nullity of an agreement on the basis of a provision of national public policy.

11 Observing that Article L. 311-14 of the Consumer Code falls within the option conferred on Member States, under Article 14(7) of Directive 2008/48, the referring court recalls inter alia that, according to the case-law of the Court, the laying down of appropriate limitation periods may be permitted in that they prevent the possibility of an agreement being put at issue indefinitely and thus take account of the principle of legal certainty.

12 In addition, it considers that the annulment of an agreement by the court in the absence of an application for or acquiescence to that annulment by the consumer would be liable to undermine the principle that the subject matter of an action is delimited by the parties, which precludes a court creating a counterclaim, and the principle of individual and collective legal certainty.

13 In those circumstances, the cour d’appel de Paris (Court of Appeal, Paris) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Does the principle that penalties must be effective, deriving from Article 23 of Directive [2008/48], in the light of the principles of legal certainty and of [Member] States’ procedural autonomy, preclude a situation whereby a court may not raise of its own motion a national legal provision, resulting from Article 14 of that directive and penalised under national law by the nullity of the agreement, beyond the five-year limitation period within which the consumer may seek the annulment of the credit agreement by bringing legal proceedings or by raising an objection?

(2) Does the principle that penalties must be effective, deriving from Article 23 of Directive [2008/48], in the light of the principles of legal certainty and of States’ procedural autonomy and the principle that the subject matter of an action is delimited by the parties, preclude a situation whereby a court may not declare a credit agreement null and void after raising of its own motion a provision of national law, resulting from Article 14 of that directive, where the consumer has not applied for or at least acquiesced in such annulment?’

14 The French Government and the European Commission both express doubts as to the admissibility of the questions referred.

15 First of all, the French Government considers that Article 14(7) of Directive 2008/48 does not lay down any substantive rule relating to credit agreements for consumers and that Article L. 311-14 of the Consumer Code cannot, consequently, be considered as a national provision ‘adopted pursuant’ to Directive 2008/48, within the meaning of Article 23 thereof. Accordingly, the questions referred seek only to resolve a conflict of norms that arises between different rules of national law relating to the limitation period and the powers of the national court which the referring court must apply in the case in the main proceedings.

16 In that regard, it must be borne in mind that, in accordance with settled case-law, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgment of 14 July 2022, Volkswagen, C‑134/20, EU:C:2022:571, paragraph 56 and the case-law cited).

17 It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 14 July 2022, Volkswagen, C‑134/20, EU:C:2022:571, paragraph 57 and the case-law cited).

19 The questions referred, which require a clarification of the scope of Article 14(7) of Directive 2008/48 in order to determine whether the national procedural rules governing the raising by a national court of its own motion of, and the penalty it imposes for, a breach, by the lender, of a provision of national law adopted or maintained in exercise of the option that that provision confers on Member States, concern the scope of application of that directive. In that context, the question of the scope that Article 14(7) is to be recognised as having is not a question that is hypothetical or that bears no relation to the outcome of the dispute in the main proceedings.

20 Next, the French Government observes that the parties do not agree as to the precise date when the sum loaned pursuant to the credit agreement at issue was made available, with the result that there is uncertainty as to whether the period of delay imposed by Article L. 311-14 of the Consumer Code was complied with in the case in the main proceedings. Depending on the date that the referring court will ultimately find, the interpretation sought by that court could thus prove to be hypothetical.

21 However, even though the referring court has not given a ruling on the date on which the sum loaned pursuant to the credit agreement at issue was made available, the presumption of relevance enjoyed by questions referred for a preliminary ruling, in accordance with the case-law referred to in paragraph 17 of this judgment, cannot be rebutted by the mere fact that, in the present case, one of the parties to the main proceedings contests a certain fact which is to be verified by the referring court and not the Court (see, to that effect, judgment of 1 October 2020, A (Advertising and sale of medicinal products online), C‑649/18, EU:C:2020:764, paragraph 44 and the case-law cited).

22 Finally, the Commission considers that the second question appears to be hypothetical, as RW and UV have expressly indicated that they acquiesced to the annulment of the credit agreement at issue.

23 In that regard it suffices to state that that possible acquiescence does not render the second question hypothetical. It is solely the referring court which is, in accordance with the case-law recalled in paragraph 16 of this judgment, in a position to determine the possible importance of that fact both as to the need for a preliminary ruling and as to the relevance of the question for the purposes of the review that it is called upon to exercise in relation to the judgment by which the lower court, of its own motion, found and penalised a breach of Article L. 311-14 of the Consumer Code.

24 In those circumstances, the questions referred for a preliminary ruling are admissible.

25 By its two questions, which it is appropriate to examine together, the referring court asks, in essence, whether the combined provisions of Article 14(7) and Article 23 of Directive 2008/48, read in the light of the principle of effectiveness, must be interpreted as meaning that the breach, by the lender, of a provision of national law which provides for a period of time during which the performance of a credit agreement may not begin must be capable of being, first, raised by the national court of its own motion irrespective of a national rule providing for a five-year limitation period and, second, penalised by that court by way of the annulment of the credit agreement, irrespective of a national rule subjecting such an annulment to an application by or at least the acquiescence of the consumer to that effect.

26 In order to reply to those questions, it is necessary as a preliminary step to verify whether a provision of a Member State’s national law, such as Article L. 311-14 of the Consumer Code, the adoption or maintenance of which is permitted under Article 14(7) of Directive 2008/48, falls within the scope of application of that directive. It is only on that condition that national procedural rules governing whether a national court may raise of its own motion, and the penalty it may impose in respect of, a breach by the lender of such a provision would have to meet the requirements under that directive.

27 In that regard, it is apparent, first, from Article 22(1) of Directive 2008/48, interpreted in the light of recitals 9 and 10 thereof, that, as regards credit agreements falling within its scope, that directive provides for full harmonisation and, as is apparent from the heading of Article 22, is imperative in nature. It follows that, in the matters specifically covered by that harmonisation, the Member States are not authorised to maintain or introduce national provisions other than those laid down by that directive (see, to that effect, judgment of 12 July 2012, SC Volksbank România, C‑602/10, EU:C:2012:443, paragraph 38).

28 Second, Article 14 of Directive 2008/48 lays down the conditions and procedures for the exercise of the right of the consumer to withdraw after concluding a credit agreement, while specifying, in paragraph 7 thereof, that the provisions of that article are to be without prejudice to any rule of national law establishing a period of time during which the performance of the contract may not begin.

29 By allowing the Member States the option of adopting or maintaining provisions establishing a period of time during which the performance of the contract may not begin, the use of the words ‘without prejudice’ in Article 14(7) of Directive 2008/48 means that the full and imperative harmonisation effected by that directive as regards the consumer’s right of withdrawal does not cover the arrangements for the start of performance of a credit agreement and, in particular, for making funds available to the borrower.

30 It follows that Article 14(7) of Directive 2008/48 merely confers on Member States the option of laying down provisions establishing a period of time during which the performance of the contract may not begin, outside the framework of the regime established by that directive (see, by analogy, judgments of 20 November 2014, Novo Nordisk Pharma, C‑310/13, EU:C:2014:2385, paragraphs 25 and 29, and of 19 November 2019, TSN and AKT, C‑609/17 and C‑610/17, EU:C:2019:981, paragraph 49).

31 Furthermore, the adoption or maintenance of a provision of national law pursuant to Article 14(7) of Directive 2008/48 is not capable of either affecting or limiting the effective exercise by the consumer of his or her right of withdrawal on the basis of Article 14, nor of infringing the other provisions of that directive, or adversely affecting its coherence or the objectives pursued thereby (see, by analogy, judgments of 20 November 2014, Novo Nordisk Pharma, C‑310/13, EU:C:2014:2385, paragraphs 28 and 31, and of 19 November 2019, TSN and AKT, C‑609/17 and C‑610/17, EU:C:2019:981, paragraph 51). The sole fact that the breach, by the lender, of such a national provision may deprive the consumer of the protection conferred by national law is irrelevant in that regard.

32 It follows from the foregoing that, where Member States lay down, in exercise of the option conferred on them by Article 14(7) of Directive 2008/48, provisions laying down a period during which the performance of the credit agreement may not begin, the national procedural rules governing the raising by a court of its own motion of, and the penalty that it imposes for, a breach by the lender of such provisions fall within the retained competence of the Member States, without being regulated by that directive or falling within the scope of that directive (see, by analogy, judgments of 19 November 2019, TSN and AKT, C‑609/17 and C‑610/17, EU:C:2019:981, paragraph 52, and of 10 June 2021, Land Oberösterreich (Housing assistance), C‑94/20, EU:C:2021:477, paragraph 47).

33 In those circumstances, first, it is not necessary to assess whether the principle of effectiveness precludes national procedural rules governing the raising by a national court of its own motion of the breach, by the lender, of a provision of national law that falls within the option conferred on Member States by Article 14(7) of Directive 2008/48. Second, such a provision of national law cannot be regarded as having been ‘adopted pursuant’ to that directive, within the meaning of Article 23 thereof, with the result that it is not necessary to interpret that article in order to determine whether it precludes the penalties applicable in the event of a breach of that provision of national law.

34 For those reasons, the answer to the questions referred is that Article 14(7) of Directive 2008/48 must be interpreted as meaning that the national procedural rules governing the raising by a national court of its own motion of, and the penalty it imposes for, a breach, by the lender, of a provision of national law establishing a period during which the performance of a credit agreement may not begin do not fall within the scope of that directive.

35 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national 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.

Article 14(7) 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,

must be interpreted as meaning that the national procedural rules governing the raising by a national court of its own motion of, and the penalty it imposes for, a breach, by the lender, of a provision of national law establishing a period during which the performance of a credit agreement may not begin do not fall within the scope of that directive.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Sogefinancement (Consumer protection - Credit agreements for consumers - Right of withdrawal - Judgment) [2023] EUECJ C-50/22 (09 March 2023) URL: http://www.bailii.org/eu/cases/EUECJ/2023/C5022.html Cite as: ECLI:EU:C:2023:177, [2023] EUECJ C-50/22, EU:C:2023:177

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