Article 7 - Respect for private and family life
Article 38 - Consumer protection
Article 47 - Right to an effective remedy and to a fair trial
Key facts of the case:
Reference for a preliminary ruling – Unfair terms in consumer contracts – Consumer credit contract – Directive 93/13/EEC – Article 1(2) – Term reflecting a mandatory statutory provision – Article 3(1), Article 4(1), Article 6(1) and Article 7(1) – Acceleration clause – Judicial review – Proportionality with regard to the consumer breaches of contract – Articles 7 and 38 of the Charter of Fundamental Rights of the European Union – Contract secured by a charge on immovable property – Extrajudicial sale of the consumer’s home.
Outcome of the case:
On those grounds, the Court (Fourth Chamber) hereby rules:
Article 3(1), Article 4(1), Article 6(1) and Article 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, read in the light of Articles 7 and 38 of the Charter of Fundamental Rights of the European Union,
must be interpreted as precluding national legislation under which the judicial review of the unfairness of an acceleration clause contained in a consumer credit agreement does not take account of the proportionality of the option given to the seller or supplier to exercise his or her right under that clause, in the light of criteria relating, in particular, to the extent of the consumer’s failure to fulfil his contractual obligations, such as the amount of the instalments which have not been paid in relation to the total amount of the credit and the duration of the contract, and to the possibility that the implementation of that clause may result in the seller or supplier being able to recover the sums due under that clause by selling, without any legal process, the consumer’s family home.
32 Furthermore, according to the referring court, notwithstanding the protection offered by Articles 7, 38 and 47 of the Charter, Directives 93/13 and 2005/29 and the principle of effectiveness, the national legislation relating to the enforcement of a charge on immovable property by means of a voluntary auction of property constituting the home of consumers, as interpreted by the Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic), does not attach sufficient importance to the protection of the family home and does not have regard to the possibility of other means of enforcing the charge. Thus, as is shown by practice, the grant of credit to consumers would have highly detrimental consequences for consumers and their families.
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37 In those circumstances, the Krajský súd v Prešove (Regional Court, Prešov) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) Does Article 47 of the [Charter], read in conjunction with Articles 7 and 38 [thereof], [Directive 93/13], [Directive 2005/29] and the principle of effectiveness of EU law preclude legislation such as Paragraph 53(9) and Paragraph 565 of the Civil Code, pursuant to which in the event of accelerated repayment, no account is taken of the proportionality of that transaction, in particular the gravity of the infringement by the consumer of his or her obligations in relation to the amount of the credit and its term?
If the answer to Question 1 is in the negative …:
(2) (a) Does Article 47 of the [Charter], read in conjunction with Articles 7 and 38 [thereof], Directive 93/13, Directive 2005/29 and the principle of effectiveness of EU law preclude case-law which does not preclude the enforcement as to its substance of a charge by means of a private auction of immovable property, consisting of the home of consumers or of other persons and which simultaneously does not have regard to the gravity of the infringement by the consumers of their obligation in relation to the amount of the credit and its term, even where there is another way in which the credit provider’s claim may be satisfied through judicial enforcement, in the context of which the sale of the home over which the charge has been granted does not take precedence?
73 To that extent, it must be held that, by its first question, the referring court asks, in essence, whether Article 3(1), Article 4(1), Article 6(1) and Article 7(1) of Directive 93/13, read in the light of Articles 7 and 38 of the Charter, must be interpreted as precluding national legislation under which a judicial review of the unfairness of an acceleration clause contained in a consumer credit agreement does not take account of the proportionality of the option available to the seller or supplier to exercise his right under that clause, in the light of criteria relating in particular to the extent of the consumer’s failure to fulfil his contractual obligations, such as the amount of the instalments that have not been paid in relation to the total amount of the credit and the duration of the contract, and to the possibility that the implementation of that clause might result in the seller or supplier being able to recover the sums due under that term by selling, without any legal process, the consumer’s family home.
74 In the first place, it should be recalled that, in view of the consumer’s weak position vis-à-vis the seller or supplier as regards both his or her bargaining power and his or her level of knowledge, Article 6(1) of Directive 93/13 provides that unfair terms are not to be binding on the consumer. In that context, and in order to ensure the high level of consumer protection set out in Article 38 of the Charter, a national court is required to assess, of its own motion, whether a contractual term falling within the scope of Directive 93/13 is unfair, compensating in that way for the imbalance which exists between the consumer and the seller or supplier, where it has available to it the legal and factual elements necessary for that task (see, to that effect, judgments of 19 December 2019, Bondora, C‑453/18 and C‑494/18, EU:C:2019:1118, paragraph 40, and of 17 May 2022, Ibercaja Banco, C‑600/19, EU:C:2022:394, paragraphs 35 to 37).
