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If you are the victim of a seizure of your property on the basis of a loan agreement that may contain unfair terms but you have not had the opportunity to raise the matter beforehand: nothing is lost. Come and see us now!
THE CONTEXT: A seizure in the presence of an unfair term
The context is as follows: several years ago, you were ordered to pay a certain sum under a loan or guarantee contract.
This contract potentially contains one or more unfair terms that have never been reviewed by a judge (for example, it is contractually stipulated that in the event of default on your part, the loan may be cancelled without prior formal notice and the sums borrowed may be paid immediately - this is an unfair clause.).
If this clause remains in force even though it is manifestly abusive, it is because the decision on which the seizure is based was made without you being present, either by means of an injunction to pay, which by its very nature is not adversarial, or by means of a procedure that was certainly brought to your attention, but in a place where you no longer live!
This decision is now final. It is said to have the force of res judicata, which, in other words, means that it constitutes a judicial truth if it does not represent THE TRUTH, and as such can normally no longer be called into question.
You have just found out about it because you have been the subject of a compulsory enforcement measure against your assets: attachment of earnings, attachment of bank accounts - a debt collection procedure - or a debt recovery procedure. attachment explained in detail by our lawyers - or worse still, seizure of property.
THE AUTHORITY OF JUDGMENT: not such an insurmountable obstacle
Two textual arguments and relatively well-established case law led us to believe that, once the final decision has been handed down, it is no longer possible to replay the match and raise the existence of one or more unfair terms.
Pursuant to Article 480 of the Code of Civil Procedure :
" A judgment which resolves in its operative part all or part of the principal claim, or which rules on a procedural objection, a plea in bar or any other incident, shall, as soon as it is delivered, be res judicata in relation to the dispute which it resolves.
The main issue is the subject matter of the dispute as determined by Article 4. ".
Article 1355 of the Civil Code sets out the threefold condition that must be met for the operative part of a judgment to have the force of res judicata :
" Res judicata applies only to what is the subject of the judgment. The thing sought must be the same; the claim must be based on the same cause of action; the claim must be between the same parties, and made by and against them in the same capacity".
The principle of concentration of resources (of which article R. 311-5 of the Code of Civil Enforcement Procedures is a textual application) is well known. see our article on the subject) resulting from the Césareo handed down by the Assemblée plénière of the Cour de cassation on 7 July 2006 required the claimant - and therefore the borrower - to put forward, as early as the proceedings relating to the first claim, all the pleas in law that it considered likely to support the claim. If he were to raise a new claim, between the same parties, relating to the same subject matter, it would come up against the authority of res judicata.
Accordingly, and in application of these two texts as well as the said principle, it was traditionally held that the enforcement judge could not exercise control over a formally correct and final enforcement order, such as an unopposed order to pay that had become enforceable.
It is therefore impossible for the debtor to raise the existence of an unfair clause at the stage of the seizure of his assets.
And if by any chance this bulwark of res judicata did not work, it was always possible to invoke the statute of limitations on such a claim.
CONSUMER PROTECTION: an essential requirement *
The edifice seemed solid, but that was without counting on the Court of Justice of the European Union, which made the first breach in 2017 in a judgment of 26 January 2017, Banco Primus, C-21/14: " where, in a previous examination of a disputed contract which resulted in the adoption of a decision having the force of res judicata, the national court confined itself to examining of its own motion, in the light of Directive 93/13, one or some of the terms of that contract, that Directive requires a national court, duly seised by the consumer, to assess, at the request of the parties or of its own motion where it has the necessary legal and factual information, the possible unfairness of the other terms of that contract. ".
In the wake of this judgment, a number of daring colleagues attempted to introduce a distinction between the general principle of concentration of resources and the temporal concentration applicable only to appeal proceedings. In vain, the Cour de cassation held that it can be deduced from article 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, from article L. 132-1, paragraph 1, now L. 212-1, paragraph 1 of the French Consumer Code, and from article 910-4 of the French Code of Civil Procedure, that: "... it is not possible to draw a distinction between the general principle of concentration of pleadings and the temporal concentration of pleadings". the principle of temporal concentration of claims laid down by the third of those provisions does not preclude an examination of the unfairness of a contractual term by the national court of its own motion, which is required to do so where it has the necessary legal and factual information to do so.
17. In declaring Mrs [L]'s claims for the annulment of unfair contractual provisions inadmissible, the judgment held that these claims should have been presented in the first set of appeal submissions, that they were presented in the third set of appeal submissions and that they were in no way intended to respond to the opposing submissions and exhibits or to rule on issues arising, subsequent to the first set of appeal submissions, from the intervention of a third party or from the occurrence or revelation of a fact.
18. In so ruling, without examining of its own motion the unfair nature of the clauses invoked in the light of the legal and factual elements available to it, the Court of Appeal violated the aforementioned texts. "Cass. Civ. 1era2 February 2022, no. 19-20.640).
The second breakthrough came in a ruling handed down by the Court of Justice of the European Union in 2022. Referred to by an Italian enforcement court for a preliminary ruling, the Court was asked to answer the question whether Articles 6 and 7 of Directive 93/13/EEC and Article 47 of the [Charter] preclude national legislation which prevents the enforcement court from carrying out an intrinsic review of an enforceable title that has become res judicata and which prevents the enforcement court from carrying out an intrinsic review of an enforceable title that has become res judicata, in the event of an expression of intention by the consumer to rely on the unfairness of the term contained in the contract on the basis of which the enforcement order was obtained, from setting aside the effects of the implied res judicata? (CJEU, No C-693/19, Judgment of the Court, SPV Project 1503 Srl and Dobank SpA v YB and Banco di Desio e della Brianza SpA and Others v YX and ZW, 17 May 2022)
After a lengthy analysis of existing Italian law, the principles underlying res judicata and the imperatives of consumer protection, the Court ruled that the legislation preventing the enforcement judge from reviewing the possible unfairness of the terms of the contract on which the unopposed res judicata order for payment was based was contrary to Directive 93/13.
Since then, all the rulings of the Cour de cassation (French Supreme Court) have constantly reiterated the construction of European case law and concluded that the authority of res judicata does not in itself prevent the national court from being required to assess, at the request of the parties or of its own motion, whether a term is unfair, even at the stage of compulsory enforcement (See for two recent examples: Cass. Com, 8 February 2023, 21-17.763, Published in the bulletin; Court of Cassation, Civil Division 2, 13 April 2023, 21-14.540, Published in the bulletin). This principle is now a key argument for contesting an attachment order.
*There is, however, an obvious limit: this examination must have already been carried out during the previous judicial review leading to the decision that has the force of res judicata.
OUR EXPERIMENTAL APPROACH AT SOLENT AVOCATS: tracking down unfair clauses likely to prevent seizure, at least in part
The Consumer Code divides unfair terms into two categories.
On the one hand, there is a so-called black list of unfair terms, which cannot be discussed. Their mere presence in a loan contract should automatically result in the clause being deemed unwritten.
Under theIn accordance with article R212-1 of the French Consumer Code, Terms which, for example, have the object or effect of eliminating or reducing the right to compensation for damage suffered by the consumer in the event of a breach by the trader of any of his obligations, or which impose on the consumer the burden of proof which, under the applicable law, should normally fall on the other party to the contract, are irrefutably unlawful.
There is also a grey list of terms which are simply presumed to be unfair, but which can be proven otherwise. By way of illustration, under Article R212-2 of the Consumer CodeUnder the terms of the contract, any clause which imposes a manifestly disproportionate amount of compensation on a consumer who defaults is presumed to be unlawful, as are any clauses which give the trader the right to terminate the contract without reasonable notice.
We have set ourselves the task of forcing the seizing companies to produce the loan contracts and other surety deeds, if necessary under penalty, and of identifying any unfair clauses likely to prevent the seizure or, at the very least, limit its effects. Indeed, the presence of such clauses can make the recovery procedure, such as a wrongful levy of executionquestionable. If you find yourself in such a situation, don't hesitate to call on a lawyer specialising in attachment to defend yourself.
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