Page - 87 - in Austrian Law Journal, Volume 1/2019

ALJ 2019 EU Consumer Contract Law Directives and Ownership 87 auction.5 As the consumer did not repay her debt, the bank initiated such an extra-judicial enforcement procedure before a notary, in which the bank itself was awarded the mortgaged property for about 60% of the assessed value stated in the contract. The consumer therefore continued to owe about € 13,500. For transferring the ownership of the mortgaged apartment to the bank, the notary drew up an instrument of sale. Without any involvement of the consumer, the bank signed as the consumer’s representative as seller. The bank also signed on its own behalf as buyer. This was in accordance with the representation clause in the mortgage contract. Thereupon, the bank was registered as the apartment’s new owner in the land register. In the following procedure before the Spanish court, the bank sought an order, based on its right of ownership, for surrender of the apartment and the ejection of the consumer from the dwelling.6 The Spanish court turned to the CJEU. The CJEU replied by first recapitulating general case law principles concerning the protection regime established by the UCTD. In particular, the CJEU noted that where a mortgage is enforced before a notary, the consumer must have a right, even at the enforcement stage, to challenge allegedly unfair contract clauses before a court.7 Then, as one of the main aspects in its argumentation, the CJEU emphasised that a distinction must be drawn between the procedure enforcing the mortgage on the one hand and the present procedure before the referring court on the other, in which the bank sought to enforce its newly-acquired right of ownership.8 The CJEU did observe that in the case at hand, the apartment owner (bank) is the same person as the mortgage creditor. However, the Court continued, any interested third party could have acquired the ownership in the course of the extra-judicial enforcement of the mortgage and could, as a result, have an interest in bringing proceedings for vacating the apartment. In such circumstances, “to allow the debtor who has granted a mortgage over that property to set up defences founded on the mortgage loan agreement against the transferee of that property, an agreement to which that transferee may nevertheless be a third party, would be liable to affect legal certainty in pre-existing proprietary relationships”.9 The CJEU found it decisive that the basis for the bank’s claim before the referring court is its ownership right in the apartment, and not the mortgage contract: (only) in the latter case, the law had required an effective review of the potential unfairness of contractual terms even at the enforcement stage. Therefore, the Court held that the consumer, in the present case, 5 See CJEU, Case C-598/15 Banco Santander para. 20. 6 According to Article 250(1) no. 7 of the Spanish Code of Civil Procedure, the court shall rule claims, under a simplified procedure, “brought by the holders of real rights entered in the land register, for the enforcement of those rights against those who challenge or interfere in their exercise without any registered title justifying the challenge or interference”. See CJEU, Case C-598/15 Banco Santander para. 7. 7 See CJEU, Case C-598/15 Banco Santander para. 38, referring to CJEU, Case C-32/14 ERSTE Bank Hungary para. 59. For an analysis of the latter judgement, see Wolfgang Faber and Eva Klampferer, Zivilrecht und Internationales Privatrecht, Schwerpunkt Verbraucherschutz, in JAHRBUCH EUROPARECHT 2016 281, 303 ff. (Günter Herzig ed., 2016). See also Andreas Piekenbrock, Vollstreckungsunterwerfung und unionsrechtliche Klauselkontrolle, 13 ZEITSCHRIFT FÜR DAS PRIVATRECHT DER EUROPÄISCHEN UNION 137 (2016), who, however, does not sufficiently address that the CJEU, in ERSTE Bank Hungary, in fact requires a possibility of judicial review in addition to the allegedly neutral role a notary plays in a private enforcement procedure. 8 CJEU, Case C-598/15 Banco Santander paras. 40–44. 9 CJEU, Case C-598/15 Banco Santander para. 45.