Netherlands, Court of Appeal Arnhem-Leeuwarden , 19 September 2017 200.139.113/01

Identification of the case

• Right to an effective remedy and to a fair trial (art. 47 CFREU)

• Article 6:231 BW, article 6:233 BW

• Council Directive 93/13

Summary of the case

The plaintiffs purchased a leasehold with related building rights on the 22nd of June 2007. The annual ground rent to be paid to Staatsbosbeheer was set at €13,750.00. Article 10 paragraph 3 of the long lease states that Staatsbosbeheer can make a transfer of the leasehold conditional upon the ground rent being updated to the current value of the leasehold. The plaintiffs informed Staatsbosbeheer that they intend to sell the leasehold on the 9th of March 2009. Staatsbosbeheer updated the valuation according to article 10 paragraph 3 of the long lease, which increased the ground rent to €18.956,25 per year. Rechtbank Overijssel, the Court of first instance, ruled that this increase in ground rent was lawful. The plaintiffs appealed to Gerechtshof Arnhem-Leeuwarden, claiming that article 10 paragraph 3 was an unfair term within the meaning of Directive 93/13. The Court must determine whether this concerns an unfair term within the meaning of the Directive, as well as whether this question is justiciable, as the plaintiffs did not argue before the Court of first instance that article 10 paragraph 3 was an unfair term within the meaning of the Directive.

• Civil judicial enforcement

Annulment of the administrative decision.

Firstly, the Court must establish whether it is under the obligation to review unfair terms under Directive 93/13. The Court cites Banco Bilbao and Faber in determining that there is an obligation to review cases that fall within the scope of the Directive. The Court is under a duty to investigate if it has the necessary factual and legal data to suspect that the agreement falls within the scope of the Directive. This extends to cases in which the alleged unfair term was not part of the plaintiff's arguments at first instance, as established by the Heesakkers/Voets judgment, stating that, according to established CJEU caselaw, provisions of Directive 93/13 must be aligned with public policy provisions under national law. Under Dutch law, the Court must in principle apply public policy provisions outside the area covered by the complaints. Thus, even though the plaintiffs did not raise article 10 paragraph 3 of the long lease as an unfair term in first instance, the Court is under a duty to consider it.

Secondly, the Court must determine whether article 10 paragraph 3 of the long lease is an unfair term within the meaning of Directive 93/13. The Court applies the test established by the CJEU in Banco Primus, which states that, when examining whether a clause in a consumer contract is unfair, it must be determined whether that clause caused a significant imbalance between the rights and obligations of the contracting parties to the detriment of the consumer.

In this case, the Court considers that under national law, article 5:91(1) BW allows the owner to require his permission for the leaseholder to transfer the lease to a third party. However, under article 5:91(4) BW, if the owner refuses permission without reasonable grounds, the leaseholder can request authorization to transfer the lease from the district court judge. The Court considers that the economic effect of increasing the ground rent under article 10 paragraph 3 of the long lease has the effect of taking away this judicial protection. Thus, the Court considers that article 10 paragraph 3 of the long lease caused a significant imbalance to the detriment of the consumer.

Finally, the Court considers whether, if article 10 paragraph 3 of the ground lease had been severed from the contract, the district court judge would have found the increase in ground rent to be unlawful. The Court again applies the CJEU’s reasoning in the Banco Primus case, stating that in order for the effect of article 7 of the Directive 93/13 to be deterrent, it must be interpreted as meaning that, if a term is unfair within the meaning of article 3(1) of the Directive, the fact that it has not been enforced cannot prevent the national court from attaching all appropriate consequences to that unfair nature.

Role of the Charter and role of the general principles on enforcement

The Charter was not directly referenced; however, this case concerned the justiciability of a question which had not been raised by one of the parties, but which the judges were under a general duty to consider due to established CJEU caselaw. Thus, this case was within the scope of article 47 CFREU.

• Right to an effective remedy before a tribunal

Article 47 CFREU is applicable in this case, as it concerns the duty on a judge to consider potential unfair terms within the meaning of Directive 93/13, if this issue has not been raised by one of the parties. Furthermore, there was a national provision under art. 5:91(4) which would have offered judicial protection to the claimant, but which was effectively removed by the economic sanction in article 10 paragraph 3 of the long lease.

• Effectiveness

The principle of effectiveness is applied at a national level in this case. The Court determines that without article 10 paragraph 3 of the ground lease, the claimant would have been able to seek recourse to the district judge if the owner of the lease would not have assented to a transfer without giving good reasons under art. 5:91(4). However, article 10 paragraph 3 of the ground lease practically bars the claimant from seeking this relief, as the economic effect of the transfer are so drastic and cannot be tested by the judge under art. 5:91(4). Thus, as the effectiveness of the national protection is removed, the Court finds that article 10 paragraph 3 of the ground lease is an unfair term within the meaning of Directive 93/13.

Elements of judicial dialogue

• Direct dialogue between CJEU/ECtHR and National court (out of preliminary reference procedure)

• CJEU, C-421/14, Banco Primus

Conform interpretation with EU law as interpreted by the CJEU.

Interpretation of national law conform with EU law.

Judicial reform.